BILL ANALYSIS �
SB 1410
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Date of Hearing: June 26, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 1410 (Ed Hernandez) - As Amended: May 25, 2012
SENATE VOTE : 23-13
SUBJECT : Independent medical review.
SUMMARY : Modifies the external Independent Medical Review (IMR)
process established for individuals enrolled in health plan
products licensed by the Department of Managed Health Care
(DMHC) and insureds of health insurance policies licensed by the
California Department of Insurance (CDI) by enhancing
requirements of clinical reviewers, requesting additional
patient demographic information, and including the names of
health plan and health insurance companies in each department's
public databases. Specifically, this bill :
1)Makes the existing IMR framework inoperative on the later of
January 1, 2013, or the termination date of contracts in
effect on January 1, 2013 between the DMHC or CDI and IMR
organizations, and makes operative a framework revised
according to this bill on January 1, 2013 or upon the
termination date of a contract in effect on January 1, 2013.
2)Requires the notification from each department to the enrollee
or insured regarding the disposition of the enrollee's or
insured's grievance to include a section designed to collect
information on the enrollee's ethnicity, race, and primary
language spoken that includes both of the following:
a) A statement of intent indicating that the information is
used for statistics only, in order to ensure that all
enrollees get the best care possible; and,
b) A statement indicating that providing this information
is optional and will not affect the IMR process in any way.
3)Modifies minimum requirements of medical professionals
selected to review medical treatment decisions to require a
clinician expert in the treatment of the enrollee's medical
condition and knowledgeable about the proposed treatment
through recent or current actual clinical experience treating
patients with the same or similar medical conditions as the
enrollee.
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4)Maintains the name of the plan or insurer along with the
director's IMR decision in a searchable database on the
Website of each department, and requires the database to
include:
a) Enrollee or insured demographic profile information,
including age and gender;
b) The enrollee or insured diagnosis and disputed health
care services;
c) The name of the health care service plan or health
insurer;
d) Whether the IMR was for medically necessary services or
for experimental or investigational therapies, as
specified;
e) Whether the IMR was standard or expedited;
f) Length of time from the receipt by the IMR organization
of the application for review and supporting documentation
to the rendering of a determination by the IMR organization
in writing;
g) Length of time from receipt by each department of the
IMR application to the issuance of the DMHC Director's or
Insurance Commissioner's determination in writing to the
parties that is binding on the health plan or health
insurer;
h) Credentials and qualifications of the reviewer or
reviewers;
i) The nature of specified criteria such as the
peer-reviewed scientific and medical evidence regarding the
effectiveness of the disputed service;
j) The final result of the determination;
aa) The year the determination was made; and,
bb) A detailed case summary that includes the specific
standards, criteria, and medical and scientific evidence,
if any, that led to the case decision.
5)Requires the database to be accompanied by:
a) The annual rate of IMR among the total enrolled or
insured population;
b) The annual rate of IMR review cases by health plan or
health insurer;
c) The number, type, and resolution of IMR cases by health
plan or health insurer; and,
d) The number, type, and resolution of IMR cases by
ethnicity, race, and primary language spoken.
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EXISTING LAW :
1)Licenses and regulates health plans through the DMHC and
health insurers through the CDI.
2)Requires every health plan and disability insurer that covers
hospital, medical, or surgical benefits to provide an
external, independent review process to examine the plan's or
insurer's coverage decisions regarding experimental or
investigational therapies for individual enrollees or insureds
who meet specified criteria.
3)Establishes in the DMHC and CDI the IMR System, and requires
health plans and health insurers to provide enrollees and
insureds with IMR whenever health care services have been
denied, modified, or delayed by the plan, or by one of its
contracting providers, or the insurer if the decision was
based in whole or in part on a finding that the proposed
health care services are not medically necessary.
4)Authorizes an enrollee or insured to apply for IMR when all of
the following conditions are met:
a) The provider has recommended a health care service as
medically necessary or the enrollee or insured has received
urgent care or emergency services that a provider
determined was medically necessary, or the enrollee or
insured has been seen by an in-plan provider for the
diagnosis or treatment of the condition for which the
enrollee seeks the IMR. Provides that the provider may be
an out-of-plan provider, however the plan shall have no
liability for payment except as specified;
b) The disputed service has been denied, modified, or
delayed because it was determined not medically necessary;
and,
c) The enrollee or insured has filed a grievance and the
disputed decision is upheld or unresolved after 30 days.
