Bill Text: CA SB1010 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Health care: prescription drug costs.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Failed) 2016-11-30 - From Assembly without further action. [SB1010 Detail]

Download: California-2015-SB1010-Amended.html
BILL NUMBER: SB 1010	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 30, 2016

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 11, 2016

   An act to amend Section  1385.03 of the Health and Safety
Code, and to amend Section 10181.3 of the Insurance Code, relating to
health care coverage.   1385.045 of, to add Section
1367.245 to, and to add Chapter 9 (commencing with Section 127675) to
Part 2 of Division 107 of the He   alth and Safety Code,
and to amend Section 10181.45 of, and to add Section 10123.204 to,
the Insurance Code, relating to health care. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1010, as amended, Hernandez. Health  care coverage:
rate review.   care: prescription drug costs.  

   Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care (DMHC)
and makes a willful violation of the act a crime. Existing law also
provides for the regulation of health insurers by the Department of
Insurance (DOI). Existing law requires health care service plans and
health insurers to file specified rate information with DMHC or DOI,
as applicable, for health care service plan contracts or health
insurance policies in the individual or small group markets and for
health care service plan contracts and health insurance policies in
the large group market.  
   This bill would require health care service plans or health
insurers that file the above-described rate information to report to
DMHC or DOI, on a date no later than the reporting of the rate
information, specified cost information regarding covered
prescription drugs, including generic drugs, brand name drugs,
specialty drugs, and prescription drugs provided in an outpatient
setting or sold in a retail setting. The information reported would
include, but not be limited to, the 25 most frequently prescribed
drugs and the average wholesale price for each drug and the 25 most
costly drugs by total plan or insurer spending and the average
wholesale price for each drug. DMHC and DOI would be required to
compile the reported information into a consumer-friendly report that
demonstrates the overall impact of drug costs on health care
premiums and publish the reports on their Internet Web sites by
January 1 of each year. Except for the report, DMHC and DOI would be
required to keep confidential all information provided pursuant to
these provisions.  
   Because a willful violation of the Knox-Keene Act is a crime, this
bill would impose a state-mandated local program.  
   This bill would require a manufacturer of a branded prescription
drug to notify state purchasers, health care service plans, health
insurers, and the chairs of specified Senate and Assembly committees
if it is increasing the wholesale acquisition cost of the drug by
more than 10% during any 12-month period or if it intends to
introduce to market a prescription drug that has a wholesale
acquisition cost of $10,000 or more annually or per course of
treatment. The bill would require a manufacturer of a generic
prescription drug with a specified price to notify state purchasers,
health care service plans, health insurers, and the chairs of
specified Senate and Assembly committees if it is increasing the
wholesale acquisition cost of the drug by more than 10% during any
12-month period. The bill would require a manufacturer, within 30
days of notification of a price increase, or of the introduction to
market of a prescription drug that has a wholesale acquisition cost
of $10,000 or more annually or per course of treatment, to report
specified information regarding the drug price to each state
purchaser, health care service plan, and health insurer, and would
require a manufacturer who fails to provide the required information
within the 30 days to be subject to a civil penalty of $1,000 per
day. The bill would also require the Legislature to conduct an annual
public hearing regarding the price increases and information
reported, as prescribed.  
   Existing law requires, for large group health care service plan
contracts and health insurance policies, each health care service
plan or health insurer to file with DMHC or DOI the weighted average
rate increase for all large group benefit designs during the 12-month
period ending January 1 of the following calendar year, and to also
disclose specified information for the aggregate rate information for
the large group market.  
   This bill would add to that disclosure of information for the
aggregate rate information for the large group market, the
requirement for health care service plans or health insurers to
disclose specified cost information regarding covered prescription
drugs, including generic drugs, brand name drugs excluding specialty
drugs, and specialty drugs dispensed at a pharmacy, network pharmacy,
or mail order pharmacy for outpatient use.  
   Existing constitutional provisions require that a statute that
limits the right of access to the meetings of public bodies or the
writings of public officials and agencies be adopted with findings
demonstrating the interest protected by the limitation and the need
for protecting that interest.  
   This bill would make legislative findings to that effect. 

