UNFINISHED BUSINESS  

Bill No: SB 583

Author: Jackson (D)

Amended: 6/19/19

Vote: 21

SENATE HEALTH COMMITTEE: 9-0, 4/24/19

AYES: Pan, Stone, Durazo, Grove, Hurtado, Leyva, Mitchell, Monning, Rubio

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SENATE FLOOR: 38-0, 5/20/19

AYES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ASSEMBLY FLOOR: 79-0, 9/9/19 - See last page for vote

SUBJECT: Clinical trials

SOURCE: Author

DIGEST:

This bill conforms California law with respect to health plan and insurer coverage requirements for participants in clinical trials to incorporate federal requirements enacted as part of the Affordable Care Act, which includes expanding the type of clinical trials to include life-threatening diseases or conditions.

Assembly Amendments make technical and clarifying changes.

ANALYSIS:

Existing state law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Services Plan Act of 1975; the California Department of Insurance (CDI) to regulate health and other insurers; Covered California as California’s health benefit exchange for individual and small business purchasers as authorized under the Affordable Care Act (ACA); and, the Department of Health Care Services to administer the Medi-Cal program. [HSC §1340, et seq., INS §106, et seq., GOV §100500 -100522, and WIC §14000, et seq.]
2. Requires every health plan contract and health insurance policy that is issued, amended, and delivered, or renewed in California, for an enrollee or insured diagnosed with cancer and accepted into a phase I, phase II, phase III or phase IV clinical trial for cancer, to provide coverage for all routine patient care costs related to the clinical trial if the enrollee’s or insured’s treating physician, who is providing covered health care services to the enrollee or insured under the enrollee’s or insured’s health benefit plan contract, recommends participation in the clinical trial after determining that participation in the clinical trial has a meaningful potential to benefit the enrollee or insured. [HSC §1370.6 and INS §10145.4]
3. Defines “routine patient care costs,” as specified. Requires the treatment to either involve a drug that is exempt under federal regulations from a new drug application; or, is approved by one of the following National Institutes of Health (NIH), the federal Food and Drug Administration (FDA), in the form of an investigational new drug application, the United States Department of Defense (DOD), or the United States Veterans’ Administration (VA). [HSC §1370.6 and INS §10145.4]

This bill:

1. Adds, for an individual or group health plan contract or health insurance policy that is issued, amended, or renewed on or after January 1, 2020, coverage for routine costs for a person participating in a clinical trial for another life-threatening disease or condition (existing state law applies only to cancer clinical trials), and prohibits discrimination against the individual’s participation in such trial.
2. Allows a qualified enrollee or insured to participate in an approved clinical trial conducted by a nonparticipating provider, including a nonparticipating provider located outside of this state, if not offered through a participating provider.
3. Requires cost sharing for routine patient care costs to be the same as that applied to the same services not delivered in a clinical trial, but requires the in-network cost sharing and out-of-pocket maximum to apply if the clinical trial is not offered or available through a participating provider.
4. Expands the entities that can approve or fund the clinical trial to include:
   1. NIH;
   2. The federal Centers for Disease Control and Prevention;
   3. The Agency for Healthcare Research and Quality;
   4. The Centers for Medicare and Medicaid Services;
   5. A cooperative group or center of any of i) through iv), DOD or VA;
   6. A qualified nongovernmental research entity identified in guidelines issued by the NIH for center support grants; and,
   7. The United States Department of Energy.
5. Defines “life-threatening disease or condition” as a disease or condition from which the likelihood of death is probable, unless the course of the disease or condition is interrupted.
6. Allows the enrollee or insured to provide medical and scientific information establishing that the enrollee or insured’s participation would be appropriate.

Background

ACA Requirements. According to Centers for Medicare and Medicaid Services, in general, the Public Health Services Act provisions added by the ACA state that if a group health plan or health insurance issuer in the group and individual health insurance market provide coverage to a qualified individual, then such plan or issuer: (1) may not deny the qualified individual participation in an approved clinical trial with respect to the treatment of cancer or another life-threatening disease or condition; (2) 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 (3) may not discriminate against the individual on the basis of the individual’s participation in the trial. A qualified individual is generally a participant or beneficiary who is eligible to participate in an approved clinical trial according to the trial protocol with respect to the treatment of cancer or another life-threatening disease or condition and either: (1) the referring health care professional is a participating provider and has concluded that the individual’s participation in such trial would be appropriate; or (2) the participant or beneficiary provides medical and scientific information establishing that the individual’s participation in such trial would be appropriate. 

Clinical trials in California. According to California Health Benefit Review Program (CHBRP), 16% of clinical trials actively recruiting in California are funded by NIH, 4% are funded by another U.S. federal agency, 55% are funded by industry, and 25% are funded by other sources. Clinical trials recruiting patients in California differ in composition from those in the U.S. overall in that the clinical trials currently recruiting patients in California are more likely to be funded by industry (58% vs. 33%). In addition, 20% of trials actively recruiting in California are in Phase I of development, 30% are in Phase II, 21% are in Phase III, 5% are in Phase IV, and 24% are trials without FDA-defined phases including trials of devices and behavioral interventions. The trials actively recruiting in California also differ from the U.S. as a whole in that they are more likely to be trials with FDA-defined phases (76% vs. 61%) and specifically more trials that are in phase III (21% vs. 9%). The most common disease addressed through clinical trials actively recruiting in California in 2019 is cancer (32%), followed by mental health conditions (4%), cardiovascular disease (4%), diabetes (3%), and HIV/AIDS (2%). The other 56% of the trials fall into the “other category,” which includes studies addressing a wide range of issues such as Alzheimer’s disease, Parkinson’s disease, obesity, sedentary lifestyles, pain management, and reproductive health.

Comments

Author’s statement. According to the author, for people living with cancer or another life-threatening disease, access to a clinical trial can be the difference between life and death. Unfortunately, access to these trials for many is limited or nonexistent due to the lack of insurance coverage and other fiscal barriers. In order to address that, a provision of the ACA took effect in 2014 that increased the federal statutes related to coverage for clinical trial participation. The adopted federal statutes requiring insurance coverage of health care benefits related to clinical trials are broader than California’s statutes in many important respects. This bill conforms California law to federal law regarding coverage of clinical trials while retaining critical consumer protections in existing state law.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Assembly Appropriations Committee, CHBRP states this bill has no cost to Medi-Cal and will cost approximately $200,000 annually to CalPERS health plans (General Fund/federal/special/local). CHBRP reports the following private market costs:

1. Increased employer-funded premium costs in the private insurance market of approximately $5.8 million.
2. Increased premium expenditures by employees and individuals purchasing insurance of $2.3 million, as well as $90,000 in enrollee out-of-pocket costs.

Costs to CDI (Insurance Fund) and DMHC (Managed Care Fund) to verify compliance are expected to be minor and absorbable.

SUPPORT: (Verified 9/9/19)

Insurance Commissioner Ricardo Lara

Alzheimer’s Association

American Diabetes Association

California Association for Health Services at Home

California Biomedical Research Association

California Chronic Care Coalition

California Life Sciences Association

City of Hope

Health Access California

OPPOSITION: (Verified 9/9/19)

None received

ARGUMENTS IN SUPPORT: The Alzheimer’s Association writes that Alzheimer’s is the second leading cause of death in California with no known cause, cure or prevention, and research acceleration is needed in order to understand and solve this fatal disease. California researchers report persistent challenges in recruiting participants for clinical trials, especially from within underrepresented communities and persons of color. Expanding coverage removes this barrier and encourages research participation. This bill further prohibits carriers from discriminating against an eligible clinical trial participant. Many of the individuals served by the Alzheimer’s Association report fear of discrimination based on family history or genetic testing. The California Association for Health Services at Home supports the author’s efforts to establish conformity with federal law relative to clinical trials. Ensuring that patients have expanded coverage to clinical trials for life-threatening diseases and conditions will benefit many individuals who have currently been limited by their specific health plan’s policies relative to clinical trials and have incurred additional out-of-pocket costs. This bill will protect individuals from being discriminated against by health plans when they are an eligible clinical trial participant and ensure that the health plans are not denying, limiting, or imposing additional conditions on coverage of routine patient costs in these trials.

ASSEMBLY FLOOR: 79-0, 9/9/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

Prepared by: Teri Boughton / HEALTH / (916) 651-4111

9/9/19 23:16:44

**** END ****

SENATE THIRD READING

STR Bill Id:SB 583

Author:(Jackson)

As Amended Ver:June 19, 2019

Majority vote

SUMMARY:

Expands required coverage for clinical trials under a plan contract or insurance policy to include a clinical trial relating to the prevention, detection, or treatment of a life-threatening disease or condition, as defined, and includes a trial funded by, among others, a qualified nongovernmental research entity. Prohibits a plan contract or insurance policy from, among other things, discriminating against an enrollee or insured for participating in an approved clinical trial. Authorizes a plan or insurer to require a qualified enrollee or insured to participate in a clinical trial, as specified, and to restrict coverage to an approved clinical trial in this state, unless the clinical trial is not offered or available through a participating provider in this state.

