BILL ANALYSIS �
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THIRD READING
Bill No: AB 922
Author: Monning (D)
Amended: 9/2/11 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE HEALTH COMMITTEE : 5-3, 9/6/11
AYES: Hernandez, De Le�n, DeSaulnier, Rubio, Wolk
NOES: Strickland, Anderson, Blakeslee
NO VOTE RECORDED: Alquist
SUBJECT : Office of Patient Advocate
SOURCE : Health Access California
Western Center on Law and Poverty
DIGEST : This bill transfers the Department of Managed
Health Care (DMHC) from the Business, Transportation and
Housing Agency to the California Health and Human Services
Agency (HHS), transfers the Office of the Patient Advocate
(OPA) from DMHC to HHS effective July 1, 2012, revises
OPA's current purpose and duties, and assigns new duties
consistent with requirements of the Patient Protection and
Affordable Care Act.
Senate Floor Amendments of 9/2/11 transfer the DMHC from
the BTH to the HHS and clarify the purpose and goals of the
OPA.
CONTINUED
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ANALYSIS :
Existing federal law:
1. Requires, under the Patient Protection and Affordable
Care Act (PPACA) (Public Law 111-148), as amended by the
Health Care Education and Reconciliation Act of 2010
(Public Law 111-152), each state, by January 1, 2014, to
establish an American Health Benefit Exchange that makes
qualified health insurance products available to
qualified individuals and qualified employers. If a
state does not establish an Exchange, the federal
government administers the Exchange.
2. Requires the federal Secretary of HHS to award grants to
states to enable states (or the exchanges operating in
such states) to establish, expand, or provide support
for offices of health insurance consumer assistance or
health insurance ombudsman programs.
3. Establishes criteria for states to meet in order to
receive a consumer assistance grant under the PPACA, and
requires the ombudsman to perform certain activities,
including assisting with the filing of complaints and
appeals, educating consumers on their rights and
responsibilities, assisting consumers with enrollment,
and resolving problems in obtaining premium tax credits
made available by PPACA. As a condition of receiving a
federal ombudsman grant, an office of health insurance
consumer assistance or ombudsman program is required to
collect and report data to the Secretary of HHS on the
types of problems and inquiries encountered by
consumers.
Existing state law:
1. Provides for the regulation of health plans by DMHC
under the Knox-Keene Health Care Service Plan Act of
1975 (Knox-Keene Act), and for the regulation of health
insurers by the Department of Insurance (CDI), under
provisions of the Insurance Code (collectively referred
to as regulators).
2. Requires DMHC to establish and maintain a toll-free
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telephone number for the purpose of receiving complaints
regarding health plans regulated by DMHC.
3. Establishes OPA within DMHC to represent the interests
of enrollees served by health plans regulated by DMHC
and establishes, as the goal of OPA, to help enrollees
secure health care services to which they are entitled
under the laws administered by DMHC. Requires OPA to
compile an annual publication, to be made available on
DMHC's website, of a quality-of-care report card,
including, but not limited to, health plans.
4. Requires the Insurance Commissioner to establish a
program to investigate complaints, respond to inquiries,
and to bring enforcement actions regarding health
insurers.
5. Requires the program to include, but not be limited to,
a toll-free telephone number dedicated to the handling
of complaints and inquiries, public service
announcements to inform consumers of the toll-free
telephone number, information as to how to register a
complaint or make an inquiry to the CDI, and a simple,
standardized complaint form designed to assure that
complaints will be properly registered and tracked.
6. Establishes the Medi-Cal program, which is administered
by the State Department of Health Care Services (DHCS),
under which qualified low-income individuals receive
health care services.
7. Authorizes DHCS, for purposes of the Medi-Cal Program,
on a regional pilot project basis, to the extent
authorized by law, to enter into contracts with one or
more nonprofit organizations to perform the functions of
the DHCS' Office of the Ombudsman.
8. Establishes and specifies the duties and authority the
California Health Benefit Exchange (Exchange) within
state government in a manner that is consistent with
PPACA.
9. Establishes the Managed Care Fund and the Insurance
Fund, for the purposes of funding the regulatory
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activities of DMHC and CDI, respectively.
This bill:
1. Transfers DMHC from the Business, Transportation and
Housing Agency (BTH) to HHS effective January 1, 2012.
Also transfers OPA from DMHC to HHS effective July 1,
2012.
2. Delays the operative date of provisions affecting
insureds covered by CDI-regulated health insurers, and
individuals who receive or are eligible for coverage
under the Medi-Cal program, the Exchange, the Healthy
Families Program, or any other county or state health
care program until January 1, 2013. Further specifies
that, for the period between July 1, 2012, and January
1, 2013, OPA will continue with any duties,
responsibilities or activities in place as of July 1,
2011, in reference to those insureds and individuals.