   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care (DMHC) and makes a
willful violation of the act a crime. Existing law also provides for
the regulation of health insurers by the Department of Insurance
(DOI). Existing law requires health care service plans and health
insurers to file specified rate information with DMHC or DOI, as
applicable, at least 60 days prior to implementing a rate change for
individual or small group health care service plan contracts or
health insurance policies. Existing law requires a plan or insurer to
disclose as part of the filing, among other things, specified
information by aggregate benefit category, such as physician
services, ancillary services, and prescription drugs. 

   This bill would add as aggregate benefit categories "other medical
professional services" and "other medical devices and therapies."
Because a willful violation of the bill's requirements by a health
care service plan would be a crime, the bill would impose a
state-mandated local program.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1367.245 is added to the 
 Health and Safety Code   ,  immediately preceding
Section 1367.25  , to read:  
   1367.245.  (a) (1) A health care service plan that reports rate
information pursuant to Section 1385.03 or 1385.045 shall report the
information described in paragraph (2) to the department on a date no
later than it reports the rate information.
   (2) For all covered prescription drugs, including generic drugs,
brand name drugs, specialty drugs, and prescription drugs provided in
an outpatient setting or sold in a retail setting, all of the
following shall be reported:
   (A) The 25 most frequently prescribed drugs and the average
wholesale price for each drug.
   (B) The 25 most costly drugs by total plan spending and the
average wholesale price for each drug.
   (C) The 25 drugs with the highest year-over-year increase and the
average wholesale price for each drug.
   (b) The department shall compile the information reported pursuant
to subdivision (a) into a consumer-friendly report that demonstrates
the overall impact of drug costs on health care premiums. The data
in the report shall be aggregated and shall not reveal information
specific to individual health care service plans.
   (c) For the purposes of this section, a "specialty drug" is one
that exceeds the threshold for a specialty drug under the Medicare
Part D program (Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173)).
   (d) By January 1 of each year, the department shall publish on its
Internet Web site the report required pursuant to subdivision (b).
   (e) After the report required in subdivision (b) is released, the
department shall include the report as part of the public meeting
required pursuant to subdivision (b) of Section 1385.045.
   (f) Except for the report required pursuant to subdivision (b),
the department shall keep confidential all of the information
provided to the department pursuant to this section, and that
information shall be exempt from disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code). 
   SEC. 2.    Section 1385.045 of the   Health
and Safety Code   is amended to read: 
   1385.045.  (a) For large group health care service plan contracts,
each health plan shall file with the department the weighted average
rate increase for all large group benefit designs during the
12-month period ending January 1 of the following calendar year. The
average shall be weighted by the number of enrollees in each large
group benefit design in the plan's large group market and adjusted to
the most commonly sold large group benefit design by enrollment
during the 12-month period. For the purposes of this section, the
large group benefit design includes, but is not limited to, benefits
such as basic health care services and prescription drugs. The large
group benefit design shall not include cost sharing, including, but
not limited to, deductibles, copays, and coinsurance.
   (b) (1) A plan shall also submit any other information required
pursuant to any regulation adopted by the department to comply with
this article.
   (2) The department shall conduct an annual public meeting
regarding large group rates within three months of posting the
aggregate information described in this section in order to permit a
public discussion of the reasons for the changes in the rates,
benefits, and cost sharing in the large group market. The meeting
shall be held in either the Los Angeles area or the San Francisco Bay
area.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following for the aggregate rate information for
the large group market submitted under this section:
   (1) For rates effective during the 12-month period ending January
1 of the following year, number and percentage of rate changes
reviewed by the following:
   (A) Plan year.
   (B) Segment type, including whether the rate is community rated,
in whole or in part.
   (C) Product type.
   (D) Number of enrollees.
   (E) The number of products sold that have materially different
benefits, cost sharing, or other elements of benefit design.
   (2) For rates effective during the 12-month period ending January
1 of the following year, any factors affecting the base rate, and the
actuarial basis for those factors, including all of the following:
   (A) Geographic region.
   (B) Age, including age rating factors.
   (C) Occupation.
   (D) Industry.
   (E) Health status factors, including, but not limited to,
experience and utilization.
