BILL ANALYSIS
SB 1169
Page 1
Date of Hearing: June 15, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 1169 (Alan Lowenthal) - As Amended: May 28, 2010
SENATE VOTE : 24-11
SUBJECT : Health care coverage: claims: prior authorization:
mental health.
SUMMARY : Requires carriers, upon receipt of a request by a
provider, to assign a tracking number to the request prior to,
retrospectively, or concurrent with the provision of health care
services and provide acknowledgment of receipt of the request to
the provider, as specified. Requires all communications
regarding the request to reference the tracking number.
Requires any form of treatment or benefit limitation for mental
health care services to be applied under the same terms as other
benefits under the plan or policy.
EXISTING LAW :
1)Provides for the regulation of health plans by the Department
of Managed Health Care (DMHC) under the Knox-Keene Health Care
Service Plan Act of 1975 (Knox-Keene) and regulation of health
insurers by the California Department of Insurance (CDI).
2)Requires carriers to have written policies and procedures
establishing the process by which the plans or insurers
prospectively, retrospectively, or concurrently review and
approve, modify, delay, or deny, based in whole or in part on
medical necessity, requests by providers of health care
services for enrollees or insureds. Requires uncontested
claims to be reimbursed within 30 or 45 working days.
Specifies that a claim is contested if the carrier has not
received a completed claim and all information necessary to
determine payer liability.
3)Requires coverage for the diagnosis and medically necessary
treatment of severe mental illnesses (SMI), as defined, of a
person of any age, and of serious emotional disturbances of a
child, to be provided under the same terms and conditions that
apply to other medical conditions.
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FISCAL EFFECT : According to the Senate Appropriations
Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
DMHC regulations up to $130 up to $170 ongoing Special*
likely minor
*Managed Care Fund
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author mental health
care providers frequently report being told by health plans
that no authorization or prior authorization requests have
been received despite the provider having submitted them. In
the case of prior authorizations, and particularly in the case
of prior authorizations for hospitalizations, this often
results in denials of claims. The author states that
assigning a unique identifier would allow providers to rebut
plan assertions that they have failed to receive documentation
establishing the filing of a claim or authorization request.
This would lead to payment on valid claims (instead of
denials); or more timely payments (instead of resubmissions
when allowed and associated time delays); and, more timely
delivery of services. Furthermore, the author states that it
would reduce the risk that medically necessary services are
not provided. In other segments of the insurance industry
(automobile claims for instance) identifiers are assigned and
provided without exception at the onset of contact by the
person making the claim. With regard to the mental health
parity provisions in this bill, the author states that
contrary to the language in existing law, mental health
providers report that the services they provide are subject to
much more stringent requirements for documentation, handling,
standards of review, frequency of review, and a much higher
degree of scrutiny, e.g., in the process of utilization
management.
2)MENTAL HEALTH PARITY IN CALIFORNIA . In 1999, the Legislature
passed and the Governor signed AB 88 (Thomson), Chapter 534,
Statutes of 1999, requiring health plans and health insurers
to provide coverage for the diagnosis and medically necessary
treatment of certain SMIs of a person of any age, and of
serious emotional disturbances of a child, as defined, under
the same terms and conditions applied to other medical
conditions. Nine specific diagnoses are considered SMI:
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schizophrenia; schizoaffective disorder; bipolar disorder;
major depressive disorder; panic disorder; obsessive
compulsive disorder; pervasive developmental disorders or
autism; anorexia nervosa; and, bulimia nervosa. For covered
conditions, health plans are required to eliminate benefit
limits and share-of-cost requirements that have traditionally
rendered mental health benefits less comprehensive than
physical health coverage. Current law requires mental health
parity (MHP) benefits to include outpatient services,
inpatient hospital services, partial hospital services, and
prescription drugs, if the health plan contract includes
coverage for prescription drugs. DMHC promulgated MHP
regulations that took effect in 2003 requiring MHP to provide
at least, in addition to all basic and other health care
services required by Knox-Keene, coverage for crisis
intervention and stabilization, psychiatric inpatient
services, including voluntary inpatient services, and services
from licensed mental health providers, including but not
limited to psychiatrists and psychologists.
3)MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT . The Mental
Health Parity and Addiction Equity Act of 2008 (MHPA), enacted
in October 2008, requires group health insurance plans to
cover mental illness and substance abuse disorders on the same
terms and conditions as other illnesses and help to end
discrimination against those who seek treatment for mental
illness. Pursuant to MHPA, the federal Departments of Labor,
Health and Human Services, and the Treasury issued an interim
final rule and accompanying guidelines governing
implementation of MHPA on February 2, 2010, that includes a
90-day public comment period that closed May 3, 2010. The
MHPA does not mandate group health plans provide any mental
health coverage. However, if a plan does offer mental health
coverage, then it requires equity in financial requirements,
such as deductibles, co-payments, coinsurance, and
out-of-pocket expenses; equity in treatment limits, such as
caps on the frequency or number of visits, limits on days of
coverage, or other similar limits on the scope and duration of
treatment; and, equality in out-of-network coverage. The MHPA
applies to all group health plans for plan years beginning
after October 3, 2009, and exempts small firms of 50 or fewer
employees.
