(1)The Knox-Keene Health Care Service Plan Act of 1975, among other things, 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 enact the Oncology Clinical Pathway Act of 2017, requiring a health care service plan or health insurer that develops and implements a clinical pathway, as defined, to comply with certain requirements for cancer treatment. The bill would prohibit a plan or health insurer from, among other things, developing and implementing a clinical pathway that discourages patient access to clinical trials. treatment, as specified. Because a willful violation of the act by a health care service plan would be a crime, this the bill would impose a state-mandated local program.

(2)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 requires every health care service plan to establish procedures in accordance with department regulations for continuously reviewing the quality of care, performance of medical personnel, utilization of services and facilities, and costs.

This bill would make technical, nonsubstantive changes to that provision.

Date of Hearing: May 17, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1107

Author:(Nazarian) – As Amended Ver:May 2, 2017

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires health plans and insurers that develop and implement "oncology clinical pathways," as defined, to comply with specified requirements, including requirements related to evidence, transparency, clinical expertise, regular updates, and disclosure of panel members.

This bill also prohibits a health plan or insurer that develops and implements oncology clinical pathways from discouraging patient access to clinical trials, requiring practitioner participation or adherence to specific treatments, or developing and implementing oncology clinical pathways that interfere with a provider's independent clinical judgment.

FISCAL EFFECT:

1. Department of Managed Health Care expects one-time costs of around $140,000 in 2017-18, and minor costs in the range of $20,000 in 2018-19, for issuing guidance and verifying oncology clinical pathways meet the bill's standards (Managed Care Fund).
2. In addition, the department projects potentially significant enforcement costs of $250,000 beginning in 2019-20 (due to a time lag for referral to trial) and up to nearly $300,000 annually thereafter (Managed Care Fund).

COMMENTS:

1. Purpose. According to the author, clinical pathways are an emerging trend in the health care industry. This bill intends to put into place specific protections related to pathways developed by health plans and insurers, including disclosure requirements.
2. Background. According to the American Society of Clinical Oncology (ASCO), oncology clinical pathways are detailed, evidence-based treatment protocols for delivering quality cancer care for specific patient populations that balance the considerations of clinical efficacy, safety, toxicities, cost, and scientific advances. There has been an increase in the use of oncology clinical pathways by clinicians, payers, and other health organizations as a way to improve patient care by limiting undesirable variability and reducing cost, while providing for the optimal course of care for a patient’s specific diagnosis. The California Health Benefits Review Program notes, in their review of this bill, several oncology pathway companies and at least one specialty benefits management organization, were marketing oncology clinical pathways to health plans and insurers, as well as providers, for use in patient care.
3. Context. This bill comes at a time of significant discussion related to the quality and cost of cancer treatment in the United States. In 2013, the Institute of Medicine (now the National Academy of Medicine) released a report called "Delivering High-Quality Cancer Care: Charting a New Course for a System in Crisis," which notes decisions about care are often not based on the latest scientific evidence, and the rising costs of care are creating disparities in access to high-quality care. Given the complexity of treatment options and volume and pace of clinical literature, clinical pathways can be a tool to guide adherence to evidence-based treatment protocols. Clinical pathways can also suggest lower-cost options that are clinically effective, providing a counterweight to what some observers have pointed out is a perverse incentive for oncology practices to use costly chemotherapy drugs, given drug reimbursement is the largest source of gross revenue for such practices. Pathways are voluntary for use by cancer care providers, and clinical treatment decisions are not dictated by a pathway. Health plans and insurers must cover medically necessary benefits pursuant to the plan contract or policy, and legally cannot restrict treatment options to what is on a pathway. Pathways are also developed by medical groups, hospitals, and private companies who market them to other entities, as well as for other conditions besides cancer.

This bill's supporters note difficulty in receiving information from health plans about how oncology clinical pathways were developed, and whether development was physician-driven.

1. Support. The Association of Northern California Oncologists and the Medical Oncology Association of Southern California, cosponsors of this bill, state the bill increases transparency about how pathways were created. The California Medical Association writes this bill will ensure physicians maintain control of patient treatment decisions. The California Life Sciences Association also supports this bill.
2. Opposition. Health plans and insurers oppose this bill. Anthem Blue Cross (Anthem), the only California health plan that currently develops clinical pathways in-house, contends this bill unnecessarily targets care management tools used by health plans and insurers, and singles out pathways developed by health plans as being in need of additional oversight standards. Additionally, Anthem opposes the requirement that health plans release third-party panelists' names.