   (F) Employee, and employee and dependents, including a description
of the family composition used.
   (G) Enrollees' share of premiums.
   (H) Enrollees' cost sharing.
   (I) Covered benefits in addition to basic health care services, as
defined in Section 1345, and other benefits mandated under this
article.
   (J) Which market segment, if any, is fully experience rated and
which market segment, if any, is in part experience rated and in part
community rated.
   (K) Any other factor that affects the rate that is not otherwise
specified.
   (3) (A) The plan's overall annual medical trend factor assumptions
for all benefits and by aggregate benefit category, including
hospital inpatient, hospital outpatient, physician services,
prescription drugs and other ancillary services, laboratory, and
radiology for the applicable 12-month period ending January 1 of the
following year. A health plan that exclusively contracts with no more
than two medical groups in the state to provide or arrange for
professional medical services for the enrollees of the plan shall
instead disclose the amount of its actual trend experience for the
prior contract year by aggregate benefit category, using benefit
categories, to the maximum extent possible, that are the same as, or
similar to, those used by other plans.
   (B) The amount of the projected trend separately attributable to
the use of services, price inflation, and fees and risk for annual
plan contract trends by aggregate benefit category, including
hospital inpatient, hospital outpatient, physician services,
prescription drugs and other ancillary services, laboratory, and
radiology. A health plan that exclusively contracts with no more than
two medical groups in the state to provide or arrange for
professional medical services for the enrollees of the plan shall
instead disclose the amount of its actual trend experience for the
prior contract year by aggregate benefit category, using benefit
categories that are, to the maximum extent possible, the same or
similar to those used by other plans.
   (C) A comparison of the aggregate per enrollee per month costs and
rate of changes over the last five years for each of the following:
   (i) Premiums.
   (ii) Claims costs, if any.
   (iii) Administrative expenses.
   (iv) Taxes and fees.
   (D) Any changes in enrollee cost sharing over the prior year
associated with the submitted rate information, including both of the
following:
   (i) Actual copays, coinsurance, deductibles, annual out of pocket
maximums, and any other cost sharing by the benefit categories
determined by the department.
   (ii) Any aggregate changes in enrollee cost sharing over the prior
years as measured by the weighted average actuarial value, weighted
by the number of enrollees.
   (E) Any changes in enrollee benefits over the prior year,
including a description of benefits added or eliminated, as well as
any aggregate changes, as measured as a percentage of the aggregate
claims costs, listed by the categories determined by the department.
   (F) Any cost containment and quality improvement efforts since the
plan's prior year's information pursuant to this section for the
same category of health benefit plan. To the extent possible, the
plan shall describe any significant new health care cost containment
and quality improvement efforts and provide an estimate of potential
savings together with an estimated cost or savings for the projection
period.
   (G) The number of products covered by the information that
incurred the excise tax paid by the health plan. 
   (4) (A) For covered prescription drugs, including generic drugs,
brand name drugs excluding specialty drugs, and specialty drugs
dispensed at a plan pharmacy, network pharmacy, or mail order
pharmacy for outpatient use all of the following shall be disclosed:
 
   (i) The percentage of the premium attributable to prescription
drug costs for the prior year for each category of prescription
drugs.  
   (ii) The year-over-year increase in the percentage of the premium
attributable to each category of prescription drugs.  
   (iii) The year-over-year increase in per member, per month costs
for drug prices compared to other components of the health care
premium.  
   (iv) The specialty tier formulary list.  
   (B) The plan shall include the percentage of the premium
attributable to prescription drugs administered in a doctor's office
that are part of the medical benefit as separate from the pharmacy
benefit, if available. 
   (d) The information required pursuant to this section shall be
submitted to the department on or before October 1, 2016, and on or
before October 1 annually thereafter. Information submitted pursuant
to this section is subject to Section 1385.07.
   SEC. 3.    Chapter 9 (commencing with Section 127675)
is added to Part 2 of Division 107 of the   Health and
Safety Code   , to read:  
      CHAPTER 9.  PRESCRIPTION DRUG PRICING FOR STATE PURCHASERS


   127675.  (a) This chapter shall apply to any manufacturer of a
prescription drug that is purchased or reimbursed by any of the
following:
   (1) A state purchaser in California, including, but not limited
to, the Public Employees' Retirement System, the State Department of
Health Care Services, the Department of General Services, and the
Department of Corrections and Rehabilitation, or an entity acting on
behalf of a state purchaser.
