Bill Text: CA SB964 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Health care coverage.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-09-25 - Chaptered by Secretary of State. Chapter 573, Statutes of 2014. [SB964 Detail]

Download: California-2013-SB964-Amended.html

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BILL NUMBER: SB 964	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 4, 2014
	AMENDED IN ASSEMBLY  JULY 1, 2014
	AMENDED IN SENATE  APRIL 9, 2014

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 10, 2014

   An act to amend Section 1367.03 of, to add  Sections
1380.4, 1380.5,1380.6, and 1380.7   Section 1367.035
 to, and to repeal  and add  Section 1380.3 of, the
Health and Safety Code, and to  amend Section 14456 of, and to
 add Section 14456.3  to   to,  the
Welfare and Institutions Code, relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 964, as amended, Hernandez. Health care coverage.
   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 requires  the department   DMHC
 to adopt standards for timeliness of access to care and
requires that contracts between health care service plans and
providers ensure compliance with those standards. Existing law
requires health care service plans to annually report to  the
department   DMHC  on compliance with those
standards in a manner specified by  the department 
 DMHC  . Under existing law, every 3 years,  the
department   DMHC  is required to review
information regarding compliance with those standards and make
recommendations for changes that further protect enrollees.
   This bill would  instead require the department to conduct
that review annually. The bill would also require health care
service plans, in making reports to the department on compliance with
the timeliness standards, to use standardized survey methodology if
developed by the department   authorize DMHC to develop
standardized methodologies to be used by plans in making the reports
on compliance with the timeliness standards, as specified, and would
make the development and adoption of those methodologies exempt from
the Administrative Procedure Act until January 1, 2020. The bill
would require DMHC to annually review information regarding
compliance with the timeliness standards and to post its findings
from the reviews, and any waivers or alternative standards approved
by DMHC, on its Internet Web site. The bill would also require a
health care service plan to annually, commencing March 1, 2015,
submit data regarding network adequacy to DMHC, as specified, and
would   require DMHC to review that data for compliance with
the Knox-Keene Act and post its findings from that review on its
Internet Web site  . Because a violation of  that
requirement   the requireme   nts imposed on
health care service plans  would be a crime, the bill would
impose a state-mandated local program.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services 
(DHCS)  , under which qualified low-income individuals receive
health care services. One of the methods by which Medi-Cal services
are provided is pursuant to contracts with various types of managed
health care plans.  Existing law establishes the California
Health Benefit Exchange for the purpose of facilitating the
enrollment of qualified individuals and small employers in qualified
health plans.   Existing law requires DHCS to conduct
annual medical audits of specified managed care plans and requires
that these reviews be scheduled and carried out jointly with reviews
carried out pursuant to the Knox-Keene Act.  The Knox-Keene Act
requires  the department   DMHC  to
periodically conduct an onsite medical survey of the health delivery
system of each health care service plan and exempts a plan that
provides services solely to Medi-Cal beneficiaries from the survey
upon submission to  the department   DMHC 
the medical  survey  audit conducted by  the
State Department of Health Care Services   DHCS 
as part of the Medi-Cal contracting process.
   This bill would eliminate that exemption  , would require
a plan that provides services to Medi-Cal beneficiaries and a plan
that provides services to enrollees in the California Health Benefit
Exchange to be surveyed by those product lines distinct from other
product lines and to be annually reviewed with respect to those
product lines for compliance with accessibility and availability of
services, continuity of care, and quality management, as specified.
The bill would also require a plan that provides services to Medi-Cal
beneficiaries through specified programs to be surveyed annually
with respect to the populations enrolled in those products until 5
years after completion of initial enrollment in those products, as
specified. The bill   and  would require 
the department   DMHC  to coordinate  these
surveys and reviews   the surveys  conducted with
respect to Medi-Cal managed care plans with  the State
Department of Health Care Services   DHCS, to the extent
possible  , provided that the coordination does not result in a
delay of the surveys  or reviews  or the failure of
 the department   DMHC  to conduct the
 surveys or reviews.   surveys. 
