BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 166
S
AUTHOR: Steinberg
B
AMENDED: April 4, 2011
HEARING DATE: April 27, 2011
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CONSULTANT:
6
Trueworthy
6
SUBJECT
Health care coverage: autism spectrum disorders
SUMMARY
Requires health care service plans licensed by the
Department of Managed Health Care (DMHC) and health
insurers licensed by the Department of Insurance (DOI) to
provide coverage for behavioral intervention therapy for
autism.
CHANGES TO EXISTING LAW
Existing law:
Provides for the licensure and regulation of health care
service plans by the DMHC
Provides for the regulation of health insurers by the DOI.
Requires a health care service plan and health insurers to
provide coverage for severe mental illnesses, and for the
serious emotional disturbances of a child. Defines severe
mental illnesses to include pervasive development disorder
and autism.
This bill:
Requires health care service plans licensed by the DMHC and
Continued---
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health insurers licensed by the DOI to provide coverage for
behavioral intervention therapy for pervasive development
disorder or autism.
Defines behavioral intervention therapy to include design,
implementation, and evaluation of environmental
modifications, such as applied behavioral analysis,
professional services or treatment programs that have been
scientifically validated and have demonstrated clinical
efficacy or that have measurable treatment outcomes.
Prohibits any benefits provided under this bill from
exceeding the essential health benefits required under the
federal Patient Protection and Affordable Care Act.
FISCAL IMPACT
SB 166 has not been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
According to the author, the intent of SB 166 is to clarify
the existing mental health parity law by requiring health
plans and health insurance companies to provide
appropriate, medically necessary coverage for autism
spectrum disorders (ASD). Existing law requires health
plans and insurance companies to provide coverage for
medically necessary services for the diagnosis and
treatment of autism and pervasive developmental disorders
(A/PDD) that are in parity with the coverage that is
provided for other diseases and conditions. However,
according to many consumers and advocates, health plans and
insurance companies fail to provide adequate clarity with
regard to the issues of "coverage and medical necessity"
for individuals with A/PDD.
The author states that many consumers are currently being
denied appropriate healthcare behavioral treatments. The
impact of these denials by health plan and insurer denials
shifts their financial responsibility of millions of
dollars to the taxpayers. Currently many A/PDD-related
health care services for insured Californians are being
paid for by the Regional Centers, counties and school
districts. Taxpayers also bear the long term social,
educational and social service costs of not treating
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individuals with ASD when they need additional services
later in life, which could have been avoided with
appropriate intervention in earlier years. The author
argues that SB 166 is a step in the right direction to
ensure that issues of medical necessity are being
determined by appropriately licensed healthcare
professionals and that the plans are in compliance with
California's existing mental health parity law.
Autism
Autism is a developmental disorder that appears in the
first three years of life, that affects the brain's normal
development of social and communication skills. Most
researchers believe autism is a physical condition linked
to abnormal biology and chemistry in the brain. The exact
causes of these abnormalities remain unknown. According to
the sponsor, it is estimated that one in every 110 children
is diagnosed with autism, making it more common than
childhood cancer, juvenile diabetes and pediatric AIDS
combined. An estimated 1.5 million individuals in the U.S.
and tens of millions worldwide are affected by autism.
Government statistics suggest the prevalence rate of autism
is increasing 10 to 17 percent annually.
Mental health parity
Current California mental health parity law requires
coverage for diagnosis and medically necessary treatment of
severe mental illnesses, and A/PDD for persons of any age.
It does not, however, specify intensive behavioral
intervention therapy as a treatment that insurance plans
must cover.
Behavioral intervention and applied behavioral analysis
Applied Behavior Analysis (ABA) is a method of teaching
children with A/PDD. It is based on the premise that
appropriate behavior - including speech, academics and life
skills - can be taught using scientific principles. ABA
assumes that children are more likely to repeat behaviors
or responses that are rewarded and they are less likely to
continue behaviors that are not rewarded. Eventually, the
reinforcement is reduced so that the child can learn
without constant rewards.