Kaiser Permanente seeks amendments to this bill to narrow such that the development of pathways, clinical guidelines, and work flows developed by Kaiser Permanente medical groups will not be affected by this bill.

1. Prior Legislation. AB 2209 (Bonilla), of the 2015-16 Legislative Session, was similar to this bill, and was referred to this committee and not heard.
2. Staff Comment. Given pathways developed or recommended by health plans are voluntary for use by providers, and given that physicians can prescribe and health plans will reimburse for medically necessary cancer care without regard to the physician's use of a pathway, it is unclear whether there is a strong market failure or consumer protection rationale for state intervention in this space. Is there anything stopping physicians from simply ignoring health plan or insurer pathways they believe are insufficiently transparent, evidence-based, or up-to-date?

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 25, 2017

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1107

Author:(Nazarian) – As Amended Ver:March 21, 2017

SUBJECT: Oncology Clinical Pathway Act of 2017.

SUMMARY: Establishes the Oncology Clinical Pathway Act of 2017 (OCP Act) and requires health care services plans (health plans) and health insurers that develop and implement clinical pathways, as defined, to comply with specified requirements for cancer treatment. Specifically, this bill:

1. Establishes the OCP Act and defines oncology clinical pathway (OCP) as a cancer treatment plan used by a provider or insurer to direct patient care for a defined patient or specific patient presentations, as specified. Clarifies that the use of an OCP by a provider relates to the practice of medicine and is not a coverage decision, as specified.
2. Provides that care provided as a result of an OCP is subject to this bill, including grievance, appeals, or independent medical review, and the external medical review process to examine coverage decisions regarding experimental or investigational therapies in existing law.
3. Requires health plans and health insurers that develop and implement an OCP to do all of the following:
   1. Ensure that each OCP is evidence-based, clearly provides the level of scientific evidence supporting the OCP conforms to the National Comprehensive Cancer Network recommendations for that disease, and is developed by a 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;
   2. Review and update, as new therapies emerge, no less than annually, each OCP. Requires health care service providers and health insurers to consider requests from network physicians on initiating a review of an OCP; and,
   3. Provide to contracting providers, upon request, all of the following:
      1. A copy of the complete OCP;
      2. The scope of the OCP, including, but not limited to, the therapeutic area covered by the OCP and any limitation on the patient population or treatment setting for which the OCP was designed, or other limitations on the scope of the OCP;
      3. All scientific data and evidence summaries evaluated in the OCP development;
      4. Key clinical features of the OCP, including but not limited to, the process and rationales for decision making, including those for quality, toxicity and cost;
      5. The names, qualifications, institutional affiliations, and any conflict of interests of the physicians or other individuals who conducted research, developed analysis, and assessed the OCP; and,
      6. Information on the process for and timing of the health plan or health insurer’s anticipated OCP review and update.
4. Prohibits a health plan and health insurer that develops and implements an OCP from any of the following:
   1. Develop and implement an OCP that discourages patient access to clinical trials;
   2. Require any practitioner participation in an OCP protocol or adherence to specific treatments within the OCP; and,
   3. Develop and implement an OCP for use by providers that interferes with the independent clinical judgment of a provider.
5. Prohibits this bill from being construed to require a health plan policy or health insurer contract to cover a benefit not otherwise required by law or not otherwise covered by health plan contract or policy.

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 of 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. Requires 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 to:
   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.

