BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 964|
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UNFINISHED BUSINESS
Bill No: SB 964
Author: Hernandez (D)
Amended: 8/22/14
Vote: 21
SENATE HEALTH COMMITTEE : 5-1, 4/30/14
AYES: Hernandez, De Le�n, DeSaulnier, Evans, Monning
NOES: Morrell
NO VOTE RECORDED: Beall, Nielsen, Wolk
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SENATE FLOOR : 22-10, 5/27/14
AYES: Beall, Block, Corbett, De Le�n, DeSaulnier, Evans,
Galgiani, Hancock, Hernandez, Hill, Hueso, Jackson, Leno,
Lieu, Mitchell, Monning, Padilla, Pavley, Roth, Steinberg,
Torres, Wolk
NOES: Anderson, Fuller, Gaines, Huff, Knight, Morrell, Nielsen,
Vidak, Walters, Wyland
NO VOTE RECORDED: Berryhill, Calderon, Cannella, Correa, Lara,
Liu, Wright, Yee
ASSEMBLY FLOOR : Not available
SUBJECT : Health care service plans: timeliness standards:
medical surveys
SOURCE : Health Access California
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DIGEST : This bill increases oversight of health care service
plans (health plans) with respect to compliance with timely
access and provider network adequacy standards.
Assembly Amendments revise and recast the bill by deleting
provisions related to County Organized Health Systems; deleting
requirements related to the Department of Managed Health Care
(DMHC) medical surveys being conducted by distinct product
lines; and deleting the requirement for annual DMHC medical
surveys to be conducted for the first five years after initial
enrollment for Medi-Cal managed care (MCMC) plans, as specified;
and instead add requirements to increase the oversight of health
plans and compliance with timely access by requiring health
plans to annually report specified network adequacy data,
authorizing health plans to include provisions requiring
compliance with timely access in its contract, and requiring the
Department of Health Care Services (DHCS) to publicly report its
findings of finalized medical audits as soon as possible, as
specified, and to share those findings and other information
with respect to Knox-Keene plans with DMHC.
ANALYSIS :
Existing law:
1. Establishes DMHC to regulate health plans under the
Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene
Act), the Department of Insurance (CDI) to regulate health
insurers under the Insurance Code and DHCS to administer the
Medi-Cal program, which provides health care to children,
senior and person with disabilities, people also eligible for
Medicare, and low-income individuals and families.
2. Requires DMHC to develop and adopt regulations to ensure
that health plan enrollees have access to health care
services in a timely manner, and requires DMHC to develop
indicators of timeliness and consider the following:
A. Waiting times for appointments with physicians and
specialists;
B. Timeliness of care in an episode of illness, including
timeliness to referrals; and
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C. Waiting time to speak to a physician, registered nurse
or other qualified health professional.
3. Requires contracts between health plans and health care
providers to assure compliance with the timely access
standards developed by DMHC. Requires the contracts to
require reporting by health care providers to health plans
and by health plans to DMHC to ensure compliance with the
standards.
4. Requires health plans to report annually to DMHC on
compliance with the timely access standards
5. Requires DMHC medical surveys to be conducted as often as
necessary, but not less frequently than once every three
years.
6. Requires, to avoid duplication, the Director of DMHC to
employ, but not be bound by, the findings of DHCS medical
surveys, for health plans contracting with DHCS, as
specified.
7. Requires, no later than 18 months following release of a
final medical survey report, DMHC to conduct a follow-up
review to determine and report on the status of the plan's
efforts to correct any deficiencies.
8. Requires DHCS to conduct annual medical audits of each MCMC
plan unless the Director of DHCS determines there is good
cause for additional reviews. Requires the reviews to use
the standards and criteria established pursuant to the
Knox-Keene Act, or Insurance Code, as appropriate.
9. Requires DHCS to be authorized to contract with professional
organizations or DMHC or CDI, as appropriate, to perform the
periodic review required by law. Requires DHCS, or its
designee, to make a finding of fact with respect to the
ability of the MCMC plan to provide quality health care
services, effectiveness of peer review, and utilization
control mechanisms, and the overall performance of the
Medi-Cal manage care plan in providing health care benefits
to its enrollees.
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10.Requires the Commissioner of CDI, on or before January 1,
2004, to promulgate regulations applicable to health insurers
to ensure that insureds have the opportunity to access needed
health care services in a timely manner. Requires these
regulations to be designed to assure accessibility of
provider services in a timely manner to individuals
comprising the insured or contracted group pursuant to the
benefits covered.