Major Provisions

COMMENTS:

Existing state and federal requirements. Current California law requires coverage of health care services related to participation in a cancer clinical trial and applies to all products, non-grandfathered and grandfathered products that existed prior to the Patient Protection and Affordable Care Act (ACA). Current federal law requires coverage for approved clinical trials for the treatment of cancer or other life-threatening disease or condition, for non-grandfathered plans after the enactment of the ACA. According to a Centers for Medicare & Medicaid Services Clinical Trials Policy, both Medicaid (Medi-Cal in California) and Medicare cover health care services related to participation in clinical trials. For non-grandfathered plans and policies, the ACA references this policy, making similar requirements applicable to almost all enrollees in plans and policies regulated by the Department of Managed Health Care and California Department of Insurance (CDI), though the ACA's requirements indicate a more limited scope of trials (only life-threatening) and require allowing self-referral to access benefit coverage.

According to the California Health Benefits Review Program (CHBRP), this bill would broaden the mandate to address participation in clinical trials related to any life-threatening diseases or conditions (not just cancer); allow enrollee self-referral to access benefit coverage related to the clinical trial (referral by a provider would no longer be required); and, expand the existing mandate's requirement that in-network cost sharing to apply to noncancer trial related services. This bill also exempts Medi-Cal Managed Care Plans. This bill would align with the ACA requirements and would additionally require, for participants in noncancer trials, coverage of out-of-network providers when a related service is not available in-network and require that all cost-sharing be at in-network rates. As this bill expands current California law that includes coverage in grandfathered plans, this bill would apply to all grandfathered and non-grandfathered plans.

According to the Author:

For people living with cancer or another life-threatening disease, access to a clinical trial can be the difference between life and death. Unfortunately, access to these trials for many is limited or nonexistent due to the lack of insurance coverage and other barriers. To address that, a provision of the ACA took effect in 2014 that required health insurers and self-funded Employee Retirement Income Security Act of 1974 plans to provide coverage for clinical trial participation. The federal statute requiring insurance coverage of health care benefits related to clinical trials is broader than California's statutes in many important respects. The author states that this bill conforms California law to federal law regarding coverage of clinical trials while retaining critical consumer protections in existing state law.

Arguments in Support:

Health Access California states that this bill would level up the playing field in terms of consumer protections regarding clinical trials, between California law and the ACA and also expand existing consumer protections to clinical trials for other conditions in addition to cancer. CDI Commissioner Lara writes that this bill is necessary to resolve ambiguities in state statute to ensure consistency with federal law, while preserving the necessary consumer protections in existing state law. The Department of Finance is neutral on this bill because it aligns California and federal law and will provide California greater regulatory authority over health plans and insurers, without creating significant costs to the state.

Arguments in Opposition:

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, CHBRP states this bill has no cost to Medi-Cal and will cost approximately $200,000 annually to CalPERS health plans (General Fund/federal/special/local). CHBRP reports the following private market costs:

1. Increased employer-funded premium costs in the private insurance market of approximately $5.8 million.
2. Increased premium expenditures by employees and individuals purchasing insurance of $2.3 million, as well as $90,000 in enrollee out-of-pocket costs.

Costs to CDI (Insurance Fund) and DMHC (Managed Care Fund) to verify compliance are expected to be minor and absorbable.

VOTES:

SENATE FLOOR: 38-0-0

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ASM HEALTH: 15-0-0

YES: Wood, Mayes, Aguiar-Curry, Bigelow, Bonta, Burke, Carrillo, Flora, Limón, McCarty, Nazarian, Ramos, Rodriguez, Santiago, Waldron

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

UPDATED:

VERSION: June 19, 2019

CONSULTANT: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0001690

Date of Hearing: August 14, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 583

Author:(Jackson) – As Amended Ver:June 19, 2019

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

SUMMARY:

This bill repeals, recasts and expands the current-law requirement for health plans and insurers to cover costs associated with clinical trials. Specifically, this bill:

1. Prohibits, for enrollees undergoing treatment of cancer or another life-threatening disease or condition, health plans and insurers from denying an enrollee’s participation in an approved clinical trial or imposing additional conditions on coverage for routine patient care costs.
2. Specifies payment rates and cost-sharing for out-of-network providers shall be the same as would apply for in-network providers if the clinical trial is not available through an in-network provider.
3. Applies to individual and group coverage (exempts Medi-Cal managed care).
4. Allows for individuals to self-refer for the clinical trial if they can prove their eligibility pursuant to the clinical trial protocol.
5. Exempts certain drugs, items, devices and services associated with the clinical trial from the requirement for coverage.

FISCAL EFFECT:

1. According to the California Health Benefits Review Program (CHBRP), this bill has no cost to Medi-Cal and will cost approximately $200,000 annually to CalPERS health plans (GF/federal/special/local).
2. CHBRP reports the following private market costs:
   1. Increased employer-funded premium costs in the private insurance market of approximately $5.8 million.
   2. Increased premium expenditures by employees and individuals purchasing insurance of $2.3 million, as well as $90,000 in enrollee out-of-pocket costs.
3. Costs to the California Department of Insurance (Insurance Fund) and Department of Managed Health Care (Managed Care Fund) to verify compliance are expected to be minor and absorbable.

COMMENTS:

1. Purpose. According to the author, access to a clinical trial can be the difference between life and death for people living with cancer or another life-threatening disease. The author states the federal statute requiring insurance coverage of health care benefits related to clinical trials is broader than California’s statutes. This bill is intended to conform California law to federal law and retain existing consumer protections.
2. Background. A clinical trial is a research study that recruits human volunteers to participate in an intervention to determine the overall safety of a particular treatment/drug and its effects on health outcomes. The objective of a clinical trial is to explore and investigate new manners and modes to prevent, detect or treat an illness or disease.

Current California law requires coverage of health care services related to participation in a cancer clinical trial and applies to all products that existed prior to the federal Affordable Care Act.

Current federal law pursuant to the federal Affordable Care Act requires coverage for approved clinical trials for the treatment of cancer or other life-threatening diseases or conditions for most plans. Medicaid (Medi-Cal in California) and Medicare also cover health care services related to participation in clinical trials, pursuant to federal law.

According to CHBRP, this bill would broaden the mandate to address participation in clinical trials related to any life-threatening diseases or conditions (not just cancer), allow enrollee self-referral to access benefit coverage related to the clinical trial (referral by a provider would no longer be required) and expand the existing mandate’s requirement that in-network cost sharing to apply to non-cancer trial related services. This bill also does not apply to Medi-Cal managed care plans, which means federal law continues to govern coverage in such plans.

CHBRP found the increased costs are largely attributable to provisions allowing for self-referral and requiring in-network cost-sharing.

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

Date of Hearing: June 25, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

SBPCA Bill Id:SB 583

Author:(Jackson) – As Amended Ver:June 19, 2019

SENATE VOTE: 38-0

SUBJECT: Clinical trials.

SUMMARY: Expands required coverage for clinical trials under a plan contract or insurance policy to include a clinical trial relating to the prevention, detection, or treatment of a life-threatening disease or condition, as defined, and includes a trial funded by, among others, a qualified nongovernmental research entity. Prohibits a plan contract or insurance policy from, among other things, discriminating against an enrollee or insured for participating in an approved clinical trial. Authorizes a plan or insurer to require a qualified enrollee or insured to participate in a clinical trial, as specified, and to restrict coverage to an approved clinical trial in this state, unless the clinical trial is not offered or available through a participating provider in this state. Specifically, this bill:

