BILL ANALYSIS �
SB 964
Page 1
SENATE THIRD READING
SB 964 (Ed Hernandez)
As Amended August 18, 2014
Majority vote
SENATE VOTE :22-10
HEALTH 14-5 APPROPRIATIONS 12-3
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|Ayes:|Pan, Ammiano, Bonilla, |Ayes:|Gatto, Bocanegra, |
| |Bonta, Chesbro, Gomez, | |Bradford, |
| |Gonzalez, | |Ian Calderon, Campos, |
| |Roger Hern�ndez, | |Eggman, Gomez, Holden, |
| |Lowenthal, Nazarian, | |Pan, Quirk, |
| |Waldron, Ridley-Thomas, | |Ridley-Thomas, Weber |
| |Rodriguez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Maienschein, Ch�vez, |Nays:|Donnelly, Jones, Wagner |
| |Mansoor, Patterson, | | |
| |Wagner | | |
| | | | |
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SUMMARY : Increases oversight of health care service plans
(health plans) with respect to compliance with timely access and
provider network adequacy standards. Specifically, this bill :
1)Requires a health plan to annually report specified network
adequacy data, including separate Medi-Cal managed care (MCMC)
and individual market product line data, as specified, to the
Department of Managed Health Care (DMHC) as a part of its
annual timely access compliance report, and requires DMHC to
review the network adequacy data for compliance with
Knox-Keene Health plan Act of 1975 (Knox-Keene Act)
requirements.
2)Requires DMHC to provide advance notice to a health plan of
any changes or additions to the network adequacy data required
to be reported, and prohibits DMHC from creating duplicate
reporting requirements in developing the format and
requirements for network adequacy data reporting.
3)Authorizes a health plan to include in its contracts with
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providers, provisions requiring compliance with timely access
and network adequacy data reporting requirements.
4)Requires DMHC to annually review health plan compliance with
timely access standards and to post its final findings from
the review, and any waivers or alternative standards approved
by the department, on its Web site.
5)Authorizes DMHC to develop, and requires health plans to use,
standardized methodologies for timely access reporting, and
exempts the development and adoption of the standardized
reporting methodologies from the Administrative Procedures Act
(APA), the body of law governing state regulations, until
January 1, 2020.
6)Makes the following changes with specific regard to MCMC
plans:
a) Repeals a provision of the Knox-Keene Act that exempts a
MCMC plan from DMHC medical survey requirements when the
Department of Health Care Services (DHCS) has conducted a
medical audit for the same period as part of the
contracting process.
b) Requires DMHC to coordinate medical surveys of MCMC
plans with DHCS to allow for simultaneous oversight of
these plans by both departments, as specified.
c) Requires DHCS to share with DMHC its findings from
medical audits as well as monthly provider files submitted
by MCMC plans, and provides that communications between the
departments regarding preliminary investigative audit
findings are exempt from disclosure under the California
Public Records Act in order to ensure confidentiality of
preliminary investigative findings.
d) Requires DHCS to publicly report the findings of
finalized annual medical audits of MCMC plans within
specified timeframes.
e) Deletes obsolete references to the Insurance Code, and
removes the California Department of Insurance (CDI) as an
organization DHCS can contract with for review and
oversight of MCMC plans, none of which are currently
regulated by CDI.
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EXISTING LAW :
1)Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
services, and sets forth the Knox-Keene Act which provides for
the licensure and regulation of health plans by DMHC.
2)Requires DMHC to develop and adopt regulations for timeliness
of access to care, and requires contracts between health plans
and providers ensure compliance with those standards.
3)Requires health plans to annually report to DMHC on compliance
with timely access standards, and requires DMHC to, every
three years, review information regarding compliance with
those standards and make recommendations that would further
protect health plan enrollees.
4)Requires DMHC to periodically, but not less frequently than
every three years, conduct an onsite medical survey of the
health delivery system of each health plan.
5)Exempts a health plan that provides services solely to
Medi-Cal beneficiaries from an onsite medical survey upon
submission to DMHC of a medical survey audit conducted for the
same survey period by DHCS as a part of the Medi-Cal
contracting process.
6)Requires DHCS to conduct annual medical audits of each MCMC
plan, and for the reviews to use the standards and criteria
set forth in Knox-Keene Act, or the Insurance Code, as
appropriate. Requires the reviews to be carried out jointly
with reviews conducted pursuant to Knox-Keene Act or the
Insurance Code, as specified.
