BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 964 (Hernandez) - Health care service plans: timeliness
standards: medical surveys.
Amended: April 9, 2014 Policy Vote: Health 5-1
Urgency: No Mandate: Yes
Hearing Date: May 23, 2014 Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: SB 964 would expand the requirements on managed
care plans for surveying and reporting on access to care. The
bill would require Medi-Cal managed care plans to generally
comply with existing reporting requirements imposed on other
commercial health plans.
Fiscal Impact:
Annual costs of about $4.5 million per year to develop
regulations, respond to complaints, and enforce requirements
of the bill by the Department of Managed Health Care
(Managed Care Fund).
No significant impacts to the Medi-Cal program are
anticipated. The Department of Health Care Services does not
expect that the additional survey and reporting requirements
in the bill will significantly increase costs to Medi-Cal
managed care plans.
Background: Under state and federal law, the Department of
Health Care Services operates the Medi-Cal program, which
provides health care coverage to pregnant women, children and
their parents with low incomes, as well as blind, disabled, and
certain other populations. Generally, the federal government
provides a 50 percent federal match for state expenditures.
Pursuant to the federal Affordable Care Act, California has
opted to expand eligibility for Medi-Cal up to 138 percent of
the federal poverty level and to include childless adults.
With the exception of certain populations (for example,
individuals eligible for limited scope Medi-Cal benefits or
individuals dually eligible for Medi-Cal and Medicare in most
counties), managed care is the primary system for providing
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Medi-Cal benefits. The Department estimates that in 2014-15, 7.5
million Medi-Cal beneficiaries (73 percent of total enrollment)
will receive care through the managed care system.
Under current law, health plans are regulated by the Department
of Managed Health Care. Existing law and regulation imposes a
variety of requirement on health plans to ensure that they
maintain adequate networks of providers (such as primary care
providers, specialty care providers, hospitals, etc.). Existing
standards require health plan enrollees to have access to care
based on geographical proximity and timely access to providers.
In order to verify compliance with these requirements, health
plans are subject to a variety of reporting requirements on the
adequacy of their provider networks.
Commercial Medi-Cal managed care plans are generally subject to
regulation by the Department of Managed Health Care. However,
county organized health systems, which provide Medi-Cal managed
care services are not. Current law exempts Medi-Cal managed care
plans from many of the existing network adequacy requirements in
law, provided that the plans meet similar requirements through
the contracting process with the Department of Health Care
Services.
Proposed Law: SB 964 would expand the requirements on managed
care plans for surveying and reporting on access to care. The
bill would require Medi-Cal managed care plans to generally
comply with existing reporting requirements imposed on other
commercial health plans.
Specific provisions of the bill would:
Require health plans to use specified survey methodologies,
if specified by the Department of Managed Health Care;
Require the Department of Managed Health Care to review and
post information on its website (beginning in 2016) on its
findings;
Repeal the exemption from medical survey requirements by
Medi-Cal managed care plans;
Require a health plan that provides Medi-Cal managed care
services to conduct medical surveys on its Medi-Cal managed
care plan product line, distinct from surveys of its other
product lines;
Require annual review of Medi-Cal managed care plan medical
surveys for compliance with existing standards;
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Require a health plan that provides coverage through
Covered California to conduct distinct surveys between
product lines sold inside and outside of Covered California;
Require additional medical surveys for Medi-Cal managed
care plans that have enrolled additional members due to
several recent transitions of populations from
fee-for-service Medi-Cal to managed care;
Allow the Department of Managed Health Care and the
Department of Health Care Services to coordinate surveys and
plan reviews;
Require a county organized health system to be treated as a
licensed health plan with respect to timely access
requirements.
Staff Comments: County organized health systems are local
government entities. By increasing responsibilities on those
plans, it is possible that the bill would increase their costs.
The costs to operate a county organized health plan, including
administrative costs, are paid through the state Medi-Cal
program. Thus, any additional costs to counties under the bill
would need to be negotiated with the Department of Health Care
services through that process, rather than through he mandate
claims process.