5)Requires medical professionals selected by IMR organizations
to review medical treatments to be physicians or other
appropriate providers who meet minimum requirements, such as
hold a nonrestricted license, and for physicians, hold a
current certification by a recognized American medical
specialty board in the area or areas appropriate to the
condition or treatment under review.
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6)Requires a medical professional selected to review medical
treatment decisions to be a clinician knowledgeable in the
treatment of the enrollee's or insured's medical condition,
knowledgeable about the proposed treatment, and familiar with
guidelines and protocols in the area of treatment under
review.
7)Requires after removing the names of the parties, including,
but not limited to, the enrollee or insured, all medical
providers, the plan or insurer, and any of the insurer's
employees or contractors, the decisions of each director
adopting a determination of an IMR organization to be made
available by DMHC and CDI to the public upon request after
considering applicable laws governing disclosure of public
records, confidentiality, and personal privacy.
8)Requires, under the Patient Protection and Affordable Care Act
(ACA), a group health plan and a health insurance issuer
offering group or individual health insurance coverage to:
a) Comply with the applicable state external review process
for such plans and issuers that, at a minimum, includes the
consumer protections set forth in the Uniform External
Review Model Act promulgated by the National Association of
Insurance Commissioners; or,
b) Implement an effective external review process that
meets minimum standards established by the Secretary of the
federal Department of Health and Humans Services (HHS)
(Secretary) if the applicable state has not established an
external review process that meets specified requirements
or if the plan is a self-insured plan that is not subject
to state insurance regulation.
9)Authorizes the Secretary to deem the external review process
of a group health plan or health insurance issuer, in
operation as of the date of enactment of this section, to be
in compliance with the ACA as determined appropriate by the
Secretary.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)One-time costs of about $100,000 and ongoing costs of about
$100,000 annually to revise the existing database by the DMHC
(Managed Care Fund).
2)One-time costs of about $460,000 and ongoing costs of about
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$100,000 to revise the existing database system by the CDI
(Insurance Fund).
3)Ongoing costs of about $200,000 per year to collect and
analyze additional data by the CDI (Insurance Fund).
4)Ongoing costs of about $200,000 per year to collect and
analyze additional data by the DMHC (Managed Care Fund).
5)Ongoing costs in the low hundreds of thousands for the
operation of the IMR process due to increased standards for
reviewer experience (Managed Care Fund and Insurance Fund).
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author this bill is
based upon issues raised in a recent report and briefing on
IMR that was sponsored by the California HealthCare Foundation
(CHCF) which evaluated over 10 years of IMR cases in
California. The author states that this bill strengthens the
standard for IMR case reviewers, and by doing so, ensures that
cases are reviewed by medical professionals with appropriate
specialized knowledge and experience.
Current law requires DMHC and CDI to make IMR decisions
available to the public upon request. In addition to meeting
this requirement, DMHC and CDI have made IMR decisions
available on their Websites. However, IMR decisions are
accompanied by incomplete information. For example, DMHC's
Website includes case summaries while CDI's does not, and CDI
but not DMHC makes available information on the year the IMR
decision is made and the priority of the IMR case (standard or
expedited). Other types of information such as the patient's
health carrier are not available on either Website. These
factors make it difficult to answer some important questions
about how the IMR program is being used. Furthermore, since
patient ethnicity, race, and primary language spoken are not
collected, it is unclear how IMR is used by different
communities.
2)CALIFORNIA IMR . IMR was initially established in California
in the mid 1990's in response to high profile cases involving
emerging expensive treatments that raised questions about
health plan coverage decisions. In January of 1998, the
Governor's Managed Health Care Improvement Task Force issued a
series of recommendations to reform managed health care in
California. One of these recommendations specifically
pertained to "Independent Third Party Review." That
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recommendation called for the "The state entity for regulation
of managed care should be directed to establish and implement
by January 1, 2000, an independent third-party review process
that would provide consumers and health plans with an
unbiased, expert-based review of grievances pertaining to
delays, denials, or curtailment of care based on medical
necessity, appropriateness, and all
'experimental-investigational treatments.'"