   (2) A health care service plan licensed pursuant to Section 1353.
   (3) A health insurer holding a valid outstanding certificate of
authority from the Insurance Commissioner.
   (b) (1) A manufacturer of a branded prescription drug shall notify
each state purchaser, health care service plan, or health insurer if
it is increasing the wholesale acquisition cost of a prescription
drug by more than 10 percent during any 12-month period or if it
intends to introduce to market a prescription drug that has a
wholesale acquisition cost of ten thousand dollars ($10,000) or more
annually or per course of treatment. The notice shall be provided in
writing at least 60 days prior to the planned effective date of the
increase. A copy of the notice shall be provided concurrently to the
Chairs of the Senate Committee on Appropriations, the Senate
Committee on Budget and Fiscal Review, the Assembly Committee on
Appropriations, and the Assembly Committee on Budget.
   (2) A manufacturer of a generic prescription drug with a price of
one hundred dollars ($100) or more per 30-day supply shall notify a
state purchaser, health care service plan, or health insurer if it is
increasing the wholesale acquisition cost of the prescription drug
by more than 10 percent during a 12-month period. The notice shall be
provided in writing at least 60 days prior to the planned effective
date of the increase. A copy of the notice shall be provided
concurrently to the Chairs of the Senate Committee on Appropriations,
the Senate Committee on Budget and Fiscal Review, the Assembly
Committee on Appropriations, and the Assembly Committee on Budget.
   (3) (A) Within 30 days of notification of a price increase, or of
the introduction to market of a prescription drug that has a
wholesale acquisition cost of ten thousand dollars ($10,000) or more
annually or per course of treatment, a manufacturer shall report all
of the following information to each state purchaser, health care
service plan, or health insurer:
   (i) A justification for the proposed increase in the price of the
drug, including all information and supporting documentation as to
why the increase is justified.
   (ii) The total dollar amount of public funding received by the
manufacturer for the development and marketing, including, but not
limited to, state and federal tax credits, grants, and all other
public subsidies.
   (iii) The expected marketing budget for the drug.
   (iv) The date the drug was purchased if it was not developed by
the manufacturer.
   (v) A schedule of past price increases for the drug.
   (B) Failure to report the information to state purchasers, health
care service plans, or health insurers shall result in a civil
penalty of one thousand dollars ($1,000) per day for every day after
the 30-day notification period.
   (c) The Legislature shall conduct an annual public hearing
regarding the price increases and information reported pursuant to
this section. The hearing shall provide for public discussion of the
reasons for the price increases, emerging trends, decreases in drug
prices, and the impact on health care affordability and premiums.
   (d) This chapter shall not restrict the legal ability of a
pharmaceutical manufacturer to change prices as permitted under
federal law. 
   SEC. 4.    Section 10123.204 is added to the 
 Insurance Code   ,  immediately preceding Section
10123.206  , to read:  
   10123.204.  (a) (1) A health insurer that reports rate information
pursuant to Section 10181.3 or 10181.45 shall report the information
described in paragraph (2) to the department on a date no later than
it reports the rate information.
   (2) For all covered prescription drugs, including generic drugs,
brand name drugs, specialty drugs, and prescription drugs provided in
an outpatient setting or sold in a retail setting, all of the
following shall be reported:
   (A) The 25 most frequently prescribed drugs and the average
wholesale price for each drug.
   (B) The 25 most costly drugs by total insurer spending and the
average wholesale price for each drug.
   (C) The 25 drugs with the highest year-over-year increase and the
average wholesale price for each drug.
   (b) The department shall compile the information reported pursuant
to subdivision (a) into a consumer-friendly report that demonstrates
the overall impact of drug costs on health care premiums. The data
in the report shall be aggregated and shall not reveal information
specific to individual health insurers.
   (c) For the purposes of this section, a "specialty drug" is one
that exceeds the threshold for a specialty drug under the Medicare
Part D program (Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173)).