7)Authorizes DHCS to contract with professional organizations,
DMHC, or CDI, to perform the annual MCMC plan reviews.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
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1)One-time costs to DMHC exceeding $200,000 to issue guidance
and regulations and to update Information Technology systems,
and ongoing costs in the range of $2.5 million annually to
conduct additional reviews of compliance with health care
access standards (Managed Care Fund).
2)To the extent greater scrutiny on the adequacy of provider
networks in Medi-Cal managed care finds networks are
inadequate, potential unknown, significant cost pressure to
the state to increase rates paid to managed care plans for
care of Medi-Cal beneficiaries (General Fund/federal funds).
COMMENTS : According to the author, this bill ensures that DMHC
has sufficient data to monitor and enforce health plan network
adequacy requirements. The author states that media reports
have given attention to concerns about lack of access to health
care providers in the Medi-Cal program and "narrow" provider
networks in Covered California and that hundreds of complaints
have been received by DMHC that are categorized as "access
issues" since 2012. The author asserts that California has
strong network adequacy and timely access requirements health
plans must follow, but monitoring and enforcement of these laws
is developing at the same time millions of new individuals are
enrolling in MCMC and Covered California plans. The author
states that this bill is intended to clarify distinctions in
enforcement responsibility and ensure tools are in place so that
the DMHC can monitor and enforce adequate network and timely
access requirements.
Health plans regulated by the DMHC must meet timely access and
network adequacy standards. Specific standards have been
promulgated through regulation, and require, for example,
appointments to be provided within 10 business days of a request
for a non-urgent primary care appointment and within 48 hours of
a request for an urgent care appointment. Health plans must
show their provider networks are large and varied enough to
offer enrollees appointments that meet the standards, and are
required to contract with adequate numbers of doctors or other
health care providers in each geographic area they serve in
order to meet the clinical and time-elapsed standards for
appointment waiting times.
DMHC is required to conduct an onsite medical survey of a health
plan at least once every three years, during which it surveys
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the plan for compliance with a variety of Knox-Keene Act
requirements, including whether plans provide timely access.
Health plans must monitor network compliance with timely access
standards, investigate and correct deficiencies, and are also
required to annually file timely access compliance reports with
DMHC. DMHC began collecting timely access reports in 2012, and
has developed a standardized timely access reporting methodology
plans can voluntarily use. Under this bill, health plans would
report specified network adequacy data as a part of the timely
access compliance reports for DMHC's review.
With regard to MCMC plans, DHCS monitors contract-specific
requirements related to access, often with the DMHC's assistance
under interagency agreements. These additional requirements may
account for the number of network providers who are not
accepting new patients, the location and types of specialists
within the network (with specific requirements that depend on
the characteristics and health needs of the plan's enrollees),
and coverage of out-of-network services that the plan may be
unable to provide. Both departments conduct various activities
to monitor access to care, including reviews of provider network
data submitted by plans, help lines that may identify early
access problems through beneficiary complaints, and periodic
on-site audits of plans' operations.
Health Access California (HAC), the bill's sponsor, states that
this bill would require additional scrutiny of managed care
plans that cover Medi-Cal beneficiaries or Covered California
enrollees in the individual market. HAC argues that DMHC does
not conduct ongoing monitoring of timeliness of access or the
adequacy of networks for the MCMC line of business, despite the
fact that more than 70% of Medi-Cal enrollees are in managed
care, and that DHCS does not check for compliance with
California regulations on timely access in its medical audits of
MCMC plans. HAC states that the provisions of this bill will
address these problems by eliminating provisions in existing law
that exempt MCMC plans from DMHC surveys and requiring annual
review of network adequacy and timely access. HAC also states
that health plans in the individual market, including plans in
Covered California, would be subject to annual scrutiny for
narrower networks.
The California Association of Health Plans (CAHP) opposes this
bill unless amended to delete provisions in this bill that
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exempt the development and adoption of the standardized
methodologies for timely access reporting from the APA. CAHP
states that the requirements of the APA are designed to provide
the public with a meaningful opportunity to participate in the
adoption of state regulations and to ensure that regulations are
clear, necessary, and legally valid. CAHP asserts that the
exemption of the standardized methodologies sets a bad
precedent, especially at a time when the public wants more
transparency from government and health plans. CAHP concludes
by stating that attention on access is commendable, but DMHC
regulations currently ensure enrollees have timely access to
necessary health care services.
Analysis Prepared by : Kelly Green / HEALTH / (916) 319-2097
FN: 0004997