Bill Text: CA AB725 | 2013-2014 | Regular Session | Amended
Bill Title: Health care management: health court demonstration program.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB725 Detail]
Download: California-2013-AB725-Amended.html
BILL NUMBER: AB 725 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 19, 2013
INTRODUCED BY Assembly Member Wilk
FEBRUARY 21, 2013
An act to amend Section 1367.003 add
Chapter 8 (commencing with Section 127670) to Part 2 of Division 107
of the Health and Safety Code, relating to health care
coverage .
LEGISLATIVE COUNSEL'S DIGEST
AB 725, as amended, Wilk. Health care coverage.
management: health court demonstration program.
The federal Patient Protection and Affordable Care Act (PPACA)
enacts various health care coverage market reforms that take effect
January 1, 2014. Among other things, PPACA authorizes the federal
Secretary of Health and Human Services to award states with
demonstration grants to develop and test alternatives to current tort
litigation for resolving disputes over injuries allegedly caused by
health care providers and organizations. States interested in
receiving a grant are required to develop an alternative to current
tort litigation and submit an application to the secretary.
This bill would require the Secretary of California Health and
Human Services to submit an application on behalf of the state to the
federal Department of Health and Human Services to receive a grant
for state demonstration programs to evaluate alternatives to current
medical tort litigation, as authorized by PPACA. The bill would
require the secretary to write the application to design a program to
create health courts based upon a no-fault process to improve the
injury resolution of liability. The bill would specify what items a
patient would need to prove under the health court demonstration
program.
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 and makes a willful
violation of the act a crime. Existing law prohibits a health care
service plan from expending for administrative costs, as defined, an
excessive amount of the payments the plan receives for providing
health care services to its subscribers and enrollees.
The federal Patient Protection and Affordable Care Act prohibits a
health insurance issuer issuing health insurance coverage from
establishing lifetime limits or unreasonable annual limits on the
dollar value of benefits for any participant or beneficiary, as
specified. The act also requires a health insurance issuer issuing
health insurance coverage to comply with minimum medical loss ratios
and to provide an annual rebate to each insured if the medical loss
ratio of the amount of the revenue expended by the issuer on costs to
the total amount of premium revenue is less than a certain
percentage, as specified.
Existing law requires health care service plans and health
insurers to comply with the requirements imposed under those federal
provisions, as specified. Existing law authorizes the Director of the
Department of Managed Health Care and the Insurance Commissioner to
promulgate regulations and emergency regulations to implement
requirements relating to medical loss ratios, as specified.
This bill would make technical, nonsubstantive changes to those
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 8 (commencing with Section
127670) is added to Part 2 of Division 107 of the Health
and Safety Code , to read:
CHAPTER 8. HEALTH COURT DEMONSTRATION PROGRAM
127670. The Secretary of California Health and Human Services
shall submit an application on behalf of the state to the United
States Department of Health and Human Services to receive a grant for
the State Demonstration Programs to Evaluate Alternatives to Current
Medical Tort Litigation, as authorized by Section 10607 of the
federal Patient Protection and Affordable Care Act (PPACA).
127672. (a) The secretary shall write the application described
in Section 127670 to design a program to create health courts based
upon a no-fault process to improve the resolution of liability for
medical injury.
(b) In accordance with PPACA, the application shall demonstrate
how the proposed alternative does all of the following:
(1) Makes the medical liability system more reliable by increasing
the availability of prompt and fair resolution of disputes.
(2) Encourages the efficient resolution of disputes.
(3) Encourages the disclosure of health care errors.
(4) Enhances patient safety by detecting, analyzing, and helping
to reduce medical errors and adverse events.
(5) Improves access to liability insurance.
(6) Fully informs patients about the differences in the
alternative and current tort litigation.
(7) Provides patients the ability to opt out of or voluntarily
withdraw from participating in the alternative at any time and to
pursue other options, including litigation, outside the alternative.
(8) Does not conflict with state law at the time of the
application in a way that prohibits the adoption of the alternative
to current tort litigation.
(9) Does not limit or curtail a patient's existing legal rights,
ability to file a claim in or access the legal system, or otherwise
abrogate a patient's ability to file a medical malpractice claim.
(10) Does not conflict with the Medical Injury Compensation Reform
Act (MICRA), including, but not limited to, Section 6146 of the
Business and Professions Code, Sections 3333.1 and 3333.2 of the
Civil Code, and Section 667.7 of the Code of Civil Procedure.
