Existing law establishes the California Health and Human Services Agency, which consists of various departments, including the Department of Managed Health Care. Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene), provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. 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 provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires a health care service plan or health insurer to annually report specified information to the Department of Managed Health Care or the Department of Insurance, including, among other things, the number of persons that receive health care coverage under specified health care service plans or health insurance policies. Existing law requires the departments to publicly report that information, including posting it on their Internet Web sites.

This bill, the Primary Care Spending Transparency Act, would require an insurer or a health care service plan or health insurer that offers a health benefit policy reports rate information, as specified, to annually report its total primary care expenditures and other specified information to the California Health and Human Services Agency, and the percentage of expenses the health care service plan or health insurer allocated to primary care, among other things. The bill would require the agency Department of Managed Health Care and the Department of Insurance to annually compile and post a report with that information on its their Internet Web site, sites, beginning July 1, 2020. The bill would direct the agency, in coordination with the Department of Managed Health Care and the Department of Insurance, to adopt rules prescribing the primary care services for which costs are reported. January 1, 2020, and would require the departments to include their reports as discussion items at specified public meetings. The bill would also require a managed health care plan to annually report specified information to the State Department of Health Care Services, which would be required to annually compile and post a report with that information on its Internet Web site, beginning January 1, 2020. The bill would require the agency Department of Managed Health Care and the Department of Insurance to convene the Primary Care Payment Reform Collaborative no later than January 1, 2020, to propose revisions to the types of primary care data collected from health care service plans and insurance carriers, health insurers, as well as to advise and assist in developing specified best practices. The bill would prescribe the membership of the Primary Care Payment Reform Collaborative.

Existing law prohibits, with exceptions, a health care service plan from releasing any information to an employer that would directly or indirectly indicate to the employer that an employee is receiving or has received services from a health care provider covered by the plan unless authorized to do so by the employee.

This bill would make technical, nonsubstantive changes to these provisions.

Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2895

Author:(Arambula) – As Amended Ver:April 11, 2018

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

SUMMARY:

This bill requires reporting on primary care expenditures by health plans and insurers to the Department of Health Care Services (DHCS), the Department of Managed Health Care (DMHC), and the California Department of Insurance (CDI).

It also requires CDI and DMHC to convene a Primary Care Payment Reform Collaborative to propose revisions to data collection and payment models for primary care.

FISCAL EFFECT:

1. Approximately $800,000 to DMHC for the first two years and $700,000 ongoing annually for rulemaking, staffing the collaborative, data collection and synthesis, and reporting (Managed Care Fund).
2. Approximately $800,000 to CDI for the first year, $500,000 in the second year, and $350,000 ongoing annually for rulemaking, staffing the collaborative, data collection and synthesis, and reporting (Insurance Fund).
3. Unknown costs to DHCS in a range similar to the other two department’s costs for rulemaking, data collection and synthesis, and reporting (GF/federal, contingent on federal financial participation for this purpose).

COMMENTS:

1. Purpose. According to the author, a higher emphasis on primary care is associated with a range of positive health outcomes. Without accurate data on current primary care expenditures, it is difficult to encourage greater investment in primary care. This bill seeks to collect data to inform health planning and investment.
2. Background. The National Academy of Medicine defines primary care as the provision of integrated, accessible health care services by clinicians who are accountable for addressing a large majority of personal health care needs, developing a sustained partnership with patients, and practicing in the context of family and community. Greater use of primary care has been associated with lower costs, higher patient satisfaction, fewer hospitalizations and emergency department visits, and lower mortality. Within the U.S., health care markets with a larger percentage of primary care physicians have lower spending and higher quality of care. A recent Commonwealth Fund analysis identified underinvestment in primary care as one of four fundamental reasons that the U.S. health system ranks last in terms of health outcomes among high-income countries. Similar efforts in other states, including Rhode Island and Oregon, have yielded success in increasing primary care investment.
3. Support and Opposition. The California Academy of Family Physicians, sponsor of this bill, states a compelling body of evidence clearly demonstrates that investment in primary care delivers value to patients and health systems. Health plans and insurers oppose this bill, questioning the value of the information and claiming a variety of confounding factors would render the information invalid for comparative purposes.

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

Date of Hearing: April 17, 2018

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 2895

Author:(Arambula) – As Amended Ver:April 11, 2018

SUBJECT: Primary Care Spending Transparency Act.