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, clinical pathways are an emerging trend in the health care industry. Ideally, pathways are developed after a deliberative process of reviewing the latest, evidence-based research and resulting in a structured multidisciplinary plan of care for patients with specific diseases and disorders. Health plans and insurers have followed suit and are beginning to develop their own pathways, including pathways to treat cancers. Unfortunately, contracting physicians have often been left in the dark as to how the health plan developed the oncology clinical pathway and whether its development was physician-driven. This bill ensures that information relating to the research considered and the composition of the development panel is disclosed only to the in-network physician upon his or her request.
2. BACKGROUND. According to the American Cancer Society, cancer is the second leading cause of death (after heart disease) in the U.S., with treatment costs of $87.7 billion in 2014. The National Comprehensive Cancer Network (NCCN), a not-for-profit alliance of 27 leading cancer centers devoted to patient care, research, and education, is dedicated to improving the quality, effectiveness, and efficiency of cancer care so that patients can live better lives. NCCN develops resources that present information to the numerous stakeholders in the health care delivery system. According to NCCN, it promotes the importance of continuous quality improvement and recognizes the significance of creating clinical practice guidelines appropriate for use by patients, clinicians, and other health care decision-makers.
   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 (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. CHBRP states in its analysis of this bill the following:
      1. Definitions. While there is general agreement in the published literature that clinical pathways incorporate considerations of clinical efficacy, safety, and costs, in that order, a more detailed definition of OCPs was developed by the American Society of Clinical Oncology (ASCO), a professional society representing over 40,000 physicians and other providers caring for people with cancer. ASCO defines OCPs as “detailed, evidence-based treatment protocols for delivering quality cancer care for specific patient populations, including the type and stage of disease,” that “balance the considerations of clinical efficacy, safety, toxicities, cost, and scientific advances.” There has been an increase in the use of OCPs by clinicians, payers, and other health organizations as a way to “improve patient care by limiting undesirable variability and reducing cost while providing for the optimal course of care for a patient’s specific diagnosis.” An estimated 60 health plans/insurers in the U.S. currently use OCPs, covering more than 170 million individuals. A recent survey found that about 58% of oncology practices used OCPs in 2016. In 2016, several oncology pathway companies and at least one specialty benefits management organization were marketing OCPs that plans/insurers and providers could implement for use in patient care.
      2. Utilization. ASCO estimates that 60 health plans/insurers in the U.S. currently use OCPs, covering more than 170 million individuals. OCPs can be used for a variety of purposes in ways that are more flexible or more restrictive depending on implementation. CHBRP is aware of their use in educating providers and in offering financial incentives to providers for adherence to the recommended treatment sequence. Health plans/insurers or providers can develop and implement their own OCPs, or purchase them from an external vendor. In 2016, several oncology pathway companies and at least one specialty benefits management organization were marketing OCPs to health plans/insurers and providers for use in patient care.
      3. Medical Effectiveness. CHBRP did not identify any studies of health plan/insurer use of OCPs that reported morbidity or mortality. However, CHBRP identified two studies examining the effects on emergency department (ED) and/or hospital use, which can be considered indicators of morbidity. These studies found that plan/insurer use of OCPs was associated with reductions in ED and hospital use, but CHBRP concluded that the evidence about effects on these outcomes is inconclusive because only one of these studies included a comparison group. In assessing the evidence on medical effectiveness for provider use of OCPs, CHBRP reviewed seven studies in the U.S., including one systemic review of 10 studies, but most did not have a comparison group. Therefore, it is uncertain whether changes in health outcomes could be attributed to provider use of OCPs. CHBRP concludes that there is limited evidence that provider use of OCPs improves some health outcomes, such as hospital length of stay, and does not decrease overall survival rates relative to usual care.
      4. Cost. This bill establishes requirements for OCPs but does not mandate a specific benefit. CHBRP is unable to identify to what extent health plans/insurers would develop and implement OCPs that are or are not compliant with this bill; estimate provider behavior in response to OCPs that are/are not compliant with this bill; or define relevant population segments that would be impacted by this bill. Therefore, CHBRP is unable to analyze costs associated with the implementation of this bill. CHBRP identified and reviewed four studies of health plan/insurer use of OCPs that reported cost impacts. Due to weak study designs, however, CHBRP cannot conclude whether the costs reported in these studies were related to plan/insurer use of OCPs or other factors including baseline severity of disease. CHBRP concludes that there is insufficient evidence to assess the extent to which plan/insurer use of OCPs impacts costs. CHBRP reviewed three more recent studies of provider use of OCPs but, due to weak study designs, cannot conclude whether the lower reported costs were related to the use of OCPs or other factors including baseline severity of disease.
   2. Other states. CHBRP is aware of one other state, Connecticut, that has introduced legislation related to clinical pathways. Both the 2016 and 2017 bills address clinical pathways more generally and are not focused on oncology.
