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. A willful violation of the act is a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plan contracts and health insurance policies to provide coverage for specified benefits.

This bill would require a health care service plan or health insurer that adopts the use of develops and implements a clinical pathway, as defined, to comply with certain requirements, including that the plan or health insurer ensures that each clinical pathway is developed in accordance with specified procedures. The bill would prohibit a plan or health insurer from, among other things, adopting developing and implementing a clinical pathway that hinders education, research, patient screening, or discourages patient access to clinical trials. The bill would require a plan or health insurer that adopts the use of develops and implements a clinical pathway to make publicly available specified information for each clinical pathway adopted. developed and implemented. Because a willful violation of the act by a health care service plan would be a crime, this 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. A willful violation of the act is a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plan contracts and health insurance policies to provide coverage for specified benefits.

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. A willful violation of the act is a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plan contracts and health insurance policies to provide coverage for specified benefits.

This bill would prohibit, on and after January 1, 2017, a health care service plan or health insurer that provides hospital, medical, or surgical expenses from implementing clinical care pathways, as defined, for use by providers in order to manage an enrollees or insureds care. Because a willful violation of this prohibition by a health care service plan would be a crime, this 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.

Date of Hearing: April 19, 2016

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 2209

Author:(Bonilla) – As Amended Ver:April 7, 2016

SUBJECT: Health care coverage: clinical care pathways.

SUMMARY: Establishes the Patient-Centered Clinical Care Pathway Act of 2016 and sets requirements for health care service plans (health plan) and health insurers when implementing clinical care pathways (CCPs). Specifically, this bill:

1. Defines CCP as a multidisciplinary management tool based on evidence-based practices used by providers involved in patient care, for a defined patient group with a particular disease or condition, or undergoing a particular procedure, that is used by the provider as a tool to make medical treatment decisions to manage the enrollee’s care, in which the different tasks, interventions, or treatment regimens used by the provider involved in the enrollee’s care are defined, optimized, and sequenced. Specifies that the use of a CCP by a provider relates to the practice of medicine and is not a coverage decision.
2. References the definition of coverage decision in existing law.
3. Requires a health plan or health insurer that adopts a CCP to do all of the following:
   1. Ensure that each CCP is developed in accordance with the following procedures:
      1. The CCP is developed by a multidisciplinary group of actively practicing physicians with clinical expertise in the therapeutic area or an organization generally recognized within the relevant medical community as a body with clinical expertise in the therapeutic area. A health plan or health insurer may collaborate with prescribing practitioners to include CCPs that are already established or integrated into the prescribing practitioners’ treatment patterns, as required; and,
      2. Prior to finalization, the CCP is reviewed and endorsed by a formal, identified review panel as specified and is subject to an opportunity for review by stakeholders, as specified.
   2. Ensure that each CCP specifies that a prescribing practitioner participating in a CCP should make recommendations concerning the treatment, management, or prevention of the relevant disease or condition for a specific patient in accordance with the prescribing practitioner’s clinical judgment and the individual patient’s needs and medical circumstances.
   3. Review and update, as appropriate, but not less than annually, each CCP, and establish and maintain a procedure by which prescribing practitioners may seek a review or an update of a CCP, as specified; and,
      
   4. Provide prescribing practitioners, enrollees or subscribers, and the public with readily available access to all of the following:
      1. Each CCP;
      2. All scientific data and evidence summaries evaluated in the development of the pathway; and,
      3. The names of the physicians and other members who conducted the research, developed the analysis, and assessed the CCP.
4. Prohibits a health plan or health insurer adopting a CCP that hinders education, research, patient screening, or patient access to clinical trials or requiring any practitioner participation in a pathway protocol or adherence to specific treatments within the CCP.
5. Provides that a health plan that adopts the use of a CCP shall make publicly available for each CCP all of the following information:
   
   1. The scope of the CCP, as specified;
      
   2. The key clinical features of the CCP, as specified;
      
   3. The names, qualifications, and any conflicts of interest of the physicians or organization that developed the CCP;
      
   4. A listing of all panel members who participated in the review of the CCP, including the institutional affiliations, medical specialties, and any conflicts of interest of the panel members;
      
   5. The sources of evidence on which the CCP is based, including the identification of the differences between the CCP and the underlying clinical practice guideline or similar document, if any, and explanation why the CCP excludes particular items or services;
      
   6. A narrative providing a comprehensive summary of the evidence on which the CCP is based, including important issues the physicians or organization considered in interpreting the evidence and developing the CCP; and,
      
   7. Information on the process for, and timing of, the health care service plan’s review and update of CCPs, as required.

EXISTING LAW:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans and the California Department of Insurance (CDI) to regulate health insurers.
   