4)RELATED LEGISLATION . AB 1600 (Beall) would require a health
care service plan contract and health insurance policy issued,
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amended, or renewed on or after January 1, 2011, that provides
hospital, medical, or surgical coverage, to provide coverage
for the diagnosis and medically necessary treatment of a
mental illness of a person of any age, including a child, and
defines mental illness as a mental disorder in the Diagnostic
and Statistical Manual IV.
5)PRIOR LEGISLATION .
a) SB 296 (Alan Lowenthal) Chapter 575, Statutes of 2009,
requires health care service plans and health insurers that
provide professional mental health services to issue
identification cards to all enrollees and insured
containing specified information by July 1, 2011, and
provide specified information relating to their policies
and procedures on their Internet Web sites by January 1,
2012.
b) SB 1553 (Alan Lowenthal) Chapter 722, Statutes of 2008,
requires the Web sites of health plans that provide
coverage for professional mental health services to
include, but not be limited to, providing information for
subscribers, enrollees, and providers on accessing mental
health services.
c) AB 1887 (Beall) of 2008 and AB 423 (Beall) of 2007
contained substantially similar provisions to those
contained in this year's AB 1600. Both were vetoed by the
Governor.
d) AB 2179 (Cohn), Chapter 797, Statutes of 2002, requires
DMHC to develop and adopt regulations to ensure that
enrollees have access to needed health care services in a
timely manner. Requires DMHC to develop indicators of
timeliness of access to care and specifies three indicators
for DMHC to consider.
e) AB 88 requires health plans and health insurers to
provide coverage for the diagnosis and medically necessary
treatment of certain SMIs, as defined, and of serious
emotional disturbances of a child, as defined, under the
same terms and conditions applied to other medical
conditions.
6)SUPPORT . The California Coalition for Mental Health (CCMH)
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states that mental health professionals experience problems
with paperwork submitted to health plans and insurers for
authorizations or claims becoming lost, delayed, forgotten, or
otherwise untraceable, leading to extraordinary claims on
their time and resources to resubmit those claims or
authorization requests. CCMH argues that this affects both
clinicians and patients with delays in treatment and
reimbursement of treatment, and worse, denials of
authorizations and treatment. The California Medical
Association states that this bill will improve the process of
health plans and health insurer reviews, make it more
difficult for plans and insurers to deny claims based on
technicalities never relayed to the requesting provider and
ensure prompt and fair resolution and payment of health
insurance claims. The Mental Health Association in California
contends that by assigning a tracking number and letting the
provider and enrollee know the request is tracked will improve
access, and notes as an example, that tracking numbers are
used successfully to track packages. The California Hospital
Association asserts that the bill addresses the problem of
different, more stringent standards for non-qualitative
treatment limitations such as utilization review being applied
to mental illness than to physical illnesses by clarifying
parity language to make it clear that any form of treatment
limitation or action is subject to parity requirements.
7)OPPOSITION . The California Association of Health Plans (CAHP)
states that this bill would impose unnecessary administrative
costs and create complicated, new notifications at a time when
health care costs are already making it difficult for
Californians to secure health insurance, and that state law
and regulations already require a complicated set of timelines
and notifications that health plans must meet in handling
claims. CAHP contends that this bill amends the state's
mental health parity law in a manner that has unclear
implications for coverage, since current law already requires
health plans to provide parity for covered mental health
services. America's Health Insurance Plans (AHIP) writes that
the administrative changes proposed by this will duplicate
existing requirements for patient-provider communication,
burdening physicians and confusing consumers, and result in
additional unnecessary administrative burdens that increase
costs for health care providers and health plans. AHIP states
that federal health care reform establishes administrative
simplification processes aimed at standardized claims
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submission and payment processes that will reduce clerical
burdens on both providers and health insurance plans.
REGISTERED SUPPORT / OPPOSITION :
Support
American Association of Marriage and Family Therapists - CA
Division (co-sponsor)
California Coalition for Mental Health (co-sponsor)
California Psychiatric Association (co-sponsor)
Mental Health Association in California (co-sponsor)
California Academy of Family Physicians
California Chapter of the American College of Emergency
Physicians
California Hospital Association
California Medical Association
California Psychological Association
Osteopathic Physicians and Surgeons of California
Opposition
America's Health Insurance Plans
Anthem Blue Cross
Association of California Life and Health Insurance Companies
California Association of Health Plans
One individual
Analysis Prepared by : Melanie Moreno / HEALTH / (916)
319-2097