3. Specifies that the duties of the OPA include, but are
not limited to:
A. Developing, in consultation with DMHC, CDI, the
Managed Risk Medical Insurance Board, DHCS, and
Exchange, consumer educational and information
guides, as specified.
B. Compiling an annual quality of care report card,
as specified.
4. States that, because of the enactment of PPACA and the
implementation of various reform provisions by January
1, 2014, the Legislature recognizes that it is
appropriate to transfer and confer on OPA new
responsibilities, including assisting consumers in
obtaining coverage and health care through health
coverage that is regulated by multiple regulators, as
specified.
5. Beginning January 1, 2013, makes the following
additional changes to the duties to OPA:
A. Receiving and responding to all inquiries,
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complaints and requests for assistance from
individuals concerning health coverage available in
California;
B. Providing and assisting in the provision of,
outreach and education about coverage options, as
specified;
C. Coordinating and working with other government and
nongovernment patient assistance programs and health
care ombudsman programs.
D. Rendering assistance to, and advocating on behalf
of, consumers with problems related to health care
services, including care and service problems and
claims or payment problems.
E. Referring consumers to the appropriate regulator
for filing complaints, grievances, or claims or
payment problems.
F. Directing OPA to provide assistance regarding
coverage options if the consumer is not eligible for
coverage, as specified.
G. Requiring OPA to ensure that either OPA, or a
state agency contracting with OPA, provides such
services.
H. Requiring OPA to operate a website, other social
media, and up-to-date communication systems to
provide public information regarding consumer
assistance programs.
6. Beginning January 1, 2013, requires OPA to track and
analyze data, as specified, on problems and complaints
by, and questions from, consumers about health care
coverage for the purpose of providing public information
about problems faced and information needed by consumers
in obtaining coverage and care.
7. Requires DMHC, DHCS, CDI, MRMIB, the Exchange, and other
public programs to provide OPA with aggregate data
concerning consumer complaints and grievances. Removes
the provision allowing OPA to access to records of CDI,
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and sunsets OPA's access of DMHC records on January 1,
2013.
8. Requires OPA to collect and report data to the United
States Secretary of Health and Human Services on
complaints and consumer assistance as required to comply
with requirements of the PPACA.
9. Allows OPA to contract with community-based consumer
assistance organizations to assist in any or all of
certain specified duties of OPA, in accordance with
existing state laws governing personal services
contracts.
10.Allows OPA to provide grants to such organizations for
the provision of a portion of OPA's duties, as
specified.
11.Requires OPA to adopt standards for the organizations
with which it contracts to ensure compliance with
privacy and confidentiality laws, as specified.
12.Requires OPA to conduct privacy trainings as necessary,
and regularly verify that the organizations have
measures in place to ensure compliance with this
provision.
13.Replaces detailed provisions related to the development
of protocols and procedures for the assisting in
resolution of consumer complaints with the requirement
that OPA develop the following:
A. A procedure for referring complaints and
grievances to the appropriate regulator or coverage
program for resolution by the relevant regulator or
public program.
B. A protocol or procedure for reporting to the
appropriate regulator and health coverage program
regarding complaints and grievances relevant to that
agency that OPA received and was able to resolve
without further action or referral.
14.Creates the OPA Trust Fund in the State Treasury, and
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upon appropriation by the Legislature, requires moneys
in the fund to be made available for implementing the
provisions of this bill.
15.Requires funding for the actual and necessary expenses
of the OPA to be provided, subject to appropriation by
the Legislature, from the Managed Care Fund and the
Insurance Fund, as specified.
16.Permits, rather than requires, OPA to apply to the
United States Secretary of Health and Human Services for
a grant made available under the federal health reform
law, and to the extent permitted by federal law, to seek
federal funding for assisting beneficiaries of the
Medi-Cal Program.
17.Makes other technical and conforming changes.
Background
Patient assistance provisions in federal health reform . On
March 23, 2010, President Obama signed PPACA. It is
estimated that 4.7 million California children and adults
who were uninsured during some part of 2009 will be
eligible for health coverage under PPACA. Among other
provisions, the new law makes statutory changes affecting
the regulation of and payment for certain types of private
health insurance. The law also significantly expands
health care coverage to currently uninsured individuals
through public program expansions, a mandate to purchase
coverage, a temporary high-risk pool program, and by
requiring guaranteed issue of coverage. It is anticipated
that millions of currently uninsured persons in California
will obtain coverage under the provisions of PPACA.
