Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and health insurers, commencing January 1, 2024, to establish and maintain specified application programming interfaces (API), including patient access API, for the benefit of enrollees, insureds, and contracted providers. Existing law authorizes the departments to require health care service plans or health insurers, as applicable, to establish and maintain provider access API and prior authorization support API if and when final federal rules are published .

This bill would instead require the departments, commencing January 1, 2027, or when final federal rules are implemented, whichever occurs later, to require health care service plans and health insurers to establish and maintain patient access API, provider access API, payer-to-payer API, and prior authorization API. The bill, until January 1, 2027, would authorize the departments to issue guidance relating to these provisions not subject to the Administrative Procedure Act, as specified. Because a violation of these requirements by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and health insurers, commencing January 1, 2024, to establish and maintain specified application programming interfaces (API), including patient access API, for the benefit of enrollees, insureds, and contracted providers. Existing law authorizes the departments to require health care service plans or health insurers, as applicable, to establish and maintain provider access API and prior authorization support API if and when final federal rules are published .

This bill would instead require the departments, commencing January 1, 2027, or when final federal rules are implemented, whichever occurs later, to require health care service plans and health insurers to establish and maintain patient access API, provider access API, payer-to-payer API, and prior authorization API. The bill, until January 1, 2027, would authorize the departments to issue guidance relating to these provisions not subject to the Administrative Procedure Act, as specified. Because a violation of these requirements by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Care and makes a willful violation of the acts requirements a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and health insurers insurers, commencing January 1, 2024, to establish and maintain specified application programming interfaces (API), including patient access API, for the benefit of enrollees, insureds, and contracted providers. Existing law authorizes the departments to require health care service plans or health insurers, as applicable, to establish and maintain provider access API and prior authorization support API if and when final federal rules are published .

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and health insurers to establish and maintain specified application programming interfaces (API), including patient access API, for the benefit of enrollees, insureds, and contracted providers.

This bill would, except for Medi-Cal dental managed care contracts, exclude a specialized plan or insurer that issues, sells, renews, or offers a contract or policy covering dental or vision services from the above-described API requirements, and would instead require a specialized plan or insurer that issues, sells, renews, or offers a contract or policy covering dental or vision services and meets specified enrollment requirements to comply with the above-described API requirements beginning January 1, 2027, or when final federal rules are implemented, the final federal rules for impacted payers are implemented, whichever is later.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and health insurers to establish and maintain specified application programming interfaces (API), including patient access API, for the benefit of enrollees, insureds, and contracted providers.

This bill would would, except for Medi-Cal dental managed care contracts, exclude a specialized plan or insurer that issues, sells, renews, or offers a contract or policy covering dental or vision services from the above-described API requirements, and would instead require a specialized plan or insurer that issues, sells, renews, or offers a contract or policy covering dental or vision services and meets specified enrollment requirements to comply with the above-described API requirements beginning January 1, 2027, or when final federal rules are implemented, whichever is later.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and health insurers to establish and maintain specified application programming interfaces (API), including patient access API, for the benefit of enrollees, insureds, and contracted providers.

This bill would exclude dental or vision benefits a specialized plan or insurer that issues, sells, renews, or offers a contract or policy covering dental or vision services from the above-described API requirements. requirements, and would instead require a specialized plan or insurer that issues, sells, renews, or offers a contract or policy covering dental or vision services and meets specified enrollment requirements to comply with the above-described API requirements beginning January 1, 2027, or when final federal rules are implemented, whichever is later.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires health care service plans and health insurers to establish and maintain specified application programming interfaces (API), including patient access API, for the benefit of enrollees, insureds, and contracted providers.

This bill would exclude dental or vision benefits from the above-described API requirements.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2198

Author:(Flora)

As Amended Ver:August 19, 2024

Majority vote

SUMMARY

Requires the Department of Managed Health Care (DMHC) and California Department of Insurance (CDI), commencing January 1, 2027, or when final federal rules are implemented, whichever occurs later, to require health plans and insurers to establish and maintain patient access application programming interfaces (API), provider access API, payer-to-payer API, and prior authorization API. Authorizes DMHC and CDI, until January 1, 2027, to issue guidance not subject to the Administrative Procedure Act.

Senate Amendments

Expand requirements to health plans and insurers and require DMHC and CDI to require health plans and insurers to establish and maintain patient access API, provider access API, payer-to-payer API, and prior authorization API.

COMMENTS

According to a 2021 California Health Care Foundation report, entitled "Why California Needs Better Data Exchange: Challenges, Impacts, and Policy Options for a 21st Century Health System," the efficient, effective, and equitable delivery of care is vital to the well-being of all Californians and is necessary for a strong and vibrant economy. Information must easily be exchanged among medical, behavioral, social services, and public health professionals to allow them to make informed decisions that impact the lives of every resident. Access to this kind of critical information is limited, with the exchange of health data confined to a subset of clinical patient information shared mostly among larger clinics and hospitals that have federally certified electronic health record (EHR) technologies.

1. Federal Action. In 2009, President Obama signed the American Recovery and Reinvestment Act of 2009, which included the Health Information Technology for Economic and Clinical Health (HITECH) Act. Among other provisions, the HITECH Act provides eligible hospitals and health care professionals with financial incentives through Medicare and Medicaid financing to adopt, implement and upgrade certified EHRs, and for "meaningful use" of certified EHRs. In 2015, Congress declared a national objective to achieve widespread Health Information Exchange through interoperable certified EHR technology nationwide by December 31, 2018 through the Medicare Access and the Children's Health Insurance Program Reauthorization Act of 2015. Patient health information is regulated under state law and federal law and regulation not only to protect the privacy of personal health information, but also to allow information to be shared between health care providers for treatment purposes, and to incentivize the adoption of certified EHR technology that fosters health information sharing. In 2016, the Cures Act further promoted the adoption use of EHR technology. The Cures Act contained multiple provisions, including provisions regarding the interoperability of health records. In addition, the Cures Act prohibits "information blocking" and contains provisions to facilitate patient access to their electronic health information by encouraging partnerships between health information networks, health care providers, and other stakeholders to offer access through secure, user-friendly software. The goal of the federal rules implementing the Cures Act are to drive the electronic access, exchange, and use of health information, to inject competition into the health care delivery system by addressing both technical barriers and business practices that impede the secure and appropriate sharing of data, with a central purpose of the rule being to facilitate patient access to their electronic health information on their smartphone.
2. Federal APIs. The Centers for Medicare & Medicaid Services (CMS) Interoperability and Patient Access Final Rule (CMS Interoperability Rule) requires Medicare Advantage organizations, Medicaid Fee-for-Service (FFS) Programs, Medicaid managed care plans, Children's Health Insurance Program (CHIP) FFS programs, CHIP managed care entities, and Qualified Health Plan issuers on the Federally-Facilitated Exchanges to implement API technology to advance health data exchange. The CMS Interoperability Rule builds on CMS' previous rule by outlining requirements for additional information that certain payers must provide via the Patient Access API and new requirements for certain payers to implement three additional APIs: Provider Access API, Payer-to-Payer API, and Prior Authorization API. The APIs finalized must meet certain technical standards to drive interoperability and increase provider and patient access to health information, for example, allowing patients to easily access their claims and encounter information, including cost, as well as a defined sub-set of their clinical information through third-party applications of their choice. According to a 2022 Harvard Business Review article, "Standardized APIs Could Finally Make It Easy to Exchange Health Records," APIs support the ability of an application from one developer to read and write data from another developer's application. The article further notes that using APIs to unlock EHR data could give people easy, efficient access to their own data to help them understand their health and make more informed choices.
3. SB 1419. SB 1419 (Becker), Chapter 888, Statutes of 2021, requires health plans, beginning January 1, 2024, to establish and maintain API for the benefit of enrollees and contracted providers to facilitate patient and provider access to health information as applicable under federal rules. Specifically, SB 1419 required patient, provider directory, and payer to payer exchange API. SB 1419 applied these requirements to all health plans and insurers, including dental and vision plans.

