BILL ANALYSIS �
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THIRD READING
Bill No: SB 1046
Author: Beall (D)
Amended: 4/8/14
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 4/2/14
AYES: Hernandez, Anderson, Beall, De Le�n, DeSaulnier, Evans,
Monning, Nielsen, Wolk
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Insurance: mental illness: developmental
disabilities: coverage: penalties
SOURCE : Department of Insurance
DIGEST : This bill authorizes the Commissioner of the
Department of Insurance (CDI) to assess administrative penalties
for any violations of the Mental Health Parity Act (MHPA),
including any rules or orders adopted or issued based on
violations of those provisions. This bill also gives the
Commissioner authority to assess a penalty for each patient
harmed by a violation of the above provisions, as a separate and
distinct violation. Imposes penalties of up to $2,500 for each
violation, or for an ongoing and continuous violation, $2,500
per day for as long as the violation continues.
ANALYSIS :
Existing law:
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1. Establishes CDI to regulate health insurance pursuant to the
Insurance Code and the Department of Managed Health Care
(DMHC) to regulate health plans under the Knox-Keene Act.
2. Requires, under MHPA, health plans and health insurers to
provide coverage for the diagnosis and medically necessary
treatment of severe mental illnesses of a person of any age,
and of serious emotional disturbances of a child, as
specified, under the same terms and conditions applied to
other medical conditions, as specified.
3. Requires, under MHPA, maximum lifetime benefits, copayments
and coinsurance, and individual and family deductibles to be
applied equally to all benefits under the plan or policy.
4. Defines, under MHPA, "severe mental illnesses" to include:
A. Schizophrenia;
B. Schizoaffective disorder;
C. Bipolar disorder (manic-depressive illness);
D. Major depressive disorders;
E. Panic disorder;
F. Obsessive-compulsive disorder;
G. Pervasive developmental disorder (PDD) or autism;
H. Anorexia nervosa; and
I. Bulimia nervosa.
5. Requires health plans and insurers to also provide coverage
for behavioral health treatment (BHT) for PDD or autism no
later than July 1, 2012, and requires the coverage to be
provided in the same manner and subject to the same
requirements as provided in #2-4 above.
6. Requires health plans and insurers to maintain an adequate
network that includes qualified autism service providers who
supervise and employ qualified autism service professionals
or paraprofessionals who provide and administer BHT.
7. Establishes Kaiser Small Group HMO as California's Essential
Health Benefits (EHB) benchmark plan, which includes MHPA,
treatment for behavioral health, treatment for PDD or autism,
the federal Mental Health Parity and Addiction Equity Act of
2008 and all rules, regulations and guidance issued pursuant
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to the Affordable Care Act, as mandated coverage required of
non-grandfathered individual and small group health plan
contracts and insurance policies.
This bill:
1. Authorizes the Commissioner to assess administrative
penalties against insurers for violations of MHPA and
requirements associated with BHT for PDD or autism.
2. Makes any person who violates the laws described in #1 above,
or who violates any rules or orders adopted or issued
pursuant to laws governing health insurers, as specified,
based on a violation of the laws described in #1 above,
liable for a penalty not to exceed $2,500 for each violation
or, for a violation that is ongoing and continuous, not to
exceed $2,500 for each day that the violation continues.
3. Makes each patient harmed by a violation of MHPA and
requirements associated with BHT for PDD, as specified, a
separate and distinct violation subject to the penalties set
forth in this bill.
4. Makes the remedies provided by this bill and by other
sections of the Insurance Code not exclusive, and authorizes
that the remedies be sought and employed in any combination
to enforce the laws governing health insurers, as specified.
5. Authorizes the Commissioner to determine penalties imposed
pursuant to these provisions, as specified.
Prior Legislation
SB 126 (Steinberg, Chapter 680, Statutes of 2013) extends, until
January 1, 2017, the sunset date of an existing state health
benefit mandate that requires health plans and health insurance
policies to cover BHT for PDD or autism and requires plans and
insurers to maintain adequate networks of service providers.
AB 1453 (Monning, Chapter 854, Statutes of 2012) and SB 951
(Hernandez, Chapter 866, Statutes of 2012) established
California's EHBs.
SB 946 (Steinberg, Chapter 650, Statutes of 2012) requires
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health plans and health insurance policies to cover BHT for PDD
or autism, requires plans and insurers to maintain adequate
networks of autism service providers, established an Autism Task
Force in DMHC, and sunsets the bill's autism mandate provisions
on July 1, 2014.
SB 1283 (Steinberg, 2010) would have established guidelines to
expedite the appeals process for grievances that are filed with
DMHC and imposed fines on health plans that did not comply, as
specified. The bill was vetoed by Governor Schwarzenegger.
AB 88 (Thomson, Chapter 534, Statutes of 1999) requires a health
care service plan contract or disability insurance policy to
provide coverage for severe mental illness, and for the serious
emotional disturbances of a child under the same terms and
conditions as applied to other medical conditions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 4/30/14)
Department of Insurance (source)
American Association for Marriage and Family Therapy
Autism Speaks
California Association for Behavior Analysis
California Chapter American College of Emergency Physicians
California Council of Community Mental Health Agencies
California Mental Health Planning Council
California Psychiatric Association
California Psychological Association
Children Now
Mental Health America of California
National Alliance on Mental Illness
Southern California Psychiatric Society
The Children's Partnership
OPPOSITION : (Verified 4/30/14)
Association of California Life and Health Insurance Companies
ARGUMENTS IN SUPPORT : CDI sponsors this bill to give CDI
equal treatment with DMHC enforcement penalties for
non-compliance with the MHPA. California's MHPA requires that
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all comprehensive health insurance policies provide coverage for
the diagnosis and medically necessary treatment of severe mental
illness of a person of any age, and of serious emotional
disturbance of a child under the same terms and conditions
applied to other medical conditions. CDI promulgated emergency
regulations which prohibit specified conditions or limitations
on coverage of therapies when determined to be medically
necessary to ensure compliance with MHPA. CDI is currently
working on finalizing permanent mental health parity
regulations. In addition, California's EHB law incorporates the
requirements from both the federal and state mental health
parity laws. Currently DMHC regulations allow for a violation
that is ongoing and continuous to be subject to a civil penalty
for each day that a violation continues. Additionally, each
enrollee harmed constitutes a separate and distinct violation
subject to civil penalty. Under the Insurance Code every
violation is an unfair insurance practice, which cannot be
multiplied by the number of days the violation occurs. This
bill rectifies the penalty disparity between CDI and DMHC. The
California Association for Behavior Analysis believes CDI should
be given penalty authority in line with the penalty authority of
DMHC to enhance current enforcement efforts of the MHPA to
ensure consumers have access to mental health services in
compliance with the law.
ARGUMENTS IN OPPOSITION : The Association of California Life
and Health Insurance Companies (ACLHIC) writes that currently
CDI has the authority to evaluate the policies and procedures of
health insurers to ensure compliance with all requirements of
the law, including those services that fall within the mental
health parity statutes. As such, CDI already has very broad
authority under the Insurance Code to impose civil penalties of
up to $5,000 per act and/or $10,000 for a willful act or
practice against any person who engages in any unfair method of
competition or any unfair or deceptive act. ACLHIC adds that
this bill, as drafted, is not identical or even consistent with
the referenced DMHC civil penalty and the two enforcement
actions are, for numerous reasons, distinctively different.
JL:k 4/30/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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