1. Prohibits an individual or group health care service plan (health plan) contract or disability insurance policy that provides hospital, medical, or surgical coverage, and that is issued, amended, or renewed on or after January 1, 2020, from the following:
   1. Denying a qualified enrollee’s or insured’s participation in an approved clinical trial;
   2. Denying, limiting, or imposing additional conditions on the coverage of routine patient care costs for items and services furnished in connection with a qualified enrollee’s participation in an approved clinical trial; and,
   3. Discriminating against an enrollee or insured based on the qualified enrollee’s or insured’s participation in an approved clinical trial.
2. Applies 1) above to:
   1. A qualified enrollee or insured participating in an approved clinical trial conducted by a participating provider; and,
   2. A qualified enrollee or insured participating in an approved clinical trial conducted by a nonparticipating provider, including a nonparticipating provider located outside this state, if the clinical trial is not offered or available through a participating provider.
3. Allows a health plan or insurer to require a qualified enrollee or insured to participate in the clinical trial through a participating provider if the participating provider accepts the enrollee or insured as a clinical trial participant, if one or more participating providers is conducting an approved clinical trial.
4. Allows a health plan or insurer to restrict coverage to an approved clinical trial in this state, unless the clinical trial is not offered or available through a participating provider in this state.
5. Requires the payment rate for routine patient care costs provided by a nonparticipating provider under a contract that is issued, amended, or renewed on or after January 1, 2020, to be the negotiated rate the health plan or insurer would otherwise pay a participating provider for the same services, less applicable cost sharing.
6. Requires cost sharing for routine patient care costs to be the same as that applied to the same services not delivered in a clinical trial, except that the in-network cost sharing and out-of-pocket maximum to apply if the clinical trial is not offered or available through a participating provider.
7. Defines approved clinical trial as a phase I, phase II, phase III, or phase IV clinical trial conducted in relation to the prevention, detection, or treatment of cancer or another life-threatening disease or condition that meets at least one of the following:
   1. The study or investigation is approved or funded, which may include funding through in-kind donations, by one or more of the following:
      1. The National Institutes of Health (NIH).
      2. The federal Centers for Disease Control and Prevention.
      3. The Agency for Healthcare Research and Quality.
      4. The Centers for Medicare and Medicaid Services (CMS).
      5. A cooperative group or center of any of the entities described in i) to iv) above, inclusive, the Department of Defense (DoD), or the United States Department of Veterans Affairs (VA).
      6. A qualified nongovernmental research entity identified in the guidelines issued by the NIH for center support grants.
      7. One of the following departments, if the study or investigation has been reviewed and approved through a system of peer review that the Secretary of the United States Department of Health and Human Services determines is comparable to the system of peer review used by the NIH and ensures unbiased review of the highest scientific standards by qualified individuals who have no interest in the outcome of the review:
         1. The VA;
         2. The DoD; or,
         3. The United States Department of Energy.
   2. The study or investigation is conducted under an investigational new drug application reviewed by the United States Food and Drug Administration (FDA).
   3. The study or investigation is a drug trial that is exempt from an investigational new drug application reviewed by the FDA.
8. Defines life-threatening disease or condition as a disease or condition from which the likelihood of death is probable, unless the course of the disease or condition is interrupted.
9. Defines qualified enrollee or insured as an enrollee or insured who meets both of the following conditions:
   1. The enrollee is eligible to participate in an approved clinical trial, according to the clinical trial protocol, for the treatment of cancer or another life-threatening disease or condition; and,
   2. Either of the following applies:
      1. The referring health care professional is a participating provider and has concluded that the enrollee’s participation in the clinical trial would be appropriate because the enrollee meets the conditions of 3)a) above; or,
      2. The enrollee provides medical and scientific information establishing that the enrollee’s participation in the clinical trial would be appropriate because the enrollee meets the conditions of 3)a) above.

EXISTING FEDERAL LAW:

1. Establishes the federal Patient Protection and Affordable Care Act (ACA), which enacts various health care coverage market reforms.
2. Prohibits a group health plan or a health insurance issuer offering group or individual health insurance coverage from:
   1. Denying a qualified individual from participating in a clinical trial;
   2. Denying, limiting, or imposing additional conditions on the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and,
   3. Discriminating against the individual on the basis of the individual’s participation in such trial.
3. Defines “qualified individual” as a participant or beneficiary in a health plan or with coverage described in 2) above who is eligible to participate in an approved clinical trial for the treatment of cancer or other life-threatening disease or condition, and, whose referring health care professional is a participating provider that has concluded that the individual’s participation would be appropriate, or, the participant or beneficiary provides medical and scientific information establishing that the individual’s participation would be appropriate.
4. Prohibits 2) and 3) above from preempting state laws that require a clinical trial’s policy for state regulated health insurance plans that is an addition to the policy required under 2) and 3) above.
5. Exempts certain plans (known as grandfathered plans) that were in place on the date the ACA was enacted, from specified provisions of the ACA, including the provision relating to coverage for individuals participating in approved clinical trials.

EXISTING STATE LAW:

1. Establishes, in state law, the California’s Health Benefit Exchange (Exchange), or Covered California, as an independent public entity not affiliated with an agency or department, and requires the Exchange to compare and make available through selective contracting, health insurance for individual and small business purchasers, as authorized under the ACA. Specifies the powers and duties of the board governing the Exchange, and requires the board to facilitate the purchase of qualified health plans through the Exchange by qualified individuals and small employers.
2. Establishes the Department of Managed Health Care (DMHC) to regulate health plans and the California Department of Insurance (CDI) to regulate health insurers.
   
3. Requires health plans and health insurers providing health coverage in the individual and small group markets to cover, at a minimum, essential health benefits (EHBs), including the 10 EHB benefit categories in the ACA, and consistent with California’s EHB benchmark plan, the Kaiser Foundation Health Plan Small Group HMO 30 plan (Kaiser benchmark), as specified in state law.
   
4. Specifies the EHBs in the following 10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and, pediatric services, including oral and vision care.
5. Requires health plans to provide basic health care services, including: physician services; hospital inpatient and ambulatory care services; diagnostic laboratory and diagnostic and therapeutic radiologic services; home health services; preventive health services; emergency health care services; and, hospice care.
6. Establishes the Independent Medical Review (IMR) program, within DMHC and CDI, and defines a disputed health care service to mean any health care service eligible for coverage and payment under a health plan contract or policy that has been denied, modified, or delayed by a decision of the plan or insurer, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. Specifies that a decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision.
7. Requires IMR reviewers to determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee or insured and any of the following:
8. Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service;
9. Nationally recognized professional standards;
10. Expert opinion;
11. Generally accepted standards of medical practice; or,
12. Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious.
13. Specifies that if a plan denies coverage pursuant to this section on the basis that its use is experimental or investigational, that decision is subject to IMR.
14. Requires every health plan contract and health insurance policy that is issued, amended, and delivered, or renewed in California, for an enrollee or insured diagnosed with cancer and accepted into a phase I, phase II, phase III, or phase IV clinical trial for cancer, to provide coverage for all routine patient care costs related to the clinical trial if the enrollee’s or insured’s treating physician, who is providing covered health care services to the enrollee or insured under the enrollee’s or insured’s health benefit plan contract, recommends participation in the clinical trial after determining that participation in the clinical trial has a meaningful potential to benefit the enrollee or insured.
15. Defines routine patient care costs, as specified. Requires the treatment to either involve a drug that is exempt under federal regulations from a new drug application; or, is approved by one of the following: NIH; FDA, in the form of an investigational new drug application; the DoD; or, the VA.
16. States that nothing in 9) above requires a health plan contracting with Medi-Cal to be responsible for reimbursement of services excluded from their contract because another entity is responsible by statute or otherwise for reimbursement of the service provider.
    
17. Requires the payment rate, in the case of health care services provided by a participating provider to be at the agreed upon rate, and in the case of a nonparticipating provider to be at the negotiated rate the plan or insurer would otherwise pay to a participating provider for the same services, less any applicable copayments and deductibles.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, for people living with cancer or another life-threatening disease, access to a clinical trial can be the difference between life and death. Unfortunately, access to these trials for many is limited or nonexistent due to the lack of insurance coverage and other barriers. To address that, a provision of the ACA took effect in 2014 that required health insurers and self-funded Employee Retirement Income Security Act of 1974 plans to provide coverage for clinical trial participation. The federal statute requiring insurance coverage of health care benefits related to clinical trials is broader than California’s statutes in many important respects. The author states that this bill conforms California law to federal law regarding coverage of clinical trials while retaining critical consumer protections in existing state law.
2. BACKGROUND.
   1. Existing state and federal requirements. Current California law requires coverage of health care services related to participation in a cancer clinical trial and applies to all products, non-grandfathered and grandfathered products that existed prior to the ACA. Current federal law requires coverage for approved clinical trials for the treatment of cancer or other life-threatening disease or condition, for non-grandfathered plans after the enactment of the ACA. According to a CMS Clinical Trials Policy, both Medicaid (Medi-Cal in California) and Medicare cover health care services related to participation in clinical trials. For non-grandfathered plans and policies, the ACA references this policy, making similar requirements applicable to almost all enrollees in plans and policies regulated by DMHC and CDI, though the ACA’s requirements indicate a more limited scope of trials (only “life-threatening”) and require allowing self-referral to access benefit coverage.