SUMMARY: Establishes the Primary Care Spending Transparency Act, and requires a health care service plan (health plan) and health insurer to annually report its total primary care expenditures and other specified information to specified departments. Specifically, this bill:

1. Makes findings and declarations, including that collaboration among insurers, health plans, purchasers, and health care providers to coordinate service delivery systems and develop innovative payment methods in support of primary integrated and coordinated health care delivery is in the best interest of the public.
2. Requires the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI), no later than January 1, 2020, to convene a Primary Care Payment Reform Collaborative (PCPRC) to propose revisions to the types of primary care data collected from health plans and health insurers, as well as to advise and assist in developing and sharing best practices in technical assistance and methods of payment that direct greater health care resources and investments toward supporting and facilitating health care innovation and care improvement in primary care.
3. Requires DMHC and CDI to appoint representatives to the PCPRC from each of the following groups:
   1. Primary care clinicians;
   2. Health care consumers;
   3. Experts in primary care contracting and payment;
   4. Independent practice associations;
   5. Third party administrators;
   6. Employers that offer self-insured health benefit plans;
   7. DMHC;
   8. CDI;
   9. Health plans and health insurers;
   10. Mental health and behavioral health professionals;
   11. A statewide organization representing community clinics;
   12. A statewide organization representing hospitals and health systems;
   13. A statewide professional association for family physicians;
   14. A statewide professional association for physicians;
   15. A statewide professional association for primary care physicians;
   16. The federal Centers for Medicare and Medicaid Services; and,
   17. The California Health Benefit Exchange.
4. Defines primary care services as health care services delivered by clinicians specializing in family medicine, general internal medicine, or general pediatrics.
5. Defines primary care clinician as a physician or other health professional licensed or certified in California whose clinical practice is in the area of primary care.
6. Requires a health plan and health insurer that reports rate information, as specified, and a Medi-Cal Managed Care (MCMC) plan to annually report beginning October 1, 2019, the following information to either the DMHC, CDI, or the Department of Health Care Services (DHCS), respectively:
   1. For medical benefits, a separation of primary care and specialty services;
   2. The percentage of expenses the health plan, health insurer, or MCMC plan allocated to primary care, compared to the health plan, health insurer, or MCMC plan’s overall expenditures.
   3. The methods the health plan, health insurer, or MCMC plan’s used to financially support the delivery of primary care services.
7. Requires DMHC, CDI, and DHCS to compile the reported information in 6) above into a public report that demonstrates health plan, health insurer, and MCMC plan spending on primary care services. Requires the data to be aggregated and not reveal information specific to an individual health plan, health insurer, or MCMC plan.
8. Requires the DMHC, CDI, and DHCS to annually publish the report in 7) above, on or before January 1, 2020, and by January 1, every year thereafter, on its Internet Website.
9. Requires the DMHC and CDI, after the report is published, to include the report as part of a discussion item at the public meeting required in 2) above

EXISTING LAW:

1. Establishes the DMHC to regulate health plans and CDI to regulate health insurers.
2. Establishes the Medi-Cal program, administered by DHCS, under which qualified low-income individuals receive health care services.
3. Requires health plans and health insurers to file specified rate information with regulators, as applicable, for health plan contracts or health insurance policies in the individual or small group markets.
4. Requires every health plan contract that provides hospital, medical, or surgical coverage, that is issued, amended, delivered, or renewed in this state, to include obstetrician-gynecologists as eligible primary care physicians, provided they meet the plan’s eligibility criteria for all specialists seeking primary care physician status.
5. Defines a primary care physician as a physician who has the responsibility for providing initial and primary care to patients, for maintaining the continuity of patient care, and for initiating referral for specialist care. Allows the primary care physician to be either a physician who has limited his or her practice of medicine to general practice or who is a board certified or board eligible internist, pediatrician, obstetrician-gynecologist, or family practitioner. Includes in this definition, a non-physician medical practitioner, who is supervised by a primary care physician, and has the responsibility for providing initial and primary care to patients, for maintaining the continuity of patient care, and for initiating referral for specialist care.
6. Defines a specialist as a physician who is board certified or board eligible in the specialty of medical care provided.