A DMHC December 13, 2023 All Plan Letter (APL) notes that these APIs are to be in accordance with standards published in a final rule issued by CMS and published in the Federal Register, and align with federal effective dates, including enforcement delays and suspensions. Pursuant to existing law, the DMHC Director is authorized to exempt health plans from compliance, if the DMHC Director finds the action to be in the public interest and not detrimental to the protection of enrollees. The DMHC APL further states, given the pending federal guidance related to APIs, the DMHC Director exempts health plans from compliance with the January 1, 2024, effective date in SB 1419, and extends the effective date to January 1, 2025 to align with potential federal proposals.

According to the Author

This bill is largely a clean-up measure since the federal regulations that prompted California action do not include commercial standalone dental. The author concludes that this bill will clarify and update California law to align with federal law.

Arguments in Support

The California Association of Dental Plans, sponsor of this bill, writes that APIs are a set of rules or protocols that let software applications communicate with each other to exchange data, features, and functionality. While SB 1419 codified federal regulations into California law, it failed to capture the exclusion of commercial dental and vision plans. CMS excluded commercial dental plans from the API requirements in the preamble to the CMS Interoperability Rule regulation and further explained dental information would be of limited use, costly to develop, and could drive dental plans away from the marketplace.

Arguments in Opposition Unless Amended

The California Optometric Association wrote with concerns, to a previous version of this bill which would exclude specified dental and vision plans from API regulations. This bill has been subsequently amended to apply to all health plans, including dental and vision plans, and should address the California Optometric Association's concerns.

FISCAL COMMENTS

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

VOTES:

ASM HEALTH: 16-0-0

YES: Bonta, Waldron, Aguiar-Curry, Arambula, Wendy Carrillo, Flora, Haney, Jones-Sawyer, Maienschein, McCarty, Joe Patterson, Rodriguez, Sanchez, Santiago, Schiavo, Weber

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 71-0-9

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Papan, Luz Rivas

SENATE FLOOR: 39-0-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Alvarado-Gil

UPDATED

VERSION: August 19, 2024

CONSULTANT: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0004235

 THIRD READING  

Bill No: AB 2198

Author: Flora (R)

Amended: 8/19/24 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 10-0, 6/12/24

AYES: Roth, Nguyen, Glazer, Gonzalez, Grove, Hurtado, Limón, Menjivar, Rubio, Wiener

NO VOTE RECORDED: Smallwood-Cuevas

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 71-0, 5/21/24 (Consent) - See last page for vote

SUBJECT: Health information

SOURCE: California Association of Dental Plans

DIGEST:

This bill requires Medi-Cal managed care plans to comply with application programming interface (API) requirements; and, delays implementation for specialized dental and vision plans.

Senate Floor Amendments of 8/19/24 delay implementation of requirements on all health plans and insurers to comply with API requirements to January 1, 2027 or when final federal rules are implemented whichever occurs later. The amendments authorize until January 1, 2027 the Department of Managed Health Care and Department of Insurance to issue guidance not subject to the Administrative Procedures Act.

ANALYSIS:

Existing law:

1. Requires health plans and insurers, commencing January 1, 2024, in order to facilitate patient and provider access to health information, to establish and maintain the following API for the benefit of enrollees and contracted providers, as applicable:
   1. Patient access API as described in specified federal law;
   2. Provider directory API, as described in specified federal law; and,
   3. Payer-to-payer exchange API, as described in specified federal law. [Health and Safety Code (HSC) §1374.196 and Insurance Code (INS) §10133.12]
      
2. Permits the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI) to require a health plan or health insurer, respectively, to establish and maintain the following APIs if and when final rules are published by the federal government, and in alignment with federal effective dates:
   1. Provider access API; and,
   2. Prior authorization support API. [HSC §1374.196 and INS §10133.12]

This bill:

1. Delays, until the later of January 1, 2027 or when final federal rules for impacted payers are implemented by the federal government, whichever is later, DMHC and CDI to require a health plan or health insurer to establish and maintain specified API for the benefit of enrollees, insureds, and contracted providers. Specifically, Patient access API, Provider access API, Payer-to-payer API, and Prior authorization API.
   
2. Authorizes until January 1, 2027, DMHC and CDI to issue guidance to health plans and insurers regarding compliance with this bill not subject to the Administrative Procedure Act. Requires DMHC to seek guidance from DHCS.
   

Comments

1. Author’s statement. According to the author, “In 2022 California codified federal regulations pertaining to APIs. Unfortunately, the law didn’t capture the exemption for commercial dental and vision plans. Without the exemption, this measure is needed to give dental and vision plans time to design and implement the API.”
   
2. API. API is a software-to-software interface that allows interactions with applications, services, or data, without the entities having to know how each other’s software is designed. API allows applications to communicate with one another and transfer information back and forth. API in health care is used to connect electronic health record systems, lab information and pharmacies, and can be used to instantly determine a patient’s coverage information. According to blog post on the federal Office of the National Coordinator for Health Information Technology, API-based exchanges have become commonplace in our everyday life and as the adoption of electronic health records continues to expand, it is essential for APIs to play an increasing role with respect to healthcare interoperability.
   
3. Federal law and rules. In 2016, the federal 21^st Century Cures Act made sharing electronic health information the expected norm in health care. The Centers for Medicare & Medicaid Services (CMS) published the Guidance for the Interoperability and Patient Access final rule on July 17, 2020, which builds on policies finalized in the CMS Interoperability and Patient Access final rule published in May 2020 and policies introduced in the CMS Interoperability proposed rule published in December 2020, which has been withdrawn. The new rule proposes requirements on Medicare Advantage organizations, state Medicaid and CHIP Fee-for-Service programs, Medicaid managed care plans and Children’s Health Insurance Program managed care entities, and Qualified Health Plan issuers on the Federally Facilitated Exchanges, (collectively “impacted payers”), to improve the electronic exchange of health care data and streamline processes related to prior authorization. As it relates to API, in this rule, starting January 1, 2026, CMS proposes to require the regulated payers to include information and metrics related to prior authorization decisions, patient claims and encounter data (excluding cost information). CMS is strongly recommending payers use certain APIs while implementation guides are being refined but are not requiring their use. The public comment period closed on March 13, 2023.
   