   This bill would also require  the State Department of
Health Care Services to post its medical survey audit findings of
Medi-Cal managed care plans on its Internet Web site  
DHCS to publicly report its medical audit findings as soon as
possible, as specified,  and to share those findings and other
information with respect to Knox-Keene plans with  the
Department of Managed Health Care   DMHC. The bill would
specify that any preliminary audit findings shared with DMHC under
this provision would be exempt from disclosure under the California
Public Records Act  .
   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 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. 
   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 1367.03 of the Health and Safety Code is
amended to read:
   1367.03.  (a) Not later than January 1, 2004, the department shall
develop and adopt regulations to ensure that enrollees have access
to needed health care services in a timely manner. In developing
these regulations, the department shall develop indicators of
timeliness of access to care and, in so doing, shall consider the
following as indicators of timeliness of access to care:
   (1) Waiting times for appointments with physicians, including
primary care and specialty physicians.
   (2) Timeliness of care in an episode of illness, including the
timeliness of referrals and obtaining other services, if needed.
   (3) Waiting time to speak to a physician, registered nurse, or
other qualified health professional acting within his or her scope of
practice who is trained to screen or triage an enrollee who may need
care.
   (b) In developing these standards for timeliness of access, the
department shall consider the following:
   (1) Clinical appropriateness.
   (2) The nature of the specialty.
   (3) The urgency of care.
   (4) The requirements of other provisions of law, including Section
1367.01 governing utilization review, that may affect timeliness of
access.
   (c) The department may adopt standards other than the time elapsed
between the time an enrollee seeks health care and obtains care. If
the department chooses a standard other than the time elapsed between
the time an enrollee first seeks health care and obtains it, the
department shall demonstrate why that standard is more appropriate.
In developing these standards, the department shall consider the
nature of the plan network.
   (d) The department shall review and adopt standards, as needed,
concerning the availability of primary care physicians, specialty
physicians, hospital care, and other health care, so that consumers
have timely access to care. In so doing, the department shall
consider the nature of physician practices, including individual and
group practices as well as the nature of the plan network. The
department shall also consider various circumstances affecting the
delivery of care, including urgent care, care provided on the same
day, and requests for specific providers. If the department finds
that health care service plans and health care providers have
difficulty meeting these standards, the department may make
recommendations to the Assembly Committee on Health and the Senate
Committee on Insurance of the Legislature pursuant to subdivision
(i).
   (e) In developing standards under subdivision (a), the department
shall consider requirements under federal law, requirements under
other state programs, standards adopted by other states, nationally
recognized accrediting organizations, and professional associations.
The department shall further consider the needs of rural areas,
specifically those in which health facilities are more than 30 miles
apart and any requirements imposed by the State Department of Health
Care Services on health care service plans that contract with the
State Department of Health Care Services to provide Medi-Cal managed
care.
   (f) (1) Contracts between health care service plans and health
care providers shall ensure compliance with the standards developed
under this section. These contracts shall require reporting by health
care providers to health care service plans and by health care
service plans to the department to ensure compliance with the
standards.
   (2) Health care service plans shall report annually to the
department on compliance with the standards in a manner specified by
the department. The reported information shall allow consumers to
compare the performance of plans and their contracting providers in
complying with the standards, as well as changes in the compliance of
plans with these standards. 
   (3) In making reports to the department pursuant to this
subdivision, health care service plans shall use standardized survey
methodology if developed by the department.  
   (3) The department may develop standardized methodologies for
reporting that shall be used by health care service plans to
demonstrate compliance with this section and any regulations adopted
pursuant to it. The methodologies shall be sufficient to determine
compliance with the standards developed under this section for
different networks of providers if a health care service plan uses a
different network for Medi-Cal managed care products than for other
products or if a health care service plan uses a different network
for individual market products than for small group market products.
The development and adoption of these methodologies shall not be
subject to the Administrative Procedure Act (Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code) until January 1, 2020. The department shall consult
with stakeholder groups in developing standardized methodologies
under this paragraph. 