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, one of the barriers to accessing healthcare is the lack of primary care health care providers, and the heavy dependence on specialists. In the U.S., approximately two-thirds of physicians are specialists and approximately one-third is in primary care. In order to improve access and continuity of care, there needs to be a strategy to address the health care workforce, and one of the first steps in doing this, is having transparency in the existing primary care medical expenditures. Requiring health plans/insurers to report total primary care medical expenditures will allow consumers and carriers to be aware of the amount of money spent on primary care, and be motivated to increase their spending – as seen in Oregon, where similar legislation has been passed. In addition to transparency, this bill will create a PCPRC with health care stakeholders, to provide health plans/insurers with proven strategies to support primary care, which will make it possible to achieve a high-value health system that all Californians have a right to.
2. BACKGROUND.
   1. Primary Care. The New England Journal of Medicine notes that a large body of evidence suggests that greater investment in primary care is good for patients and health systems. Greater use of primary care has been associated with lower costs, higher patient satisfaction, fewer hospitalizations and emergency department visits, and lower mortality. Within the U.S., health care markets with a larger percentage of primary care physicians have lower spending and higher quality of care. Despite this evidence, the U.S. continues to undervalue primary care. A recent Commonwealth Fund analysis identified underinvestment in primary care as one of four fundamental reasons that the U.S. health system ranks last among high-income countries. Compared with peer countries, the U.S. has fewer primary care clinicians than specialists, along with larger income disparities between the two groups of providers, and provides fewer services in the primary care setting. Although the Patient Protection and Affordable Care Act introduced a number of payment and regulatory changes that offer incentives to invest in primary care, they have not been enough to fix this foundational problem.
   2. Other states. The New England Journal of Medicine article also noted that from 2009 to 2014, Rhode Island regulators required commercial insurers to raise their primary care spending rate by one percentage point per year (using strategies other than increasing fee-for-service rates) as a condition of having their rates approved. Insurers responded by spending more on patient centered medical homes, accountable care organizations, performance incentives, and “common good” services such as health information technology, practice transformation, and loan repayment programs. As a result, primary care spending in Rhode Island grew from $47 million to $74 million. Rhode Island was the only state in New England to increase its supply of primary care providers per capita over this period, while per capita spending by commercial health insurers grew more slowly than in any other New England state (by 0.6% in Rhode Island, vs. 2.8% in Massachusetts and 5.5% in Connecticut). Insurers must now maintain this higher level of investment, and primary care remains a focus of delivery system reform efforts. Similarly, after studying state primary care spending for two years, the Oregon legislature recently passed statutory requirements mandating that commercial insurers, Medicaid coordinated care organizations, and health plans serving public employees have a minimum primary care spending rate of 12%, effective in 2023. It also established the PCPRC to develop recommendations for how additional funds can be most effectively deployed.
3. SUPPORT. The California Academy of Family Physicians, sponsor of this bill, states that a compelling body of evidence clearly demonstrates that investment in primary care delivers greater value to patients and health systems, resulting in fewer hospitalizations and emergency department visits, higher patient satisfaction and lower mortality.
4. OPPOSITION. The California Association of Health Plans (CAHP) contend that comparing primary care provider expenditures between plans can skew the true meaning of primary care utilization due to variances in contract rates, member preferences, referrals or the overall health needs of the enrollee population. CAHP states that it is not entirely clear what the intended purpose of this data would be or its ultimate significance.
5. RELATED LEGISLATION.
   1. AB 2203 (Gray) requires the basic Medi-Cal rate for primary care services provided by a primary care service provider to be not less than 100% of the payment rate that applies to the same services as established by the Medicare program, for both the fee-for-service and MCMC plans. AB 2203 is currently pending in Assembly Appropriations Committee.
   2. AB 2502 (Wood) requires the Secretary of California Health and Human Services, no later than January 1, 2020, to establish, implement, and administer the California Health Care Payments Database. AB 2502 is currently pending in Assembly Health Committee.
6. PREVIOUS LEGISLATION.
   1. AB 2372 (Burke) of 2016 would have designated an human immunodeficiency virus (HIV) specialist as an eligible primary care provider and includes provisions that access to HIV specialists is subject to regulations that govern network adequacy, consistent with the specialty designation. AB 2372 was held in Assembly Appropriations Committee.
   2. AB 2168 (Gallegos), Chapter 426, Statutes of 2000, requires standing referrals to an HIV specialist.
   3. AB 1534 (Nazarian) of 2017, would have required a health care service plan contract or health insurance policy that is issued, amended, or renewed on or after January 1, 2018, to permit an HIV specialist, as defined, to be an eligible primary care provider, as defined, if the provider requests primary care provider status and meets the plan’s or the health insurer’s eligibility criteria for all specialists seeking primary care provider. AB 1534 was sent to the Senate inactive file.

REGISTERED SUPPORT / OPPOSITION:

Support (prior version of this bill)

California Academy of Family Physicians (sponsor)

Opposition (prior version of this bill)

Association of California Life and Health Insurance Companies

California Association of Health Plans

Health Net

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