BILL NUMBER: AB 718 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 1, 2009
AMENDED IN SENATE JULY 8, 2009
AMENDED IN SENATE JUNE 30, 2009
AMENDED IN SENATE JUNE 16, 2009
AMENDED IN SENATE MAY 27, 2009
AMENDED IN ASSEMBLY APRIL 22, 2009
AMENDED IN ASSEMBLY APRIL 13, 2009
INTRODUCED BY Assembly Member Emmerson
(Coauthor: Senator Negrete McLeod)
FEBRUARY 26, 2009
An act to add and repeal Section 14087.521 of the Welfare
and Institutions Code, relating to healing arts. An
act to amend Sections 1399.805, 1399.811, 1399.813, and 1399.815 of
the Health and Safety Code, and to amend Sections 10901.3, 10901.9,
10902.1, and 10902.3 of the Insurance Code, relating to health care
coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 718, as amended, Emmerson. Inland Empire Health Plan
E-Prescribing Pilot Program. H ealth care
coverage: federally eligible defined individuals: preferred provider
products: premium rates.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires a health care service plan or a health insurer
offering individual plan contracts or individual health insurance
policies to fairly and affirmatively offer, market, and sell certain
individual contracts and policies to all federally eligible defined
individuals, as defined, in each service area in which the plan or
insurer provides or arranges for the provision of health care
services. For those contracts and policies that offer services
through a preferred provider arrangement, existing law requires that
the premium not exceed the average premium paid by a similar
subscriber of the Major Risk Medical Insurance Program (MRMIP), as
specified.
This bill would define the "average premium paid" for purposes of
this provision as an amount calculated on an annual basis by the
Managed Risk Medical Insurance Board using a weighted average based
on each plan's or insurer's enrollment in MRMIP, as specified. The
bill would require plans and insurers to include a statement
regarding those maximum premium rates in certain solicitation and
sales materials.
Existing law requires plans and insurers to file a specified
notice with the Department of Managed Health Care or the Department
of Insurance prior to renewing or amending a contract or policy
issued to a federally eligible defined individual and prior to
changing the premium rates applicable to that contract or policy.
Existing law requires the notice or amendment to include a
certification of compliance with specified premium requirements.
This bill would specify that this certification binds the plan or
insurer to the representation of compliance and subjects the plan or
insurer to all remedies available to the Director of the Department
of Managed Health Care or the Insurance Commissioner, as specified.
Because a willful violation of the bill's requirements with
respect to health care service plans would be a crime, the bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Existing law establishes the Medi-Cal program, administered by the
State Department of Health Care Services, under which basic health
care services are provided to qualified low-income persons. Existing
law authorizes the California Medical Assistance Commission to
negotiate exclusive contracts with any county that seeks to provide,
or arrange for the provision of health care services provided under
the Medi-Cal program. Existing law authorizes the Board of
Supervisors of San Bernardino County to, by ordinance, establish a
commission to negotiate the above-described exclusive contract and to
arrange for the supervision of certain health care services.
The Pharmacy Law regulates, among other matters, the dispensing by
prescription of dangerous devices and dangerous drugs, which include
controlled substances. Existing law authorizes the electronic
transmission of prescriptions under specified circumstances.
This bill would, until January 1, 2013, create the Inland Empire
Health Plan E-Prescribing Pilot Program and would require the program
to promote health care quality and the exchange of health care
information and to include specified components, including electronic
prescribing, as defined. The bill would require the Inland Empire
Health Plan, a joint powers agency, to select, through a competitive
bid process, an entity whose product has specified certification to
administer the program and would require this entity to submit a
report to the Legislature, by January 1, 2012, regarding the goals
and results of the program and whether the program should be
extended, as specified. The bill would provide that a physician who
contracts with the Inland Empire Health Plan shall not be required to
participate in the pilot program. The bill would provide that the
above-described provisions shall be funded by funds made available by
the federal American Recovery and Reinvestment Act of 2009. By
imposing a new requirement on a joint powers agency, the bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature, to
the extent funding and resources are available, that the Managed
Risk Medical Insurance Board shall develop and deliver the average
premiums paid to the Department of Managed Health Care and the
Department of Insurance for the 2010 calendar year and that the
health care service plans and health insurers subject to the
provisions of this act shall comply with all of the provisions of
this act for all health care service plan contracts and all health
insurance polices issued and sold during the 2010 calendar year.