4. California legislation. SB 1419 (Becker, Chapter 888, Statutes of 2022) required health plans and insurers to comply with these federal requirements. SB 582 (Becker of 2023) would have exempted specialized plans and insures that cover dental and vision services only and delayed the requirements of SB 1419 because the sponsors indicated that the federal government’s timelines for the open API requirements shifted several times, and a delay was needed. SB 582 was vetoed by the Governor.
5. California health data exchange. As part of the health budget trailer bill (AB 133, Assembly Budget Committee, Chapter 143, Statutes of 2021), California began the process to establish a health data exchange framework. According to the Center for Data and Insights (CDII), which administers it, the data exchange framework is not a new technology or centralized data repository; instead, it is an agreement across health and human services systems and providers to share information safely. That means every health care provider can access the information they need to treat a patient quickly and safely; health care, behavioral health and social services agencies can connect to each other to deliver what Californians need to be healthy; and, the public health system can better assess how to address the needs of all communities. CDII states that hundreds of experts and members of the public have helped shape a framework that delivers on these principles. The data sharing agreement was finalized July 1, 2022 and was expected to be executed by health and human services organizations on January 31, 2023. Health care entities required to participate are: general acute care hospitals, physician organizations and medical groups, skilled nursing facilities, health plans and insurers, Medi-Cal managed care plans, clinical laboratories, and acute psychiatric hospitals. Most providers were required to begin data exchange by January 31, 2024 and the remaining providers are required to begin data exchange by January 31, 2026.
6. Medi-Cal. According to a DHCS All Plan Letter from 2022, CMS Interoperability Rule requires dental managed care plans to implement and maintain a secure, standards-based API and a publicly-accessible, standards-based Patient Access API as well as Provider Directory API that can connect to mobile applications, provider electronic health records, or practice management systems. Dental managed care plans must also comply with the requirements of federal regulations, and public reporting and information blocking components of the CMS Interoperability Rule to the extent these requirements are applicable to dental managed care plans.

Related/Prior Legislation

SB 582 (Becker of 2023) exempted, among other provisions, a specialized health plan contract covering dental or vision services from the requirements to establish and maintain specified API interfaces. The bill was vetoed by Governor Newsom.

SB 1419 (Becker, Chapter 888, Statutes of 2022) required, among other provisions, health plans and health insurers to establish and maintain certain API to facilitate patient and provider access to health information.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) established, among many other provisions, a process for developing the data exchange framework, including the components and milestones related to the stakeholder advisory group, establishing the data exchange framework; health care organization adoption of the data exchange framework; and, real-time health information exchange.

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

SUPPORT: (Verified 6/24/24)

California Association of Dental Plans (source)

OPPOSITION: (Verified 6/24/24)

None received

ARGUMENTS IN SUPPORT: The California Association of Dental Plans, this bill’s sponsor, writes that this extends the effective date of API requirements for commercial stand-alone dental and vision plans to January 1, 2027 or to a future date corresponding to applicable federal regulations and includes a small plan exemption. SB 1419 codified federal regulations that required health plans and health insurers to establish and maintain APIs, which are a set of rules or protocols that let software applications communicate with each other to exchange data, features, and functionality. While SB 1419 codified federal regulations into California law, it failed to capture the exclusion of commercial dental and vision plans. CMS excluded commercial dental plans from the API requirements in the preamble to the Patient Access and Interoperability Rule regulation and further explained dental information would be of limited use, costly to develop, and could drive dental plans away from the marketplace. This bill is necessary to provide stand-alone dental plans the time needed to design and build these APIs, as this is a new endeavor not intended in the guiding federal rules.

ASSEMBLY FLOOR: 71-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Papan, Luz Rivas

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

8/20/24 17:22:10

**** END ****

 THIRD READING  

Bill No: AB 2198

Author: Flora (R)

Amended: 6/17/24 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 10-0, 6/12/24

AYES: Roth, Nguyen, Glazer, Gonzalez, Grove, Hurtado, Limón, Menjivar, Rubio, Wiener

NO VOTE RECORDED: Smallwood-Cuevas

ASSEMBLY FLOOR: 71-0, 5/21/24 (Consent) - See last page for vote

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Health information

SOURCE: California Association of Dental Plans

DIGEST:

This bill requires Medi-Cal managed care plans to comply with application programming interface (API) requirements; and, delays implementation for specialized dental and vision plans.

ANALYSIS:

Existing law:

1. Requires health plans and insurers, commencing January 1, 2024, in order to facilitate patient and provider access to health information, to establish and maintain the following API for the benefit of enrollees and contracted providers, as applicable:
   1. Patient access API as described in specified federal law;
   2. Provider directory API, as described in specified federal law; and,
   3. Payer-to-payer exchange API, as described in specified federal law. [Health and Safety Code (HSC) §1374.196 and Insurance Code (INS) §10133.12]
      
2. Permits the Department of Managed Health Care (DMHC) and the California Department Insurance (CDI) to require a health plan or health insurer, respectively, to establish and maintain the following APIs if and when final rules are published by the federal government, and in alignment with federal effective dates:
   1. Provider access API; and,
   2. Prior authorization support API. [HSC §1374.196 and INS §10133.12]

This bill:

1. Subjects Medi-Cal dental managed care contracts to the January 1, 2024 API requirements in existing law.
   
2. Delays, until the later of January 1, 2027 or when the final federal rules for impacted payers are implemented by the federal government, whichever is later, the requirement that a specialized health plan or insurer contract covering dental or vision services to establish and maintain specified API for the benefit of enrollees, insureds, and contracted providers.
   

Comments

1. Author’s statement. According to the author, “In 2022 California codified federal regulations pertaining to APIs. Unfortunately, the law didn’t capture the exemption for commercial dental and vision plans. Without the exemption, this measure is needed to give dental and vision plans time to design and implement the API.”
   
2. API. API is a software-to-software interface that allows interactions with applications, services, or data, without the entities having to know how each other’s software is designed. API allows applications to communicate with one another and transfer information back and forth. API in health care is used to connect electronic health record systems, lab information and pharmacies, and can be used to instantly determine a patient’s coverage information. According to blog post on the federal Office of the National Coordinator for Health Information Technology, API-based exchanges have become commonplace in our everyday life and as the adoption of electronic health records continues to expand, it is essential for APIs to play an increasing role with respect to healthcare interoperability.
   
