BILL ANALYSIS
SB 630
Page 1
SENATE THIRD READING
SB 630 (Steinberg)
As Amended September 4, 2009
Majority vote
SENATE VOTE :34-0
HEALTH 13-0 APPROPRIATIONS 12-5
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|Ayes:|Jones, Adams, |Ayes:|De Leon, Ammiano, |
| |Blumenfield, Block, | |Charles Calderon, Coto, |
| |Carter, De La Torre, De | |Davis, |
| |Leon, | |Fuentes, Hall, John A. |
| |Hall, Hayashi, Hernandez, | |Perez, |
| | | |Skinner, Solorio, |
| |Bonnie Lowenthal, Nava, | |Torlakson, Hill |
| |V. Manuel Perez | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, |
| | | |Audra Strickland |
| | | | |
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SUMMARY : Clarifies that the existing requirement for health
plans and health insurers to cover reconstructive surgery
includes, as of July 1, 2010, medically necessary dental or
orthodontic services that are an integral part of reconstructive
surgery for cleft palates. Specifically, this bill :
1)Clarifies that the requirement in existing law for health
plans and health insurers to provide coverage for
reconstructive surgery applies, as of July 1, 2010, to
medically necessary dental or orthodontic services that are an
integral part of reconstructive surgery for cleft palates
performed to improve function or to create a normal
appearance, to the extent possible.
2)Defines "cleft palate" for purposes of this bill as a
condition that may include cleft palate, cleft lip, or other
craniofacial anomalies associated with cleft palate.
3)Exempts from the provisions of this bill certain contracts
entered into between the Department of Health Care Services
and a health plan for enrolled Medi-Cal beneficiaries that do
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not cover services provided by the California Children's
Services program, as specified.
EXISTING LAW :
1)Provides for the regulation of health plans by the Department
of Managed Health Care (DMHC) and health insurers by the
California Department of Insurance (CDI).
2)Requires health plans licensed under the Knox-Keene Health
Care Service Plan Act of 1975 (Knox-Keene) to cover all
medically necessary basic health care services, as defined.
Defines basic health care services to include: physician
services; hospital inpatient and outpatient services,
including outpatient physical, occupational, and speech
therapy; diagnostic laboratory and x-ray services; preventive
and routine care, such as vaccinations and routine checkups;
emergency and urgent care services, including ambulance and
out-of-area emergency services; and, medically appropriate
home health services. There is no requirement for health
insurers subject to regulation by CDI to cover medically
necessary basic services or any specific minimum basic
benefits.
3)Requires every health plan and every health insurer, to cover
or offer coverage for specified mandated benefits or types of
coverage. Mandated benefits and mandated offerings may apply
to individual coverage, group coverage, or both, depending on
the statutory requirements related to that benefit, and in
most instances, apply equally to health plans and health
insurers. There are some specific mandates or mandated
offerings that apply only to health plans or only to health
insurers.
4)Requires health plans and health insurers to provide coverage
for reconstructive surgery that is necessary to improve
function or create a normal appearance to the extent possible.
5)Defines "reconstructive surgery" as surgery performed to
correct or repair abnormal structures of the body caused by
congenital defects, developmental abnormalities, trauma,
infection, tumors, or disease.
6)Permits health plans and insurers to apply prior authorization
and utilization review procedures to requests for
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reconstructive surgeries, as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Although this bill addresses a health mandate, this bill has
not been analyzed by the California Health Benefits Review
Program (CHBRP). Therefore specific CHBRP estimates on SB 630
have not been published.
2)Based on CHBRP analysis of a similar bill, SB 1634
(Steinberg), which was vetoed in 2008 due to cost concerns,
this bill has a likely fiscal impact of $600,000 in premium
costs in the private group and individual insurance markets.
These costs reflect a shift from out-of-pocket spending by
individuals and families to health insurance premium
expenditures.
3)Based on CHBRP analysis of SB 1634, costs of $40,000 to the
California Public Employees' Retirement System to comply with
the mandated expansion of coverage established by this bill.
4)The total cost impact, in both the private and public sectors
is relatively minor compared to other health mandates because
fewer than 100 individuals statewide are expected to benefit
from this mandate.
COMMENTS : According to the author, children with cleft palates
often undergo reconstructive surgery performed by a team of
medical specialists, not for cosmetic reasons, but to correct
extra or missing teeth or extremely misplaced and misshapen
teeth and jaws. The author argues that these children need
orthodontic services for medical reasons but cannot obtain
coverage unless they have separate dental insurance, which may
not entirely cover the substantial expenses associated with
cleft palate repair. The author points out that existing law
requiring health plans and health insurers to provide coverage
for reconstructive surgery, including surgeries to correct or
repair congenital defects and developmental abnormalities, such
as oral clefts, does not explicitly include orthodontic
procedures for oral cleft repair as covered services. This bill
is intended to clarify that medically necessary dental and
orthodontic services must be covered for the purpose of
reconstructive surgery that is performed for cleft palate
procedures.
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Existing law requires health plans and health insurers to cover
reconstructive surgery, including surgeries to correct or repair
congenital defects and developmental abnormalities, such as oral
clefts. DMHC reports that, as is the case with other
reconstructive surgeries that affect the mouth, dental and
orthodontic procedures may be considered part of oral cleft
reconstructive surgery if deemed medically necessary. DMHC has
a neutral position on a prior version of this bill, stating that
this bill helps to clarify and confirm services that are
required under Knox-Keene when medically necessary to provide or
complete the reconstructive surgery. Additionally, DMHC notes
that the intent language in this bill is important in ensuring
that the provisions of the bill are not construed to limit or
prevent coverage for dental or orthodontic services in other
situations where they are medically necessary and an essential
part of reconstructive surgery to address other medical
conditions caused from trauma or cancer, for example.
The California Society of Plastic Surgeons (CSPS), the sponsor
of this bill, states that children born with cleft palate or
craniofacial anomalies have teeth that are missing,
malpositioned, or abnormally shaped or jaws that may be in more
than one piece because of bony clefts. CSPS argues that dental
care for children in these cases is obviously needed for medical
reasons but, under current law, some health plans and insurers
do not feel obligated to provide this care. The California
Dental Association writes in support that the clarification in
this bill is needed to ensure that dental or orthodontic
services that are medically necessary and related to
reconstructive surgery for cleft palate procedures are
appropriately covered. The California Medical Association adds
that medically necessary reconstructive work should be covered
by health plans and insurers because it has a severe impact on a
patient's overall well-being as the myriad of abnormalities
associated with cleft palate can result in additional health,
dental, and social problems unless corrected.
Health plans, health insurers, and business groups object to
this bill, contending that it constitutes an expansion of the
existing reconstructive surgery mandate. The California
Association of Health Plans (CAHP) states that, under current
law, health plans and insurers are responsible for making a
child with a cleft palate able to subsequently have braces, like
any other child, but nothing in existing law requires plans or
insurers to be responsible for covering the orthodontia;
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therefore, according to CAHP, this bill is more than a
clarification of existing law. The Association of California
Life and Health Insurance Companies and the California Chamber
of Commerce argue that this bill warrants a review by CHBRP for
its impact on premiums. While opponents acknowledge that
delaying implementation of this bill is important to the
industry in order to allow time to assemble networks of
orthodontic professionals not currently participating in medical
plan provider networks, they remain very concerned about the
cumulative effect of benefit mandates on premiums and coverage
levels, particularly at a time when individuals and employers
are trying to afford coverage.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097
FN: 0002970