SB 250

Bill Subjects

Abstract

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 provides for the regulation of health insurers by the Department of Insurance. Existing law generally authorizes a health care service plan or health insurer to use prior authorization and other utilization review or utilization management functions, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law requires a health care service plan or health insurer, including those plans or insurers that delegate utilization review or utilization management functions to medical groups, independent practice associations, or to other contracting providers, to comply with specified requirements and limitations on their utilization review or utilization management functions. Existing law requires the criteria or guidelines used to determine whether or not to authorize, modify, or deny health care services to be developed with involvement from actively practicing health care providers. This bill would specify that the health care providers involved with developing the above-described criteria or guidelines include contracted physicians and surgeons and other health professionals acting within their scopes of practice that have experienced, or are currently subject to, utilization review or utilization management. The bill would grant a physician and surgeon the right to have an appeal of a prior authorization decision conducted by a physician and surgeon of the same or similar specialty, and would prohibit a plan or insurer from requiring an appeal of an adverse prior authorization request result to be filed before filing an independent medical review. On or after January 1, 2024, this bill would prohibit a health care service plan or health insurer from requiring a contracted health professional to complete or obtain a prior authorization for any health care services if the plan or insurer approved or would have approved not less than 90% of the prior authorization requests they submitted in the most recent one-year contracted period. The bill would set standards for this exemption and its denial and appeal. The bill would authorize a plan or insurer to evaluate the continuation of an exemption not more than once every 12 months, and would prohibit a plan or insurer from rescinding an exemption outside of the end of the 12-month period unless a contracted health professional has committed fraud or a pattern of abuse, as specified. Under the bill, a "health care service" for prior authorization exemption purposes would include brand name prescription drugs until January 1, 2027. The bill would require the Department of Managed Health Care and the Department of Insurance to each conduct an analysis of the inclusion of brand name prescription drugs as a health care service and report its findings to the Legislature by July 1, 2026. Because a willful violation of the bill's requirements relative to health care service plans 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. 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer to establish criteria or guidelines that meet specified requirements to be used to determine whether or not to authorize, modify, or deny health care services. This bill would authorize the Department of Managed Health Care and the Insurance Commissioner, as appropriate, to review a plan's or insurer's clinical criteria, guidelines, and utilization management policies to ensure compliance with existing law. If the criteria and guidelines are not in compliance with existing law, the bill would require the Director of the Department of Managed Health Care or the commissioner to issue a corrective action and send the matter to enforcement, if necessary. The bill would require each department, on or before July 1, 2022, to develop a methodology for a plan or insurer to report the number of prospective utilization review requests it denied in the preceding 12 months, as specified. This bill would require a health care service plan contract or health insurance contract issued, amended, or renewed on or after January 1, 2022, to reimburse a contracting individual health professional, as defined, the in-network cost-sharing amount for services provided to an enrollee or insured at a contracting health facility, as defined. The bill would also require a plan or insurer and its delegated entities, on or before January 1, 2023, and annually thereafter, to report, among other things, its average number of denied prospective utilization review requests, as specified. The bill would require, on and after January 1, 2023, a plan or insurer to examine an individual health professional's record of prospective utilization review requests during the preceding 12 months and grant the individual health professional "deemed approved" status for 2 years, meaning an exemption from the prospective utilization review process, if specified criteria are met. The bill would authorize a plan or insurer to request an audit of an individual health professional's records after the initial 2 years of an individual health professional's deemed approved status and every 2 years thereafter, and would specify the audit criteria by which an individual health professional would keep or lose that status. The bill would authorize the commissioner to adopt regulations to implement these provisions, as specified. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.