According to the California Health Benefits Review Program (CHBRP), this bill would broaden the mandate to address participation in clinical trials related to any life-threatening diseases or conditions (not just cancer); allow enrollee self-referral to access benefit coverage related to the clinical trial (referral by a provider would no longer be required); and, expand the existing mandate’s requirement that in-network cost sharing to apply to noncancer trial related services. This bill also exempts Medi-Cal Managed Care Plans. This bill would align with the ACA requirements and would additionally require, for participants in noncancer trials, coverage of out-of-network providers when a related service is not available in-network and require that all cost-sharing be at in-network rates. As this bill expands current California law that includes coverage in grandfathered plans, this bill would apply to all grandfathered and non-grandfathered plans.

• 1. Clinical Trials. According to CHBRP, clinical trials are research studies that recruit human volunteers to participate in an intervention to determine the overall safety of a particular treatment/drug and its effects on health outcomes. The objective of a clinical trial is to explore and investigate new manners and modes to prevent, detect, or treat an illness or disease.

Clinical trials can be categorized into six different types including: i) prevention trials; ii) screening trials; iii) diagnostic trials; iv) treatment trials; v) behavioral trials; and, vi) quality of life trials. All 50 states have benefit mandates related to clinical trials, though CHBRP is unaware of any that allow self-referral to substitute for the treating physician’s recommendation/referral, that require in-network cost sharing for all covered services, or that require coverage of out-of-network providers when a service is not available in-network. The Center for Information and Study on Clinical Research Participation estimates that 2.33 million Americans participated in clinical trials in 2015. Clinical trial participants report participating in clinical trials for a range of reasons, including helping to advance science and the treatment of the disease/condition (49%), to obtain better treatment (44%), to help others with the same disease/condition (39%), and to receive monetary compensation (29%).

• 1. 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 EHBs, 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. Coverage Impacts and Enrollees Covered. This bill would require coverage for health care services related to an enrollee’s participation in a life-threatening disease clinical trial. Routine health care services may include administration of the drug or service under study, mid-trial monitoring tests, and follow-up care needed due to side effects. CHBRP estimates that 100% of commercial and CalPERS enrollees have coverage for health care services related to clinical trials, while 7% can access benefit coverage through self-referral based on medical literature. Postmandate, 100% of commercial and CalPERS enrollees could self-refer for benefit coverage.
     2. Utilization. According to CHBRP, not all participation in a clinical trial generates a charge for an enrollee’s health plan or policy: approximately 41% of participants are in observational studies, which are unlikely to do so at all. Furthermore, it is not clear to what extent the administrators of clinical trials that could generate charges do so. Not generating such charges may indicate a lack of awareness of the existing benefit coverage mandates (some of which are relatively recent) or a desire to maintain control of data related to the study participants. Currently, out of the 16.9 million commercial and California Public Employees' Retirement System (CalPERS) enrollees with coverage subject to this bill, CHBRP estimates that 7,035 are enrolled in a clinical trial that is generating bills for the enrollee’s plan or insurer. Postmandate, CHBRP estimates that the number of these enrollees participating in clinical trials would increase to 7,372, a 5% increase. This increase would be due to the new ability of enrollees to self-refer for related benefit coverage. CHBRP assumed a 5% increase due to the difficulty of exercising this option. For an enrollee to self-refer, the enrollee must first be aware of a relevant clinical trial, which itself is a barrier to entry. Then the enrollee must have, for submission to the plan or insurer, access to medical literature, which is often difficult, although not impossible, for the public at large to access. Access to the internet or to research institutions with library assistance can facilitate both of these. There is a supply-side limitation as well, in that there are a limited number of spaces open in actively recruiting clinical trials. Finally, the enrollee must meet the inclusion criteria to participate in the clinical trial. CHBRP determined utilization of plan- or insurer-covered routine health care services used by enrollees who participate in clinical trials. An average of 0.713 inpatient days, 2.872 outpatient visits, 0.458 professional visits, and 1.731 professional procedures are used annually per enrollee, among enrollees who participate in clinical trials. CHBRP assumes these utilization rates per enrollee would not change postmandate, as the utilization of health care services is determined by the administration of the clinical trial. However, with more participants in clinical trials, the total number of routine health care services would increase.
     3. EHBs. CHBRP states that this bill would not require new benefit coverage and would not exceed EHBs.
     4. Medical Effectiveness. According to CHBRP, an evidence-based assessment of the medical, financial, and public health impacts of this bill typically involves a systematic literature review on the benefit or treatment referenced in the legislation. In this case, that would be a review of the effectiveness of clinical trials. This would encompass all literature for all clinical trials for a wide range of conditions. According to CHBRP, it was not feasible to complete this task given the timeframe for this analysis. In addition, there is no overall consensus regarding if patients participating in clinical trials have better outcomes compared to those not participating in clinical trials. As such, CHBRP has not included a medical effectiveness analysis of clinical trials in this report. In addition, without literature that describes the effectiveness of the proposed benefit or treatment, it is not possible to estimate a public health impact of the legislation.
     5. Impact on Expenditures. CHBRP states that this bill would increase total net annual expenditures by $8,298,000 or 0.0052% for commercial and CalPERS enrollees in DMHC-regulated plans and CDI-regulated policies. This is due to an $8,208,000 increase in total health insurance premiums paid by employers and enrollees for newly covered benefits, adjusted by a $90,000 increase in enrollee expenses for covered and benefits. The additional costs for enrollee expenses are due to cost sharing for routine health care services used by enrollees who have newly gained access to benefit coverage through self-referral. As the bill exempts the benefit coverage of Medi-Cal beneficiaries enrolled in DMHC-regulated plans, no impact is projected for Medi-Cal. CHBRP expects an increase in premiums of $206,000 (0.007%) for CalPERS. CHBRP states that this bill has no impact on the number of uninsured.
     6. Long-Term Impacts. According to CHBRP, this bill may increase the awareness of both the state mandate and the federal mandate for coverage of health care services related to clinical trial participation, which may, in the future, cause administrators of clinical trials to more frequently charge insurers for routine health care services. Therefore, while the number of overall enrollees who participate in clinical trials may remain the same, the number of clinical trials charging plans and insurers may increase by some unknown amount. An increase in such charges would be expected to cause a related increase in expenditures (premiums and enrollee expenses). This bill would allow commercial and CalPERS enrollees to self-refer for access to benefit coverage related to clinical trials but would not do so for Medi-Cal beneficiaries enrolled in DMHC-regulated plans. Participation in clinical trials is predominantly comprised of whites, whereas other racial/ethnic groups such as blacks and Hispanics are underrepresented. Due to the Medi-Cal population distribution having a higher representation of blacks and Hispanics, it is possible that over time, this bill could lead to a worsening in disparities of participation in clinical trials by race/ethnicity.

1. SUPPORT. Health Access California states that this bill would level up the playing field in terms of consumer protections regarding clinical trials, between California law and the ACA and also expand existing consumer protections to clinical trials for other conditions in addition to cancer. CDI Commissioner Lara writes that this bill is necessary to resolve ambiguities in state statute to ensure consistency with federal law, while preserving the necessary consumer protections in existing state law.
2. RELATED LEGISLATION.
   1. SB 746 (Bates) requires that coverage for chemotherapy or radiation therapy for the treatment of cancer to include coverage for anticancer medical devices.
   2. AB 1246 (Limon) requires large group health insurance policies, issued, amended, or renewed on or after July 1, 2020, to include coverage for medically necessary basic health care services and, to the extent the policy covers prescription drugs, coverage for medically necessary prescription drugs. AB 1246 is pending in Senate Health Committee.
3. PREVIOUS LEGISLATION. SB 37 (Speier), Chapter 172, Statutes of 2001, requires health care plans and certain disability insurers to provide coverage for all routine patient care costs relative to the treatment of an enrollee or insured diagnosed with cancer and accepted in a clinical trial meeting specified requirements, if the enrollee's treating physician, who is providing covered health care services under their health plan contract, recommends participation in the clinical trial after determining such participation has a meaningful potential to benefit the enrollee or insured, as specified.

REGISTERED SUPPORT / OPPOSITION:

Support

Alzheimer's Association
American Diabetes Association
California Association for Health Services at Home
California Chronic Care Coalition
California Department of Insurance
California Life Sciences Association
City of Hope National Medical Center
Health Access California

Oppose

None on file.