PPACA also contains provisions to provide funding for
states to establish health insurance consumer assistance
programs. In order to be eligible to receive a grant,
states are required to designate an independent office of
health insurance consumer assistance that, directly or in
coordination with state health insurance regulators and
consumer assistance organizations, receives and responds to
inquiries and complaints concerning federal and state
health insurance requirements. DMHC, in partnership with
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the OPA, has been awarded $3.4 million to:
Develop and promote a coordinated, consumer-friendly
website and corresponding toll-free number that consumers
can call with questions about health care coverage, and
to receive assistance with the filing of complaints and
appeals.
Conduct a statewide media campaign to educate consumers
about their rights and responsibilities, and to provide
assistance with enrollment in group health plans or
health insurance coverage.
Evaluate the effectiveness of the initiatives, and track
and quantify consumer problems and inquiries, for
reporting to state and federal policymakers.
Implementation of the PPACA will lead to millions more
Californians enrolled in coverage, including expansions of
public programs. Consumers will also have expanded choices
of coverage and different options to use, should they lose
a source of job-based coverage, have a child, divorce, or
have an increase in income. All of these changes will
affect eligibility, making it all the more necessary to
establish one entity to help them with their health
coverage.
California's current system of consumer assistance .
California has a number of entities that provide services
for assistance with public and private health care
coverage, including:
Government Entities : HMO HelpLine, Medi-Cal Managed Care
(MCMC) Ombudsman, CDI Consumer Hotline (applies to all
types of insurance) Department of Labor, the Employee
Benefits Security Administration (EBSA), 1-800-Medicare,
county welfare offices, the OPA, and the Exchange
(forthcoming).
Nonprofit Entities : Health Consumer Alliance (HCA),
Health Insurance Counseling and Advocacy Program (HICAP),
and Certified Application Assistors (CAAs).
These services include advice on coverage options,
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education about how to navigate the system, assistance with
complaints and grievances, and assistance in choosing a
carrier and finding a provider. These entities also
respond to complaints about, among other things,
eligibility, coverage of services, and timely access to
providers.
Community-based consumer assistance programs . There are a
number of community-based organizations in California that
provide assistance to health care consumers. The HCA helps
low-income Californians in 13 counties. Each health
consumer center runs a hotline to assist consumers by
telephone and provides in-person visits as well as
outstationed services in hospitals, courts, or farm fields.
Consumers can also email an office for assistance. The
HCA helps consumers regardless of their type of coverage.
HICAP provides free and objective information and
counseling about Medicare. Volunteer counselors help
Medicare beneficiaries understand their rights and health
care options. HICAP also offers free educational
presentations to groups of Medicare beneficiaries, their
families and/or providers on a variety of Medicare and
other health insurance-related topics.
CAAs help families complete and submit the joint
HFP/Medi-Cal application. These community-based entities
play a crucial role in providing information to thousands
of Californians (primarily low income, many with LEP) about
health coverage options and helping them to get enrolled
and properly use their insurance coverage. CAAs are
trained and certified by MRMIB to help Californians
understand their coverage options and enroll in health
coverage. CAAs are often bilingual, come from the
communities they serve, and can be employed by Federally
Qualified Health Centers, Rural Health Centers, regional
nonprofit organizations, and schools, etc. Throughout
California, these entities have developed strong and
trusting relationships within their communities and are
valued by local families needing information about health
coverage.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
OPA expansion and Unknown, potentially in the
hundreds of Special*
shift thousands of dollars
OPA additional duties likely
in the millions of dollars annually
Special*
and ongoing commencing January 1, 2013
administration
DMHC data reporting $0 about
$250$500Special**
CDI data reporting $0 $1,100
$550Special***
DHCS, MRMIB, and Unknown, potentially
significant General/****
Exchange data commencing January 1, 2013
Federal/
reporting
Special
* Office of the Patient Advocate Trust Fund
** Managed Care Fund
*** Insurance Fund
**** MRMIB costs shared 35 percent
General Fund; 65 percent federal funds; Medi-Cal
costs shared 50 percent General Fund, 50 percent
federal funds; Exchange costs paid from the
California Health Trust Fund, to the extent federal
financial participation is available.
