BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 1283
S
AUTHOR: Steinberg
B
AMENDED: April 8, 2010
HEARING DATE: April 21, 2010
1
CONSULTANT:
2
Chan-Sawin/
8 3
SUBJECT
Health care coverage: grievance system
SUMMARY
Deletes the authority of the director of the Department of
Managed Health Care (DMHC) to determine that additional
time is necessary to review a grievance, and instead,
requires DMHC to send written notice to the enrollee or
subscriber of the final disposition within 30 days of
receipt of all relevant information that is necessary to
make a coverage decision.
CHANGES TO EXISTING LAW
Existing law:
The Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act) regulates the licensure of health care
service plans (health plan), and the Department of Managed
Health Care (DMHC) oversees compliance by health plans with
state law. Existing law also requires all health plans to
establish and maintain a grievance process, approved by
DMHC, under which enrollees and subscribers may submit
their grievances to the plan.
An enrollee or subscriber, who has either: 1) completed his
or her plan's grievance process; or, 2) participated in the
plan's grievance process for a minimum of 30 days, is
authorized under existing law to submit his or her
Continued---
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 2
grievance to DMHC for review. Existing law also allows
providers to assist their patients in the filing of
grievances with DMHC.
Upon receiving a request to review a grievance, existing
law requires DMHC to send a written notice of the final
disposition of the grievance to the enrollee or subscriber
within 30 days, unless the Director of DMHC, using his or
her discretion, determines that additional time is
reasonably needed to complete the review.
This bill:
This bill removes the Director of DMHC's discretion to
extend the timeframe beyond the 30 days required by law to
notify an enrollee or subscriber of the results of DMHC's
review. Instead, it requires DMHC to notify the enrollee
or subscriber within 30 days of receiving all relevant
information necessary for the department to make a
determination.
FISCAL IMPACT
This bill has not been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
This bill is intended to expedite the appeals process for
grievances filed with DMHC and ensure consumer grievances
are evaluated in an appropriate and timely manner.
According to the author, many consumers, families, and
advocates have reported delays in DMHC's resolution of
grievances filed with the department, particularly those
related to autism spectrum disorders (ASD).
Over a six month period between September 1, 2009 and March
1, 2010, the DMHC Help Center processed seventy-six cases
for the denial of services related to autism treatment
complaints. Of these seventy-six cases, the department
completed their review and notified the enrollee of their
determination in the following timeframes:
Within 30 days: 32 cases (42% of total
complaints)
Between 31-60 days: 19 cases (25% of total
complaints)
Between 61-90 days: 12 cases (16% of total
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 3
complaints)
After 90 days: 11 cases (14% of total
complaints)
Not applicable/Insufficient data: 2 cases ( 3%
of total complaints)
The author points out that the data clearly indicates that
a significant number of autism-related complaints (48%) are
not resolved in a timely manner, and these results raise
the possibility that consumers with other health issues may
also face comparable challenges and delays in resolving
grievances with the department.
Consumers and advocates indicate that delays in this
process may result in serious and significant untoward
outcomes, such as delaying the implementation of intensive,
early intervention therapy for children with autism
spectrum disorders that are proven to be crucial to
achieving optimum outcomes. Furthermore, a prolonged
appeals process adds undue stress to consumers and their
families, and may impose an undue fiscal hardship.
Grievances and the DMHC HMO Help Center
DMHC was formed by the Legislature in 2000 to unify
regulatory and consumer protection functions for HMO
patients in California, and to enforce the Knox-Keene Act,
which provides plan enrollees and subscribers the right to
file grievances with both their health plan and with DMHC.
The Knox-Keene Act further specifies legislative intent
that subscribers and enrollees in a health plan have their
grievances expeditiously and thoroughly reviewed by DMHC.
Within DMHC is a Help Center that provides health plan
enrollees and subscribers assistance with navigating the
grievance process. Complaints are researched and resolved
by a team of Help Center staff that includes consumer
service representatives, analysts, patients' rights
attorneys, and clinical staff.
Although the Help Center does not give legal advice, it
reviews complaints and makes determinations if a health
plan has followed existing law. The Help Center is
available to consumers 24 hours a day, 7 days a week.
Since 2000, the Help Center has assisted over 1 million
consumers in resolving complaints and problems with their
health plans in 148 different languages.