2. Requires health plans to maintain the following:
   1. Complete drug formulary or formularies, including a list of prescription drugs on the formulary of the plan by major therapeutic category with an indication of whether any drugs are preferred over other drugs;
   2. Records developed by the pharmacy and therapeutic committee of the health plan that fully describe the reasoning behind formulary decisions; and,
   3. Health plan arrangements with entities that are associated with activities of the health plan to encourage formulary compliance or otherwise manage prescription drug benefits.
3. Requires health plans to disclose or provide for the disclosure the process the health plan, its contracting provider groups, or any entity with which the plan contracts for services that include utilization review or utilization management functions, uses to authorize, modify, or deny health care services under the benefits provided by the health plan, including coverage for sub-acute care, transitional inpatient care, or care provided in skilled nursing facilities. Requires health plans to disclose those processes to enrollees or persons designated by an enrollee, or to any other person or organization, upon request. Provides that the criteria or guidelines used by health plans, or any entities with which plans contract for services that include utilization review or utilization management functions, to determine whether to authorize, modify, or deny health care services shall:
   1. Be developed with involvement from actively practicing health care providers;
   2. Be consistent with sound clinical principles and processes; and,
   3. Be evaluated, and updated if necessary, at least annually.
4. Requires health plans to demonstrate that medical decisions are rendered by qualified medical providers, unhindered by fiscal and administrative management.
5. Establishes the Independent Medical Review (IMR) process as part of the DMHC or CDI appeal process.
6. Requires health plans or insurers or specialized dental plan or insurance contracts that issue, sell, renew, or offer contracts to, no later than September 30, 2015, and each year thereafter, to file a report, to be known as the Medical Loss Ratio (MLR) annual report, with the departments that contains the same information required in the 2013 federal MLR Annual Reporting Form. Requires the DMHC or the CDI, as applicable and, if a financial examination is determined to be necessary to verify the representations in the MLR annual report, to provide the health plan or health insurer with a notification before conducting the examination, and would require the health plan or health insurer to electronically submit to the appropriate department specified requested records, books, and papers. Declares the intent of the Legislature that the data reported pursuant to these provisions be considered by the Legislature in adopting a MLR standard for health plans and specialized health insurance policies that cover dental services that would take effect no later than January 1, 2018. Authorizes the DMHC and the CDI, until January 1, 2018, to issue guidance to health plans and health insurers of specialized health insurance policies subject to these provisions regarding compliance with these provisions, as specified.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, CCPs are structured care plans used to detail the care of patients for a specific disease and dictate the exact sequence of treatments that physicians should follow. Medical groups and hospitals develop CCPs in a scientific and transparent manner by publicly convening a committee of subject matter experts from varying professional backgrounds and recommending best patient treatment practices. Once developed, the CCP is continually reviewed and modified to reflect the latest breakthroughs in research and treatment practices. The author notes that the method of development, experts consulted, and reviewed research are all open to scrutiny. Additionally, the author states that CCPs dictate what cancer drugs will and will not be used to treat a specific cancer type. Capitalizing on the ability to influence and limit cancer drug usage, health plans have begun to develop their own CCPs. Health plans refuse to fully disclose how they develop pathways, making it impossible to determine if health plans prioritize maximum cost savings over quality cancer care.

The author contends that high quality patient care should remain the priority when designing treatment plans. When health plans design their own CCPs, top priorities get shifted towards cost management. This bill will protect patients by ensuring that CCPs developed by health plans are based on cutting edge science and clinical experience and each patient’s specific circumstances where the top priority is to provide high quality patient care.