3. Federal law and rules. In 2016, the federal 21^st Century Cures Act made sharing electronic health information the expected norm in health care. The Centers for Medicare & Medicaid Services (CMS) published the Guidance for the Interoperability and Patient Access final rule on July 17, 2020, which builds on policies finalized in the CMS Interoperability and Patient Access final rule published in May 2020 and policies introduced in the CMS Interoperability proposed rule published in December 2020, which has been withdrawn. The new rule proposes requirements on Medicare Advantage organizations, state Medicaid and CHIP Fee-for-Service programs, Medicaid managed care plans and Children’s Health Insurance Program managed care entities, and Qualified Health Plan issuers on the Federally Facilitated Exchanges, (collectively “impacted payers”), to improve the electronic exchange of health care data and streamline processes related to prior authorization. As it relates to API, in this rule, starting January 1, 2026, CMS proposes to require the regulated payers to include information and metrics related to prior authorization decisions, patient claims and encounter data (excluding cost information). CMS is strongly recommending payers use certain APIs while implementation guides are being refined but are not requiring their use. The public comment period closed on March 13, 2023.
   
4. California legislation. SB 1419 (Becker, Chapter 888, Statutes of 2022) required health plans and insurers to comply with these federal requirements. SB 582 (Becker of 2023) would have exempted specialized plans and insures that cover dental and vision services only and delayed the requirements of SB 1419 because the sponsors indicated that the federal government’s timelines for the open API requirements shifted several times, and a delay was needed. SB 582 was vetoed by the Governor.
5. California health data exchange. As part of the health budget trailer bill (AB 133, Committee on Budget, Chapter 143, Statutes of 2021), California began the process to establish a health data exchange framework. According to the Center for Data and Insights (CDII), which administers it, the data exchange framework is not a new technology or centralized data repository; instead, it is an agreement across health and human services systems and providers to share information safely. That means every health care provider can access the information they need to treat a patient quickly and safely; health care, behavioral health and social services agencies can connect to each other to deliver what Californians need to be healthy; and, the public health system can better assess how to address the needs of all communities. CDII states that hundreds of experts and members of the public have helped shape a framework that delivers on these principles. The data sharing agreement was finalized July 1, 2022 and was expected to be executed by health and human services organizations on January 31, 2023. Health care entities required to participate are: general acute care hospitals, physician organizations and medical groups, skilled nursing facilities, health plans and insurers, Medi-Cal managed care plans, clinical laboratories, and acute psychiatric hospitals. Most providers were required to begin data exchange by January 31, 2024 and the remaining providers are required to begin data exchange by January 31, 2026.
6. Medi-Cal. According to a DHCS All Plan Letter from 2022, CMS Interoperability Rule requires dental managed care plans to implement and maintain a secure, standards-based API and a publicly-accessible, standards-based Patient Access API as well as Provider Directory API that can connect to mobile applications, provider electronic health records, or practice management systems. Dental managed care plans must also comply with the requirements of federal regulations, and public reporting and information blocking components of the CMS Interoperability Rule to the extent these requirements are applicable to dental managed care plans.

Related/Prior Legislation

SB 582 (Becker of 2023) exempted, among other provisions, a specialized health plan contract covering dental or vision services from the requirements to establish and maintain specified API interfaces. SB 582 was vetoed by Governor Newsom.

SB 1419 (Becker, Chapter 888, Statutes of 2022) required, among other provisions, health plans and health insurers to establish and maintain certain API to facilitate patient and provider access to health information.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) established, among many other provisions, a process for developing the data exchange framework, including the components and milestones related to the stakeholder advisory group, establishing the data exchange framework; health care organization adoption of the data exchange framework; and, real-time health information exchange.

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

SUPPORT: (Verified 6/24/24)

California Association of Dental Plans (source)

OPPOSITION: (Verified 6/24/24)

None received

ARGUMENTS IN SUPPORT: The California Association of Dental Plans, this bill’s sponsor, writes that this extends the effective date of API requirements for commercial stand-alone dental and vision plans to January 1, 2027 or to a future date corresponding to applicable federal regulations and includes a small plan exemption. SB 1419 codified federal regulations that required health plans and health insurers to establish and maintain APIs, which are a set of rules or protocols that let software applications communicate with each other to exchange data, features, and functionality. While SB 1419 codified federal regulations into California law, it failed to capture the exclusion of commercial dental and vision plans. CMS excluded commercial dental plans from the API requirements in the preamble to the Patient Access and Interoperability Rule regulation and further explained dental information would be of limited use, costly to develop, and could drive dental plans away from the marketplace. This bill is necessary to provide stand-alone dental plans the time needed to design and build these APIs, as this is a new endeavor not intended in the guiding federal rules.

ASSEMBLY FLOOR: 71-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Papan, Luz Rivas

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

6/25/24 13:06:34

**** END ****

SENATE COMMITTEE ON HEALTH

Senator Richard Roth, Chair

BILL NO: AB 2198

SUBJECT: Health information

SUMMARY:

Requires Medi-Cal managed care plans to comply with application programming interface (API) requirements; delays implementation for specialized dental and vision plans; and, exempts specialized dental or vision plans with 90,000 or fewer enrollees or insureds from the API requirements.

Existing law:

1. Requires health plans and insurers, commencing January 1, 2024, in order to facilitate patient and provider access to health information, to establish and maintain the following API for the benefit of enrollees and contracted providers, as applicable:
   1. Patient access API as described in specified federal law;
   2. Provider directory API, as described in specified federal law; and,
   3. Payer-to-payer exchange API, as described in specified federal law. [HSC §1374.196 and INS §10133.12]
      
2. Permits the Department of Managed Health Care (DMHC) and the California Department Insurance (CDI) to require a health plan or health insurer, respectively, to establish and maintain the following APIs if and when final rules are published by the federal government, and in alignment with federal effective dates:
   1. Provider access API; and,
   2. Prior authorization support API. [HSC §1374.196 and INS §10133.12]

This bill:

1. Subjects Medi-Cal dental managed care contracts to the January 1, 2024 API requirements in existing law.
   
2. Delays, until the later of January 1, 2027 or when final rules are implemented by the federal government, the requirement that a specialized health plan or insurer contract covering dental or vision services to establish and maintain specified API for the benefit of enrollees, insureds, and contracted providers.
   
3. Exempts a specialized health plan or policy contract covering dental or vision services with 90,000 or fewer enrollees or insureds who are California residents across all dental or vision product lines.
   

FISCAL EFFECT:

According to the Assembly Appropriations Committee, minor and absorbable costs to the DMHC and no cost to the CDI.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, in 2022 California codified federal regulations pertaining to APIs. Unfortunately, the law didn’t capture the exemption for commercial dental and vision plans. Without the exemption, this measure is needed to give dental and vision plans time to design and implement the API.
   