   (g) (1) When evaluating compliance with the standards, the
department shall focus more upon patterns of noncompliance rather
than isolated episodes of noncompliance.
   (2) The director may investigate and take enforcement action
against plans regarding noncompliance with the requirements of this
section. Where substantial harm to an enrollee has occurred as a
result of plan noncompliance, the director may, by order, assess
administrative penalties subject to appropriate notice of, and the
opportunity for, a hearing in accordance with Section 1397. The plan
may provide to the director, and the director may consider,
information regarding the plan's overall compliance with the
requirements of this section. The administrative penalties shall not
be deemed an exclusive remedy available to the director. These
penalties shall be paid to the Managed Care Administrative Fines and
Penalties Fund and shall be used for the purposes specified in
Section 1341.45. The director shall periodically evaluate grievances
to determine if any audit, investigative, or enforcement actions
should be undertaken by the department.
   (3) The director may, after appropriate notice and opportunity for
hearing in accordance with Section 1397, by order, assess
administrative penalties if the director determines that a health
care service plan has knowingly committed, or has performed with a
frequency that indicates a general business practice, either of the
following:
   (A) Repeated failure to act promptly and reasonably to assure
timely access to care consistent with this chapter.
   (B) Repeated failure to act promptly and reasonably to require
contracting providers to assure timely access that the plan is
required to perform under this chapter and that have been delegated
by the plan to the contracting provider when the obligation of the
plan to the enrollee or subscriber is reasonably clear.
   (C) The administrative penalties available to the director
pursuant to this section are not exclusive, and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies deemed warranted by the director to enforce
this chapter.
   (4) The administrative penalties shall be paid to the Managed Care
Administrative Fines and Penalties Fund and shall be used for the
purposes specified in Section 1341.45.
   (h) The department shall work with the patient advocate to assure
that the quality of care report card incorporates information
provided pursuant to subdivision (f) regarding the degree to which
health care service plans and health care providers comply with the
requirements for timely access to care.
   (i) The department shall annually review information regarding
compliance with the standards developed under this section and shall
make recommendations for changes that further protect enrollees. 
Commencing no later than December 1, 2015, and annually thereafter,
the department shall post its findings from the review on its
Internet Web site.  
   (j) The department shall post on its Internet Web site any waivers
or alternative standards that the department approves under this
section on or after January 1, 2015. 
   SEC. 2.    Section 1367.035 is added to the 
 Health and Safety Code   , to read:  
   1367.035.  (a) Commencing March 1, 2015, and annually thereafter,
a health care service plan shall submit to the department, in a
manner specified by the department, data regarding network adequacy,
including, but not limited to, the following:
   (1) Provider location.
   (2) Area of specialty.
   (3) Provider admitting privileges.
   (4) Providers with open practices.
   (5) Provider patient capacity.
   (6) The number of patients assigned to a provider.
   (7) Complaints regarding network adequacy and timely access that
the health care service plan received during the preceding year.
   (b) A health care service plan that uses a network for its
Medi-Cal managed care product line that is different from the network
used for its other product lines shall submit the data required
under subdivision (a) for its Medi-Cal managed care product line
separately from the data submitted for its other product lines.
   (c) A health care service plan that uses a network for its
individual market product line that is different from the network
used for its small group market product line shall submit the data
required under subdivision (a) for its individual market product line
separate from the data submitted for its small group market product
line.
   (d) The department shall review the data submitted pursuant to
this section for compliance with this chapter and the regulations
adopted thereunder. The department shall post its findings from that
review on its Internet Web site.
   (e) In collecting data under this section, the department shall
maximize the use of all relevant existing reports and information
already submitted to the department by a plan and, if applicable, the
outcomes of medical audits and monthly provider files provided to
the department by the State Department of Health Care Services
pursuant to Section 14456.3 of the Welfare and Institutions Code.