According to the sponsors of this bill, Association of Northern California Oncologists, Medical Oncology Association of Southern CA, and California Medical Association, in January 2015, the American Society of Clinical Oncology (ASCO) established the Task Force on Clinical Pathways to review the current landscape of oncology pathway use and recommended a set of principles for the development and use of CCPs in cancer care. The Task Force gathered and reviewed extensive information regarding the rapidly evolving environment of oncology pathways in the United States. The deliberations of the Task Force have been reviewed and were approved by ASCO’s Board of Directors on August 12, 2015, as recommendations by ASCO for the development and use of CCPs in oncology. As part of the nine items recommended, ASCO indicated that oncology pathways should be developed through a process that is consistent and transparent to all stakeholders. ASCO concluded that when used appropriately, oncology pathways can be instrumental in managing value-based payment models being proposed and used going forward. However, oncology pathways must be developed and used appropriately and efficiently to guide care recommendations and coverage policies.

1. BACKGROUND.
   1. California Health Benefits Review Program (CHBRP) analysis. AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the University of California to assess legislation proposing a mandated benefit or service and prepare a written analysis with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. CHBRP was created in response to AB 1996. SB 125 (Ed Hernandez), Chapter 9, Statutes of 2015, added an impact assessment on essential health benefits, and legislation that impacts health insurance benefit designs, cost sharing, premiums, and other health insurance topics. 

The Committee requested CHBRP to conduct an analysis of this bill but states that it is unaware of any standard clinical or legal definition of CCPs and the definitions provided in literature vary. Based upon the definition as introduced in the bill (this bill was subsequently amended on April 7, 2016), CHBRP noted that it was unable to identify the extent to which this bill would prohibit health plans and insurers use of utilization management techniques so it was unable to provide a traditional analysis of the potential medical effectiveness, cost, or utilization impacts of this bill. As such, CHBRP prepared a brief that provides background and discusses the impact on health outcomes and health interventions identified in medical literature and cautions the introduced language could have much broader impacts.

• • 1. Defining CCPs. CHBRP is unaware of any standard clinical or legal definition of CCPs, and the definitions provided in the literature vary greatly. A literature review by De Bleser et al. (2006) identified 84 different definitions for CCPs. These definitions included broad terms such as care pathway, protocol, and guideline. A team of Cochrane Review authors reviewed the 84 definitions of CCPs and put forth several criteria that they suggested be used as a basis for development of a standardized, internationally accepted definition of CCPs:
       1. The intervention consists of a structured multidisciplinary plan of care;
       2. The intervention is used to assist the translation of guidelines or evidence into practice;
       3. The intervention details a set of necessary or recommended steps in a course of treatment or care in a plan, pathway, algorithm, guideline, protocol, or other “inventory of actions;”
       4. The intervention describes timeframes or criteria-based progression to proceed through the steps; and,
       5. The intervention aims to standardize care for a specific clinical problem, procedure, or episode of health care in a specific population.
          

To date, it appears that CCPs are used by payers/insurers for educational purposes or to offer incentives for adherence to the pathway; CHBRP found no published evidence of payers/insurers requiring adherence to CCPs or reducing payments if providers used treatments not on the pathway. CHBRP identified multiple issues that complicate the assessment of the effectiveness of CCPs. The first issue relates to the portion of a physician’s practice affected by any specific CCP used by a health plan or health insurer. When providers are paid by several plans or health insurers that use different CCPs for a specific condition, the possibility of conflicting CCPs could substantially diminish any positive effects. By contrast, when a CCP for a specific condition is used by a group of providers, it has the potential to be consistently implemented for all patients in the practice or group for whom the CCP is applicable. A second complicating factor in assessing the effectiveness of CCPs is that published studies of health plan or insurer use of CCPs are much more limited and have focused on oncology in the outpatient setting, where treatment often spans several months or longer. By contrast, published studies of provider use of CCPs are more variable in the diseases and conditions studied and the length of a treatment episode. CHBRP states that the heterogeneity of the studies limits the generalizability of the findings, and the available evidence is insufficient to conclude that CCPs are more effective when implemented at the initiation of providers than at the initiation of plans/insurers.

