Amended in Senate April 9, 2014

Senate Bill No. 964

Introduced by Senator Hernandez

February 10, 2014

An act to amend Section begin delete 1380.3 end delete begin insert 1367.03 end insert of, begin delete and end delete to add Sections 1380.4, 1380.5, begin delete and end delete 1380.6 begin insert , and 1380.7 end insert to, begin insert and to repeal Section 1380.3 of, end insert the Health and Safety Code, begin insert and to amend Section 14087.95 of the Welfare and Institutions Code, end insert relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 964, as amended, Hernandez. Health care service plans: begin insert timeliness standards: end insert medical surveys.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. begin delete Existing law establishes the California Health Benefit Exchange for the purpose of facilitating the enrollment of qualified individuals and small employers in qualified health plans. end delete begin insert One of the methods by which Medi-Cal services are provided is pursuant to contracts with various types of managed health care plans, including through county organized health systems. Existing law specifies that these county organized health systems are exempt from the Knox-Keene Health Care Service Plan Act of 1975. end insert

Existing law, the Knox-Keene Health Care Service Plan Act of 1975 begin insert (Knox-Keene Act) end insert , provides for the licensure and regulation of health care service plans by the Department of Managed Health begin delete Care. Existing end delete begin insert Care and makes a willful violation of the act a crime. Existing law requires the department to adopt standards for timeliness of access to care and requires that contracts between health care service plans and providers ensure compliance with those standards. Existing law requires health care service plans to annually report to the department on compliance with those standards in a manner specified by the department. Under existing law, every 3 years, the department is required to review information regarding compliance with those standards and make recommendations for changes that further protect enrollees. end insert

begin insert

This bill would eliminate the requirement that the department make recommendations for changes that further protect enrollees, would require the department to review information regarding compliance with the timeliness standards, including any waivers or alternative standards granted to plans, on an annual basis, and would require the department to annually post its findings from that review on its Internet Web site commencing December 1, 2016. The bill would require health care service plans, in making reports to the department on compliance with the timeliness standards, to use standardized survey methodology if developed by the department. The bill would also require a contract between a county organized health systems established under the Medi-Cal program and a provider to ensure compliance with the timeliness standards adopted by the department and would require the county organized health system to annually report to the department on compliance with those standards. By expanding the scope of a crime and imposing a new duty on counties, the bill would impose a state-mandated local program.

end insert

begin insert Existing end insert law begin insert establishes the California Health Benefit Exchange for the purpose of facilitating the enrollment of qualified individuals and small employers in qualified health plans. The Knox-Keene Act end insert requires the department to periodically conduct an onsite medical survey of the health delivery system of each begin delete plan. Existing law end delete begin insert health care service plan and end insert exempts a plan that provides services solely to Medi-Cal beneficiaries from the survey upon submission to the department the medical survey audit conducted by the State Department of Health Care Services as part of the Medi-Cal contracting process.

This bill begin delete would specify that a plan that provides services solely to Medi-Cal beneficiaries is not exempt from the medical survey with respect to quality management, utilization review, timely access, network adequacy, and any other requirements related to access and availability, except as specified. The bill end delete would begin insert eliminate that exemption, would end insert require a plan that provides services to Medi-Cal beneficiaries begin delete , except for a plan that serves Medi-Cal beneficiaries exclusively, end delete and a plan that provides services to enrollees in the California Health Benefit Exchange to be surveyed begin delete separately with respect to those products end delete begin insert by those product lines distinct from other product lines and to be annually reviewed with respect to those product lines for compliance with accessibility and availability of services, continuity of care, and quality management, as specified end insert . The bill would also require a plan that provides services to Medi-Cal beneficiaries through specified programs to be surveyed annually with respect to begin insert the populations enrolled in end insert those products until 5 years after completion of initial enrollment in those products, as specified. begin insert The bill would authorize the department to coordinate these surveys and reviews conducted with respect to Medi-Cal managed care plans with the State Department of Health Care Services, provided that the coordination does not result in a delay of the surveys or reviews or the failure of the department to conduct the surveys or reviews. end insert

begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

end insert begin insert

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1367.03 of the end insert begin insert Health and Safety Code end insert
begin insert is amended to read: end insert

1367.03.  

