BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1771 (V.M. Pérez) - Telephone visits.
Amended: June 24, 2014 Policy Vote: Health 7-1
Urgency: No Mandate: Yes
Hearing Date: August 11, 2014
Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1771 would mandate that health insurers and
health plans provide coverage for telephone visits provided by a
contracted physician or contracted non-physician health care
provider.
Fiscal Impact:
Uncertain impact on health care premiums paid by CalPERS
(various funds). According to the California Health Benefits
Review Program, there is a great deal of uncertainty as to
the manner in which physicians would provide telephone
visits and the uptake of such services by patients.
Physicians may elect to use telephone visits to substitute
for in person visits with patients, for example when
discussing ongoing treatments. In such cases, the bill would
reduce overall health care costs, because health insurers
and health plans typically pay providers lower rates for
telephone visits. On the other hand, the ability to speak to
a physician or other health care provider may increase
utilization of services by patients. For example, a patient
that has questions about a medication might elect to use a
telephone visit rather than taking the time to make an
in-person appointment.
Based on scenarios that make assumptions about the
willingness of patients to make use of telephone visits and
the extent to which such visits substitute for in-person
visits versus supplementing in-person visits, the California
Health Benefits Review Program found that overall health
care premium costs could decline or increase by tens of
millions in either direction.
Accordingly, the proportional impact on the health care
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premiums paid by CalPERS could either decrease or increase.
Under a low-uptake scenario and moderate assumptions about
substitution versus supplementation, CalPERS premium costs
could decline by as much as $200,000 per year or could
increase by up to $1 million per year. Under a high-uptake
scenario, CalPERS premium costs could decline by as much as
$1 million per year or could increase by up to $5 million
per year.
One-time costs of about $110,000 over two years for review
of plan filings. Ongoing costs of $70,000 per year for
enforcement by the Department of Insurance (Insurance Fund).
One-time costs of about $230,000 over two years to adopt
regulations and review plan filings. Ongoing costs of
$40,000 per year for enforcement by the Department of Manage
Health Care (Managed Care Fund).
Background: Under current law, health insurers are regulated by
the Department of Insurance and health plans are regulated by
the Department of Managed Health Care.
Under current law, health insurers and health plans are
prohibited from requiring an in-person visit between an enrollee
and an health care provider before paying for services that are
appropriately provided through telehealth. Similarly, current
law prohibits health insurers or health plans from limiting the
setting where services are provided through telehealth.
Alternatively, current law prohibits health insurers and health
plans from requiring the use of telehealth when the health care
provider determines that telehealth is not appropriate.
Proposed Law: AB 1771 would mandate that health insurers and
health plans to provide coverage for telephone visits provided
by a contracted physician or contracted non-physician health
care provider.
Specific provisions of the bill would:
Beginning on January 1, 2016, require a health insurer or
health plan to cover telephone visits provided by a
contracted physician or non-physician health care provider;
Prohibit a health insurer or health plan from requiring a
telephone visit when a health care provider determines it is
not appropriate;
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Exclude patients in correctional facilities;
Limit the required reimbursement for services when the
telephone visit is related to another service or procedure
provided to the patient, when the telephone visit leads to a
related services or visit; when the health care provider
receives a bundled or capitated payment; or when the
telephone visit is not initiated by the patient.
Related Legislation:
AB 1917 (Gordon) would limit cost sharing for a 30-day
supply of a prescription drug to 1/12 of the annual
out-of-pocket maximum for a prescription that has a course
of treatment more than three months or 1/2 of the annual
out-of-pocket limit for a prescription with a course of
treatment of less than three months. That bill is on the
Senate Floor.
AB 2418 (Bonilla) would require health plans and health
insurers with mandatory mail order filling of drug
prescriptions to allow enrollees to opt out of mandatory
mail order. The bill would allow enrollees to receive a
partial prescription refill, at a prorated share of cost, in
order to synchronize prescriptions. The bill would require
health plans and health insurers to provide coverage for the
early refill of covered ophthalmic products at 70 percent of
the predicted days of use. That bill is on this committee's
Suspense File.
AB 2533 (Ammiano) would require a health plan or health
insurer to assist an enrollee in arranging for care from a
noncontracting provider when the enrollee is unable to
receive timely access to medically necessary care from a
contracting provider. That bill is on this committee's
Suspense File.
Staff Comments: As noted above, there is significant uncertainty
as to how patients and physicians will make use of telephone
visits if health insurers and health plans are required to pay
for their coverage. The impact on health care premiums, overall,
was estimated by the California Health Benefits Review Program
to range from savings of $40 million per year to increase costs
of $50 million per year in the low-uptake scenario and savings
of $160 million to costs of $250 million in the high-uptake
scenario.
Based on the available scientific literature, the California
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Health Benefits Review Program was unable to determine whether
increased access to telephone visits would have a significant
impact on public health
The California Health Benefits Review Program does not
anticipate any increase in the rates paid by the state to
Medi-Cal managed care plans. This is because the California
Health Benefits Review Program assumes that Medi-Cal managed
care plans and their contracted physician groups already invest
in cost-effective health care technologies, and the rates paid
by the state reflect those investments.
Because the bill does not expand essential health benefits, as
defined in the Affordable Care Act and mandated in state law,
the bill is not expected to result in costs to the state to
subsidize health care coverage through Covered California.
The only costs that may be incurred by a local agency under the
bill relate to crimes and infractions. Under the California
Constitution, such costs are not reimbursable by the state.