• • 1. Impacts on health outcomes, processes of care, and costs. Additionally, CHBRP states the evidence on the impacts of CCPs on health outcomes, processes of care, and costs tends to be condition-specific, so study results cannot be generalized beyond the diseases/conditions studied. For health plan or health insurer use of CCPs, there are very few published studies, and the evidence is insufficient to assess the impacts on health outcomes. There is limited evidence from three studies with weak research designs using data from two health plans showing reduced oncology costs for oncology patients, and there is insufficient evidence to draw conclusions about cost impacts when CCPs are used for other conditions. For provider use of CCPs, there is stronger evidence from higher-quality research studies that their use leads to improved health outcomes and improved processes of care. There is also evidence from studies with moderate to weak research designs that provider use of CCPs lowers costs. The available evidence is insufficient to conclude that CCPs are more effective when implemented by providers than by plans/insurers.
       
  1. Conflict of Interest. This bill requires the health plans and health insurers to identify any conflicts of interest of the physicians or organization that developed the CCP. The federal Department of Health and Human Services, Office of Inspector General has expressed concern regarding the Centers for Medicare & Medicaid Services (CMS) lack of oversight of Medicare Part D Pharmacy and Therapeutics (P&T) Committees conflicts of interest.  As the entities responsible for making Medicare Part D formulary decisions, P&T Committees must ensure that their decisions are made based on scientific evidence and not based on the personal financial interests of committee members. Federal regulations require that Medicare Part D sponsors follow their P&T Committee’s decisions regarding which drugs to place on formulary.  However, sponsors ultimately can determine the tier placement of such drugs based on P&T Committee recommendations. With respect to conflicts of interest, federal laws and regulations stipulate that at least one physician and at least one pharmacist on the P&T Committee must be free of conflict relative to the Part D sponsor, Part D plan, and pharmaceutical manufacturers.

1. SUPPORT. The California Retired Teachers Association (CalTRA) states that this bill would ensure that health plans and insurers cannot implement CCPs that would limit access to necessary care and insurance payment for that necessary care. CalTRA believes that medical professionals and patients should be able to determine the best appropriate care for individuals based on sound medical practices. California Chronic Care Coalition (CCCC) states that pathways are structured care plans used to detail the care of patients for a specific disease and dictate the exact sequence of treatments that physicians should follow. CCCC contends that health plans have begun to develop their own pathways to capitalize on the ability to influence and limit cancer drug usage and focus on cost rather than patient care. CCCC contends that health plans refuse to say how they develop pathways, making it impossible to determine if health plans prioritize maximum cost savings over quality cancer care. Additionally, CCCC states that when health plans design their own pathways, top priorities get shifted towards cost management. The CCCC supports this bill because it will protect patients by ensuring that when a health plan develops pathways, they are doing so with 100% transparency and accountability, using cutting edge science and clinical experience and each patient’s specific circumstances where the top priority is to provide high quality patient care.

The Association of Northern California Oncologists (ANCO) state that extensive research from clinical trials and peer-reviewed publications is used in the development of the CCP and once developed, it is continually reviewed and modified to reflect the latest breakthroughs in research and treatment practices. ANCO further states that the method of development, experts consulted, and research reviewed are all open to scrutiny. The Medical Oncology Association of Southern California (MOASC) also describes the ideal pathway process and states that pathways can also be a dangerous slippery slope that allows for insurance plans to dictate medical treatments and can lead to social injustice where treatment is determined by the insurance care in your pocket. MOASC contends that these pathways focus on cost containment, rather than optimal patient care, which is appropriate for a for-profit corporation beholden to shareholder interest. MOASC also states that health plans refuse to say how they develop pathways, criteria for selecting treatments, the identities, qualifications, affiliations, or conflicts of who develops the pathway, and goals and objections such that it is impossible to determine if health plans prioritize max cost savings over quality cancer care.

1. OPPOSITION. The California Association of Health Plans (CAHP), the Association of California Life and Health Insurance Companies, and America’s Health Insurance Plans contend that health insurance mandates threaten efforts of all health care stakeholders to provide consumers with meaningful health care choices and affordable coverage options. They state that the Patient Protection and Care Act (ACA) requires the state to pay for the increased cost associated with the mandate for those enrollees who purchase health insurance on the Exchange. They also state that benefit mandates eliminate the ability of health insurers and HMOs to provide unique benefit packages aimed at the needs of consumers by requiring individuals and employers to purchase benefits prescribed by the Legislature, not driven by consumer choice. Finally, the opposition note that health benefit mandates stifle the use of innovative, evidence based medicine.