   (d) By January 1 of each year, the department shall publish on its
Internet Web site the report required pursuant to subdivision (b).
   (e) After the report required in subdivision (b) is released, the
department shall include the report as part of the public meeting
required pursuant to subdivision (b) of Section 10181.45.
   (f) Except for the report required pursuant to subdivision (b),
the department shall keep confidential all of the information
provided to the department pursuant to this section, and that
information shall be exempt from disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code). 
   SEC. 5.    Section 10181.45 of the  
Insurance Code   is amended to read: 
   10181.45.  (a) For large group health insurance policies, each
health insurer shall file with the department the weighted average
rate increase for all large group benefit designs during the 12-month
period ending January 1 of the following calendar year. The average
shall be weighted by the number of insureds in each large group
benefit design in the insurer's large group market and adjusted to
the most commonly sold large group benefit design by enrollment
during the 12-month period. For the purposes of this section, the
large group benefit design includes, but is not limited to, benefits
such as basic health care services and prescription drugs. The large
group benefit design shall not include cost sharing, including, but
not limited to, deductibles, copays, and coinsurance.
   (b) (1) A health insurer shall also submit any other information
required pursuant to any regulation adopted by the department to
comply with this article.
   (2) The department shall conduct an annual public meeting
regarding large group rates within three months of posting the
aggregate information described in this section in order to permit a
public discussion of the reasons for the changes in the rates,
benefits, and cost sharing in the large group market. The meeting
shall be held in either the Los Angeles area or the San Francisco Bay
area.
   (c) A health insurer subject to subdivision (a) shall also
disclose the following for the aggregate rate information for the
large group market submitted under this section:
   (1) For rates effective during the 12-month period ending January
1 of the following year, number and percentage of rate changes
reviewed by the following:
   (A) Plan year.
   (B) Segment type, including whether the rate is community rated,
in whole or in part.
   (C) Product type.
   (D) Number of insureds.
   (E) The number of products sold that have materially different
benefits, cost sharing, or other elements of benefit design.
   (2) For rates effective during the 12-month period ending January
1 of the following year, any factors affecting the base rate, and the
actuarial basis for those factors, including all of the following:
   (A) Geographic region.
   (B) Age, including age rating factors.
   (C) Occupation.
   (D) Industry.
   (E) Health status factors, including, but not limited to,
experience and utilization.
   (F) Employee, and employee and dependents, including a description
of the family composition used.
   (G) Insureds' share of premiums.
   (H) Insureds' cost sharing.
   (I) Covered benefits in addition to basic health care services, as
defined in Section 1345 of the Health and Safety Code, and other
benefits mandated under this article.
   (J) Which market segment, if any, is fully experience rated and
which market segment, if any, is in part experience rated and in part
community rated.
   (K) Any other factor that affects the rate that is not otherwise
specified.
   (3) (A) The insurer's overall annual medical trend factor
assumptions for all benefits and by aggregate benefit category,
including hospital inpatient, hospital outpatient, physician
services, prescription drugs and other ancillary services,
laboratory, and radiology for the applicable 12-month period ending
January 1 of the following year. A health insurer that exclusively
contracts with no more than two medical groups in the state to
provide or arrange for professional medical services for the health
insurer's insureds shall instead disclose the amount of its actual
trend experience for the prior contract year by aggregate benefit
category, using benefit categories, to the maximum extent possible,
that are the same or similar to those used by other insurers.
   (B) The amount of the projected trend separately attributable to
the use of services, price inflation, and fees and risk for annual
policy trends by aggregate benefit category, including hospital
inpatient, hospital outpatient, physician services, prescription
drugs and other ancillary services, laboratory, and radiology. A
health insurer that exclusively contracts with no more than two
medical groups in the state to provide or arrange for professional
medical services for the insureds shall instead disclose the amount
of its actual trend experience for the prior contract year by
aggregate benefit category, using benefit categories that are, to the
maximum extent possible, the same or similar to those used by other
insurers.
   (C) A comparison of the aggregate per insured per month costs and
rate of changes over the last five years for each of the following:
   (i) Premiums.
   (ii) Claims costs, if any.
   (iii) Administrative expenses.