The author contends that consumers and advocates have noted
that many health plans and insurance companies are failing
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to provide appropriate healthcare services for individuals
with A/PDD, even when these interventions and treatments
are being prescribed by physicians and other licensed
medical professionals. The author states coverage is
particularly problematic when it comes to behavioral
intervention therapy (BIT), ABA and other
developmentally-based interventions. Until several years
ago, many plans denied BIT on the basis that it was "not
medically necessary;" "experimental" and/or "lacked
evidence of proven efficacy." The issue of whether these
services were "covered services" was not contested at that
time, and these cases were referred for an Independent
Medical Review (IMR) by appropriate and licensed health
care providers.
The author states that recently, a significant number of
plans have denied BIT services, not on the basis of medical
necessity, but on the basis that these services are
"educational" and "not a covered benefit." Since issues
related to "coverage" are resolved by an administrative
process, physicians and other licensed mental health
providers are excluded from this process.
Requirement in other states
Twenty six states and the District of Columbia have passed
health insurance benefit mandates related to autism.
The California Health Benefits Review Program analysis of
SB 166
The California Health Benefits Review Program (CHBRP)
conducted an evidence-based assessment of the medical,
financial, and public health impacts of Senate Bill (SB)
TBD 1 Autism, later introduced as SB 166 (Steinberg).
CHBRP found the following cost impacts:
The bill would increase total expenditures by
approximately $93.3 million, or 0.10 percent, for
plans and policies subject to the bill. This increase
in expenditures results from a $22 2.4 million
increase in health insurance premiums, a $17.1 million
increase in out-of-pocket expenses for enrollees with
PDD/A with newly covered benefits, and a $146.2
million decrease in expenses for noncovered benefits.
The premium impact would range from 0.14 percent to
0.24 percent for privately funded health insurance and
0.26 percent to 3.54 percent for publicly funded
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health insurance.
The $146.2 million reduction in expenses for
noncovered benefits would be a reduction in
expenditures for payors other than health
plans/insurers. It would be partially offset by the
increase in $17.1 million that enrollees with PDD/A
would see in out-of-pocket expenses for newly covered
benefits.
The bill would be expected to shift costs from
other payors such as families and California
Department of Education (CDE) to DMHC-regulated plans
and CDI-regulated insurers. However, the extent of
overlap is unclear and therefore it is not possible to
calculate the costs that would be shifted from
families, charities, Department of Development
Services, CDE or other payors.
Potential effects of the federal Affordable Care Act
The federal "Patient Protection and Affordable Care Act"
and the "Health Care and Education Reconciliation Act"
(PPACA) were enacted in March 2010. These laws are expected
to dramatically affect the California health insurance
market and its regulatory environment, with most changes
becoming effective in 2014. How these provisions are
implemented in California will largely depend on pending
legal actions, funding decisions, regulations to be
promulgated by federal agencies, and statutory and
regulatory actions to be taken by California state
government. The provisions that go into effect during these
transitional years would affect the baseline, or current
enrollment, expenditures, and premiums.
The PPACA requires in 2014 that states "make payments?to
defray the cost of any additional benefits" required of
Qualified Health Plans (QHPs) sold in the Exchange.
According to CHBRP, SB 166 does not require any benefits
to be provided that exceed the essential health benefits
required to be provided and because of this provision, the
bill is not expected to incur a fiscal liability for the
state as it relates to the QHPs sold in the Exchange.
Related bills
AB 171 (Beall) would require health care service plan
contracts and health insurance policies to provide coverage
for the screening, diagnosis, and treatment of autism
spectrum disorders. AB 171 is pending before the Assembly
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Health Committee.
Prior legislation
SB 1283 (Steinberg) of 2010 would have established
guidelines to expedite the appeals process for grievances
that are filed with DMHC and imposed fines on health plans
that did not comply with providing appropriate information
to DMHC. SB 1283 was vetoed by the Governor.