SEC. 2. Section 1399.805 of the Health
and Safety Code is amended to read:
1399.805. (a) (1) After the federally eligible defined
individual submits a completed application form for a plan contract,
the plan shall, within 30 days, notify the individual of the
individual's actual premium charges for that plan contract, unless
the plan has provided notice of the premium charge prior to the
application being filed. In no case shall the premium charged for any
health care service plan contract identified in subdivision (d) of
Section 1366.35 exceed the following amounts:
(A) For health care service plan contracts that offer services
through a preferred provider arrangement, the average premium paid by
a subscriber of the Major Risk Medical Insurance Program
(MRMIP) who is of the same age and resides in the same
geographic area as the federally eligible defined individual.
However, for federally qualified individuals who are between the ages
of 60 and 64, inclusive, the premium shall not exceed the average
premium paid by a subscriber of the Major Risk Medical
Insurance Program MRMIP who is 59 years of age
and resides in the same geographic area as the federally eligible
defined individual.
(B) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The individual shall have 30
days in which to exercise the right to buy coverage at the quoted
premium rates.
(2) A plan may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health care service plans that offer services through a
preferred provider arrangement, the average of the Major
Risk Medical Insurance Program MRMIP rate for
families of the same size that reside in the same geographic area as
the federally eligible defined individual.
(B) For health care service plans identified in subdivision (d)
of Section 1366.35 that do not offer services through a preferred
provider arrangement, 170 percent of the standard premium charged to
a family that is of the same size and resides in the same geographic
area as the federally eligible defined individual.
(b) When a federally eligible defined individual submits a
premium payment, based on the quoted premium charges, and that
payment is delivered or postmarked, whichever occurs earlier, within
the first 15 days of the month, coverage shall begin no later than
the first day of the following month. When that payment is neither
delivered or postmarked until after the 15th day of a month, coverage
shall become effective no later than the first day of the second
month following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the plan
contract, the individual shall have the option of changing coverage
to a different plan contract offered by the same health care service
plan. If the individual notified the plan of the change within the
first 15 days of a month, coverage under the new plan contract shall
become effective no later than the first day of the following month.
If an enrolled individual notified the plan of the change after the
15th day of a month, coverage under the new plan contract shall
become effective no later than the first day of the second month
following notification.
(d) (1) For purposes of subparagraph (A) of paragraph (1) of
subdivision (a), the "average premium paid" shall be determined by
calculating a weighted average that is based upon each health care
service plan's and each health insurer's aggregate enrollment in
MRMIP within each designated geographic region, as follows:
(A) Each health care service plan and each health insurer shall
have a single weight factor for each geographic region. This weight
factor shall be a ratio of each health care service plan's or each
health insurer's total MRMIP subscribers in the designated geographic
region, divided by the total MRMIP subscribers in that geographic
region for all health care service plans and health insurers, for a
period of six months.
(B) The weight factor for each health care service plan and each
health insurer, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that health care service plan or
health insurer for each age and dependent category. The result of
that multiplication shall be added to the corresponding results for
all other health care service plans and health insurers. The total
sum shall be the average premium paid for the corresponding age and
dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in
MRMIP, for the six-month period of January 1 to June 30 immediately
preceding the calendar year for which the premiums will be effective.
The Managed Risk Medical Insurance Board shall, under its
letterhead, provide the average premiums paid to the department and
the Department of Insurance no later than October 15 of each year
prior to the calendar year for which the premiums will be effective,
or 20 working days after the MRMIP premiums are finalized for the
upcoming calendar year, whichever is later. At the time it provides
the average premiums paid, the Managed Risk Medical Insurance Board
shall also provide the department and the Department of Insurance the
MRMIP premiums and geographical enrollment data that served as the
basis for the calculation of the average premiums paid.
SEC. 3. Section 1399.811 of the Health
and Safety Code is amended to read:
1399.811. Premiums for contracts offered, delivered, amended, or
renewed by plans on or after January 1, 2001,
2010, shall be subject to the following requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program (MRMIP)
who is of the same age and resides in the same geographic area
as the federally eligible defined individual. However, for federally
qualified individuals who are between the ages of 60 to 64 years,
inclusive, the premium shall not exceed the average premium paid by a
subscriber of the Major Risk Medical Insurance Program
MRMIP who is 59 years of age and resides in the
same geographic area as the federally eligible defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 to 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program
MRMIP who is of the same age and resides in the
same geographic area as the federally eligible defined individual.
