BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 55|
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THIRD READING
Bill No: AB 55
Author: Migden (D), et al
Amended: 9/9/99 in Senate
Vote: 21
SENATE INSURANCE COMMITTEE : 7-0, 8/18/99
AYES: Speier, Escutia, Figueroa, Hughes, Johnston, Schiff,
Sher
NOT VOTING: Johnson, Leslie, Lewis
SENATE APPROPRIATIONS COMMITTEE : 9-1, 9/3/99
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Karnette,
McPherson, Perata, Vasconcellos
NOES: Kelley
NOT VOTING: Johnson, Leslie, Mountjoy
ASSEMBLY FLOOR : 45-27, 6/2/99 - See last page for vote
SUBJECT : Health care service plans: independent
medical review
SOURCE : Author
DIGEST : This bill establishes in the Department of
Corporations for health service plans and the Department of
Insurance an independent medical review system, as
specified.
Senate Floor Amendments of 9/9/99 :
1.Clarify that it is the Medicare beneficiaries who are
CONTINUED
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enrolled in a health care service plan who will not be
excluded from the Independent Review process unless
expressly preempted by federal law.
2.Clarify an enrollee may apply to the Independent Medical
Review process when any one of the following three
conditions has occurred rather than all three:
A. the enrollee's provider has recommended a health
care service as medically necessary, or
B. the enrollee has received urgent care or emergency
services that a provider determined was medically
necessary, or
C. the enrollee has been seen by an in-plan provider
for the diagnosis or treatment of the medical
condition for which the enrollee seeks independent
review.
3.Clarify the plan will have liability to pay for services
provided by an out-of-plan provider if the enrollee
secured urgent or emergency medical care or other
compelling care which was later found by the Independent
Medical Review organization to be medically necessary.
4.Identify the department as the designator of the
Independent Medical Review organization following the
enrollee's application for Independent Medical Review.
5.Expands the director's ability to establish additional
requirements consistent with the purposes of this Article
to assist the department in carrying out its
responsibilities.
6.Eliminate the provision which requires the plan, upon
receiving an Independent Medical Review decision adopted
by the director that finds that the health care service
was medically necessary, to immediately notify the
enrollee and offer to promptly implement the decision and
to reimburse the enrollee for any reasonable costs
associated with the provision of urgent care, emergency
services or other compelling health care services secured
outside of the plan provider network. NOTE: This exact
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provision was amended into the September 8, 1999 version
of SB 189 in the same code section, Health and Safety
Code Section 1374.34.
ANALYSIS : Existing law:
1.Provides that the State Department of Corporations (DOC)
regulates plans and the State Department of Insurance
(DOI) regulates disability insurers (insurers). Requires
plans to maintain a grievance system.
2.Requires plans and insurers to have an external IMRS to
examine coverage decisions regarding experimental or
investigational therapies for enrollees with a terminal
illness.
This bill:
1.Would establish, commencing January 1, 2001, an IMRS for
enrollees to seek an independent review whenever health
care services have been denied, delayed, or otherwise
limited by a plan or one of its contracting providers
based on a finding that the service is not medically
necessary or appropriate, and would not exclude Medi-Cal
or Medicare beneficiaries from participation.
2.Would provide that independent reviews be conducted by
expert medical organizations independent of plans and
certified by an accrediting organization, pursuant to
conflict of interest provisions.
3.Would direct DOC to adopt the determination of the
independent review entity, which shall be binding on the
plan. In cases where the enrollee's position prevails,
the plan must either offer the enrollee the disputed
health care service or reimburse the enrollee for care
received if so directed by DOC.
4.Would specify that the enrollee shall not pay any
application o processing fees of any kind. The costs of
IMRS would be borne by the health plan or insurer.
5.Would create a similar IMRS system in the Department of
Insurance for review of similar decisions by insurers.
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Background
Last year, the Governor's Managed Health Care Improvement
Task Force issued a series of recommendations to reform
managed health care including the recommendation that "the
state entity for regulation of managed care should be
directed to establish and implement by January 1, 2000, an
independent third-party review process that would provide
consumers and health plans with an unbiased, expert-based
review of grievances pertaining to delays, denials, or
curtailment of care based on medical necessity,
appropriateness, and all experimental-investigational
therapies."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/18/99) (per Senate Insurance
analysis) (Unable
to re-verify at time of writing)
American Federation of State, County and Municipal
Employees
California School Employees Association
California Teachers Association
Consumers Union
Union of American Physicians and Dentists
Western Center on Law and Poverty
OPPOSITION : (Unable to verify at time of writing)
- - -
ARGUMENTS IN SUPPORT : The author states that the right
to sue helps people only after they have been harmed,
whereas a IMRS will help people before their condition
worsens; and the right to sue is the "hammer" that will
keep the system honest. Currently only government
employees are allowed to file lawsuits against plans.
ARGUMENTS IN OPPOSITION : There was opposition by various
health organizations on the previous version of the bill,
however, opposition was based mostly on liability
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provisions not contained in the bill now.
ASSEMBLY FLOOR :
AYES: Alquist, Aroner, Bock, Calderon, Cardenas, Cardoza,
Corbett, Correa, Davis, Ducheny, Dutra, Firebaugh,
Florez, Gallegos, Granlund, Havice, Hertzberg, Honda,
Jackson, Keeley, Knox, Kuehl, Lempert, Longville,
Lowenthal, Mazzoni, Migden, Papan, Reyes, Romero, Scott,
Shelley, Soto, Steinberg, Strom-Martin, Thomson,
Torlakson, Vincent, Washington, Wayne, Wesson, Wiggins,
Wildman, Wright, Villaraigosa
NOES: Aanestad, Ackerman, Ashburn, Baldwin, Bates, Battin,
Brewer, Briggs, Campbell, Cox, Dickerson, Frusetta,
House, Kaloogian, Leach, Leonard, Maldonado, Margett,
Olberg, Oller, Robert Pacheco, Rod Pacheco, Pescetti,
Runner, Strickland, Thompson, Zettel
NOT VOTING: Baugh, Cedillo, Cunneen, Floyd, Machado,
Maddox, McClintock, Nakano
DLWL:sl 1/3/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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