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 18, 2014
	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 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, 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 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 DMHC on
compliance with those standards in a manner specified by DMHC. Under
existing law, every 3 years, DMHC is required to review information
regarding compliance with those standards and make recommendations
for changes that further protect enrollees.
   This bill would 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,  
plan, as part of the annual reports, to  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.
  Act. The bill would require, if DMHC requests
additional information to be reported, that the department provide
health care service plans with notice of the change by November 1 of
the year prior to the change. The bill would also require a health
care service plan that provides services to Medi-Cal beneficiaries to
provide the report data to the State Department of Health Care
Services.  Because a violation of the requirements 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 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 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 DMHC the medical audit conducted by DHCS as part
of the Medi-Cal contracting process.
   This bill would eliminate that exemption and would require DMHC to
coordinate the surveys conducted with respect to Medi-Cal managed
care plans with DHCS, to the extent possible, provided that the
coordination does not result in a delay of the surveys or the failure
of DMHC to conduct the surveys.
   This bill would also require DHCS to publicly report its 
findings of finalized  medical  audit findings
 audits  as soon as possible, as specified, and to share
those findings and other information with respect to Knox-Keene plans
with 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) 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   stakeholders  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  final  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,   As part of the reports submitted to the
department pursuant to subdivision (f) of Section 1367.03 and
regulations adopted pursuant to that section,  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   Hospitals where providers
have  admitting privileges  , if any  .
   (4) Providers with open practices.
   (5)  Provider patient capacity.   Provider to
enrollee ratios for providers on a full-time equivalent basis. 

   (6) The number of patients assigned to a  primary care 
provider  or, for providers who do not have assigned enrollees,
the number of enrollee primary care provider   visits for
the calendar year being reported  .
   (7)  Complaints   Grievances  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.  
chapter. 
   (e) In  collecting   submitting  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   a health
care service plan that provides services to Medi-Cal beneficiaries
pursuant to Chapter 7 (commencing with Section 14087.98) or Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code, shall provide the same data to the
State Department of Health Care Services pursuant to Section 14456.3
of the Welfare and Institutions Code. 
    (f)     In developing the format and
requirements for reports, data, or other information provided by
plans pursuant to subdivision (a), the department shall not create
duplicate reporting requirements, but, instead, shall take into
consideration all existing relevant reports, data, or other
information provided by plans to the department. 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.

   (g) If the department requests additional information or data to
be reported pursuant to subdivision (a), which is different or in
addition to the information required to be reported in paragraphs (1)
to (7), inclusive, of subdivision (a), the department shall provide
health care service plans notice of that change by November 1 of the
year prior to the change.  
   (h) A health care service plan may include in the provider
contract provisions requiring compliance with the reporting
requirements of Section 1367.03 and this section. 
  SEC. 3.  Section 1380.3 of the Health and Safety Code is repealed.
  SEC. 4.  Section 1380.3 is added to the Health and Safety Code, to
read:
   1380.3.  The department shall coordinate the surveys conducted
pursuant to 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 required under Section 1380 or in the failure of the
department to conduct those surveys.
  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, 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, if reviews 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, 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  finalized
 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  , if any,  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. 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 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).
  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.