This subdivision does not limit the authority of the department to
request additional information from the plan as deemed necessary to
carry out and complete any enforcement action initiated under this
chapter. 
   SEC. 2.   SEC. 3.   Section 1380.3 of
the Health and Safety Code is repealed. 
  SEC. 3.    Section 1380.4 is added to the Health
and Safety Code, to read:
   1380.4.  A plan that provides services to Medi-Cal beneficiaries
pursuant to Chapter 8 (commencing with Section 14200) of Part 3 of
Division 9 of the Welfare and Institutions Code shall do both of the
following:
   (a) Be surveyed under Section 1380 by its Medi-Cal managed care
product lines distinct from its other product lines, if any, in order
to determine whether the services received by Medi-Cal beneficiaries
comply with the requirements of this chapter.
   (b) (1) Be annually reviewed, with respect to its Medi-Cal managed
care product lines, for compliance with all of the following:
   (A) Accessibility and availability of services, including network
adequacy and timely access to care.
   (B) Continuity of care.
   (C) Quality management.
   (2) This subdivision shall not be construed to require an onsite
survey in addition to the survey required by Section 1380.
   (3) The department may conduct the annual review required by this
subdivision through telephonic or other means and is not required to
perform the review onsite, unless the director determines that an
onsite review is necessary.
   (4) In conducting the annual review required by this subdivision,
the department shall maximize the use of all relevant existing
reports and information already submitted to the department by the
plan and, if applicable, the outcomes of medical survey audits and
monthly provider files provided to the department by the Department
of Health Care Services pursuant to Section 14456.3 of the Welfare
and Institutions Code. This paragraph shall not limit the authority
of the department to request additional information from the plan as
deemed necessary to carry out and complete the annual review required
by this subdivision and any enforcement action initiated as a result
of the review.  
  SEC. 4.    Section 1380.5 is added to the Health
and Safety Code, to read:
   1380.5.  (a) A plan that provides services to enrollees in the
California Health Benefit Exchange pursuant to Title 22 (commencing
with Section 100500) of the Government Code shall do both of the
following:
   (1) Be surveyed under Section 1380 by its product lines sold
through the Exchange distinct from its product lines sold outside the
Exchange, if any, in order to determine whether the services
received by the Exchange enrollees comply with the requirements of
this chapter.
   (2) (A) Be annually reviewed, with respect to its product lines
sold through the Exchange, for compliance with all of the following:
   (i) Accessibility and availability of services, including network
adequacy and timely access to care.
   (ii) Continuity of care.
   (iii) Quality management.
   (B) This paragraph shall not be construed to require an onsite
survey in addition to the survey required by Section 1380.
   (C) The department may conduct the annual review required by this
paragraph through telephonic or other means and is not required to
perform the review onsite, unless the director determines that an
onsite review is necessary.
   (D) In conducting the annual review required by this paragraph,
the department shall maximize the use of all relevant existing
reports and information already submitted to the department by the
plan and, if applicable, the outcomes of medical survey audits and
monthly provider files provided to the department by the Department
of Health Care Services pursuant to Section 14456.3 of the Welfare
and Institutions Code. This subparagraph shall not limit the
authority of the department to request additional information from
the plan as deemed necessary to carry out and complete the annual
review required by this paragraph and any enforcement action
initiated as a result of the review.
   (b) This section shall not apply to either of the following:
   (1) A plan that uses the same network for its product lines sold
in the individual and small group markets through the Exchange as the
network used for its product lines sold in the individual and small
group markets outside the Exchange.
   (2) A plan that uses the same network for its product lines sold
through the Exchange as the network used for its Medi-Cal managed
care product lines.  
  SEC. 5.    Section 1380.6 is added to the Health
and Safety Code, to read:
   1380.6.  A plan that enrolls Medi-Cal beneficiaries as a result of
any of the following shall be surveyed annually under Section 1380
with respect to the populations enrolled in those products until five
years after the completion of initial enrollment under those
products:
   (a) The transition of Healthy Families Program enrollees to the
Medi-Cal program pursuant to Chapter 16.2 (commencing with Section
12694.1) of Part 6.2 of Division 2 of the Insurance Code.