SUPPORT : (Verified 9/6/11)
Health Access California (co-source)
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Western Center on Law and Poverty (co-source)
100% Campaign
American Federation of State, County and Municipal
Employees, AFL-CIO
Asian Pacific American Legal Center
California Association of Marriage and Family Therapists
California Children's Health Initiatives
California Chiropractic Association
California Coalition for Mental Health
California Coverage & Health Initiatives
California Family Resource Association
California Immigrant Policy Center
California Optometric Association
California Pan-Ethnic Health Network
California Rural Legal Assistance Foundation
Children NOW
Children's Defense Fund-California
Children's Health Initiatives of Greater Los Angeles
Children's Partnership
Congress of California Seniors
Consumers Union
First 5 Association of California
Having Our Say
Health Consumer Center
Inland Empire United Way
Maternal and Child Health Access
Mental Health Association in California
National Alliance on Mental Illness California
National Association of Social Workers - California Chapter
National Health Law Program
Neighborhood Legal Services of Los Angeles County
PICO California
Santa Clara Board of Supervisors
SEIU California
The 100% Campaign
Unitarian Universalist Legislative Ministry Action Network,
CA
United Way of California
Youth Law Center
OPPOSITION : (Verified 9/6/11)
Association of California Life and Health Insurance
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Companies
California Right to Life Committee, Inc.
California Association of Health Plans
Insurance Commissioner (unless amended)
ARGUMENTS IN SUPPORT : Health Access California (HAC), a
cosponsor of this bill, writes that enactment of federal
health reform means that virtually every Californian will
have access to quality, affordable health care. Existing
programs, including the HMOHelp Line, have done much of
what is contemplated in this bill, but not all. HAC
contends a state-level ombudsman who serves as the first
line of triage for consumer complaints, while leaving the
respective regulators and sources of coverage the
responsibility for resolving specific complaints and
grievances, is necessary. HAC asserts that this bill will
result in a robust response to grievances and complaints
about the health care system.
Western Center on Law & Poverty (WCLP), also a cosponsor,
writes that uninsured persons have different needs than
those who are consistently covered. This includes people
who primarily speak a language other than English, those
who have never navigated a health insurance plan, and those
who have never consistently seen a health care provider.
For all those reasons, WCLP states that Californians need a
centralized hub when dealing with questions or problems
with their coverage. WCLP argues that AB 922 leverages
existing consumer assistance programs by allowing OPA to
contract with community based organizations that already
provide consumer assistance services, many of which are
experts in public programs, while ensuring that the most
qualified organizations can assist consumers in
community-based settings in a linguistically and culturally
appropriate manner. WCLP asserts that this
"hub-and-spokes" approach has been effective in states like
New York, which allows one nonprofit organization to
coordinate with other community organizations to assist
health consumers.
Consumers Union argues that this bill positions California
to maximize federal funds for ombudsman and consumer
navigation services, which is critically important to have
in place well in advance of the mandate for individual
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coverage that takes effect in 2014. The American
Federation of State, County and Municipal Employees states
that this bill would greatly facilitate California's
ability to comply and cope with federal health reform, and
that the state cannot offer its residents adequate
assistance in this matter currently. The 100% Campaign,
PICO California and the California Coverage & Health
Initiatives state there is no one single place for families
to obtain clear and concise information and support. This
bill not only builds toward future implementation of PPACA,
it provides a needed network to reach out to hundreds of
thousands of children who are currently uninsured but
eligible for California's public program coverage.
The California Optometric Association writes in support,
stating that OPA will provide a "one-stop-shop" that
consolidates the existing fragmented system into one office
to provide clear, concise and up-to-date information to
consumers. The California Chiropractic Association (CCA)
believes that it is essential to provide consumers support
in making coverage choices and for consumer coverage
complaints. By operating as an independent state entity,
CCA believes that OPA will synthesize a fragmented health
care information coverage, outreach and complaint system.
ARGUMENTS IN OPPOSITION : The California Association of
Health Plans (CAHP) opposes this bill on the grounds that
California already has consumer advocacy programs under
each regulator that are funded by the industry through
assessments and taxes that cost the industry and its
consumers millions of dollars. CAHP states that this new
entity does not provide any order to the myriad of
assistance programs currently available to consumers, and
instead adds a new layer of government bureaucracy designed
largely to forward calls back to the regulator. CAHP
supports consolidation of existing consumer related
functions, and argues that consolidation could lead to more
uniformity and clarity for consumers.
The Association of California Life and Health Insurance
Companies (ACLHIC) concurs with CAHP, and argues that this
bill has the potential to increase the cost of health care
by increasing the fees imposed on carriers. ACLHIC points
out that the industry currently funds consumer assistance
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programs at DMHC, OPA and CDI, and existing law requires
carriers to include their respective regulator's consumer
complaint number on claims forms, as well as other written
notices that go out to enrollees and insureds. ACLHIC also
asserts that there is no real evidence supporting the
concept of adding an additional independent office for
consumer assistance.
The California Right to Life Committee (CRLC), Inc. writes
that this bill advances the PPACA when there are serious
challenges to its constitutionality, and that it would be
better public policy not to depend on federal tax dollars
under these circumstances. CRLC also contends that this
bill "is another attempt to promote family planning and
abortion services to low-income persons and non-English
speaking populations".
CTW:mw 9/6/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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