This bill:
1.Requires a health plan to annually report specified network
adequacy data, including separate MCMC and individual market
product line data, as specified, to 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 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
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 DMHC, 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, 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
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MCMC plan from DMHC medical survey requirements when 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 CDI as an organization DHCS can contract with for
review and oversight of MCMC plans, none of which are
currently regulated by CDI.
Background
According to the author's office, this bill has been introduced
to ensure that the DMHC medical surveys take into consideration
requirements unique to MCMC and Covered California and that
sufficient attention and resources are given to health plan
network adequacy and timely access enforcement. Media reports
have raised concerns about lack of access to health care
providers and "narrow" provider networks in Medi-Cal and Covered
California. Covered California has also reported questions
about accuracy of provider directories, timely access calls in
certain areas or "hot spots," and confusion about mismatch of
physicians and hospitals, physician confusion about network
status and confusion about benefit design. California has
strong network adequacy and timely access to services
requirements for health plans and insurers 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. Covered California has recommended
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coordinating directly with regulators on network adequacy,
requiring the use of the regulator template, common analytics
and coordinated product and network filing reviews with cross
plan comparisons. DMHC also indicates that over the last 18
months significant complaint increases with regard to access
related to Covered California and Medi-Cal include enrollees
having difficulty finding a provider that is contracted with
their plan. This bill is intended to clarify distinctions in
enforcement responsibility and ensure tools are in place so that
DMHC can monitor and enforce adequate network and timely access
requirements. Having an insurance card only ensures better
health outcomes if patients actually have access to the right
care at the right place at the right time.
DMHC and CDI Timely Access . The DMHC's Timely Access to
Non-Emergency Health Care Services Regulation (Timely Access
Regulation) became effective January 17, 2010. The purpose of
the Timely Access Regulation is to fully implement AB 2179
(Cohn, Chapter 797, Statutes of 2002) which directed DMHC and
CDI to adopt regulations to ensure enrollees access to necessary
health care services in a timely manner. The health plans
licensed by DMHC had until January 17, 2011 to fully implement
the policies, procedures and systems necessary to comply with
the regulations. In October 2010, health plans were required to
submit a filing to demonstrate how the standards and regulations
would be met. Each health plan must show that its provider
network is large and varied enough to offer enrollees
appointments that meet the specified standards.
Covered California . At Covered California's April 17, 2014
board meeting, staff reviewed its contractual expectations for
quality and access and shared with the board and public concerns
being raised about the accuracy of certain plan provider
directories, timely access to available providers, including
specialists and call hot spots in rural counties and in Alameda
County. Confusion about benefit design with regard to
in-network vs. out-of-network benefits was described as well as
mismatch of physicians and hospitals. Covered California staff
explained that they are troubleshooting with plan partners and
referring enrollees to DMHC and independent legal assistance
through the Health Consumer Alliance. Covered California
indicates they have been proactive with plans and provider
organizations in trying to communicate changes and add
physicians to networks. Covered California is working to
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optimize timely access and is considering methods such as
sponsoring a third party "secret shopper" survey.
Prior Legislation
SB 94 (Senate Budget and Fiscal Review Committee, Chapter 37,
Statutes of 2013) requires DHCS to enter into an interagency
agreement with DMHC to have DMHC, on behalf of the DHCS, conduct
financial audits, medical surveys, and a review of the provider
networks of the managed care health plans participating in the
federal waiver demonstration project and the MCMC expansion into
rural counties, and to provide consumer assistance to
beneficiaries, as specified. Requires the interagency agreement
to be updated, as necessary, on an annual basis in order to
maintain functional clarity regarding the roles and
responsibilities of these core activities. Prohibits DHCS from
delegating its authority as the single state Medicaid agency to
DMHC. The bill also requires DHCS to enter into an interagency
agreement with DMHC to perform some or all of DHCS' oversight
and readiness review activities for the Coordinated Care
Initiative, as specified. These activities may include
providing consumer assistance to beneficiaries and conducting
financial audits, medical surveys, and a review of the adequacy
of provider networks of the participating managed care health
plans. Requires the interagency agreement to be updated, as
necessary, on an annual basis in order to maintain functional
clarity regarding the roles and responsibilities of DMHC and
DHCS. Prohibits DHCS from delegating its authority, as
specified, as the single state Medicaid agency to DMHC.
AB 1467 (Assembly Budget Committee, Chapter 23, Statutes of
2012) among other provisions addresses Medi-Cal Dental Managed
Care in Sacramento and Los Angeles counties. Provides for the
establishment of a stakeholder advisory committee to provide
input on the delivery of oral health and dental care services in
Sacramento County. Provides the Director of DHCS with the
authority to establish a beneficiary dental exception process in
which Medi-Cal beneficiaries mandatorily enrolled in dental
health plans in Sacramento County can move to fee-for-service
Denti-Cal. Establishes a list of performance measures to ensure
that dental health plans meet quality criteria, and requires an
interagency agreement with DMHC. The bill also provides for the
expansion of MCMC into the 28 rural counties that are now
fee-for-service. This proposal will result in General Fund
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savings of $2.7 million in 2012-13.