(11) Does not require any party to participate in the program.
127674. (a) Under the health court demonstration program, a
patient shall be required to prove only the following:
(1) He or she suffered an injury.
(2) The injury was caused by medical care.
(3) The injury meets specified severity criteria.
(b) A patient shall not be required to show a third party acted in
a negligent fashion.
SECTION 1. Section 1367.003 of the Health and
Safety Code is amended to read:
1367.003. (a) Every health care service plan that issues, sells,
renews, or offers health care service plan contracts for health care
coverage in this state, including a grandfathered health plan, but
not including specialized health care service plan contracts, shall
provide an annual rebate to each enrollee under such coverage, on a
pro rata basis, if the ratio of the amount of premium revenue
expended by the health care service plan on the costs for
reimbursement for clinical services provided to enrollees under such
coverage and for activities that improve health care quality to the
total amount of premium revenue, excluding federal and state taxes
and licensing or regulatory fees and after accounting for payments or
receipts for risk adjustment, risk corridors, and reinsurance, is
less than the following:
(1) With respect to a health care service plan offering coverage
in the large group market, 85 percent.
(2) With respect to a health care service plan offering coverage
in the small group market or in the individual market, 80 percent.
(b) Every health care service plan that issues, sells, renews, or
offers health care service plan contracts for health care coverage in
this state, including a grandfathered health plan, shall comply with
the following minimum medical loss ratios:
(1) With respect to a health care service plan offering coverage
in the large group market, 85 percent.
(2) With respect to a health care service plan offering coverage
in the small group market or in the individual market, 80 percent.
(c) (1) The total amount of an annual rebate required under this
section shall be calculated in an amount equal to the product of the
following:
(A) The amount by which the percentage described in paragraph (1)
or (2) of subdivision (a) exceeds the ratio described in paragraph
(1) or (2) of subdivision (a).
(B) The total amount of premium revenue, excluding federal and
state taxes and licensing or regulatory fees and after accounting for
payments or receipts for risk adjustment, risk corridors, and
reinsurance.
(2) A health care service plan shall provide any rebate owing to
an enrollee no later than August 1 of the calendar year following the
year for which the ratio described in subdivision (a) was
calculated.
(d) (1) The director may adopt regulations in accordance with the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code)
that are necessary to implement the medical loss ratio as described
under Section 2718 of the federal Public Health Service Act (42
U.S.C. Sec. 300gg-18), and any federal rules or regulations issued
under that section.
(2) The director may also adopt emergency regulations in
accordance with the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code) when it is necessary to implement the
applicable provisions of this section and to address specific
conflicts between state and federal law that prevent implementation
of federal law and guidance pursuant to Section 2718 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-18). The initial
adoption of the emergency regulations shall be deemed to be an
emergency and necessary for the immediate preservation of the public
peace, health, safety, or general welfare.
(e) The department shall consult with the Department of Insurance
in adopting necessary regulations, and in taking any other action for
the purpose of implementing this section.
(f) This section shall be implemented to the extent required by
federal law and shall comply with, and not exceed, the scope of
Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec.
300gg-91) and the requirements of Section 2718 of the federal Public
Health Service Act (42 U.S.C. Sec. 300gg-18) and any rules or
regulations issued under those sections.
(g) This section shall not be construed to apply to provisions of
this chapter pertaining to financial statements, assets, liabilities,
and other accounting items to which subdivision (s) of Section 1345
applies.
(h) This section shall not be construed to apply to a health care
service plan contract or insurance policy issued, sold, renewed, or
offered for health care services or coverage provided in the Medi-Cal
program (Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9 of the Welfare and Institutions Code), the Healthy
Families Program (Part 6.2 (commencing with Section 12693) of
Division 2 of the Insurance Code), the Access for Infants and Mothers
Program (Part 6.3 (commencing with Section 12695) of Division 2 of
the Insurance Code), the California Major Risk Medical Insurance
Program (Part 6.5 (commencing with Section 12700) of Division 2 of
the Insurance Code), or the Federal Temporary High Risk Insurance
Pool (Part 6.6 (commencing with Section 12739.5) of Division 2 of the
Insurance Code), to the extent consistent with the federal Patient
Protection and Affordable Care Act (Public Law 111-148).