The current California IMR process requires an enrollee or
insured to attempt to resolve the dispute through an internal
process before seeking the external IMR. The CHCF IMR report
identified the following trends: In 56% of the IMRs, the
appeal was requested for a female, while in 44% it was for a
male. California's IMR cases increased by age, peaking in the
41 to 60 year old age bracket. Just over half of all IMR
cases involved one of four diagnosis categories: orthopedics,
neurology, mental health, or cancer. The specific treatments
and services varied but most commonly fell into four
categories: surgery, pharmacy, diagnostic imaging, and
durable medical equipment. Forty-six percent of IMR cases in
2010 were overturned in favor of the enrollee/insured. The
review found that IMR cases clustered around situations where
best treatment practices for a particular disease are
unsettled in the medical community. The study revealed that
there is: inconsistent IMR case resolution for similar cases,
lack of clarity and transparency regarding the basis for
decisions made by IMR reviewers, and evidence that the
qualifications and training of IMR reviewers may be poorly
matched to the cases they review. The report suggests
requiring data to be public and include sufficient detail
regarding criteria used by reviewers such as scientific data
to decide the cases, include more demographic data, and
encourage the regulators to jointly monitor and validate the
consistency of the IMR review decisions.
3) ACA REQUIREMENTS . The ACA establishes requirements for
internal and external appeals of coverage determinations and
claims, including for self-insured plans not subject to state
regulation. State IMR programs must meet federal
requirements. The ACA requirements are similar to
California's IMR and as such, California is one of 23 states
notified by federal HHS that it meets the minimum
requirements. According to the CHCF report, California's IMR
is governed by more stringent rules than those established by
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the ACA. However, California can improve some requirements
such as requiring IMR reviewers be "expert" in the treatment
of the covered person's relevant medical condition and
"knowledgeable about the recommended health care service or
treatment through recent or current actual clinical experience
treating patients with the same or similar medical
conditions."
4)SUPPORT . Proponents of this bill agree that increasing
standards of the IMR process by requiring expert reviewers
knowledgeable about the proposed treatment through actual and
recent experience and expanding transparency of information
will enhance the quality of medical care for Californians in
managed care. Many also write in support of a provision that
was contained in a previous version of this bill regarding a
common database that would be shared between the two
departments. Proponents emphasize the consistency in
decisions that the common database would bring. The
California Podiatric Medical Association supports this bill
but requests that Doctors of Podiatric Medicine be
specifically included in this bill. The California
Psychiatric Association supports this bill but suggestions
further clarification that an expert reviewer should be board
certified or qualified to be board eligible in the medical
specialty which is the predominant field of treatment (e.g., a
psychiatrist as opposed to an internal medicine specialist for
treatment of a psychiatric disorder).
5)SUPPORT IF AMENDED . The California Association of Health
Plans (CAHP) would support this bill if it is amended to
exclude the name of the health plan associated with specific
IMR cases. CAHP believes including the plan name without any
meaningful context can be misleading to consumers.
6)PREVIOUS LEGISLATION .
a) AB 1663 (Friedman and Knowles), Chapter 979, Statutes of
1995, requires health plans and disability insurers to
establish an independent external review process to examine
coverage decisions for experimental or investigational
treatments. Requires independent review entities to be
accredited by a private, nonprofit accrediting
organization. Requires the accrediting organization to
develop and apply standards that ensure the independence of
independent review entities.
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b) AB 55 (Migden), Chapter 533, Statutes of 1999,
establishes in the Department of Corporations (prior to
DMHC) for health plans and the CDI an IMR system, and
clarifies that an enrollee may apply to the IMR process
when any one of the following three conditions has occurred
rather than all three:
i) The enrollee's provider has recommended a health
care service as medically necessary;
ii) The enrollee has received urgent care or emergency
services that a provider determined was medically
necessary; or,
iii) The enrollee has been seen by an in-plan provider
for the diagnosis or treatment of the medical condition
for which the enrollee seeks independent review.
c) SB 189 (Schiff), Chapter 542, Statutes of 1999,
establishes a reasonable external, independent review
process to examine coverage decisions regarding
experimental or investigational therapies for individual
enrollees or insureds with life-threatening or seriously
debilitating conditions.
REGISTERED SUPPORT / OPPOSITION :
Support
BayBio
BIOCOM
California Academy of Physician Assistants
California Chiropractic Association
California Healthcare Institute
California Optometric Association
California Pan-Ethnic Health Network
California Podiatric Medical Association
California Psychiatric Association
California Psychological Association
California Urological Association
Consumers Union
Health Access California
Medical Oncology Association of Southern California
Neuropathy Action Foundation
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Osteopathic Physicians & Surgeons of California
Opposition
None on file.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097