2. API. API is a software-to-software interface that allows interactions with applications, services, or data, without the entities having to know how each other’s software is designed. API allows applications to communicate with one another and transfer information back and forth. API in health care is used to connect electronic health record systems, lab information and pharmacies, and can be used to instantly determine a patient’s coverage information. According to blog post on the federal Office of the National Coordinator for Health Information Technology, API-based exchanges have become commonplace in our everyday life and as the adoption of electronic health records continues to expand, it is essential for APIs to play an increasing role with respect to healthcare interoperability.
   
3. Federal law and rules. In 2016, the federal 21^st Century Cures Act made sharing electronic health information the expected norm in health care. The Centers for Medicare & Medicaid Services (CMS) published the Guidance for the Interoperability and Patient Access final rule on July 17, 2020, which builds on policies finalized in the CMS Interoperability and Patient Access final rule published in May 2020 and policies introduced in the CMS Interoperability proposed rule published in December 2020, which has been withdrawn. The new rule proposes requirements on Medicare Advantage organizations, state Medicaid and CHIP Fee-for-Service programs, Medicaid managed care plans and Children’s Health Insurance Program managed care entities, and Qualified Health Plan issuers on the Federally Facilitated Exchanges, (collectively “impacted payers”), to improve the electronic exchange of health care data and streamline processes related to prior authorization. As it relates to API, in this rule, starting January 1, 2026, CMS proposes to require the regulated payers to include information and metrics related to prior authorization decisions, patient claims and encounter data (excluding cost information). CMS is strongly recommending payers use certain APIs while implementation guides are being refined but are not requiring their use. The public comment period closed on March 13, 2023.
   
4. California legislation. SB 1419 (Becker, Chapter 888, Statutes of 2022) requires health plans and insurers to comply with these federal requirements. SB 582 (Becker of 2023) would have exempted specialized plans and insures that cover dental and vision services only and delayed the requirements of SB 1419 because the sponsors indicated that the federal government’s timelines for the open API requirements shifted several times, and a delay was needed. SB 582 was vetoed by the Governor.
5. California health data exchange. As part of the health budget trailer bill (AB 133, Committee on Budget, Chapter 143, Statutes of 2021), California began the process to establish a health data exchange framework. According to the Center for Data and Insights (CDII), which administers it, the data exchange framework is not a new technology or centralized data repository; instead, it is an agreement across health and human services systems and providers to share information safely. That means every health care provider can access the information they need to treat a patient quickly and safely; health care, behavioral health and social services agencies can connect to each other to deliver what Californians need to be healthy; and, the public health system can better assess how to address the needs of all communities. CDII states that hundreds of experts and members of the public have helped shape a framework that delivers on these principles. The data sharing agreement was finalized July 1, 2022 and was expected to be executed by health and human services organizations on January 31, 2023. Health care entities required to participate are: general acute care hospitals, physician organizations and medical groups, skilled nursing facilities, health plans and insurers, Medi-Cal managed care plans, clinical laboratories, and acute psychiatric hospitals. Most providers were required to begin data exchange by January 31, 2024 and the remaining providers are required to begin data exchange by January 31, 2026.
6. Medi-Cal. According to a DHCS All Plan Letter from 2022, CMS Interoperability Rule requires dental managed care plans to implement and maintain a secure, standards-based API and a publicly-accessible, standards-based Patient Access API as well as Provider Directory API that can connect to mobile applications, provider electronic health records, or practice management systems. Dental managed care plans must also comply with the requirements of federal regulations, and public reporting and information blocking components of the CMS Interoperability Rule to the extent these requirements are applicable to dental managed care plans.
7. Related legislation. AB 1331 (Wood) updates existing law related to data exchange, such as authorizing CDII to develop a framework for investigating violations of the data sharing agreement; requiring CDII to report violations to state licensing entities and oversee disputes and grievances; and, establishing a board to review, modify, and approve data sharing requirements for signatories. AB 1331 is pending in the Senate Appropriations Committee.
   
8. Prior legislation. SB 582 (Becker of 2023) among other provisions, would have exempted a specialized health plan contract covering dental or vision services from the requirements to establish and maintain specified API interfaces. SB 582 was vetoed by Governor Newsom, who stated:

This bill would require the California Health and Human Services Agency's (CHHS) Data Exchange Framework (DxF) stakeholder advisory group to consider new standards for including Electronic Health Records (EHR) vendors in the DxF, establish standards for EHR vendors' fees, and authorize CHHS to oversee and enforce EHR vendors for noncompliance with federal standards.

My Administration spearheaded the creation of the DxF to accelerate and expand the exchange of health information to provide safe, effective, whole person care to Californians in real time. Given the ongoing efforts by CHHS and the Center for Data Insights and Innovation to stand up the DxF, this bill is premature. The state should prioritize implementation of this important work before we consider modifications.

SB 1419 (Becker, Chapter 888, Statutes of 2022) among other provisions, requires health plans and health insurers to establish and maintain certain API to facilitate patient and provider access to health information.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021), among many other provisions, establishes a process for developing the data exchange framework, including the components and milestones related to the stakeholder advisory group, establishing the data exchange framework; health care organization adoption of the data exchange framework; and, real-time health information exchange.

1. Support. The California Association of Dental Plans, this bill’s sponsor, writes that this extends the effective date of API requirements for commercial stand-alone dental and vision plans to January 1, 2027 or to a future date corresponding to applicable federal regulations and includes a small plan exemption. SB 1419 codified federal regulations that required health plans and health insurers to establish and maintain APIs, which are a set of rules or protocols that let software applications communicate with each other to exchange data, features, and functionality. While SB 1419 codified federal regulations into California law, it failed to capture the exclusion of commercial dental and vision plans. CMS excluded commercial dental plans from the API requirements in the preamble to the Patient Access and Interoperability Rule regulation and further explained dental information would be of limited use, costly to develop, and could drive dental plans away from the marketplace. This bill is necessary to provide stand-alone dental plans the time needed to design and build these APIs, as this is a new endeavor not intended in the guiding federal rules.
   