SB 1563 (Perata) of 2008 would have required DMHC and DOI
to establish the Autism Workgroup for Equitable Health
Insurance Coverage, to examine issues related to health
care service plan and health insurance coverage of A/PPD.
SB 1563 was vetoed by the Governor.
AB 88 (Thomson) Chapter 534, Statutes of 1999 requires a
health care service plan contract or disability insurance
policy to provide coverage for severe mental illnesses, and
for the serious emotional disturbances of a child.
Arguments in support
Autism Speaks believes this measure will ensure that
children diagnosed with autism receive the medically
necessary treatments to increase their quality of life and
functional independence, which is consistent with the
intent and spirit of California's existing mental health
parity law. Autism Speaks writes that this bill will
provide coverage for intensive behavioral interventions
such as ABA, the most commonly prescribed treatment
protocol for autism and the treatment of choice for many
children with autism. Autism Speaks contends that
California families who have private health insurance are
forced to rely on government programs to meet the needs of
their children with autism. The Association of Regional
Center Agencies (ARCA) states, as payors of last resort,
regional centers believe all avenues of payment must be
exhausted before services and treatment is processed
through the regional center. ARCA argues that many parents
of children with autism have health care coverage through
managed care organizations. Given the continuous crisis
status of the state budget and the recent reduction of $554
million in the regional center budget, the Legislature can
no longer afford to permit plans to shift their
responsibility to the state.
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Supporters argue SB 166 strikes a balance between
safeguarding the healthcare needs of a vulnerable
population and reimbursing effective medical care.
Arguments in opposition
The California Chamber of Commerce writes in opposition
that this bill will increase health care premiums and will
further contribute to the problem of rising health care
costs.
America's Health Insurance Plans and the Association of
California Life and Health Insurance Companies writes in
opposition to all "mandate" bills pending before the
Legislature, including SB 166, stating that many of the
mandated benefits will not be included in the federal
essential health benefits package. They argue that the
inclusion of these additional mandated benefits will have a
harmful effect on program costs to California's budget.
The California Association of Health Plans (CAHP) is
opposed to SB 166 stating it would impose a costly new
mandate for health plans to cover the cost of educational
nonmedical services for autism that arent covered for other
mental health conditions. CAHP states that educational
and lifeskills training historically and appropriately have
been provided through schools and regional centers. While
rapid growth in those diagnosed with autism has put a
strain on schools and regional centers, having health plans
take over the financial responsibility for educational
services would set a new precedent that could compel
coverage for countless other nonmedical services.
POSITIONS
Support: Alliance of California Autism Organizations
(sponsor)
Advisory Commission on Special Education
Alameda County Developmental Disabilities
Coalition
Association of Regional Center Agencies
Autism Behavioral Research Individualized
Treatment & Education
Autism Deserves Equal Coverage
Autism Health Insurance Project
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Autism Society Inland Empire
Autism Society of Los Angeles
Autism Society of Santa Barbara
Autism Speaks
California Association of School Psychologists
California Disability Services Association
Coalition for Adequate Funding for Special
Education
Contra Costa County Developmental Disabilities
Council
Creative Living Options Inc.
Desert/Mountain SELPA Children's Center
East Bay Developmental Disabilities Legislative
Coalition
East Seals Superior California
Educate. Advocate.
Housing Now
La Familia Counseling Service
Los Angeles County Board of Supervisors
PRIDE Industries
Progressions Developmental and Behavioral
Pediatrics
Sacramento Asperger Syndrome Information &
Support
Special Needs Network
The Arc and United Cerebral Palsy in California
UCP of Sacramento and Northern California
United Cerebral Palsy of Los Angeles, Venture and
Santa Barbara Counties
114 individuals
Oppose: America's Health Insurance Plans
Association of California Life and Health
Insurance Companies
California Association of Health Plans
California Chamber of Commerce
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