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

 THIRD READING  

Bill No: SB 583

Author: Jackson (D)

Amended: 4/29/19

Vote: 21

SENATE HEALTH COMMITTEE: 9-0, 4/24/19

AYES: Pan, Stone, Durazo, Grove, Hurtado, Leyva, Mitchell, Monning, Rubio

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Clinical trials

SOURCE: Author

DIGEST:

This bill conforms California law with respect to health plan and insurer coverage requirements for participants in clinical trials to incorporate federal requirements enacted as part of the Affordable Care Act, which includes expanding the type of clinical trials to include life-threatening diseases or conditions.

ANALYSIS:

Existing federal law:

1. Prohibits, a group health plan or a health insurance issuer offering group or individual health insurance coverage from: denying a qualified individual from participating in a clinical trial; denying, limiting or imposing additional conditions on the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and, discriminating against the individual on the basis of the individual’s participation in such trial. [42 USC §300gg–8]
2. Defines “qualified individual” as a participant or beneficiary in a health plan or with coverage described in 1) above who is eligible to participate in an approved clinical trial for the treatment of cancer or other life-threatening disease or condition, and, whose referring health care professional is a participating provider that has concluded that the individual’s participation would be appropriate, or, the participant or beneficiary provides medical and scientific information establishing that the individual’s participation would be appropriate. [42 USC §300gg–8]
3. Prohibits 1) and 2) above from preempting state laws that require a clinical trial’s policy for state regulated health insurance plans that is an addition to the policy required under 1) and 2) above. [42 USC §300gg–8]
4. Exempts certain plans (known as grandfathered plans) that were in place on the date the federal Affordable Care Act (ACA) was enacted, from specified provisions of the ACA, including the provision relating to coverage for individuals participating in approved clinical trials. [45 CFR §147.140(c)]

Existing state law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Services Plan Act of 1975; the California Department of Insurance (CDI) to regulate health and other insurers; Covered California as California’s health benefit exchange for individual and small business purchasers as authorized under the ACA; and, the Department of Health Care Services to administer the Medi-Cal program. [HSC §1340, et seq., INS §106, et seq., GOV §100500 -100522, and WIC §14000, et seq.]
2. Establishes as California's essential health benefits (EHBs) benchmark the Kaiser Small Group Health Maintenance Organization, existing California mandates, and 10 ACA mandated benefits. [HSC §1367.005 and INS §10112.27]
3. Requires every health plan contract and health insurance policy that is issued, amended, and delivered, or renewed in California, for an enrollee or insured diagnosed with cancer and accepted into a phase I, phase II, phase III or phase IV clinical trial for cancer, to provide coverage for all routine patient care costs related to the clinical trial if the enrollee’s or insured’s treating physician, who is providing covered health care services to the enrollee or insured under the enrollee’s or insured’s health benefit plan contract, recommends participation in the clinical trial after determining that participation in the clinical trial has a meaningful potential to benefit the enrollee or insured. [HSC §1370.6 and INS §10145.4]
4. Defines “routine patient care costs,” as specified. Requires the treatment to either involve a drug that is exempt under federal regulations from a new drug application; or, is approved by one of the following National Institutes of Health (NIH), the federal Food and Drug Administration (FDA), in the form of an investigational new drug application, the United States Department of Defense (DOD), or the United States Veterans’ Administration (VA). [HSC §1370.6 and INS §10145.4]
5. States that nothing in 3) or 4) above requires a health plan contracting with Medi-Cal to be responsible for reimbursement of services excluded from their contract because another entity is responsible by statute or otherwise for reimbursement of the service provider. [HSC §1370.6 and INS §10145.4]
6. Requires the payment rate, in the case of health care services provided by a participating provider to be at the agreed upon rate, and in the case of a nonparticipating provider to be at the negotiated rate the plan or insurer would otherwise pay to a participating provider for the same services, less any applicable copayments and deductibles. [HSC §1370.6 and INS §10145.4]
7. Requires reviews, for purposes of Independent Medical Review, to determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee/insured and any of the following:
8. Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service;
9. Nationally recognized professional standards;
10. Expert opinion;
11. Generally accepted standards of medical practice; or,
12. Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. [HSC §1374.33 and IC §10169.3]

This bill:

1. Adds, for an individual or group health plan contract or disability insurance policy that is issued, amended, or renewed on or after January 1, 2020, coverage for routine costs for a person participating in a clinical trial for another life-threatening disease or condition (existing state law applies only to cancer clinical trials), and prohibits discrimination against the individual’s participation in such trial.
2. Allows a qualified enrollee or insured to participate in an approved clinical trial conducted by a nonparticipating provider, including a nonparticipating provider located outside of this state, if not offered through a participating provider.
3. Requires cost sharing for routine patient care costs to be the same as that applied to the same services not delivered in a clinical trial, but requires the in-network cost sharing and out-of-pocket maximum to apply if the clinical trial is not offered or available through a participating provider.
4. Expands the entities that can approve or fund the clinical trial to include:
   1. NIH;
   2. The federal Centers for Disease Control and Prevention;
   3. The Agency for Healthcare Research and Quality;
   4. The Centers for Medicare and Medicaid Services (CMS);
   5. A cooperative group or center of any of i) through iv), DOD or VA;
   6. A qualified nongovernmental research entity identified in guidelines issued by the NIH for center support grants; and,
   7. The United States Department of Energy.
5. Defines “life-threatening disease or condition” as a disease or condition from which the likelihood of death is probable, unless the course of the disease or condition is interrupted.
6. Allows the enrollee or insured to provide medical and scientific information establishing that the enrollee or insured’s participation would be appropriate.

Background

1. California Health Benefits Review Program (CHBRP) analysis. AB 1996 (Thomson, Chapter 795, Statutes of 2002) requested 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, and reviewed this bill. Key findings include:
   1. Coverage impacts and enrollees covered. CHBRP estimates that 100% of commercial and California Public Employees’ Retirement System (CalPERS) enrollees have coverage for health care services related to clinical trials, while 7% can access benefit coverage through self-referral based on medical literature. Post mandate, 100% of commercial and CalPERS enrollees could self-refer for benefit coverage.
   2. EHBs. This bill alters a current state benefit mandate and according to CHBRP is not considered to exceed EHBs.
   3. Utilization. Currently, out of the 16.9 million commercial and CalPERS enrollees with coverage subject to this bill, CHBRP estimates that 7,035 are enrolled in a clinical trial that is generating bills for the enrollee’s plan or insurer. Postmandate, CHBRP estimates that number would increase to 7,372, a 5% increase. This increase would be due to the new ability of enrollees to self-refer for related benefit coverage. CHBRP assumed a 5% increase due to the difficulty of exercising this option. For an enrollee to self-refer, the enrollee must first be aware of a relevant clinical trial, which itself is a barrier to entry. Then the enrollee must have, for submission to the plan or insurer, access to medical literature, which is often difficult, although not impossible, for the public at large to access. Access to the Internet or to research institutions with library assistance can facilitate both of these. There is a supply-side limitation as well, in that there are a limited number of spaces open in actively recruiting clinical trials. Finally, the enrollee must meet the inclusion criteria to participate in the clinical trial. An average of 0.713 inpatient days, 2.872 outpatient visits, 0.458 professional visits, and 1.731 professional procedures are used annually per enrollee, among enrollees who participate in clinical trials. CHBRP assumes these utilization rates per enrollee will not change postmandate, as the utilization of health care services is determined by the administration of the clinical trial. However, with more participants in clinical trials, the total number of routine health care services will increase.
   4. Impact on expenditures. This bill increases total net annual expenditures by $8,298,000 or 0.0052% for commercial and CalPERS enrollees in DMHC-regulated plans and CDI-regulated policies. This is due to an $8,208,000 increase in total health insurance premiums paid by employers and enrollees for newly covered benefits, adjusted by a $90,000 increase in enrollee expenses for covered benefits. The additional costs for enrollee expenses are due to cost-sharing for routine health care services used by enrollees who have newly gained access to benefit coverage through self-referral.
   5. Medi-Cal. This bill specifies applicability to “group and individual” health insurance, which means it would not be applicable to the benefit coverage of the 7.6 million Medi-Cal beneficiaries enrolled in DMHC-regulated plans. However, Federal Clinical Trials Policy (NCD310.1), indicates that both Medicaid (Medi-Cal in California) and Medicare cover health care services related to participation in clinical trials. The policy does not require coverage for nonmedical services, does not address potential participant self-referral, and does not require coverage by an out-of-network provider when no in-network provider can provide the service. However, the policy is broader than this bill in terms of disease/condition, as it is not limited to “life threatening” situations.
2. ACA Requirements. According to CMS, in general, the Public Health Services Act provisions added by the ACA state that if a group health plan or health insurance issuer in the group and individual health insurance market provide coverage to a qualified individual, then such plan or issuer: (a) may not deny the qualified individual participation in an approved clinical trial with respect to the treatment of cancer or another life-threatening disease or condition; (b) 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 (c) may not discriminate against the individual on the basis of the individual’s participation in the trial. A qualified individual is generally a participant or beneficiary who is eligible to participate in an approved clinical trial according to the trial protocol with respect to the treatment of cancer or another life-threatening disease or condition and either: (a) the referring health care professional is a participating provider and has concluded that the individual’s participation in such trial would be appropriate; or (b) the participant or beneficiary provides medical and scientific information establishing that the individual’s participation in such trial would be appropriate. 
3. Grandfathered plans. There are 1.9 million grandfathered plan enrollees and insureds in California, mostly in large groups and mostly in DMHC regulated plans. In 2012, 32% of all commercial enrollees were in grandfathered plans, vs. 13% in 2017. The ACA clinical trials requirement does not apply to the grandfathered plans, but the current California clinical trials law related to cancer treatment does apply to grandfathered plans. This bill goes beyond strict federal conformity by applying the ACA requirements to grandfathered plans.
4. Clinical trials in California. According to CHBRP, 16% of clinical trials actively recruiting in California are funded by NIH, 4% are funded by another U.S. federal agency, 55% are funded by industry, and 25% are funded by other sources. Clinical trials recruiting patients in California differ in composition from those in the U.S. overall in that the clinical trials currently recruiting patients in California are more likely to be funded by industry (58% vs. 33%). In addition, 20% of trials actively recruiting in California are in Phase I of development, 30% are in Phase II, 21% are in Phase III, 5% are in Phase IV, and 24% are trials without FDA-defined phases including trials of devices and behavioral interventions. The trials actively recruiting in California also differ from the U.S. as a whole in that they are more likely to be trials with FDA-defined phases (76% vs. 61%) and specifically more trials that are in phase III (21% vs. 9%). The most common disease addressed through clinical trials actively recruiting in California in 2019 is cancer (32%), followed by mental health conditions (4%), cardiovascular disease (4%), diabetes (3%), and HIV/AIDS (2%). The other 56% of the trials fall into the “other category,” which includes studies addressing a wide range of issues such as Alzheimer’s disease, Parkinson’s disease, obesity, sedentary lifestyles, pain management, and reproductive health.