2. Opposition. The California Pan-Ethnic Health Network writes California rightfully approved state API requirements that are inclusive of dental and vision plans. Now, dental and vision plans are asking the state to exempt them as well as dental and vision benefits from these requirements. This would be a huge step backwards for California. SB 1419 ensures dental and vision plans are meeting API requirements, providing physicians and patients with seamless access to all data needed to provide high-quality patient care. The law ensures these standards apply equally to public and commercial dental and vision plans and will make it easier for dental plans to participate in California’s HIE, should California require this in the future. As an essential health benefit under the Affordable Care Act, dental plans and benefits must not be exempted from these important consumer requirements. California is making progress towards implementing universal, comprehensive health care coverage. Excluding dental and vision benefits from these API requirements threatens California’s progress and harms patients and providers for whom access to this data is critical in order to improve health outcomes for all. Health Access California writes in California, we pride ourselves on our progress toward offering universal whole person care. Including dental and vision health plans and benefits in these API requirements are necessary to not leave out an important piece of consumers’ health care. Exempting dental and vision benefits from these requirements would undermine our goal of whole person care.
3. Oppose unless amended. The California Dental Association writes while the federal API regulations excluded stand-alone dental plans, the following types of plans that include dental were not excluded: Medicare Advantage organizations, state Medicaid fee-for-service programs, Medicaid managed care plans, and qualified health plans sold on the federal exchange. Because federal law does not exclude Medicaid plans, currently the Medi-Cal dental managed care plans are working towards being compliant with federal API regulations. There are several types of API addressed in the federal regulations, but there are two APIs which providers and patients would benefit from, helping the dental insurance systems function more like other health care systems. Provider Access APIs would enable providers to request past health information from a payer, which could help consumers significantly in ensuring accuracy of past health information and allows the provider to readily have this valuable patient information. Prior Authorization APIs would require plans to approve or deny claims within seven calendar days, or 72 hours for expedited requests, and standardizes denials to have detailed information. The current practice of predetermination within dentistry, only allows a dentist to know if a patient is a covered enrollee of the dental plan and if the treatment is a covered benefit. This API would help providers and patients with the burden of rising costs associated with seeking much needed dental treatment, as dental insurance often falls short in covering the full cost incurred by patients. CDA requests amendments to ensure the SB 1419 requirements apply to all of the plans covered by the federal API regulations.
   
4. Amendments.
   1. To address the request from CDA, the author and sponsor request amendments to remove the exemption for specialized dental and vision plans and policies with 90,000 or fewer enrollees or insureds.
   2. Committee staff suggests the following additional clarifying amendments:

Commencing January 1, 2027, or when the final federal rules for impacted payers are implemented by the federal government,

SUPPORT AND OPPOSITION:

Support: California Association of Dental Plans (sponsor)

Oppose: California Dental Association (unless amended)

California Pan-Ethnic Network

Health Access California

-- END --

Date of Hearing: May 15, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2198

Author:(Flora) – As Amended Ver:April 29, 2024

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

SUMMARY:

This bill exempts from requirements to establish and maintain specified application programming interfaces (APIs) a specialized health plan or insurer that covers dental or vision services, and instead requires the specialized plan or insurer to comply with specified API requirements beginning January 1, 2027, or when final federal rules are implemented, whichever is later.

This bill requires a specialized health plan or insurer establish and maintain the following APIs:

1. Patient access API.
2. Provider directory API.
3. Payer-to-payer exchange API.

The bill also authorizes the Department of Managed Health Care (DMHC) and the Department of Insurance (CDI) to require a dental or vision plan to establish and maintain the following API when final rules are published by the federal government:

1. Provider access API.
2. Prior authorization support API.

This bill does not apply to a specialized health plan with 90,000 or fewer enrollees who are California residents across all dental or vision product lines.

FISCAL EFFECT:

Minor and absorbable costs to the DMHC.

No cost to the CDI.

COMMENTS:

1. Purpose. This bill is sponsored by the California Association of Dental Plans (CADP). According to the author:

This measure is needed to clarify dental and vision plans are not subject to application programming interfaces (API) as prescribed by federal regulations. It’s largely a clean-up measure since the federal regulations that prompted California action do not include commercial standalone dental. AB 2198 will clarify and update California law to align with federal law.

Amendments to this bill add requirements for APIs upon completion of federal rules.

1. Background. According to CADP, sponsor of this bill, APIs are a set of rules or protocols that let software applications communicate with each other to exchange data, features, and functionality. SB 1419 (Becker), Chapter 888, Statutes of 2021, codified federal regulations into California law, but it failed to capture the exclusion of commercial dental and vision plans. The federal Center for Medicare and Medicaid Services (CMS) excluded commercial dental plans from API requirements in the preamble to the CMS Interoperability Rule and further explained dental information would be of limited use, costly to develop, and could drive dental plans away from the marketplace.
   
   Federal APIs. The CMS Interoperability Rule requires certain programs that are funded, at least in part, by the federal government to implement API technology to advance health data exchange. The CMS Interoperability Rule builds on CMS' previous rule by outlining requirements for additional information that certain payers must provide via the Patient Access API and new requirements for certain payers to implement three additional APIs: Provider Access API, Payer-to-Payer API, and Prior Authorization API. The APIs must meet certain technical standards to drive interoperability and increase provider and patient access to health information – for example, allowing patients to easily access their claims and encounter information, including cost, as well as a defined sub-set of their clinical information through third-party applications of their choice.
   

SB 1419. SB 1419 requires health plans, beginning January 1, 2024, to establish and maintain API for the benefit of enrollees and contracted providers to facilitate patient and provider access to health information as applicable under federal rules. Specifically, SB 1419 required patient, provider directory, and payer-to-payer exchange APIs. SB 1419 applied these requirements to all health plans and insurers, including dental and vision plans. A December 2023 DMHC All Plan Letter (APL) states, given the pending federal guidance related to APIs, the DMHC director extends the effective date to January 1, 2025 to align with potential federal proposals.

This bill clarifies that health plans or insurers offering dental or vision benefits are excluded from the API provisions of SB 1419. According to the author and sponsors of this bill, federal guidance does not include dental or vision plans, and the intent of SB 1419 was to incorporate into California law the requirements of the federal Interoperability Regulations. Since CMS did not include dental and vision plans in the federal regulations, and SB 1419 was intended to implement federal regulations at the state level, the author suggests the Legislature did not contemplate inclusion of dental and vision plans.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 23, 2024

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 2198 (

Author:(Flora) – As Introduced Ver:February 7, 2024

SUBJECT: Health information.

SUMMARY: Exempts health plans or insurers offering dental or vision benefits from the requirements to establish and maintain application programming interfaces (API) pursuant to 6) below under existing law.

EXISTING LAW:

