Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law sets forth specified prior authorization limitations for health care service plans and health insurers.

This bill would prohibit a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, that provides coverage for physical therapy from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. The bill would require a physical therapy provider to verify an enrollees or an insureds coverage and disclose their share of the cost of care, as specified. The bill would require a physical therapy provider to obtain separate written consent for costs that may not be covered by the enrollees or insureds plan contract or policy, that includes a written estimate of the cost of care for which the enrollee or insured is responsible if coverage is denied or otherwise not applicable. With respect to health care service plans, the bill would specify that its provisions do not apply to Medi-Cal managed care plan contracts. Because a willful violation of this provision by a health care service plan would be a crime, the 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 act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law sets forth specified prior authorization limitations for health care service plans and health insurers.

This bill would prohibit a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, that provides coverage for physical therapy from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. The bill would require a physical therapy provider to verify an enrollees or an insureds coverage and disclose their share of the cost of care, as specified. The bill would require a physical therapy provider to disclose if the provider is not in the network of the enrollees plan or the insureds policy, and if so, to obtain the enrollees or the insureds consent in writing to receive services from the noncontracting provider prior to initiating care. obtain separate written consent for costs that may not be covered by the enrollees or insureds plan contract or policy, that includes a written estimate of the cost of care for which the enrollee or insured is responsible if coverage is denied or otherwise not applicable. With respect to health care service plans, the bill would specify that its provisions do not apply to Medi-Cal managed care plan contracts. Because a willful violation of this provision by a health care service plan would be a crime, the 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 act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law sets forth specified prior authorization limitations for health care service plans and health insurers.

This bill would prohibit a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, that provides coverage for physical therapy from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. The bill would require a physical therapy provider to verify an enrollees or an insureds coverage and disclose their share of the cost of care, as specified. The bill would require a physical therapy provider to disclose if the provider is not in the network of the enrollees plan or the insureds policy, and if so, to obtain the enrollees or the insureds consent in writing to receive services from the noncontracting provider prior to initiating care. Because a willful violation of this provision by a health care service plan would be a crime, the 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 act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law sets forth specified prior authorization limitations for health care service plans and health insurers.

This bill would prohibit a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, that provides coverage for physical therapy from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. Because a willful violation of this provision by a health care service plan would be a crime, the 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.

GOVERNOR'S VETO

GV Bill Id:AB 931

Author:(Irwin)

As Enrolled Ver:September 12, 2023

2/3 vote

SUMMARY

Prohibits a health plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. Defines new episode of care to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment. Makes various findings and declarations, including that recent practices by various health plans, health insurers, and their agents to limit the availability of physical therapy, including the use of computer-generated denials or modifications of treatment plans recommended by the patient's treating clinician, are interfering in this ongoing goal of timely, appropriate care.

Senate Amendments

1. Requires a physical therapy provider, prior to treatment, to verify the enrollee or insured's coverage and disclose the enrollee or insured's cost sharing, including the maximum out-of-pocket expense the enrollee or insured may be charged per visit if the health plan or insurer denies coverage for services rendered. Requires the disclosure to encourage the enrollee or insured to contact the plan or insurer for coverage information and to indicate that by signing the separate written consent, an enrollee or insured does not give up any rights, as specified. Requires the physical therapy provider to also disclose if the physical therapy provider is not in network.
2. Requires the provider, for costs that may not be covered by the enrollee's or insured's plan contract or insurance policy, to obtain separate written consent that includes a written estimate of the cost of care for which the enrollee or insured is responsible if coverage is denied or otherwise not applicable, as specified.
3. Exempts a Medi-Cal managed care plan that contracts with the State Department of Health Care Services, as specified, from the provisions of this bill.

Governor’s Veto Message

Beginning January 1, 2025, this bill would prohibit a health plan or insurer from requiring prior authorization for the initial 12 physical therapy treatment visits for a new episode of care. The bill would also require that, prior to treatment, the provider verify an enrollee's coverage and disclose the enrollee's cost sharing, maximum out-of-pocket expense per visit, and whether the provider is in-network for the enrollee.

I appreciate the author's intent to increase access to physical therapy treatment. However, prior authorization, when applied appropriately, can be an important tool to contain health care costs, protect patients from unanticipated billing, and ensure medically necessary care. Further, existing law requires health plans to provide appointments within a timely access minimum standard, even when prior authorization is required.

COMMENTS

1. Prior Authorization. Prior authorization is a decision by a health plan or insurer that a health care service, treatment plan, prescription drug, or durable medical equipment is medically necessary. The health plan or insurer may require preauthorization for certain services before an individual receives them, except in an emergency.

Health plans and insurers are subject to various requirements in California, as stated in existing law above, including an obligation to file policies and procedures that describe utilization review or utilization management functions, used to authorize, modify, or deny health care services under the benefits provided by the health plan. Additionally, existing law requires these policies and procedures to ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes.