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 4
DMHC's Grievance Process
Consumers may file grievances concerning benefits and
coverage disputes, claims and billing problems,
eligibility, inadequate access to care, and attitude or
service concerns. Grievances are required under the
Knox-Keene Act to be filed first with an individual
enrollee or subscriber's health plan. However, before a
complaint is eligible for review, the health plan, through
its own grievance and appeals process, must have an
opportunity to assess and resolve the issue within 30 days
(or 72 hours for expedited urgent grievances).
After either completing his or her health plan's grievance
process or participating in the process for at least 30
days, a subscriber or enrollee can also submit the
grievance to DMHC for review. DMHC must review all written
documents submitted with the grievance form, and may ask
for additional materials, hold meetings with parties
involved, including providers. Generally, DMHC has 30 days
to provide the enrollee or subscriber, and the health plan,
a written notice of the department's final decision, along
with reasons for the decision. Although decisions made by
DMHC are final, patients can take legal action if they so
chose.
Based on the circumstances presented by the member, the
Help Center uses one of four resolution processes for
consumers:
1. Quick Resolution-An informal process that resolves
consumers' concerns within hours or a few days.
2. Urgent Case Resolution-An informal process that
addresses urgent clinical issues that cannot wait 30
days to go through the formal complaint process.
3. Early Review-A formal process that addresses
time-sensitive non-clinical issues prior to the
member's participation in the health plan's grievance
and appeal process.
4. Complaint Resolution-A formal process that resolves
complaints within 30 days. This process follows the
member's requirement by law to participate in the
health plan's 30-day grievance and appeal process.
During their review process, DMHC determines whether a case
involves an issue that is eligible for an Independent
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 5
Medical Review (IMR). An IMR provides health plan members
the opportunity to receive an outside review of their
health care dispute from doctors and other health care
professionals, completely independent of the member's
health plan. Disputes regarding denials of service may
qualify for an IMR.
By law, before an IMR application is eligible for review,
an independent review organization, comprised of physician
and medical specialists, conducts the actual reviews.
Health plans are assessed a fee for the reviews. There is
no charge to the member for the application, processing, or
resolution of an IMR.
The director of DMHC must formally adopt the IMR
determination. If the health plan's decision is overturned,
the health plan is required to implement the findings
within five days. Generally, IMR cases are processed
(through completion) within 30 days of qualification of the
application.
2008 grievance resolution timeframes
Data on all incoming complaints, regardless of type, are
entered into the Help Center's automated case management
system. The director of DMHC is required under the
Knox-Keene Act to establish and maintain a system of aging
of grievances that are pending and unresolved for 30 days
or more, including a brief explanation of the reasons each
grievance is pending and unresolved for 30 days or more.
The director must also periodically evaluate patient
complaints to find out whether the plans are complying with
the grievance standards.
DMHC publishes an annual report that details the number and
types of complaints or grievances received during the
calendar year, including IMR data. However, this report
does not include any data regarding grievance resolution
timeframes.
DMHC makes publicly available, annual provider complaint
statistics. The following statistics are based on
grievances filed by providers in 2008:
---------------------------------------------------------
| 2008 | Average Number of | Total Provider |
| |Calendar Days to Close | Grievances |
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 6
| | a Grievance | Received |
|-------------+-----------------------+-------------------|
|First | 38.73 | 1,529 |
|Quarter | | |
|-------------+-----------------------+-------------------|
|Second | 55.4 | 1,519 |
|Quarter | | |
|-------------+-----------------------+-------------------|
|Third | 42.74 | 1,134 |
|Quarter | | |
|-------------+-----------------------+-------------------|
|Fourth | 74.08 | 2,886 |
|Quarter | | |
---------------------------------------------------------
Autism related grievances
Autism and autism spectrum disorders (ASD) are complex
neurobiological disorders that typically last throughout a
person's lifetime, and may cause significant impairments in
language, communications, social interactions,
abnormalities in behaviors, and other physical
manifestations.
California's existing mental health parity law requires
that private health plans and insurers provide medically
necessary services for the diagnosis, care, and treatment
of individuals with autism and pervasive developmental
disorders. However, findings by the California Legislative
Blue Ribbon Commission on Autism indicate that many
individuals still face barriers in accessing autism
services.