Comments

Author’s statement. According to the author, for people living with cancer or another life-threatening disease, access to a clinical trial can be the difference between life and death. Unfortunately, access to these trials for many is limited or nonexistent due to the lack of insurance coverage and other fiscal barriers. In order to address that, a provision of the ACA took effect in 2014 that increased the federal statutes related to coverage for clinical trial participation. The adopted federal statutes requiring insurance coverage of health care benefits related to clinical trials are broader than California’s statutes in many important respects. This bill conforms California law to federal law regarding coverage of clinical trials while retaining critical consumer protections in existing state law.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 5/13/19)

California Insurance Commissioner Ricardo Lara

Alzheimer’s Association

American Diabetes Association

California Association for Health Services at Home

California Biomedical Research Association

Health Access California

OPPOSITION: (Verified 5/13/19)

America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

ARGUMENTS IN SUPPORT: The Alzheimer’s Association writes that Alzheimer’s is the second leading cause of death in California with no known cause, cure or prevention, and research acceleration is needed in order to understand and solve this fatal disease. California researchers report persistent challenges in recruiting participants for clinical trials, especially from within underrepresented communities and persons of color. Expanding coverage removes this barrier and encourages research participation. This bill further prohibits carriers from discriminating against an eligible clinical trial participant. Many of the individuals served by the Alzheimer’s Association report fear of discrimination based on family history or genetic testing. The California Association for Health Services at Home (CAHSAH) supports the author’s efforts to establish conformity with federal law relative to clinical trials. Ensuring that patients have expanded coverage to clinical trials for life-threatening diseases and conditions will benefit many individuals who have currently been limited by their specific health plan’s policies relative to clinical trials and have incurred additional out-of-pocket costs. This bill will protect individuals from being discriminated against by health plans when they are an eligible clinical trial participant and ensure that the health plans are not denying, limiting, or imposing additional conditions on coverage of routine patient costs in these trials.

ARGUMENTS IN OPPOSITION: The California Association of Health Plans, the Association of California Life and Health Insurance Companies, and America’s Health Insurance Plans oppose mandate bills that lead to higher premiums, harming affordability and access for small businesses and individual market consumers. Over the past several years, employers have been losing more and more flexibility to set their own benefit designs due to costly state and federal regulations. These mandates will add to those higher health care costs.

Prepared by: Teri Boughton / HEALTH / (916) 651-4111

5/15/19 15:21:16

**** END ****

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: SB 583

SUBJECT: Clinical trials

SUMMARY:

Conforms California law with respect to health plan and insurer coverage requirements for participants in clinical trials to incorporate federal requirements enacted as part of the Affordable Care Act, which includes expanding the type of clinical trials to include life-threatening diseases or conditions.

Existing federal law:

1. Prohibits, a group health plan or a health insurance issuer offering group or individual health insurance coverage from: denying a qualified individual from participating in a clinical trial; denying, limiting or imposing additional conditions on the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and, discriminating against the individual on the basis of the individual’s participation in such trial. [42 USC §300gg–8]
   
2. Defines “qualified individual” as a participant or beneficiary in a health plan or with coverage described in 1) above who is eligible to participate in an approved clinical trial for the treatment of cancer or other life-threatening disease or condition, and, whose referring health care professional is a participating provider that has concluded that the individual’s participation would be appropriate, or, the participant or beneficiary provides medical and scientific information establishing that the individual’s participation would be appropriate. [42 USC §300gg–8]
   
3. Prohibits 1) and 2) above from preempting state laws that require a clinical trial’s policy for state regulated health insurance plans that is an addition to the policy required under 1) and 2) above. [42 USC §300gg–8]
   
4. Exempts certain plans (known as grandfathered plans) that were in place on the date the federal Affordable Care Act (ACA) was enacted, from specified provisions of the ACA, including the provision relating to coverage for individuals participating in approved clinical trials. [45 CFR §147.140(c)]
   

Existing state law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Services Plan Act of 1975; the California Department of Insurance (CDI) to regulate health and other insurers; Covered California as California’s health benefit exchange for individual and small business purchasers as authorized under the ACA; and, the Department of Health Care Services (DHCS) to administer the Medi-Cal program. [HSC §1340, et seq., INS §106, et seq., GOV §100500 -100522, and WIC §14000, et seq.]
   
2. Establishes as California's essential health benefits (EHBs) benchmark the Kaiser Small Group Health Maintenance Organization, existing California mandates, and ten ACA mandated benefits. [HSC §1367.005 and INS §10112.27]
3. Requires every health plan contract and health insurance policy that is issued, amended, and delivered, or renewed in California, for an enrollee or insured diagnosed with cancer and accepted into a phase I, phase II, phase III or phase IV clinical trial for cancer, to provide coverage for all routine patient care costs related to the clinical trial if the enrollee’s or insured’s treating physician, who is providing covered health care services to the enrollee or insured under the enrollee’s or insured’s health benefit plan contract, recommends participation in the clinical trial after determining that participation in the clinical trial has a meaningful potential to benefit the enrollee or insured. [HSC §1370.6 and INS §10145.4]
   
4. Defines “routine patient care costs,” as specified. Requires the treatment to either involve a drug that is exempt under federal regulations from a new drug application; or, is approved by one of the following National Institutes of Health (NIH), the federal Food and Drug Administration (FDA), in the form of an investigational new drug application, the United States Department of Defense (DOD), or the United States Veterans’ Administration (VA). [HSC §1370.6 and INS §10145.4]
   
5. States that nothing in 3) or 4) above requires a health plan contracting with Medi-Cal to be responsible for reimbursement of services excluded from their contract because another entity is responsible by statute or otherwise for reimbursement of the service provider. [HSC §1370.6 and INS §10145.4]
   
6. Requires the payment rate, in the case of health care services provided by a participating provider to be at the agreed upon rate, and in the case of a nonparticipating provider to be at the negotiated rate the plan or insurer would otherwise pay to a participating provider for the same services, less any applicable copayments and deductibles. [HSC §1370.6 and INS §10145.4]
   
7. Requires reviews, for purposes of Independent Medical Review (IMR), to determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee/insured and any of the following:
8. Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service;
9. Nationally recognized professional standards;
10. Expert opinion;
11. Generally accepted standards of medical practice; or,
12. Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. [HSC §1374.33 and IC §10169.3]

This bill:

1. Adds, for an individual or group health plan contract or insurance policy that is issued, amended, or renewed on or after January 1, 2020, coverage for routine costs for a person participating in a clinical trial for another life-threatening disease or condition (existing state law applies only to cancer clinical trials), and prohibits discrimination against the individual’s participation in such trial.
   
