BILL ANALYSIS                                                                                                                                                                                                    




          Appropriations Committee Fiscal Summary

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|                               |SB 254  (Speier)            |
|-------------------------------+----------------------------|
|                               |                            |
|-------------------------------+----------------------------|
|Hearing Date: 5/27/99          |Amended: 5/18/99            |
|-------------------------------+----------------------------|
|Consultant: David              |Policy Vote: Insurance 6-1  |
|Maxwell-Jolly                  |                            |
|                               |Judic. 6-3                  |
|                               |                            |
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____________________________________________________________ 

BILL SUMMARY: SB 254 requires the Department of  
Corporations to establish the Independent  Medical Review  
System which  would be available for review of any plan  
decision denying, delaying, limiting, or terminating health  
care covered by the plan.  Any  enrollee, including a  
Medi-Cal enrollee or, unless expressly preempted by federal  
law, a Medicare enrollee, may apply for an independent  
medical review.  The bill also revises the statutory  
grievance process  to shorten the time period the enrollee  
must pursue remedies under the process before being able to  
file a complaint with the department.
                         Fiscal Impact (in thousands)
  
Major Provisions    1999-2000     2000-01      2001-02      Fund  

Independent review system         unknown cost offset by feesCorp.
State employee heath benefits unknown cost         General &
                                                     Other
Medi-Cal managed care plans   unknown cost         General &
                                                     federal

STAFF COMMENTS:  SUSPENSE FILE

The bill authorizes health plan assessment to cover the  
cost of the independent review system.  The bill provisions  
that result in direct state cost include:
 Shortens from 60 to 30 the time by which a plan must  
  respond to "grievances."  Shortening this time could  
  result in more complaints being referred to the state  
  because the state does not take complaints until the  










  existing 60 day period has expired. 
 Shortness from 60 to 30 days the requirement for the  
  department to review pending grievances and explain why  
  the grievance is still pending.
 Potential costs for the contract with the accrediting  
  organization.
 Audit of independent review decisions.
 Independent evaluation.

SB 189, on today's agenda, also establishes an independent  
review system.  The two bills differ in several ways: 
1.The situations when independent review is allowed, 
2.Standards for the admissibility of the reviewer's  
  findings in later proceedings,
3.The criteria for determining medical necessity, 
4.The timing of the review, and 
5.The Department of Corporation's role in making a  
  preliminary review of the request for independent review.