However, for federally qualified individuals who are between the ages
of 60 and 64 years, inclusive, the premium shall not exceed the
average premium paid by a subscriber of the Major Risk
Medical Insurance Program MRMIP who is 59 years
of age and resides in the same geographic area as the federally
eligible defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The premium effective on
January 1, 2001, shall apply to in force business at the earlier of
either the time of renewal or July 1, 2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average increase in the premiums
charged to a subscriber of the Major Risk Medical Insurance
Program MRMIP who is of the same age and resides
in the same geographic area as the federally eligible defined
individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, the increase in premiums charged
to a nonfederally qualified individual who is of the same age and
resides in the same geographic area as the federally defined eligible
individual. The premium for an eligible individual may not be
modified more frequently than every 12 months.
(3) For a contract that a plan has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(d) (1) For purposes of paragraph (1) of subdivision (a) and
paragraph (1) of subdivision (b), the "average premium paid" shall be
determined by calculating a weighted average that is based upon each
health care service plan's and each health insurer's aggregate
enrollment in MRMIP within each designated geographic region, as
follows:
(A) Each health care service plan and each health insurer shall
have a single weight factor for each geographic region. This weight
factor shall be a ratio of each health care service plan's or each
health insurer's total MRMIP subscribers in the designated geographic
region, divided by the total MRMIP subscribers in that geographic
region for all health care service plans and health insurers, for a
period of six months.
(B) The weight factor for each health care service plan and each
health insurer, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that health care service plan or
health insurer for each age and dependent category. The result of
that multiplication shall be added to the corresponding results for
all other health care service plans and health insurers. The total
sum shall be the average premium paid for the corresponding age and
dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in
MRMIP, for the six-month period of January 1 to June 30 immediately
preceding the calendar year for which the premiums will be effective.
The Managed Risk Medical Insurance Board shall, under its
letterhead, provide the average premiums paid to the department and
the Department of Insurance no later than October 15 of each year
prior to the calendar year for which the premiums will be effective,
or 20 working days after the MRMIP premiums are finalized for the
upcoming calendar year, whichever is later. At the time it provides
the average premiums paid, the Managed Risk Medical Insurance Board
shall also provide the department and the Department of Insurance the
MRMIP premiums and geographical enrollment data that served as the
basis for the calculation of the average premiums paid.
SEC. 4. Section 1399.813 of the Health
and Safety Code is amended to read:
1399.813. (a) In connection with the
offering for sale of any a plan
contract to an individual, each plan shall make a reasonable
disclosure, as part of its solicitation and sales materials, of all
individual contracts.
(b) For plan contracts that offer services through a preferred
provider arrangement and that are offered or sold to federally
eligible defined individuals, the disclosure described in subdivision
(a) shall also include the following statement, which, if the
disclosure is made in writing, shall be in at least 12-point boldface
type:
"The maximum premium rate for this preferred provider product is
available on the Internet Web sites of the Department of Managed
Health Care, at www.dmhc.ca.gov, and the Department of Insurance, at
www.insurance.ca.gov. By visiting either of these Internet Web sites,
you can compare the rates that were disclosed to you for this
product and ensure that they are less than, or equal to, the maximum
rate allowed by law."
SEC. 5. Section 1399.815 of the Health
and Safety Code is amended to read:
1399.815. (a) At least 20 business days prior to renewing or
amending a plan contract subject to this article, or at least 20
business days prior to the initial offering of a plan contract
subject to this article, a plan shall file a notice of an amendment
with the director in accordance with the provisions of Section 1352.
The notice of an amendment shall include a statement certifying that
the plan is in compliance with subdivision (a) of Section 1399.805
and with Section 1399.811. Any action by the director, as permitted
under Section 1352, to disapprove, suspend, or postpone the plan's
use of a plan contract shall be in writing, specifying the reasons
the plan contract does not comply with the requirements of this
chapter.