   (iv) Taxes and fees.
   (D) Any changes in insured cost sharing over the prior year
associated with the submitted rate information, including both of the
following:
   (i) Actual copays, coinsurance, deductibles, annual out of pocket
maximums, and any other cost sharing by the benefit categories
determined by the department.
   (ii) Any aggregate changes in insured cost sharing over the prior
years as measured by the weighted average actuarial value, weighted
by the number of insureds.
   (E) Any changes in insured benefits over the prior year, including
a description of benefits added or eliminated as well as any
aggregate changes as measured as a percentage of the aggregate claims
costs, listed by the categories determined by the department.
   (F) Any cost containment and quality improvement efforts made
since the insurer's prior year's information pursuant to this section
for the same category of health insurer. To the extent possible, the
insurer shall describe any significant new health care cost
containment and quality improvement efforts and provide an estimate
of potential savings together with an estimated cost or savings for
the projection period.
   (G) The number of products covered by the information that
incurred the excise tax paid by the health insurer. 
   (4) (A) For covered prescription drugs, including generic drugs,
brand name drugs excluding specialty drugs, and specialty drugs
dispensed at a pharmacy, network pharmacy, or mail order pharmacy for
outpatient use all of the following shall be disclosed:  
   (i) The percentage of the premium attributable to prescription
drug costs for the prior year for each category of prescription
drugs.  
   (ii) The year-over-year increase in the percentage of the premium
attributable to each category of prescription drugs.  
   (iii) The year-over-year increase in per member, per month costs
for drug prices compared to other components of the health care
premium.  
   (iv) The specialty tier formulary list.  
   (B) The insurer shall include the percentage of the premium
attributable to prescription drugs administered in a doctor's office
that are part of the medical benefit as separate from the pharmacy
benefit, if available. 
   (d) The information required pursuant to this section shall be
submitted to the department on or before October 1, 2016, and on or
before October 1 annually thereafter. Information submitted pursuant
to this section is subject to Section 10181.7.
   SEC. 6.    The Legislature finds and declares that
Sections 1 and 4 of this act, which add Section 1367.245 to the
Health and Safety Code and Section 10123.204 to the Insurance Code,
impose a limitation on the public's right of access to the meetings
of public bodies or the writings of public officials and agencies
within the meaning of Section 3 of Article I of the California
Constitution. Pursuant to that constitutional provision, the
Legislature makes the following findings to demonstrate the interest
protected by this limitation and the need for protecting that
interest:  
   In order to protect proprietary, confidential information reported
by prescription drug manufacturers, health care service plans, and
health insurers, and to protect the integrity of the competitive
market, it is necessary that this act limit the public's right of
access to that information. 
   SEC. 7.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.  
  SECTION 1.    Section 1385.03 of the Health and
Safety Code is amended to read:
   1385.03.  (a) All health care service plans shall file with the
department all required rate information for individual and small
group health care service plan contracts at least 60 days prior to
implementing any rate change.
   (b) A plan shall disclose to the department all of the following
for each individual and small group rate filing:
   (1) Company name and contact information.
   (2) Number of plan contract forms covered by the filing.
   (3) Plan contract form numbers covered by the filing.
   (4) Product type, such as a preferred provider organization or
health maintenance organization.

       (5) Segment type.
   (6) Type of plan involved, such as for profit or not for profit.
   (7) Whether the products are opened or closed.
   (8) Enrollment in each plan contract and rating form.
   (9) Enrollee months in each plan contract form.
   (10) Annual rate.
   (11) Total earned premiums in each plan contract form.
   (12) Total incurred claims in each plan contract form.
   (13) Average rate increase initially requested.
   (14) Review category: initial filing for new product, filing for
existing product, or resubmission.
   (15) Average rate of increase.
   (16) Effective date of rate increase.
   (17) Number of subscribers or enrollees affected by each plan
contract form.
   (18) The plan's overall annual medical trend factor assumptions in
each rate filing for all benefits and by aggregate benefit category,
including hospital inpatient, hospital outpatient, physician
services, prescription drugs and other ancillary services,
laboratory, and radiology. A plan may provide aggregated additional
data that demonstrates or reasonably estimates year-to-year cost
increases in specific benefit categories in the geographic regions
listed in Sections 1357.512 and 1399.855. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.