   (b) Article 2.82 (commencing with Section 14087.98) of Chapter 7
of Part 3 of Division 9 of the Welfare and Institutions Code.
   (c) Section 14182 of the Welfare and Institutions Code.
   (d) Sections 14182.16 and 14182.17, or Section 14132.275, of the
Welfare and Institutions Code. 
   SEC. 6.   SEC. 4.   Section 
1380.7   1380.3  is added to the Health and Safety
Code, to read:
    1380.7.   1380.3.   The department
shall coordinate the surveys  and reviews  conducted
pursuant to  Sections 1380.4 and 1380.6  
Section 1380  with the State Department of Health Care Services
 , to the extent possible,  in order to allow for
simultaneous oversight of Medi-Cal managed care plans by both
departments, provided that this coordination does not result in a
delay of the surveys  or reviews  required under
 Sections 1380.4and 1380.6   Section 1380 
or in the failure of the department to conduct those surveys 
or reviews  .
   SEC. 5.    Section 14456 of the   Welfare
and Institutions Code   is amended to read: 
   14456.  The department shall conduct annual medical audits of each
prepaid health plan unless the director determines there is good
cause for additional reviews.
   The reviews shall use the standards and criteria established
pursuant to the Knox-Keene Health Care Service Plan Act of 1975,
 or to Chapter 11A (commencing with Section 11491) of Part 2
of Division 2 of the Insurance Code,  as appropriate. Except
in those instances where major unanticipated administrative
obstacles prevent, or after a determination by the director of good
cause, the reviews shall be scheduled and carried out jointly with
reviews carried out pursuant to the Knox-Keene Health Care Service
Plan Act of 1975,  or to Chapter 11A (commencing with Section
11491) of Part 2 of Division 2 of the Insurance Code, as
appropriate,  if reviews  under either act 
will be carried out within time periods which satisfy the
requirements of federal law.
   The department shall be authorized to contract with professional
organizations or the Department of Managed Health  Care or
the Department of Insurance,  Care,  as
appropriate, to perform the periodic review required by this section.
The department, or its designee, shall make a finding of fact with
respect to the ability of the prepaid health plan to provide quality
health care services, effectiveness of peer review, and utilization
control mechanisms, and the overall performance of the prepaid health
plan in providing health care benefits to its enrollees. 
   The director shall publicly report the findings of annual medical
audits conducted pursuant to this section as soon as possible but no
later than 90 days following completion of any corrective action plan
initiated pursuant to the audit unless the director determines, in
his or her discretion, that additional time is reasonably necessary
to fully and fairly report the results of the audit. 
   SEC. 7.   SEC. 6.   Section 14456.3 is
added to the Welfare and Institutions Code, to read:
   14456.3.  (a) The department shall share with the Department of
Managed Health Care its findings from medical  survey
 audits and monthly provider files of a Medi-Cal managed
care plan that provides services to Medi-Cal beneficiaries pursuant
to Chapter 7 (commencing with Section 14000) or this chapter and is
subject to Chapter 2.2 (commencing with Section 1340) of Division 2
of the Health and Safety Code. 
   (b) To the extent that the department communicates its preliminary
investigative audit findings to the Department of Managed Health
Care under subdivision (a), those communications 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).  
   (b) The department shall post on its Internet Web site its
findings from medical survey audits of a Medi-Cal managed care plan
that provides services to Medi-Cal beneficiaries pursuant to Chapter
7 (commencing with Section 14000) or this chapter. 
   SEC. 7.    The Legislature finds and declares that
Section 6 of this act, which adds Section 14456.3 to the Welfare and
Institutions Code, imposes 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 ensure the confidentiality of preliminary
investigative findings disclosed by the State Department of Health
Care Services to the Department of Managed Health Care pursuant to
this act, the limitation on the public's right of access to those
files is necessary. 
  SEC. 8.  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.