(b) Prior to making any changes in the premium, the plan shall
file an amendment in accordance with the provisions of Section 1352,
and shall include a statement certifying the plan is in compliance
with subdivision (a) of Section 1399.805 and with Section 1399.811.
All other changes to a plan contract previously filed with the
director pursuant to subdivision (a) shall be filed as an amendment
in accordance with the provisions of Section 1352, unless the change
otherwise would require the filing of a material modification.
(c) An amendment or notice of an amendment filed pursuant to this
section shall not be deemed accepted or approved unless the required
statement of certification is concurrently filed with the amendment
or notice. The certification required by this section, whether
provided by the health care service plan or an independent agent or
consultant, binds the plan to the representation of compliance and
subjects the plan to all remedies available to the director to the
extent the filing or certification is determined to be a
misrepresentation, whether or not willful, or a falsification of the
information contained therein, or otherwise violates the requirements
of this chapter or any of the rules promulgated under this chapter.
SEC. 6. Section 10901.3 of the
Insurance Code is amended to read:
10901.3. (a) (1) After the federally eligible defined individual
submits a completed application form for a health benefit plan, the
carrier shall, within 30 days, notify the individual of the
individual's actual premium charges for that health benefit plan
design. In no case shall the premium charged for any health benefit
plan identified in subdivision (d) of Section 10785 exceed the
following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program (MRMIP)
who is of the same age and resides in the same geographic area
as the federally eligible defined individual. However, for federally
qualified individuals who are between the ages of 60 and 64,
inclusive, the premium shall not exceed the average premium paid by a
subscriber of the Major Risk Medical Insurance Program
MRMIP who is 59 years of age and resides in the
same geographic area as the federally eligible defined individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive, the premium shall not exceed 170 percent of the
standard premium charged to an individual who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual. The individual shall have 30 days in which to exercise
the right to buy coverage at the quoted premium rates.
(2) A carrier may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average of the Major
Risk Medical Insurance Program MRMIP rate for
families of the same size that reside in the same geographic area as
the federally eligible defined individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to a family
that is of the same size and resides in the same geographic area as
the federally eligible defined individual.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the
health benefit plan, the individual shall have the option of changing
coverage to a different health benefit plan design offered by the
same carrier. If the individual notified the plan of the change
within the first 15 days of a month, coverage under the new health
benefit plan shall become effective no later than the first day of
the following month. If an enrolled individual notified the carrier
of the change after the 15th day of a month, coverage under the
health benefit plan shall become effective no later than the first
day of the second month following notification.
(d) (1) For purposes of subparagraph (A) of paragraph (1) of
subdivision (a), the "average premium paid" shall be determined by
calculating a weighted average that is based upon each carrier's and
each health care service plan's aggregate enrollment in MRMIP within
each designated geographic region, as follows:
(A) Each carrier and each health care service plan shall have a
single weight factor for each geographic region. This weight factor
shall be a ratio of each carrier's or each health care service plan's
total MRMIP subscribers in the designated geographic region, divided
by the total MRMIP subscribers in that geographic region for all
carriers and health care service plans, for a period of six months.
(B) The weight factor for each carrier and each health care
service plan, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that carrier or plan for each age
and dependent category. The result of that multiplication shall be
added to the corresponding results for all other carriers and health
care service plans. The total sum shall be the average premium paid
for the corresponding age and dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in
MRMIP, for the six-month period of January 1 to June 30 immediately
preceding the calendar year for which the premiums will be effective.
The Managed Risk Medical Insurance Board shall, under its
letterhead, provide the average premiums paid to the department and
the Department of Managed Health Care no later than October 15 of
each year prior to the calendar year for which the premiums will be
effective, or 20 working days after the MRMIP premiums are finalized
for the upcoming calendar year, whichever is later. At the time it
provides the average premiums paid, the Managed Risk Medical
Insurance Board shall also provide the department and the Department
of Managed Health Care the MRMIP premiums and geographical enrollment
data that served as the basis for the calculation of the average
premiums paid.