In July 2009, Consumer Watchdog, a nonprofit public
interest organization, sued DMHC for wrongfully allowing
insurance companies to refuse to pay for autism treatments,
resulting in the denial of critically needed, medically
necessary treatment for autistic children. Until March
2009, patients were able to appeal an insurer's denial of
applied behavioral analysis (ABA) therapy, a type of
treatment for autism, by going through IMR. Most IMR
appeals resulted in favor of the patient.
In March 2009, DMHC issued a memo indicating that the
department would review ABA and other autism treatment
denials through DMHC's own internal grievance system, as
urged by insurers, rather than through the IMR process.
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 7
The Los Angeles Superior Court, in October 2009, ruled
against DMHC, citing that the department's memo constituted
an illegal "underground regulation" because it violated
state law requiring state agencies to follow a public
hearing process when the agency seeks to adopt or change
state regulations governing health care policies.
Prior legislation
SB 189 (Schiff and Assemblymember Migden), Chapter 542,
Statutes of 1999, established an independent review process
for health insurance beneficiaries in the event they are
denied care and are unsatisfied with the result of the
insurer's internal grievance process.
SB 454 (Russell), Chapter 788, Statutes of 1995,
established requirements on health plans and the Department
of Corporations (DOC) related to establishing and
maintaining a formal enrollee grievance process, as
specified.
SB 689 (Rosenthal), Chapter 789, Statutes of 1995, among
other things, required DOC to establish a toll-free number
for the filing of grievances by enrollees concerning health
plans, and required health plans to inform enrollees of the
toll-free number and to resolve grievances within specified
time frames.
AB 2085 (Corbett), Chapter 796, Statutes of 2002, required
every health plan with a website to provide an online form
through its website that subscribers or enrollees can use
to file a grievance with their health plan online, as
specified.
AB 78 (Gallegos), Chapter 525, Statutes of 1999,
established a new Department of Managed Care (DMC) and
transferred the regulation of health plans from the
Department of Corporations (DOC) to the new department.
Arguments in support
The Alliance of California Autism Organizations (Alliance)
supports the bill, stating that current statute intends to
provide families a speedy resolution of complaints, but
regulatory bodies overseeing the process are taking too
much discretion and delaying the resolution of many
grievances for months and sometimes even over a year. The
Alliance also voices concerns that requiring DMHC to begin
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 8
their review once "all relevant" information is received is
ambiguous, as agencies repeatedly request new information
over the course of months. If DMHC needs some protection
that consumers will provide relevant information in a
timely manner, the Alliance suggests that the 30 day clock
begin once a completed standard grievance or IMR
application is received with all the required information
clearly laid out on the application. In this case, the
Alliance argues that new requests should not be allowed by
DMHC.
The Special Education Local Plan Area Administrators
(SELPAs) writes in support of SB 1283, as the bill
clarifies duties imposed upon health plans and insurers to
provide medically necessary services for the diagnosis and
treatment of autism spectrum disorders.
COMMENTS
1. How does the grievance resolution timeframe for other
cases compare to those related to autism? It is unclear if
delays in resolving grievances apply primarily to cases
relating to ASD, or if this is a common trend across all
grievances.
2. Public reporting of timeframes for individual enrollee
grievance resolutions. Currently, timeframes for provider
grievance resolutions are publicly available. The author
may wish to consider amendments directing DMHC to include,
in its annual published report, data that details the
number and types of complaints or grievances received
during the calendar year, including grievance resolution
timeframes. This could include, but is not limited to,
average number of days before grievances are closed,
average number of days before a grievance is sent to IMR,
average number of days before the IMR process is resolved
and a decision rendered by the director, and a breakdown of
the number of cases resolved under and over 30 days.
3. What constitutes "all relevant information necessary to
make a coverage decision?" It is unclear if it is the
author's intent to provide flexibility to DMHC to define
"all relevant information" in making a determination on
when the 30-day timeframe to notify the enrollee of the
department's decision should start. The author may wish to
provide clarification or direction on this point. Relevant
STAFF ANALYSIS OF SENATE BILL 1283 (Steinberg)Page 9
information may include, but is not limited to, medical
records, claims information, denial documentation, etc.
POSITIONS
Support: Alliance of California Autism Organization
Special Education Local Plan Area
Administrators
Oppose: None received.
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