   (19) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, other medical professional
services, ancillary services, prescription drugs and other medical
devices and therapies, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.
   (20) A comparison of claims cost and rate of changes over time.
   (21) Any changes in enrollee cost sharing over the prior year
associated with the submitted rate filing.
   (22) Any changes in enrollee benefits over the prior year
associated with the submitted rate filing.
   (23) The certification described in subdivision (b) of Section
1385.06.
   (24) Any changes in administrative costs.
   (25) Any other information required for rate review under PPACA.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following aggregate data for all rate filings
submitted under this section in the individual and small group health
plan markets:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of subscribers.
   (E) Number of covered lives affected.
   (2) The plan's average rate increase by the following categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
   (d) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.
   (e) A plan shall submit any other information required under
PPACA. A plan shall also submit any other information required
pursuant to any regulation adopted by the department to comply with
this article.  
  SEC. 2.    Section 10181.3 of the Insurance Code
is amended to read:
   10181.3.  (a) All health insurers shall file with the department
all required rate information for individual and small group health
insurance policies at least 60 days prior to implementing any rate
change.
   (b) An insurer shall disclose to the department all of the
following for each individual and small group rate filing:
   (1) Company name and contact information.
   (2) Number of policy forms covered by the filing.
   (3) Policy form numbers covered by the filing.
   (4) Product type, such as indemnity or preferred provider
organization.
   (5) Segment type.
   (6) Type of insurer involved, such as for profit or not for
profit.
   (7) Whether the products are opened or closed.
   (8) Enrollment in each policy and rating form.
   (9) Insured months in each policy form.
   (10) Annual rate.
   (11) Total earned premiums in each policy form.
   (12) Total incurred claims in each policy form.
   (13) Average rate increase initially requested.
   (14) Review category: initial filing for new product, filing for
existing product, or resubmission.
   (15) Average rate of increase.
   (16) Effective date of rate increase.
   (17) Number of policyholders or insureds affected by each policy
form.
   (18) The insurer's overall annual medical trend factor assumptions
in each rate filing for all benefits and by aggregate benefit
category, including hospital inpatient, hospital outpatient,
physician services, prescription drugs and other ancillary services,
laboratory, and radiology. An insurer may provide aggregated
additional data that demonstrates or reasonably estimates
year-to-year cost increases in specific benefit categories in the
geographic regions listed in Sections 10753.14 and 10965.9. For
purposes of this paragraph, "major geographic region" shall be
defined by the department and shall include no more than nine
regions.
   (19) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual policy trends
by aggregate benefit category, such as hospital inpatient, hospital
outpatient, physician services, other medical professional services,
ancillary services, prescription drugs and other medical devices and
therapies, laboratory, and radiology.
   (20) A comparison of claims cost and rate of changes over time.
   (21) Any changes in insured cost sharing over the prior year
associated with the submitted rate filing.
   (22) Any changes in insured benefits over the prior year
associated with the submitted rate filing.
   (23) The certification described in subdivision (b) of Section
10181.6.
   (24) Any changes in administrative costs.
   (25) Any other information required for rate review under PPACA.
   (c) An insurer subject to subdivision (a) shall also disclose the
following aggregate data for all rate filings submitted under this
section in the individual and small group health insurance markets:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of policyholders.
   (E) Number of covered lives affected.
   (2) The insurer's average rate increase by the following
categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
insurer's last rate filing for the same category of health benefit
plan. To the extent possible, the insurer shall describe any
significant new health care cost containment and quality improvement
efforts and provide an estimate of potential savings together with an
estimated cost or savings for the projection period.
   (d) The department may require all health insurers to submit all
rate filings to the National Association of Insurance Commissioners'
System for Electronic Rate and Form Filing (SERFF). Submission of the
required rate filings to SERFF shall be deemed to be filing with the
department for purposes of compliance with this section.
   (e) A health insurer shall submit any other information required
under PPACA. A health insurer shall also submit any other information
required pursuant to any regulation adopted by the department to
comply with this article.  
  SEC. 3.    No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution. 
                                      
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