SEC. 7. Section 10901.9 of the
Insurance Code is amended to read:
10901.9. Commencing January 1, 2001,
2010, premiums for health benefit plans offered, delivered,
amended, or renewed by carriers shall be subject to the following
requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of the Major
Risk Medical Insurance Program (MRMIP) who is of the same
age and resides in the same geographic area as the federally eligible
defined individual. However, for federally qualified individuals who
are between the ages of 60 to 64, inclusive, the premium shall not
exceed the average premium paid by a subscriber of the Major
Risk Medical Insurance Program MRMIP who is 59
years of age and resides in the same geographic area as the federally
eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 to 64,
inclusive, the premium shall not exceed 170 percent of the standard
premium charged to an individual who is 59 years of age and resides
in the same geographic area as the federally eligible defined
individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of the
Major Risk Medical Insurance Program MRMIP who
is of the same age and resides in the same geographic area as the
federally eligible defined individual. However, for federally
qualified individuals who are between the ages of 60 and 64,
inclusive, the premium shall not exceed the average premium paid by a
subscriber of the Major Risk Medical Insurance Program
MRMIP who is 59 years of age and resides in the
same geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive,
the premium shall not exceed 170 percent of the standard premium
charged to an individual who is 59 years of age and resides in the
same geographic area as the federally eligible defined individual.
The premium effective on January 1, 2001, shall apply to in force
business at the earlier of either the time of renewal or July 1,
2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average increase in the premiums charged to a
subscriber of the Major Risk Medical Insurance Program
MRMIP who is of the same age and resides in the
same geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, the increase in premiums charged to a nonfederally
qualified individual who is of the same age and resides in the same
geographic area as the federally defined eligible individual. The
premium for an eligible individual may not be modified more
frequently than every 12 months.
(2)
( 3 ) For a contract that a carrier has
discontinued offering, the premium applied to the first rating period
of the new contract that the federally eligible defined individual
elects to purchase shall be no greater than the premium applied in
the prior rating period to the discontinued contract.
(d) (1) For purposes of paragraph (1) of subdivision (a) and
paragraph (1) of subdivision (b), the "average premium paid" shall be
determined by calculating a weighted average that is based upon each
carrier's and each health care service plan's aggregate enrollment
in MRMIP within each designated geographic region, as follows:
(A) Each carrier and each health care service plan shall have a
single weight factor for each geographic region. This weight factor
shall be a ratio of each carrier's or each health care service plan's
total MRMIP subscribers in the designated geographic region, divided
by the total MRMIP subscribers in that geographic region for all
carriers and health care service plans, for a period of six months.
(B) The weight factor for each carrier and each health care
service plan, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that carrier or plan for each age
and dependent category. The result of that multiplication shall be
added to the corresponding results for all other carriers and health
care service plans. The total sum shall be the average premium paid
for the corresponding age and dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in the
MRMIP, for the six-month period of January 1st to June 30th
immediately preceding the calendar year for which the premiums will
be effective. The Managed Risk Medical Insurance Board shall, under
its letterhead, provide the average premiums paid to the department
and the Department of Managed Health Care no later than October 15 of
each year prior to the calendar year for which the premiums will be
effective, or 20 working days after the MRMIP premiums are finalized
for the upcoming calendar year, whichever is later. At the time it
provides the average premiums paid, the Managed Risk Medical
Insurance Board shall provide the department and the Department of
Managed Health Care the MRMIP premiums and geographical enrollment
data that served as the basis for the calculation of the average
premiums paid.
SEC. 8. Section 10902.1 of the
Insurance Code is amended to read:
10902.1. (a) In connection with the
offering for sale of any health benefit plan designed to an
individual, each carrier shall make a reasonable disclosure, as part
of its solicitation and sales materials, of all individual contracts.
(b) For health benefit plans that offer services through a
preferred provider arrangement and that are offered or sold to
federally eligible defined individuals, the disclosure described in
subdivision (a) shall also include the following statement, which, if
the disclosure is made in writing, shall be in at least 12-point
boldface type:
"The maximum premium rate for this preferred provider product is
available on the Internet Web sites of the Department of Insurance,
at www.dmhc.ca.gov, and the Department of Managed Health Care, at
www.mrmib.ca.gov. By visiting either of these Internet Web sites, you
can compare the rates that were disclosed to you for this product
and ensure that they are less than, or equal to, the maximum rate
allowed by law."