Furthermore, California law requires the Department of Managed Health Care (DMHC) to conduct a routine medical survey of each licensed full service and specialty health plan at least once every three years. DMHC may also perform an investigative medical survey as often as deemed necessary by DMHC's Director. The medical survey is a comprehensive evaluation of the plan's compliance with the law in the following health plan program areas:

• 1. Quality Assurance;
  2. Grievances and Appeals (enrollee complaints);
  3. Access and Availability;
  4. UM (referrals and authorizations); and,
  5. Overall plan performance in meeting enrollees' health care needs.

1. Existing consumer protections. In California, consumers have many health care rights, including the right to know why a plan denies a service or treatment, and the right to file a grievance if the consumer disagrees. Health plans are required to have grievance and appeals systems to assist consumers in resolving these issues. A health plan's grievance program informs consumers of their full grievance and appeal rights and the protections afforded to them under the law, including the right to pursue an independent medical review or file a complaint with the DMHC if they are dissatisfied with their health plan's decision. A robust grievance program also allows health plans to track and trend grievances for the purpose of uncovering systemic problems, thereby providing the opportunity for quality improvement.
2. Physical Therapy studies. A 2020 Workers Compensation Research Institute draft study writes that physical therapy is a common treatment for musculoskeletal conditions. Treatment guidelines and opioid prescribing guidelines often recommend physical therapy with uncomplicated conditions such as lower back pain and as the first line non-pharmacological treatment before considering opioid prescriptions and other invasive procedures. The study notes that outside workers' compensation, studies have reported that for lower back pain, early physical therapy treatment is associated with lower utilization of medical services and better outcomes. The study concluded that for workers with lower back pain conditions for which physical therapy is indicated, early physical therapy before 14 days of injury is likely to be beneficial, resulting in a lower utilization of medical services, lower overall medical costs, and shorter temporary disability duration. The findings of the study support the value of ordering physical therapy early rather than late, suggesting that clinicians and payors should be encouraged to work proactively to remove barriers to early physical therapy.

A 2020 New York Times article noted that people with back pain are often referred for physical therapy, though studies on its effectiveness have been mixed. A randomized trial suggests that, despite some limitations, physical therapy may have real benefits. Researchers, in an Annals of Internal Medicine study, studied 220 adults, aged 18 to 60 years, with back pain and sciatica (pain radiating down the leg) of less than three months' duration. All patients completed eight well-validated questionnaires covering back and leg pain, disability, physical activity, and quality of life. At four weeks, six months, and one year, the therapy group showed less disability and decreased back pain intensity compared with the controls. There was no difference between the treatment group and controls in how much additional health care they used or how many days of work they missed, but the therapy group was more likely to rate their treatment as successful at one month and one year.

According to the Author

One of the most notable barriers to a patient's assigned course of physical therapy treatment is the requirement for prior authorization. As a patient suffers through discomfort and pain, their assigned physical therapy treatment can be the only accessible path to long-term relief they have available. However, patients too frequently face barriers to accessing this treatment due to an insurer's requirement for prior authorization. The author states that prior authorization can significantly impact a patient's path to recovery by delaying the beginning of treatment and continually breaking up the consistency of treatment sessions due to a need for additional authorizations in between sessions. The author states that this bill addresses this barrier to physical therapy treatment by preventing insurers from requiring prior authorization for the first 12 visits related to a new episode of care. In doing so, the author concludes that this bill prevents the harms created by the denial or delay of care and unnecessary reviews for medically necessary physical therapy treatment.

Arguments in Support

The California Physical Therapy Association (CPTA) writes that an increasing number of health plans/insurers and third-party administrators are using computer algorithms and automated systems for decision-making over the care their beneficiaries may receive. Such practices often seem to have no basis in research and are inconsistent with community standards of care for the symptoms and diagnoses presented by patients and seem more directed toward limiting numbers of visits patients may obtain. These practices create barriers and challenges to patients by delaying access to medically necessary care and increasing the administrative burden required to navigate prior authorization, unnecessary reviews, and manage appeals. The only recourse for a patient is to file a complaint with DMHC, but this is an ineffective remedy because it results in the very delays and stoppages in care that produce the poor outcomes indicated by the studies referenced. It also places the provider in an odd position with his or her patient, who may be new to them. According to CPTA, research studies indicate that delays in treatment can result in poorer outcomes for patients.