2. Allows a qualified enrollee or insured to participate in an approved clinical trial conducted by a nonparticipating provider, including a nonparticipating provider located outside of this state, if not offered through a participating provider.
   
3. Requires cost sharing for routine patient care costs to be the same as that applied to the same services not delivered in a clinical trial, but requires the in-network cost sharing and out-of-pocket maximum to apply if the clinical trial is not offered or available through a participating provider.
   
4. Expands the entities that can approve or fund the clinical trial to include:
   • 1. NIH;
     2. The federal Centers for Disease Control and Prevention;
     3. The Agency for Healthcare Research and Quality;
     4. The Centers for Medicare and Medicaid Services (CMS);
     5. A cooperative group or center of any of i) through iv), DOD or VA;
     6. A qualified nongovernmental research entity identified in guidelines issued by the NIH for center support grants; and,
     7. The United States Department of Energy.
        
5. Defines “life-threatening disease or condition” as a disease or condition from which the likelihood of death is probable, unless the course of the disease or condition is interrupted.
   
6. Allows the enrollee or insured to provide medical and scientific information establishing that the enrollee or insured’s participation would be appropriate.
   

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, for people living with cancer or another life-threatening disease, access to a clinical trial can be the difference between life and death. Unfortunately, access to these trials for many is limited or nonexistent due to the lack of insurance coverage and other fiscal barriers. In order to address that, a provision of the ACA took effect in 2014 that increased the federal statutes related to coverage for clinical trial participation. The adopted federal statutes requiring insurance coverage of health care benefits related to clinical trials are broader than California’s statutes in many important respects. This bill conforms California law to federal law regarding coverage of clinical trials while retaining critical consumer protections in existing state law.
2. 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, and reviewed this bill. Key findings include:
   1. Coverage impacts and enrollees covered. CHBRP estimates that 100% of commercial and CalPERS enrollees have coverage for health care services related to clinical trials, while 7% can access benefit coverage through self-referral based on medical literature. Post mandate, 100% of commercial and CalPERS enrollees could self-refer for benefit coverage.
   2. Essential health benefits. This bill alters a current state benefit mandate and according to CHBRP is not considered to exceed EHBs.
      
   3. Utilization. Currently, out of the 16.9 million commercial and CalPERS enrollees with coverage subject to this bill, CHBRP estimates that 7,035 are enrolled in a clinical trial that is generating bills for the enrollee’s plan or insurer. Postmandate, CHBRP estimates that number would increase to 7,372, a 5% increase. This increase would be due to the new ability of enrollees to self-refer for related benefit coverage. CHBRP assumed a 5% increase due to the difficulty of exercising this option. For an enrollee to self-refer, the enrollee must first be aware of a relevant clinical trial, which itself is a barrier to entry. Then the enrollee must have, for submission to the plan or insurer, access to medical literature, which is often difficult, although not impossible, for the public at large to access. Access to the Internet or to research institutions with library assistance can facilitate both of these. There is a supply-side limitation as well, in that there are a limited number of spaces open in actively recruiting clinical trials. Finally, the enrollee must meet the inclusion criteria to participate in the clinical trial. An average of 0.713 inpatient days, 2.872 outpatient visits, 0.458 professional visits, and 1.731 professional procedures are used annually per enrollee, among enrollees who participate in clinical trials. CHBRP assumes these utilization rates per enrollee will not change postmandate, as the utilization of health care services is determined by the administration of the clinical trial. However, with more participants in clinical trials, the total number of routine health care services will increase.
   4. Impact on expenditures. This bill would increase total net annual expenditures by $8,298,000 or 0.0052% for commercial and CalPERS enrollees in DMHC-regulated plans and CDI-regulated policies. This is due to an $8,208,000 increase in total health insurance premiums paid by employers and enrollees for newly covered benefits, adjusted by a $90,000 increase in enrollee expenses for covered benefits. The additional costs for enrollee expenses are due to cost-sharing for routine health care services used by enrollees who have newly gained access to benefit coverage through self-referral.
   5. Medi-Cal. This bill specifies applicability to “group and individual” health insurance, which means it would not be applicable to the benefit coverage of the 7.6 million Medi-Cal beneficiaries enrolled in DMHC-regulated plans. However, Federal Clinical Trials Policy (NCD310.1), indicates that both Medicaid (Medi-Cal in California) and Medicare cover health care services related to participation in clinical trials. The policy does not require coverage for nonmedical services, does not address potential participant self-referral, and does not require coverage by an out-of-network provider when no in-network provider can provide the service. However, the policy is broader than this bill in terms of disease/condition, as it is not limited to “life threatening” situations.
      
3. ACA Requirements. According to CMS, in general, the Public Health Services Act (PHS Act) provisions added by the ACA state that if a group health plan or health insurance issuer in the group and individual health insurance market provide coverage to a qualified individual, then such plan or issuer: (1) may not deny the qualified individual participation in an approved clinical trial with respect to the treatment of cancer or another life-threatening disease or condition; (2) 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 (3) may not discriminate against the individual on the basis of the individual’s participation in the trial. A qualified individual is generally a participant or beneficiary who is eligible to participate in an approved clinical trial according to the trial protocol with respect to the treatment of cancer or another life-threatening disease or condition and either: (1) the referring health care professional is a participating provider and has concluded that the individual’s participation in such trial would be appropriate; or (2) the participant or beneficiary provides medical and scientific information establishing that the individual’s participation in such trial would be appropriate. 
   
4. Grandfathered plans. There are 1.9 million grandfathered plan enrollees and insureds in California, mostly in large groups and mostly in DMHC regulated plans. In 2012, 32% of all commercial enrollees were in grandfathered plans, vs. 13% in 2017. (See the chart below for the distribution between DMHC and CDI). The ACA clinical trials requirement does not apply to the grandfathered plans, but the current California clinical trials law related to cancer treatment does apply to grandfathered plans. This bill would apply to grandfathered plans.

1. Background on clinical trials. According to CHBRP, clinical trials follow a sequential series of phases (i.e., Phase I-IV) ranging from early, small-scale studies (Phase I) to introduction to the public, post-drug or treatment approval by FDA (Phase IV). Phase I is when researchers test a drug or treatment among a small cohort of individuals (20 to 80 individuals) for the first time to learn about the safety and potential side effects of the drug or treatment. Phase II is the phase in which the new drug or treatment is distributed to a larger cohort of individuals (100 to 300 individuals) to further study the treatment or drug’s effectiveness and safety. During Phase III, the drug or treatment is distributed to approximately 1,000 to 3,000 individuals to validate its effectiveness, monitor side effects, compare it to a standard or similar treatment available in the market, and collect additional information. Phase IV is the phase in which the drug or treatment has been approved by the FDA and is available for use among the general public. During Phase IV, researchers will continue to track the drug or treatment’s safety and seek additional information regarding its benefits and optimal use.
   
2. Clinical trials in California. According to CHBRP, 16% of clinical trials actively recruiting in California are funded by NIH, 4% are funded by another U.S. federal agency, 55% are funded by industry, and 25% are funded by other sources. Clinical trials recruiting patients in California differ in composition from those in the U.S. overall in that the clinical trials currently recruiting patients in California are more likely to be funded by industry (58% vs. 33%). In addition, 20% of trials actively recruiting in California are in Phase I of development, 30% are in Phase II, 21% are in Phase III, 5% are in Phase IV, and 24% are trials without FDA-defined phases including trials of devices and behavioral interventions. The trials actively recruiting in California also differ from the U.S. as a whole in that they are more likely to be trials with FDA-defined phases (76% vs. 61%) and specifically more trials that are in phase III (21% vs. 9%). The most common disease addressed through clinical trials actively recruiting in California in 2019 is cancer (32%), followed by mental health conditions (4%), cardiovascular disease (4%), diabetes (3%), and HIV/AIDS (2%). The other 56% of the trials fall into the “other category,” which includes studies addressing a wide range of issues such as Alzheimer’s disease, Parkinson’s disease, obesity, sedentary lifestyles, pain management, and reproductive health.
   
3. Related legislation. SB 11 (Beall) requires on-formulary, lowest tier coverage of prescription medications approved by the FDA for treatment of substance use disorders, and creates mental health parity reporting. SB 11 is set for hearing in this Committee on April 24, 2019.