(a) Not later than January 1, 2004, the department
shall develop and adopt regulations to ensure that enrollees have
access to needed health care services in a timely manner. In
developing these regulations, the department shall develop
indicators of timeliness of access to care and, in so doing, shall
consider the following as indicators of timeliness of access to care:

(1) Waiting times for appointments with physicians, including
primary care and specialty physicians.

(2) Timeliness of care in an episode of illness, including the
timeliness of referrals and obtaining other services, if needed.

(3) Waiting time to speak to a physician, registered nurse, or
other qualified health professional acting within his or her scope
of practice who is trained to screen or triage an enrollee who may
need care.

(b) In developing these standards for timeliness of access, the
department shall consider the following:

(1) Clinical appropriateness.

(2) The nature of the specialty.

(3) The urgency of care.

(4) The requirements of other provisions of law, including
Section 1367.01 governing utilization review, that may affect
timeliness of access.

(c) The department may adopt standards other than the time
elapsed between the time an enrollee seeks health care and obtains
care. If the department chooses a standard other than the time
elapsed between the time an enrollee first seeks health care and
obtains it, the department shall demonstrate why that standard is
more appropriate. In developing these standards, the department
shall consider the nature of the plan network.

(d) The department shall review and adopt standards, as needed,
concerning the availability of primary care physicians, specialty
physicians, hospital care, and other health care, so that consumers
have timely access to care. In so doing, the department shall
consider the nature of physician practices, including individual
and group practices as well as the nature of the plan network. The
department shall also consider various circumstances affecting the
delivery of care, including urgent care, care provided on the same
day, and requests for specific providers. If the department finds
that health care service plans and health care providers have
difficulty meeting these standards, the department may make
recommendations to the Assembly Committee on Health and the
Senate Committee on Insurance of the Legislature pursuant to
subdivision (i).

(e) In developing standards under subdivision (a), the department
shall consider requirements under federal law, requirements under
other state programs, standards adopted by other states, nationally
recognized accrediting organizations, and professional associations.
The department shall further consider the needs of rural areas,
specifically those in which health facilities are more than 30 miles
apart and any requirements imposed by the State Department of
Health Care Services on health care service plans that contract
with the State Department of Health Care Services to provide
Medi-Cal managed care.

(f) (1) Contracts between health care service plans and health
care providers shall begin delete assure end delete begin insert ensure end insert compliance with the standards
developed under this section. These contracts shall require
reporting by health care providers to health care service plans and
by health care service plans to the department to ensure compliance
with the standards.

(2) Health care service plans shall report annually to the
department on compliance with the standards in a manner specified
by the department. The reported information shall allow consumers
to compare the performance of plans and their contracting providers
in complying with the standards, as well as changes in the
compliance of plans with these standards.

begin insert

(3) In making reports to the department pursuant to this
subdivision, health care service plans shall use standardized survey
methodology if developed by the department.

end insert

(g) (1) When evaluating compliance with the standards, the
department shall focus more upon patterns of noncompliance rather
than isolated episodes of noncompliance.

(2) The director may investigate and take enforcement action
against plans regarding noncompliance with the requirements of
this section. Where substantial harm to an enrollee has occurred
as a result of plan noncompliance, the director may, by order,
assess administrative penalties subject to appropriate notice of,
and the opportunity for, a hearing in accordance with Section 1397.
The plan may provide to the director, and the director may
consider, information regarding the plan’s overall compliance with
the requirements of this section. The administrative penalties shall
not be deemed an exclusive remedy available to the director. These
penalties shall be paid to the Managed Care Administrative Fines
and Penalties Fund and shall be used for the purposes specified in
Section 1341.45. The director shall periodically evaluate grievances
to determine if any audit, investigative, or enforcement actions
should be undertaken by the department.

(3) The director may, after appropriate notice and opportunity
for hearing in accordance with Section 1397, by order, assess
administrative penalties if the director determines that a health
care service plan has knowingly committed, or has performed with
a frequency that indicates a general business practice, either of the
following:

(A) Repeated failure to act promptly and reasonably to assure
timely access to care consistent with this chapter.