1. Establishes under federal law, the Health Insurance Portability and Accountability Act (HIPAA) which sets standards for privacy of individually identifiable health information and security standards for the protection of electronic protected health information, including, through regulations, that a HIPAA covered entity may not condition the provision of treatment, payment, enrollment in the health plan, or eligibility for benefits on the provision of an authorization, except under specified circumstances. Provides that if HIPAA’s provisions conflict with state law, the provision that is most protective of patient privacy prevails. [45 Code of Federal Regulations §164.500, et. seq.]
2. Defines electronic health record (EHR) as an electronic record of health-related information on an individual that is created, gathered, managed, and consulted by authorized health care clinicians and staff. [42 United States Code §17921]
3. Defines, for purposes of the Confidentiality of Medical Information Act, medical information to mean any individually identifiable information, in electronic or physical form, in possession of or derived from a provider of health care, health care service plan, pharmaceutical company, or contractor regarding a patient’s medical history, mental or physical condition, or treatment. Defines individually identifiable information to mean that the medical information includes or contains any element of personal identifying information sufficient to allow identification of the individual, such as the patient’s name, address, electronic mail address, telephone number, social security number, or other information that, alone or in combination with other publicly available information, reveals the individual’s identity. [Civil Code §56, et. seq.]
4. Requires the California Health and Human Services Agency (CHHSA), on or before July 1, 2022, to establish the Data Exchange Framework (Framework) and include a single data-sharing agreement and common set of policies and procedures that will leverage and advance national standards for information exchange and data content, and that will govern and require health information exchange (HIE) among health care entities and government agencies in California. [Health and Safety Code (HSC) §130290]
5. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 and the California Department of Insurance (CDI) to regulate health insurers. [HSC §1340, et seq., and Insurance Code (INS) §106, et seq.]
6. Requires, commencing January 1, 2024, health plans and health insurers to establish and maintain API (patient access API, provider directory API, and payer-to-payer exchange API), as described by the federal regulations, for the benefit of enrollees, insureds, and contracted providers. Authorizes the DMHC or CDI to require a health plan or insurer to establish and maintain provider access API and prior authorization support API if and when the final rules are published by the federal government. [HSC §1374.196 and INS §10133.12]

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, this bill is needed to clarify dental and vision plans are not subject to APIs as prescribed by federal regulations, and it is largely a clean-up measure since the federal regulations that prompted California action do not include commercial standalone dental. The author concludes that this bill will clarify and update California law to align with federal law.
2. BACKGROUND. According to a 2021 California Health Care Foundation report, entitled “Why California Needs Better Data Exchange: Challenges, Impacts, and Policy Options for a 21st Century Health System,” the efficient, effective, and equitable delivery of care is vital to the well-being of all Californians and is necessary for a strong and vibrant economy. Information must easily be exchanged among medical, behavioral, social services, and public health professionals to allow them to make informed decisions that impact the lives of every resident. Access to this kind of critical information is limited, with the exchange of health data confined to a subset of clinical patient information shared mostly among larger clinics and hospitals that have federally certified EHR technologies.
   1. Federal Action. In 2009, President Obama signed the American Recovery and Reinvestment Act of 2009, which included the Health Information Technology for Economic and Clinical Health (HITECH) Act. Among other provisions, the HITECH Act provides eligible hospitals and health care professionals with financial incentives through Medicare and Medicaid financing to adopt, implement and upgrade certified EHRs, and for “meaningful use” of certified EHRs. In 2015, Congress declared a national objective to achieve widespread HIE through interoperable certified EHR technology nationwide by December 31, 2018 through the Medicare Access and the Children's Health Insurance Program Reauthorization Act of 2015. Patient health information is regulated under state law and federal law and regulation not only to protect the privacy of personal health information, but also to allow information to be shared between health care providers for treatment purposes, and to incentivize the adoption of certified EHR technology that fosters health information sharing. In 2016, the Cures Act further promoted the adoption use of EHR technology. The Cures Act contained multiple provisions, including provisions regarding the interoperability of health records. In addition, the Cures Act prohibits “information blocking” and contains provisions to facilitate patient access to their electronic health information by encouraging partnerships between health information networks, health care providers, and other stakeholders to offer access through secure, user-friendly software. The goal of the federal rules implementing the Cures Act are to drive the electronic access, exchange, and use of health information, to inject competition into the health care delivery system by addressing both technical barriers and business practices that impede the secure and appropriate sharing of data, with a central purpose of the rule being to facilitate patient access to their electronic health information on their smartphone.
   2. Federal APIs. The Centers for Medicare & Medicaid Services (CMS) Interoperability and Patient Access Final Rule (CMS Interoperability Rule) requires Medicare Advantage organizations, Medicaid Fee-for-Service (FFS) Programs, Medicaid managed care plans, Children's Health Insurance Program (CHIP) FFS programs, CHIP managed care entities, and Qualified Health Plan issuers on the Federally-Facilitated Exchanges (FFEs) to implement API technology to advance health data exchange. The CMS Interoperability Rule builds on CMS' previous rule by outlining requirements for additional information that certain payers must provide via the Patient Access API and new requirements for certain payers to implement three additional APIs: Provider Access API, Payer-to-Payer API, and Prior Authorization API. The APIs finalized must meet certain technical standards to drive interoperability and increase provider and patient access to health information, for example, allowing patients to easily access their claims and encounter information, including cost, as well as a defined sub-set of their clinical information through third-party applications of their choice. According to a 2022 Harvard Business Review article, “Standardized APIs Could Finally Make It Easy to Exchange Health Records,” APIs support the ability of an application from one developer to read and write data from another developer’s application. The article further notes that using APIs to unlock EHR data could give people easy, efficient access to their own data to help them understand their health and make more informed choices.
   3. SB 1419. SB 1419 (Becker), Chapter 888, Statutes of 2021, requires health plans, beginning January 1, 2024, to establish and maintain API for the benefit of enrollees and contracted providers to facilitate patient and provider access to health information as applicable under federal rules. Specifically, SB 1419 required patient, provider directory, and payer to payer exchange API. SB 1419 applied these requirements to all health plans and insurers, including dental and vision plans.

A DMHC December 13, 2023 All Plan Letter (APL) notes that these APIs are to be in accordance with standards published in a final rule issued by CMS and published in the Federal Register, and align with federal effective dates, including enforcement delays and suspensions. Pursuant to existing law, the DMHC Director is authorized to exempt health plans from compliance, if the DMHC Director finds the action to be in the public interest and not detrimental to the protection of enrollees. The DMHC APL further states, given the pending federal guidance related to APIs, the DMHC Director exempts health plans from compliance with the January 1, 2024, effective date in SB 1419, and extends the effective date to January 1, 2025 to align with potential federal proposals.

This bill clarifies that health plans or insurers offering dental or vision benefits are excluded from the API provisions of SB 1419. According to the author and sponsors of this bill, at this time, federal guidance does not include dental or vision plans. Additionally, the author states that based on the Senate legislative analysis of SB 1419, the intent of that bill was to incorporate into California law the requirements of the federal Interoperability Regulations. Since CMS did not include dental and vision plans in the federal regulations, and SB 1419 was intended to implement federal regulations at the state level, the author suggests the California’s Legislature did not contemplate inclusion of dental and vision plans.