      1. Senate Bill 435 of 2016 would have included: (1) requirements related to transparency of clinical pathways used by health carriers; and, (2) supplemental provider payments for use of such pathways. Senate Bill 435 was amended to authorize a study of health carrier use of clinical pathways and the bill died in the appropriations committee.
      2. House Bill 5960 of 2017 establishes requirements for clinical pathways used by plans/insurers, including transparency and information on provider financial incentives. House Bill 5960 was referred to the Connecticut Joint Committee on Insurance and Real Estate.
3. SUPPORT. The Association of Northern California Oncologists and the Medical Oncology Association of Southern California, cosponsors of this bill, state in certain cases, doctors have been unable to discern or obtain any details about how the health plan or health insurer created the pathway and, therefore, cannot ensure it is the most appropriate treatment option for their patients. The California Medical Association states that this bill will make sure that physicians remain informed of treatments recommended by health plans and insurers so they can maintain control of patient treatment decisions. The California Life Sciences Association writes that this bill allows a physician to verify whether a particular pathway is based upon the best, most recent science and would require the insurer to consider a physician’s request that the pathway be reviewed by the insurer.
4. OPPOSE UNLESS AMENDED. Kaiser Permanente (Kaiser) is concerned with how this bill’s provisions will be applied to Kaiser. Because its medical groups may “develop and implement” pathways in collaboration with health personnel employed by Kaiser Health Plan and Kaiser Foundation Hospital system, its medical groups must assume that many of its clinical guidelines, work flows and other practice patterns could fall under this bill. As Kaiser understands, the author and sponsors are primarily concerned about health plans requiring physicians to use certain pathway, which does not happen at Kaiser, so Kaiser is asking the author to narrow this bill to capture only that situation, and to clarify other terms of this bill.
5. OPPOSITION. Anthem Blue Cross (Anthem) contends that this bill unnecessarily targets care management tools used by health plans and insurers and singles out pathways developed by health plans as being in need of additional oversight standards. Additionally, Anthem opposes the requirement that health plans release third-party panelists names, as the names of participating panelists on the Pharmacy and Therapeutics or Medical Assessment committees are not shared. The Association of California Life and Health Insurance Companies (ACLHIC) contends that the specific targeting of health insurers is particularly troublesome since there is no clear nexus for doing so, and not simultaneously calling into question other healthcare entities’ use of similar pathways and programs is unwarranted. Additionally, the requirements that health insurers make public the names of the third party professionals that help to review, ameliorate and streamline pathways is a very slippery slope. According to ACLHIC, the very reason that these panelists are kept anonymous is to protect the integrity of the review process and prevent undue influence by special interest groups. Blue Shield of California states that the scope of the definition of "oncology clinical pathways" is so broad that it would prohibit the use of evidence-based tools, including step therapy and prior authorization, which is directly counter to the direction health plans have been encouraged to move in, or in some cases required to move in, in order to achieve improvements in health care quality and affordability.
6. RELATED LEGISLATION. AB 2209 (Bonilla) of 2016 would have established the Patient-Centered Clinical Care Pathway Act of 2016 and set forth requirements for health plans and health insurers when implementing clinical care pathways. AB 2209 was held in Assembly Appropriations Committee.
7. COMMENTS.
   1. OCP Definition.  This bill incorporates some, but not all, aspects of ASCO’s OCP definition.  As a result, assessment of future compliance with this bill by health plans or insurers may be more challenging using this bill’s definition of OCPs rather than ASCO’s definition.
   2. Justification for disclosure.  This bill requires health plans to provide specified information to contracted providers like the scope, scientific data and evidence summaries, and key clinical features of the OCP.  The Committee may wish for the author to clarify the purpose of disclosing the names of the physicians and other individuals who conducted research, developed analysis, and assessed the OCP.   
   3. Vagueness.  This bill prohibits health plans and insurers, subject to this bill, from the following:
      1. Developing and implementing OCPs that discourages patient access to clinical trials.  The ACA provides that a health plan or insurer may not deny a qualified individual participation in an approved clinical trial with respect to the treatment of cancer or another life-threatening disease or condition; may not deny (or limit or impose additional conditions on) the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and may not discriminate against the individual on the basis of the individual’s participation in the trial; and,
      2. Developing and implementing an OCP for use by providers that interferes with the independent clinical judgment of a provider.

The Committee may wish to clarify how each of the above provisions will be implemented. 

REGISTERED SUPPORT / OPPOSITION:

Support

Association of Northern California Oncologists (sponsor)

Medical Oncology Association of Southern California (sponsor)

California Life Sciences Association

California Medical Association

Carrie’s TOUCH

Latina Breast Cancer Agency

Latinas Contra Cancer

National Council of Asian Pacific Islander Physicians

Ovarian Cancer Coalition of Greater California

Shanti Project

Opposition

America’s Health Insurance Plans
Anthem Blue Cross

Association of California Life and Health Insurance Companies

California Association of Health Plans

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