(B) Repeated failure to act promptly and reasonably to require
contracting providers to assure timely access that the plan is
required to perform under this chapter and that have been delegated
by the plan to the contracting provider when the obligation of the
plan to the enrollee or subscriber is reasonably clear.

(C) The administrative penalties available to the director
pursuant to this section are not exclusive, and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies deemed warranted by the director to
enforce this chapter.

(4) The administrative penalties shall be paid to the Managed
Care Administrative Fines and Penalties Fund and shall be used
for the purposes specified in Section 1341.45.

(h) The department shall work with the patient advocate to
assure that the quality of care report card incorporates information
provided pursuant to subdivision (f) regarding the degree to which
health care service plans and health care providers comply with
the requirements for timely access to care.

begin delete

(i) The department shall report to the Assembly Committee on
Health and the Senate Committee on Insurance of the Legislature
on March 1, 2003, and on March 1, 2004, regarding the progress
toward the implementation of this section.

end delete begin delete

(j)  Every three years, the

end delete

begin insert (i) end insert begin insert   end insert begin insert The end insert department shall begin insert annually end insert review information regarding
compliance with the standards developed under this section begin delete and
shall make recommendations for changes that further protect
enrollees end delete begin insert , including any waivers or alternative standards granted
to a plan pursuant to this section. By December 1, 2016, and
annually thereafter, the department shall post its findings from
that review on its Internet Web site end insert .

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 1380.3 of the end insert begin insert Health and Safety Code end insert begin insert is
repealed. end insert

begin delete

1380.3.  

Notwithstanding Section 1380, any plan that provides
services solely to Medi-Cal beneficiaries pursuant to Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code shall not be subject to the
requirements of Section 1380 upon the submission to the director
of the medical survey audit for the same period conducted by the
State Department of Health Services as part of the Medi-Cal
contracting process, unless the director determines that an
additional medical survey audit is required.

end delete

begin delete

SECTION 1.  

Section 1380.3 of the Health and Safety Code is
amended to read:

1380.3.  

(a) Notwithstanding Section 1380, and except as
provided in subdivision (b), a plan that provides services solely to
Medi-Cal beneficiaries pursuant to Chapter 8 (commencing with
Section 14200) of Part 3 of Division 9 of the Welfare and
Institutions Code shall not be subject to the requirements of Section
1380 upon the submission to the director of the medical survey
audit for the same period conducted by the State Department of
Health Care Services as part of the Medi-Cal contracting process,
unless the director determines that an additional medical survey
audit is required.

(b) A plan that provides services solely to Medi-Cal beneficiaries
pursuant to Chapter 8 (commencing with Section 14200) of Part
3 of Division 9 of the Welfare and Institutions Code shall not be
exempt from Section 1380 with respect to quality management,
utilization review, timely access, network adequacy, and any other
requirements related to access and availability unless the
department and the State Department of Health Care Services
jointly make a public determination that the medical survey audit
for the same period conducted by the State Department of Health
Care Services as part of the Medi-Cal contracting process assures
compliance with the access and availability requirements of this
chapter.

end delete

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 1380.4 is added to the Health and Safety Code,
to read:

1380.4.  

begin delete (a) end delete begin delete   end delete A plan that provides services to Medi-Cal
beneficiaries pursuant to Chapter 8 (commencing with Section
14200) of Part 3 of Division 9 of the Welfare and Institutions Code
shall begin delete be end delete begin insert do both of the following: end insert

begin insert (a) end insert begin insert   end insert begin insert Be end insert surveyed under Section 1380 begin delete separately with respect to
those products end delete begin insert by its Medi-Cal managed care product line distinct
from its other product lines, if any, end insert in order to determine whether
the services received by Medi-Cal beneficiaries begin delete through those
products end delete comply with the requirements of this chapter.

begin delete

(b) If a plan provides services solely to Medi-Cal beneficiaries
pursuant to Chapter 8 (commencing with Section 14200) of Part
3 of Division 9 of the Welfare and Institutions Code, compliance
with Section 1380.3 shall satisfy the requirements of this section.