• 1. Dental exemptions. The California Association of Dental Plans (CADP), sponsor of this bill, cite to 2020 and 2024 federal guidance noting that the requirements proposed in federal regulations do not apply to issuers offering only stand-alone dental plans (SADPs) on the FFEs. In contrast to qualified health plan issuers of medical plans, according to CADP, issuers offering only SADPs offer enrollees access to a unique and specialized form of medical care. CMS references the exclusion of dental plans throughout the preamble in both the 2020 and 2024 API regulations. CMS explains that dental information would be: i) of limited use; ii) costly to develop; and, iii) could drive dental plans away from marketplace participation. In addition, language specifically excluding SADPs in the FFEs is directly incorporated into the final regulations. CADP contends that the proposed standards and health information technology (HIT) investment would be overly burdensome for SADP issuers as related to their current enrollment and premium intake and could result in SADP issuers no longer participating in FFEs, which would not be in the best interest of enrollees.
  2. Department of Health Care Services (DHCS) 2022 APL. In a DHCS 2022 APL, DHCS writes that the CMS Interoperability Rule requires dental managed care plans (DMCPs) to implement and maintain a secure, standards-based Patient Access API and a publicly-accessible, standards-based Provider Directory API that can connect to mobile applications, provider electronic health records, or practice management systems. DMCP must also comply with the requirements of federal regulations, and the public reporting and information blocking components of the CMS Interoperability Rule to the extent these requirements are applicable to DMCPs. DHCS provided the following information to the DMCPs:
     1. Patient Access API. DMCP must implement the Patient Access API that can connect to provider EHRs and practice management systems. The Patient Access API must permit third-party applications to retrieve, with the approval and at the direction of a member or member’s authorized representative, data specified in the United States Core Data for Interoperability through the use of common technologies and without special effort from the member. Additionally, DMCPs must tailor these member educational resources to best meet the needs of their member populations, including literacy levels, languages spoken, conditions, etc. as required; and,
     2. Provider Directory API. DMCPs must implement and maintain a publicly accessible standards-based Provider Directory API as described, and meet the same technical standards of the Patient Access API, excluding the security protocols related to user authentication and authorization and any other protocols that restrict the availability of provider directory information to particular persons or organizations. DMCPs are required to update the provider directory on a weekly basis after the DMCP receives the provider information, or is notified of a change.

1. SUPPORT. CADP, sponsor of this bill, writes that APIs are a set of rules or protocols that let software applications communicate with each other to exchange data, features, and functionality. While SB 1419 codified federal regulations into California law, it failed to capture the exclusion of commercial dental and vision plans. CMS excluded commercial dental plans from the API requirements in the preamble to the CMS Interoperability Rule regulation and further explained dental information would be of limited use, costly to develop, and could drive dental plans away from the marketplace.
2. OPPOSE UNLESS AMENDED. The California Dental Association requests the amendments to this bill that align with federal regulations by including the same dental plans specified in the federal regulations and additionally to apply the provider access and prior authorization API requirements to stand alone dental plans, as it would be beneficial for patients and providers alike to have access to the information these APIs would provide.
3. OPPOSITION. Health Access California states that APIs are critical to the facilitation of HIE amongst providers for better care and for patients. In 2022, California launched its Framework to facilitate the secure exchange of health and social services information, to help give providers a clear understanding of a consumers’ health history, to deliver better, whole-person care. While the federal interoperability requirements excluded dental and vision plans, California law rightly included dental and vision benefits and plans in the API requirements. This bill not only excludes dental and vision health plans from the API requirements, but specifically dental and vision benefits, inclusive of those benefits for enrollees enrolled in full-service health plans like Kaiser. Exempting dental and vision benefits from these requirements would undermine our goal of whole person care. The California Pan Ethnic Health Network writes that this bill ensures dental and vision plans are meeting API requirements, providing physicians and patients with seamless access to all data needed to provide high-quality patient care. AB 1419 ensures these standards apply equally to public and commercial dental and vision plans and will make it easier for dental plans to participate in California’s HIE, should California require this in the future. As an essential health benefit under the Patient Protection and Affordable Care Act, dental plans and benefits must not be exempted from these important consumer requirements.
4. PREVIOUS LEGISLATION.
   1. SB 582 (Becker) from 2023 was substantially similar to this bill with respect to the API exemption and was vetoed by Governor Newsom in large part due to another provision as it relates to EHRs and as premature given the work of CHHSA’s Framework.
   2. SB 1419 requires, beginning January 1, 2024, health plans and health insurers to establish and maintain API, as described by the federal regulations, for the benefit of enrollees, insureds, and contracted providers.
   3. AB 133 (Committee on Budget), Chapter 143, Statutes of 2021, establishes the Framework and requires by July 1, 2022, in consultation with members of the Stakeholder Advisory Group, the CHHSA to finalize a data sharing agreement. Specifies that the Framework defines the parties that will be subject to these new data exchange rules and sets forth a common set of terms, conditions, and obligations to support secure, real-time access to and exchange of health and social services information, in compliance with applicable federal, state, and local laws, regulations, and policies.
   4. SB 371 (Caballero) of 2021 would have required any federal funds CHHSA receives for HIT and the exchange to be deposited in the California Health Information Technology and Exchange Fund. Would have authorized CHHSA to use the fund to provide grants to health care providers to implement or expand health information technology and to contract for direct data exchange technical assistance for safety net providers. Would have required a health information organization to be connected to the California Trusted Exchange Network and to a qualified national network. Would have required a health care provider, health system, health care service plan, or health insurer that engages in HIE to comply with specified federal standards. SB 371 was never heard in Assembly Health Committee.
   5. SB 441 (Galgiani) of 2019 would have enacted the California Interoperability Enforcement Act to regulate EHR vendors operating in California and require the office to review federal law and policy for opportunities to regulate EHR vendors and to establish an interoperability enforcement structure. SB 441 was scheduled but not heard in the Senate Health Committee.
   6. SB 853 (Committee on Budget), Chapter 717, Statutes of 2010, authorizes the state to contract with a qualified nonprofit entity to operate a federally-funded HIE. Establishes a process for a nonprofit entity to implement a statewide collaborative process for expanding capacity for electronic HIE, as well as, establishes the parameters and requirements of entering into a contract with a nonprofit entity.
   7. SB 337 (Alquist), Chapter 180, Statutes of 2009, authorizes CHHSA to apply for federal HIT and exchange funding and, if no application is made by a certain date, requires selection of a state-designated qualified nonprofit agency for the purposes of submitting an application for federal HIT and exchange funding.
5. COMMENT. California’s Framework is an initiative with purpose to accelerate and expand HIE among health care entities, government agencies, and social service programs throughout the state. At this time, dental plans are not required to participate in the Framework. This bill seeks to exempt dental plans from establishing and maintaining APIs, with goals to advance health data exchange. At a time when we should be encouraging connectivity, lessen provider administrative burden, and increase patient access to records, should we stifle this type of potential for data sharing? The author is committed to incorporating a threshold provider compliance provision in this bill to delay implementation for dental and vision plans until a number of contracted providers are utilizing EHRs.
6. AUTHOR AMENDMENTS. To address concerns exempting dental from existing health plan requirements, the author is proposing the following amendments:
   1. Delete the dental and vision exemption to instead delay implementation of commercial stand alone dental and vision plans to align with federal timelines of at least 2027; and,
   2. Exempt smaller, regional plans from the requirements of existing law.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Dental Plans (sponsor)

Opposition

California Pan - Ethnic Health Network
Health Access California

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