BILL ANALYSIS
SB 1169
Page 1
SENATE THIRD READING
SB 1169 (Alan Lowenthal)
As Amended May 28, 2010
Majority vote
SENATE VOTE :24-11
HEALTH 12-5 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Bradford, |
| | De La Torre, De | |Charles Calderon, Coto, |
| |Leon, Eng, Hayashi, | |Davis, De Leon, Gatto, |
| |Hernandez, Jones, Bonnie | |Hall, Skinner, Solorio, |
| |Lowenthal, V. Manuel | |Torlakson, Torrico |
| |Perez, Salas | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Fletcher, Conway, Smyth, |Nays:|Conway, Harkey, Miller, |
| | Audra Strickland, | |Nielsen, Norby |
| |Nestande | | |
| | | | |
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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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Unknown, likely absorbable workload to the California
Department of Managed Health Care (DMHC) to continue oversight
of health plan reimbursement practices. Minor absorbable
workload to the California Department of Insurance (CDI) to
continue oversight of health insurers.
2)Federal health reform, the Patient Protection and Affordable
Care Act (PL-111-148) includes provisions which may reduce the
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impact of the requirements of this bill over the next several
years. The federal reform changes include several provisions
related to administrative streamlining and standardization.
COMMENTS : 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.
In 1999, the Legislature passed and the Governor signed AB 88
(Thomson), Chapter 534, Statutes of 1999, requiring health plans
and insurers to provide coverage for the diagnosis and medically
necessary treatment of certain serious mental illnesses (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: 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
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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 under existing
law, coverage for crisis intervention and stabilization,
psychiatric inpatient services, including voluntary inpatient
services, and services from licensed mental health providers,
including psychiatrists and psychologists.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPA)
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.
Related legislation. AB 1600 (Beall) would require a health
care service plan contract and health insurance policy issued,
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.
Prior legislation. SB 296 (Alan Lowenthal) Chapter 575,
Statutes of 2009, requires health care service plans and health
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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. 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. 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. 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. 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.
The California Coalition for Mental Health (CCMH) 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
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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.
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 submission and payment processes that will reduce
clerical burdens on both providers and health insurance plans.
Analysis Prepared by : Melanie Moreno / HEALTH / (916)
319-2097
FN: 0005165