BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1410|
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THIRD READING
Bill No: SB 1410
Author: Hernandez (D)
Amended: 5/25/12
Vote: 21
SENATE HEALTH COMMITTEE : 6-3, 4/11/12
AYES: Hernandez, Alquist, De Le�n, DeSaulnier, Rubio, Wolk
NOES: Harman, Anderson, Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/24/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
SUBJECT : Independent medical review
SOURCE : Author
DIGEST : This bill makes several changes to the
Independent Medical Review (IMR) process for health care
consumers that are seeking to overturn a decision by their
health plan or insurer.
ANALYSIS : Existing law:
1.Requires the licensing and regulation of health care
service plans (health plans) by the Department of Managed
Health Care (DMHC), and requires the licensing and
regulation of health insurers by the Department of
Insurance (DOI).
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2.Requires DMHC and DOI to establish an IMR system under
which an enrollee or insured must seek an external IMR
whenever health care services have been denied, modified,
or delayed by a health plan or insurer (collectively
"carriers") and the enrollee or insured has previously
filed a grievance that remains unresolved after 30 days.
3.Requires medical professionals selected by an IMR
organization to review medical treatment decisions to
meet certain minimum requirements, including that he or
she be a clinician knowledgeable in the treatment of the
patient's medical condition, knowledgeable about the
proposed treatment, and familiar with guidelines and
protocols in the area of treatment under review.
4.Requires DMHC and DOI to adopt the determination of an
IMR organization as binding on the health plan or
insurer.
5.Requires the IMR decisions to be made freely available,
on request, to the public, and requires certain
information to be removed from the decision before it is
made available to the public, including the name of the
carrier.
The bill:
1.Requires applications for a review to include a section
where consumers could voluntarily disclose demographic
data, such as ethnicity and language spoken.
2.Increases the level of expertise required of reviewers,
by requiring them to be expert in the treatment of the
consumer's specific medical condition and have recent
clinical experience in that area.
3.Requires decisions to be available to the public and
eliminate the current prohibition on including the name
of the health plan or insurer in public documents.
4.Requires the departments to provide the required
information on their individual websites, using their
existing databases.
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Background
Types of IMR cases . California's IMR provides for
independent, external review of three main types of
disputed carrier decisions: medical necessity,
urgent/emergency care, and experimental/investigational.
Medical necessity IMR cases occur when carriers deny,
modify, or delay requests for coverage of services in whole
or in part due to findings that the services are not
medically necessary. Medical necessity decisions are
distinguished from coverage decisions, which are reviewed
directly by DMHC and DOI rather than through IMR. Both
covered benefits and medical necessity are defined
contractually and vary among carriers. According to
existing law, a medical necessity decision regarding a
disputed health care service relates to the practice of
medicine and is not a coverage decision, while a coverage
decision means the approval or denial of health care
services based on a finding that the provision of a health
care service is included or excluded as a covered benefit
under the terms of a health carrier contract. Carriers
categorize their decisions as medical necessity or coverage
decisions, but DMHC and DOI have the final authority as to
how disputed decisions will be categorized and appealed.
Urgent or emergency care IMR cases are for services already
received, when a carrier decides that the services did not
require urgent care and that the patient should have known
that an emergency did not exist even if a provider deemed
the services to be medically necessary.
Experimental or investigational IMR cases occur when
carriers deny coverage of services for patients on the
basis that the disputed service is considered experimental
or investigational by the carrier. In order for a patient
to have access to IMR under these circumstances:
The patient must have a life-threatening or seriously
debilitating condition;
The patient's physician must certify that the patient has
a condition for which standard services have not been
effective or medically appropriate, or for which there is
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no more beneficial standard service covered by the plan
than the one proposed;
The patient's physician must have recommended or the
patient or physician must have requested a service which,
based on medical and scientific evidence, is likely to be
more beneficial than services that are standardly
available;
The carrier must have denied coverage of the service; and
The service would be a covered benefit except for the
carrier's decision that it is experimental or
investigational.
Prior Legislation
AB 55 (Migden), Chapter 533, Statutes of 1999, created the
IMR system and requires every health carrier to provide
those receiving coverage from these products with an
opportunity to seek an IMR whenever health care services
have been denied, modified, or delayed in cases where a
carrier deems the services to be medically unnecessary.
SB 189 (Schiff), Chapter 542, Statutes of 1999, established
an IMR process for experimental or investigational
therapies; requires the contracting of impartial,
independent, accredited entities for the purposes of the
IMR process; and amends the internal grievance processes of
carriers.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time costs of about $100,000 and ongoing costs of
about $100,000 to revise the existing database by the
Department of Managed Health Care (Managed Care Fund).
One-time costs of about $460,000 and ongoing costs of
about $100,000 to revise the existing database system by
the Department of Insurance (Insurance Fund).
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Ongoing costs of about $200,000 per year to collect and
analyze additional data by the Department of Insurance
(Insurance Fund).
Ongoing costs of about $200,000 per year to collect and
analyze additional data by the Department of Managed
Health Care (Managed Care Fund).
Ongoing costs in the low hundreds of thousands for the
operation of the independent medical review process due
to increased standards for reviewer experience (Managed
Care Fund and Insurance Fund).
SUPPORT : (Verified 5/25/12)
BayBio
BIOCOM
California Healthcare Institute
California Orthopaedic Association
California Pan-Ethnic Health Network
California Psychiatric Association
Neuropathy Action Foundation
ARGUMENTS IN SUPPORT : The California Pan-Ethnic Health
Network writes in support of this bill and its requirement
for DMHC and DOI to collaborate on a more complete and
standardized database of IMR cases, arguing that the bill
will allow for more effective program use and oversight by
consumers, carriers, regulators, and policymakers by
facilitating stronger assessments of IMR use and better
outcomes for all Californians including communities of
color. The California Psychiatric Association (CPA) writes
that by increasing the standards for clinicians to
participate as reviewers, this bill continues the quest for
quality in the delivery of managed health care services,
and for helping safeguard the rights of patients to have
access to the very best, most appropriate medical care. The
CPA additionally recommends that a reviewer should be a
physician who is board certified or qualified to be
board-eligible in the medical specialty which is the
predominant field within which a particular treatment
expertise is bestowed. The Neuropathy Action Foundation
writes that this bill is especially important because it
strengthens the minimum standard for reviewers to
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participate in an IMR case. The California Healthcare
Institute argues in support of the bill that by requiring
IMR to be conducted by a clinician with expertise in the
enrollee's medical condition, This bill ensures that
patients receive the most appropriate treatment when
coverage is initially denied. BIOCOM writes that this bill
would significantly strengthen IMR by ensuring that
reviewers are well versed in both the condition in question
and current treatment options, thus providing a vital check
to ensure that consumers have access to quality medical
care.
CTW:nl 5/25/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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