SB 159 (Wiener) authorizes a pharmacist to furnish preexposure prophylaxis (PrEP) and postexposure prophylaxis (PEP), in specified amounts, if the pharmacist completes a training program approved by the Board of Pharmacy and complies with specified requirements, such as assessing a patient and providing a patient with counseling and tests. Prohibits plans and insurers from subjecting combination antiretroviral drug treatments that are medically necessary for the prevention of AIDS/HIV, including PrEP and PEP, to prior authorization or step therapy, and expands the Medi-Cal schedule of benefits to include PrEP and PEP as pharmacist services. SB 159 is set for hearing in this Committee on April 24, 2019.

SB 163 (Portantino) expands the definition of behavioral health treatment (BHT) and expands the provider qualifications to include more provider types that can provide BHT under the mandate that health plans and insurers cover BHT for pervasive developmental disorder or autism. Prohibits the setting, location, or time of treatment recommended by a qualified autism services provider from being used as the only reason to deny or reduce coverage for medically necessary services. Requires the setting to be consistent with the standard of care for BHT. SB 163 passed this Committee by a vote of 8-0 on April 10, 2019.

SB 600 (Portantino) clarifies coverage for standard fertility preservation services when a medically necessary treatment may cause iatrogenic infertility to an enrollee or insured. SB 600 is set for hearing in this Committee on April 24, 2019.

SB 746 (Bates) requires that coverage for chemotherapy or radiation therapy for the treatment of cancer to include coverage for anticancer medical devices. SB 746 is set for hearing in this Committee on April 24, 2019.

AB 598 (Bloom) requires coverage for hearing aids, as defined, for an enrollee or insured under 18 years of age, as specified. AB 598 is set to for hearing in the Assembly Health Committee on April 23, 2019.

AB 651 (Grayson) requires when an the enrollee, insured, or subscriber receives covered services from a noncontracting air ambulance provider, to pay no more than the same cost sharing that the enrollee, insured, or subscriber would pay for the same covered services received from a contracting air ambulance provider. AB 651 is set for hearing in the Assembly Health Committee on April 23, 2019.

AB 744 (Aguiar-Curry) requires reimbursement of a health care provider for the diagnosis, consultation, or treatment of an enrollee, subscriber, insured, or policyholder delivered through telehealth services on the same basis and to the same extent as the same service provided through in-person diagnosis, consultation, or treatment. AB 744 is set for hearing in the Assembly Health Committee on April 23, 2019.

AB 767(Wicks) requires coverage for in vitro fertilization, as a treatment of infertility, and mature oocyte cryopreservation. AB 767 is set for hearing in the Assembly Health Committee on April 23, 2019.

AB 993 allows health plans to include HIV specialists as eligible primary care providers (PCPs), if the provider requests PCP status and meets the health insurer’s eligibility criteria. AB 993 passed the Assembly Health Committee by a vote of 15-0 on April 9, 2019.

AB 1246 (Limon) requires large group health insurance policies to include coverage for medically necessary basic health care services and, to the extent the policy covers prescription drugs, coverage for medically necessary prescription drugs. AB 1246 passed the Assembly Health Committee by a vote of 13-0 on April 9, 2019.

AB 1611(Chiu) requires that if an enrollee or insured receives covered services from a noncontracting hospital, he or she is prohibited from paying more than the same cost sharing that he or she would pay for the same covered services received from a contracting hospital. AB 1611 is set for hearing in the Assembly Health Committee on April 23, 2019.

AB 1676 (Maienschein) requires coverage for a telehealth consultation program that provides providers who treat children and pregnant and postpartum persons with access to a psychiatrist, as specified, in order to more quickly diagnose and treat children and pregnant and postpartum persons suffering from mental illness. AB 1676 is set for hearing in the Assembly Health Committee on April 23, 2019.

1. Prior legislation. SB 37 (Speier, Chapter 172, Statutes of 2001) requires health care plans and certain disability insurers to provide coverage for all routine patient care costs relative to the treatment of an enrollee or insured diagnosed with cancer and accepted in a clinical trial meeting specified requirements, if the enrollee's treating physician, who is providing covered health care services under their health plan contract, recommends participation in the clinical trial after determining such participation has a meaningful potential to benefit the enrollee or insured, as specified.
2. Support. The Alzheimer’s Association writes that Alzheimer’s is the second leading cause of death in California with no known cause, cure or prevention, and research acceleration is needed in order to understand and solve this fatal disease. California researchers report persistent challenges in recruiting participants for clinical trials, especially from within underrepresented communities and persons of color. Expanding coverage removes this barrier and encourages research participation. This bill further prohibits carriers from discriminating against an eligible clinical trial participant. Many of the individuals served by the Alzheimer’s Association report fear of discrimination based on family history or genetic testing. The California Association of Health Services at Home (CAHSAH) supports the author’s efforts to establish conformity with federal law relative to clinical trials. Ensuring that patients have expanded coverage to clinical trials for life-threatening diseases and conditions will benefit many individuals who have currently been limited by their specific health plan’s policies relative to clinical trials and have incurred additional out-of-pocket costs. This bill will protect individuals from being discriminated against by health plans when they are an eligible clinical trial participant and ensure that the health plans are not denying, limiting, or imposing additional conditions on coverage of routine patient costs in these trials.
   
3. Opposition. The California Association of Health Plans, the Association of California Life and Health Insurance Companies, and America’s Health Insurance Plans oppose mandate bills that lead to higher premiums, harming affordability and access for small businesses and individual market consumers. Over the past several years, employers have been losing more and more flexibility to set their own benefit designs due to costly state and federal regulations. These mandates will add to those higher health care costs.
   
4. Policy comments.
   1. Plans have to comply with federal law. Whether this bill is enacted or not, health plans and insurers must comply with federal law. By incorporating federal law into existing California law it allows California regulators to enforce the federal requirements. This bill conforms California law to federal law without reducing California standards for consumers. Another outcome in reconciling the two laws, is this bill would apply the federal provisions to grandfathered plans, which currently must comply with the existing California law.
      
   2. Multiple mandates and market uncertainty. California’s existing coverage mandates including EHB already provide very comprehensive benefit coverage. The Committee will be hearing multiple bills this year that will have small to large relative impacts on health insurance premiums. This bill is one of six Senate bills to be considered. While many policy arguments can be made to advance all of these bills. Committee members may also wish to consider the cumulative effect of these bills and the tradeoffs associated with increasing health insurance premiums in the context of the already high cost of health insurance, another potential restructuring of health insurance markets nationally and in California because of actions taking place at the federal level to repeal the ACA, and in consideration of the Governor’s budget proposal, and other legislation, to provide state financial assistance and to require Californians to purchase health insurance.
      
5. Amendments. The author requests the Committee adopt the following technical amendments:
   
   1. HSC 1370.6.

(c) (1) The payment rate for routine patient care costs provided by a participating nonparticipating provider under a contract that is issued, amended, or renewed on or after January 1, 2020, shall be the negotiated rate the health care service plan would otherwise pay a participating provider for the same services, less applicable cost sharing.

(e) This section shall not be construed to limit coverage provided by a health care service plan contract with respect to clinical trials.

(g) This section does not apply to vision-only, dental-only, accident-only, specified disease, hospital indemnity, Medicare supplement, CHAMPUS supplement, long-term care, or disability income plan contracts, except that for specified disease and hospital indemnity plan contracts, coverage for benefits under this section shall apply, but only to the extent that the benefits are covered under the general terms and conditions that apply to all other benefits under the contract. This section shall not be construed as imposing a new benefit mandate on specified disease or hospital indemnity plans. This section does not apply to a specialized health care service plan contract.

• 1. INS 10145.4.

(a) An individual or group health insurance policy disability insurance policy that provides hospital, medical, or surgical coverage that is issued, amended, or renewed on or after January 1, 2020, shall not:

(c) (1) The payment rate for routine patient care costs provided by a participating nonparticipating provider under a contract policy that is issued, amended, or renewed on or after January 1, 2020, shall be the negotiated rate the health disability insurer would otherwise pay a participating provider for the same services, less applicable cost sharing.

(c)(3) This section does not limit or modify any existing requirements under this chapter or prevent application of cost-sharing provisions in a contract policy, except as provided in paragraph (2).

(d)(4) “Routine patient care costs” include drugs, items, devices, and services provided consistent with coverage under the contract policy for an insured who is not enrolled in an approved clinical trial, including the following:

(d)(5)(C) Drugs, items, devices, and services specifically excluded from coverage in the contract policy, except for drugs, items, devices, and services required to be covered pursuant to this section or other applicable law.

(e) This section shall not be construed to limit coverage provided by a health insurer disability insurance policy with respect to clinical trials.

(f) The provision of services required by this section shall not, in itself, give rise to liability on the part of the health disability insurer.

SUPPORT AND OPPOSITION:

Support: Alzheimer’s Association

California Association for Health Services at Home

Oppose: America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

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