SEC. 9. Section 10902.3 of the
Insurance Code is amended to read:
10902.3. (a) At least 20 business days prior to renewing or
amending a health benefit plan contract subject to this chapter, or
at least 20 business days prior to the initial offering of a health
benefit plan subject to this chapter, a carrier shall file a
statement with the commissioner in the same manner as required for
small employers as outlined in Section 10717. The statement shall
include a statement certifying that the carrier is in compliance with
subdivision (a) of Section 10901.3 and with Section 10901.9. Any
action by the commissioner, as permitted under Section 10717, to
disapprove, suspend, or postpone the plan's use of a carrier's health
benefit plan design shall be in writing, specifying the reasons the
health benefit plan does not comply with the requirements of this
chapter.
(b) Prior to making any changes in the premium, the carrier shall
file an amendment in the same manner as required for small employers
as outlined in Section 10717, and shall include a statement
certifying the carrier is in compliance with subdivision (a) of
Section 10901.3 and with Section 10901.9. All other changes to a
health benefit plan previously filed with the commissioner pursuant
to subdivision (a) shall be filed as an amendment in the same manner
as required for small employers as outlined in Section 10717.
(c) A statement or amendment filed pursuant to this section shall
not be deemed accepted or approved unless the required statement of
certification is concurrently filed with the statement or amendment.
The certification required by this section, whether provided by the
carrier or an independent agent or consultant, binds the carrier to
the representation of compliance and subjects the carrier to all
remedies available to the commissioner to the extent the filing or
certification is determined to be a misrepresentation, whether or not
willful, or a falsification of the information contained therein, or
otherwise violates the requirements of this code or any of the rules
promulgated under this code.
SEC. 10. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SECTION 1. Section 14087.521 is added to the
Welfare and Institutions Code, to read:
14087.521. (a) The Inland Empire Health Plan E-Prescribing Pilot
Program is hereby created. For purposes of this section, "program"
means the Inland Empire Health Plan E-Prescribing Pilot Program.
(b) The program shall be administered by an entity whose product
has been certified by the Certification Commission for Health
Information Technology or another certifying entity authorized by the
federal Department of Health and Human Services, either as a
stand-alone electronic prescribing product or service or as part of
an electronic health record product or service. This entity shall be
selected by the Inland Empire Health Plan through a competitive bid
process.
(c) The program shall promote health care quality and the exchange
of health care information consistent with applicable law,
including, but not limited to, applicable state and federal
confidentiality and data security requirements and applicable state
record retention and reporting requirements. The program shall
include all of the following components:
(1) Integrated clinical decision support alerts for allergies,
drug-drug interactions, duplications in therapy, and elderly alerts.
(2) Current payer formulary information.
(3) Appropriate alternatives, when needed, to support
cost-effective prescribing at the point of care, except that nothing
in this section shall be construed to authorize the program to
establish a drug formulary.
(4) Drug compendia approved by the federal Centers for Medicare
and Medicaid Services.
(5) Electronic prescribing consistent with applicable state and
federal law.
(6) Patient drug history.
(d) (1) Electronic prescribing pursuant to the program shall not
interfere with a patient's existing freedom to choose a pharmacy and
shall not interfere with the prescribing decision at the point of
care.
(2) A physician who contracts with the Inland Empire Health Plan
shall not be required to participate in the pilot program.
(e) The entity administering the program shall, on or before
January 1, 2012, submit a report to the Legislature on the goals and
results of the program and whether the program should be extended.
This report shall include quantifiable data on all of the following:
(1) The number of prescribers enrolled in the program who use
electronic prescribing.
(2) The number of pharmacies participating in the program.
(3) The number and percentage of prescriptions sent electronically
as a percentage of the overall number of prescriptions reimbursed by
the plan.
(4) Expenditures on the program.
(5) Data on whether and to what extent the program achieved the
following goals:
(A) Reduced medication errors.
(B) Reduced prescription fraud.
(C) Reduced health care costs, including, but not limited to,
inpatient hospitalization, by reducing medication errors, increasing
patient medication compliance, and identifying medication
contraindications.
(f) For purposes of this section, "electronic prescribing" shall
have the same meaning as "electronic data transmission prescription"
as defined in subdivision (c) of Section 4040 of the Business and
Professions Code.
(g) This section shall be funded by funds made available by the
federal American Recovery and Reinvestment Act of 2009 (Public Law
111-5).
(h) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
SEC. 2. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.