Blue Shield of California (BSC) states that this bill would create unnecessary barriers to health plans implementing CCPs, which are evidence-based practices used by providers to treat some of the most serious illnesses. BSC contends that the health plan and its provider partners utilize evidence-based programs across a range of services, covering everything from joint replacement to cancer treatment. California Association of Provider Groups (CAPG) contends that CCPs are hard to define; are a primary tool to reduce variation in practice among providers; and, tying CCPs to financial incentives is an effective way to improve quality of care.

Kaiser Permanente (Kaiser) states that this bill is vague and broadly written that could enact onerous new reporting requirements on the use of CCPs. Kaiser states it does not require the use of or dictate CCPs, however it contends that the collaborative nature of its model could be included in this bill. Kaiser notes that because its medical groups may develop pathways in collaboration with health personnel employed by the health plan and Kaiser Foundation Hospital system, Kaiser’s medical group must assume that any of Kaiser’s clinical guidelines, work flows and other practice pattern could fall under this bill. This includes its KP HealthConnect, the electronic medical record system, and the development of pharmaceutical formularies. Finally, Kaiser raises concerns with respect to the comment and review from external groups indicating that this unprecedented process can hinder appropriate changes to Kaiser’s medical group’s practices based on new research.

According to Anthem Blue Cross (Anthem), it developed the Cancer Care Quality Program (Program) to address issues with respect to medical evidence and best practices; huge cost variations; and current business models for oncologists. Anthem states that its Program creates voluntary pathways that in-network physicians can use to provide patients with clinically appropriate, quality care with minimal side effects at the best cost. Anthem contends that this bill elects to single out health plan pathways with additional oversight standards. While some of the provisions of this bill are consistent with Anthem practice, Anthem opposes the requirement that health plans release the names of third party panelists and raises concerns that this is an attempt by drug companies and others to gain access to the names of providers in an attempt to influence the process. Anthem also raises concerns with the provision of this bill that hinders education, research, patient screening or patient access to clinical trials. Finally, Anthem notes that this bill should be applied to pathways developed by others, including pathways and clinical drug trials in which providers are paid by drug manufacturers for participation.

1. POLICY COMMENTS. This bill requires health plans to provide information with respect to the implementation of CCPs as defined in this bill. However, as the CHBRP background indicates, there is no standard clinical or legal definition of CCPs and there is a lack of CCP studies and cost impacts and the availability of standard elements of a CCP and the process for development.
   1. CCP Study. In an effort to better understand the CCP process and give the Legislature sufficient information to determine the appropriate mechanism or standard to use when regulating CCPs, the Committee recommends that instead of imposing specific requirements on CCP’s, this bill should instead require health plans beginning January 1, 2018, to submit to the DMHC their existing procedures and protocols or processes for establishing or administering CCPs. As part of this reporting requirement, health plans should submit specified information on CCPs, including how they are currently utilized, for what purposes, membership, and any other information that could be relevant. The DMHC then reviews these filings and submits a report of its findings to the Legislature.
   2. Definition of CCPs. The Committee may wish to consider narrowing the definition of CCPs as opponents have raised concerns that the current definition may include practices that are not currently identified as CCP, such as drug formulary determinations and other potential patient-centered assessment tools utilized by health plans as part of the pre-authorization process.
   3. Other entities. Since CCPs are also developed by other entities, like providers and medical groups, hospitals, and drug manufacturers, the Committee may wish to consider applying this bill to other entities.
   4. IMR. With respect to the coverage decision referenced in the definition of a CCP, the author may wish to consider this reference and its impact on the IMR process in that a particular service within a CCP can potentially be excluded as not a covered benefit and therefore not subject to the IMR process.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of Northern California Oncologists

Medical Oncology Association of Southern CA

National Council of Asian Pacific Islander Physicians

California Medical Association

California Chronic Care Coalition

California Retired Teachers Association

Latinas Contra Cancer

National Council of Asian Pacific Islander Physicians

Ovarian Cancer Coalition of Greater California

Opposition

America’s Health Insurance Plans

Anthem Blue Cross

Association of California Life and Health Insurance Companies

Blue Shield of California

California Association of Health Plans

California Association of Provider Groups

Kaiser Permanente

Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097