California Healthcare Legislative Update

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CALIFORNIA LEGISLATIVE HEALTH CARE UPDATEOCTOBER 3, 2013

Affordable Care Act Overview

On Tuesday, October 1, Governor Brown signed legislation to continueimplementation of the Affordable Care Act ("Obamacare") in California. TheGovernor chose October 1 to coincide with the day that Covered California, theStates health insurance exchange, began its first open enrollment period, allowingCalifornians to obtain insurance coverage through the health care exchange for thefirst time.

The slate of bills signed into law include provisions to support streamlined Medi-Calenrollment for children participating in the National School Lunch Program, revisionsto exemptions that will make contracts between Covered California and its

contracted carriers more transparent, and changes to the budgeting methodologyfor calculating Medi-Cal related county administrative costs. In total, GovernorBrown signed nine bills into law.

Below is a summary of the legislative package of bills:

AB 422 (Assemblymember Adrin Nazarian)Requires information on Covered Californias health care coverage and thecontinued availability of Medi-Cal options to be included on the National SchoolLunch Program (NSLP) notifications that school districts may provide to students, asspecified, effective on January 1, 2014.

This bill significantly expands the ability of schools and counties to support theenrollment of children in Medi-Cal, and to a lesser extent, subsidized insurancethrough the Exchange. Specifically it authorizes school districts or CountySuperintendents to incorporate a request in the school lunch application for theapplicants consent for the child to participate in Medi-Cal, and to share informationfrom the school lunch application (after receiving consent from the parent/guardianto do so) with the county for the purposes of enrolling in Medi-Cal. In other words the School Lunch program can serve as an important enrollment vehicle for Medi-Cal. It does not allow information to be shared with Covered California, but it doesallow information about Covered California to be incorporated into the NSLPapplication.

SB 332 (Senator Bill Emmerson)Makes Covered Californias contracts and rates of payment to vendors andcontractors, and other board and staff work open to public inspection under theCalifornia Public Records Act (PRA), except for health plan contracts and their rates,which are made public in three and four years respectively.

This bill addresses concerns that were raised by some stakeholders during CoveredCalifornias health plan selection process. The concerns (raised by advocates,

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among others) focused on contract provisions between the Exchange and healthplans that would not be made public. This bill makes those provisions and rateinformation public, though it only unseals those three years after the contract orcontract amendment is open to inspection. Specifically:

The bill would provide that the one year exemption from disclosure for

contracts with participating carriers apply to those contracts entered into onor after the effective date of the bill. The bill would also require that the

portion of the contract or amendment containing the rates of payment beopen to inspection 3 years after a contract or amendment is open toinspection pursuant to these provisions.(http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB332)

This bill is to take effect immediately as an urgency statute.

SB 28 (Senator Ed Hernandez)Furthers implementation of the states expansion of Medi-Cal, authorized and

required by the ACA, by giving the Department of Health Care Services greaterflexibility in issuing all-county letters until regulations are adopted, and updatingthe budgeting methodology for Medi-Cal county administrative costs.There arethreeaspects of this bill that may merit additional attention:

(1) It requires the Major Risk Medical Insurance Program (MRMIP) to provide theexchange with MRMIP subscriber and applicant information in order to assistCovered California in conducting outreach to them.

(2) It requires the Covered California board to provide a specified noticeinforming MRMIP subscribers and applicants that they may be eligible forreduced-cost coverage through the Exchange or no-cost coverage throughMedi-Cal.

(3) It provides DHCS with the authority to issue all county letters, and updatesthe County Administrative Cost Control Plan budgeting methodology,specifically by authorizing:

the development of the new budgeting methodology to include, amongother things, county survey of costs, time and motion studies, and in-personobservations by department staff.(http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id201320140SB28)

This bill would require that the new budgeting methodology be implemented nosooner than the 2015-16 fiscal year.

AB 1180 (Assemblymember Richard Pan)Updates California law implementing the federal Health Insurance Portability andAccountability Act of 1996 (HIPAA) and other individual coverage rights related tolosing group coverage to conform with the federal ACA. The bill also requires healthplans and health insurers to notify specified individuals about the availability ofguaranteed issue coverage through Covered California.

SB 138 (Senator Ed Hernandez)



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Requires health care service plans and health insurers to take specified steps toprotect the confidentiality of an insured individual's medical information forpurposes of sensitive services or if disclosure will endanger an individual, asspecified.

SB 161 (Senator Ed Hernandez)

Establishes new regulatory requirements for stop-loss insurance sold to smallemployers but allows stop-loss insurance issued prior to September 1, 2013, to berenewed or reissued by the same or different insurer under the same terms andconditions, without meeting the new requirements.

SB 249 (Senator Mark Leno)Authorizes the Department of Public Health and qualified entities to share healthrecords involving the diagnosis, care, and treatment of human immunodeficiencyvirus (HIV) or acquired immunodeficiency syndrome (AIDS) related to a beneficiarysenrollment in federal Ryan White Act (RWA) funded programs to coordinate care

and enrollment as beneficiaries transition to new health coverage programs.

SB 353 (Senator Ted W. Lieu)Requires health plans and health insurers that provide essential health benefits totranslate specified coverage documents in the same language they use to marketor advertise to an individual or small employer, if that language is not alreadyrequired to be translated under existing law.

SB 800 (Senator Ricardo Lara)Requires the Department of Health Care Services (DHCS) to provide CoveredCalifornia with information about parents or caretakers of children enrolled in theHealthy Families program (HFP) or the targeted low-income Medi-Cal program inorder to conduct outreach to potentially eligible individuals. Transfers specifiedemployees of the Managed Risk Medical Insurance Board (MRMIB) to CoveredCalifornia and DHCS, as specified.California continues to lead the nation in both health care reform andimplementation of a State exchange. As the States economic condition improves,the debate will continue in further expansion of health programs, further restorationof funding to previously reduced programs, and coverage for more individuals andfamilies in the State.

If you have further questions, or need additional information, please contact:

Jonah Frohlich, Managing Director, [email protected]

Tom McMorrow, Partner, [email protected]

Richard Costigan, Senior Director of State Government Affairs,[email protected]



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California Healthcare Legislative Update

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