end delete begin insert

(b) Be annually reviewed, with respect to its Medi-Cal managed
care product lines, for compliance with all of the following:

end insert begin insert

(1) Accessibility and availability of services, including network
adequacy and timely access to care.

end insert begin insert

(2) Continuity of care.

end insert begin insert

(3) Quality management, including precautions to ensure that
appropriate care is not withheld or delayed for any reason.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

Section 1380.5 is added to the Health and Safety Code,
to read:

1380.5.  

begin insert (a) end insert begin insert   end insert A plan that provides services to enrollees in the
California Health Benefit Exchange pursuant to Title 22
(commencing with Section 100500) of the Government Code shall
begin delete be end delete begin insert do both of the following: end insert

begin insert (1) end insert begin insert   end insert begin insert Be end insert surveyed begin delete separately end delete under Section 1380 begin delete with respect to
those products end delete begin insert by its product line sold through the Exchange
distinct from its product line sold outside the Exchange, if any, end insert in
order to determine whether the services received by begin delete those end delete begin insert the
Exchange end insert enrollees begin delete through the products end delete comply with the
requirements of this chapter.

begin insert

(2) Be annually reviewed, with respect to its product line sold
through the Exchange, for compliance with all of the following:

end insert begin insert

(A) Accessibility and availability of services, including network
adequacy and timely access to care.

end insert begin insert

(B) Continuity of care.

end insert begin insert

(C) Quality management, including precautions to ensure that
appropriate care is not withheld or delayed for any reason.

end insert begin insert

(b) This section shall not apply to either of the following:

end insert begin insert

(1) A plan that uses the same network for its product line sold
through the Exchange as the network used for its product line sold
outside the Exchange.

end insert begin insert

(2) A plan that uses the same network for its product line sold
through the Exchange as the network used for its Medi-Cal
managed care product line.

end insert

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section 1380.6 is added to the Health and Safety Code,
to read:

1380.6.  

begin delete Notwithstanding Section 1380.3, a end delete begin insert A end insert plan that enrolls
Medi-Cal beneficiaries as a result of any of the following shall be
surveyed annually under Section 1380 with respect to begin insert the
populations enrolled in end insert those products until five years after the
completion of initial enrollment under those products:

(a) The transition of Healthy Families Program enrollees to the
Medi-Cal program pursuant to Chapter 16.2 (commencing with
Section 12694.1) of Part 6.2 of Division 2 of the Insurance Code.

(b) Article 2.82 (commencing with Section 14087.98) of Chapter
7 of Part 3 of Division 9 of the Welfare and Institutions Code.

(c) Section 14182 of the Welfare and Institutions Code.

(d)  begin delete Section end delete begin insert Sections end insert 14182.16 begin insert and 14182.17, end insert or begin delete 14232.275 end delete
begin insert Section 14132.275, end insert of the Welfare and Institutions Code.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 1380.7 is added to the end insert begin insert Health and Safety Code end insert begin insert ,
to read: end insert

begin insert

begin insert 1380.7. end insert   

The department may coordinate the surveys and
reviews conducted pursuant to Sections 1380.4 and 1380.6 with
the State Department of Health Care Services in order to allow
for simultaneous oversight of Medi-Cal managed care plans by
both departments, provided that this coordination does not result
in a delay of the surveys or reviews required under Sections 1380.4
and 1380.6 or in the failure of the department to conduct those
surveys or reviews.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 14087.95 of the end insert begin insert Welfare and Institutions Code end insert
begin insert is amended to read: end insert

14087.95.  

begin insert (a) end insert begin insert   end insert Counties contracting with the department
pursuant to this article shall be exempt from the provisions of
Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code for purposes of carrying out the contracts.

begin insert

(b) Notwithstanding subdivision (a), a county contracting with
the department pursuant to this article shall, for purposes of
carrying out that contract, be treated as a health care service plan
under, and comply with, subdivision (f) of Section 1367.03 of the
Health and Safety Code.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for certain
costs that may be incurred by a local agency or school district
because, in that regard, this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.

end insert begin insert

However, if the Commission on State Mandates determines that
this act contains other costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end insert