AB 2179 (Cohn, Chapter 797, Statutes of 2002) requires DMHC and
CDI to develop and adopted regulations to ensure that enrollees
have access to needed health care services.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
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).
SUPPORT : (Verified 8/26/14)
Health Access California (source)
AARP
AFSCME
California Association for Health Services at Home
California Chapter of the American College of Emergency
Physicians
California Coverage and Health Initiatives
California Medical Association
California Pan-Ethnic Health Network
California Primary Care Association
Children Now
Children's Defense Fund - California
March of Dimes California Chapter
National Association of Social Workers
National Health Law Program
National Multiple Sclerosis Society - California Action Network
PICO California
Private Essential Access Community Hospitals
SEIU - California State Council
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The Children's Partnership
United Ways of California
Western Center on Law and Poverty
OPPOSITION : (Verified 8/26/14)
California Association of Health Plans
ARGUMENTS IN SUPPORT : This bill's sponsor, Health Access
California (Health Access), indicates for more than 20 years,
Directors of DHCS have assured lawmakers, advocates, and other
stakeholders that those Californians covered through MCMC would
have the same protections as every other Californian in a
managed care plan. Yet during all these decades, Health Access
states they have listened to complaint after complaint from
consumers and physicians about lack of timely access to adequate
networks for those in Medi-Cal. Today over 70% of Californians
on Medi-Cal are in managed care and that proportion is still
rising as numerous managed care transitions continue. About
half the consumers that DMHC is responsible for protecting are
in MCMC-yet there is no focused scrutiny on Medi-Cal managed
care plans. Covered California has been an active purchaser,
driving hard bargains with its contracting plans. Health Access
does not oppose narrow networks but does oppose inadequate
networks that do not assure timely access to medically necessary
care. The National Health Law Program among other provisions
supports that this bill will hold Medi-Cal County Organized
Health Systems to the same standards as other plans. The March
of Dimes indicates that Medi-Cal pays for nearly 50% of births
and 1.4 million individuals have enrolled in an exchange plan so
any quality improvements for both of these types of plans can
lead to healthier pregnancies and healthier babies for a large
population. The California Pan-Ethnic Health Network indicates
narrow networks must be adequate networks that provide timely
access to care so that Californians with coverage through
Covered California get the care they need when they need it.
Western Center on Law and Poverty (WCLP) believes it is critical
with these increases in MCMC that there is proper scrutiny paid
to timely access to care, network adequacy, continuity of care
and quality of care. WCLP also writes that joint oversight and
responsibility of DMHC and DHCS should be formalized as does
this bill. WCLP indicates that a survey of a plan's commercial
product is not sufficient to give information about the adequacy
of the plan in serving their Medi-Cal or Covered California
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enrollees. The California Chapter of the American College of
Emergency Physicians believes Medi-Cal enrollees are over
represented in emergency departments because they cannot get in
to see a doctor.
ARGUMENTS IN OPPOSITION : The California Association of Health
Plans (CAHP) writes that health plans are held strictly
accountable for enrollee access through regulation, statute, and
contracts with state entities like Covered California and
Medi-Cal. Currently, in order to obtain a license in
California, a health plan must undergo an exhaustive application
process through DMHC, which can take upwards of a year and
entails hundreds of application exhibits demonstrating every
aspect of proposed operations. Plans must file their entire
provider network, GeoAccess standards and maps (plotting the
location of all providers and all members in each plan region),
and methodologies for ensuring timely access to care. If a
health plan desires to expand into a new line of business, the
health plan must file all new exhibits demonstrating network
adequacy. Once licensed, health plans must file several weekly,
monthly, quarterly or annual reports and a combination of
network, timely access, and geographic access related reports as
a routine part of health plan operations. Additional ad hoc
reports are routinely requested by DMHC, DHCS, or Covered
California. All health plans already undergo a routine medical
survey within the first year of licensure and every three to
five years thereafter. It is important to note that health
plans pay an annual assessment to the DMHC to support many of
these regulatory functions including a hotline that helps
enrollees if they experience any difficulties accessing care.
CAHP believes this bill will lead to more cost and
administrative burdens.
JL:k 8/26/14 Senate Floor Analyses
SUPPORT/ OPPOSITION: SEE ABOVE
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