Arguments in Opposition

The California Association of Health Plans and Association of California Life and Health Insurance Companies write that prior authorization serves a critical function within the health care system as it allows health plans and insurers the opportunity to evaluate specific services and ensure that they are not only medically necessary but are consistent with the appropriate clinical care guidelines. Prior authorization protocols promote safe, effective and affordable care for plan enrollees while ensuring that patients receive the right care, at the right time, from the right provider. This bill would undermine this process by allowing physical therapy providers to provide their patients with up to twelve visits without any oversight or review by the patient's health plan or primary care physician. In essence this policy change would grant unfettered access to this particular service, restricting the health plan or insurer's ability to determine if the treatments visits are medically necessary or follow the standard clinical guidelines. The Department of Finance is opposed to this bill, due to the significant General Fund costs and pressures to the Managed Care Fund, which could lead to increased health care premiums for consumers. The California Health and Human Services Agency notes this bill does not prohibit a health plan from conducting retrospective utilization management review, which could result in some physical therapy session being deemed medically unnecessary. Additionally, existing law provides timely access standards for physical therapy, even if prior authorization is required.

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. DMHC estimates minor and absorbable costs.
2. Unknown costs, likely minor, for the California Department of Insurance in 2024-25 for staffing resources (Insurance Fund)

VOTES

ASM HEALTH: 12-0-3

YES: Wood, Aguiar-Curry, Arambula, Boerner Horvath, Wendy Carrillo, Vince Fong, Maienschein, McCarty, Rodriguez, Santiago, Villapudua, Weber

ABS, ABST OR NV: Waldron, Flora, Joe Patterson

ASM APPROPRIATIONS: 12-2-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Robert Rivas, Weber, Wilson

NO: Dixon, Mathis

ABS, ABST OR NV: Megan Dahle, Sanchez

ASSEMBLY FLOOR: 62-1-17

YES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Megan Dahle, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk‑Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Ting, Valencia, Villapudua, Ward, Wicks, Wilson, Wood, Zbur, Rendon

NO: Davies

ABS, ABST OR NV: Alanis, Chen, Dixon, Essayli, Flora, Hoover, Lackey, Mathis, McKinnor, Jim Patterson, Joe Patterson, Sanchez, Soria, Ta, Waldron, Wallis, Weber

SENATE FLOOR: 39-0-1

YES: Allen, Alvarado-Gil, 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, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Seyarto

ASSEMBLY FLOOR: 74-0-6

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

ABS, ABST OR NV: Chen, Essayli, Flora, Lackey, Sanchez, Weber

UPDATED

VERSION: September 12, 2023

CONSULTANT: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0002506

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 931

Author:(Irwin)

As Amended Ver:September 1, 2023

Majority vote

SUMMARY

Prohibits a health plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. Defines new episode of care to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment. Makes various findings and declarations, including that recent practices by various health plans, health insurers, and their agents to limit the availability of physical therapy, including the use of computer-generated denials or modifications of treatment plans recommended by the patient's treating clinician, are interfering in this ongoing goal of timely, appropriate care.

Senate Amendments

1. Requires a physical therapy provider, prior to treatment, to verify the enrollee or insured’s coverage and disclose the enrollee or insured’s cost sharing, including the maximum out-of-pocket expense the enrollee or insured may be charged per visit if the health plan or insurer denies coverage for services rendered. Requires the disclosure to encourage the enrollee or insured to contact the plan or insurer for coverage information and to indicate that by signing the separate written consent, an enrollee or insured does not give up any rights, as specified. Requires the physical therapy provider to also disclose if the physical therapy provider is not in network.
2. Requires the provider, for costs that may not be covered by the enrollee’s or insured’s plan contract or insurance policy, to obtain separate written consent that includes a written estimate of the cost of care for which the enrollee or insured is responsible if coverage is denied or otherwise not applicable, as specified.
3. Exempts a Medi-Cal managed care plan that contracts with the State Department of Health Care Services, as specified, from the provisions of this bill.

COMMENTS

1. Prior Authorization. Prior authorization is a decision by a health plan or insurer that a health care service, treatment plan, prescription drug, or durable medical equipment is medically necessary. The health plan or insurer may require preauthorization for certain services before an individual receives them, except in an emergency.

Health plans and insurers are subject to various requirements in California, as stated in existing law above, including an obligation to file policies and procedures that describe utilization review or utilization management functions, used to authorize, modify, or deny health care services under the benefits provided by the health plan. Additionally, existing law requires these policies and procedures to ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes.

Furthermore, California law requires the Department of Managed Health Care (DMHC) to conduct a routine medical survey of each licensed full service and specialty health plan at least once every three years. DMHC may also perform an investigative medical survey as often as deemed necessary by DMHC's Director. The medical survey is a comprehensive evaluation of the plan's compliance with the law in the following health plan program areas:

• 1. Quality Assurance;
  2. Grievances and Appeals (enrollee complaints);
  3. Access and Availability;
  4. UM (referrals and authorizations); and,
  5. Overall plan performance in meeting enrollees' health care needs.

1. Existing consumer protections. In California, consumers have many health care rights, including the right to know why a plan denies a service or treatment, and the right to file a grievance if the consumer disagrees. Health plans are required to have grievance and appeals systems to assist consumers in resolving these issues. A health plan's grievance program informs consumers of their full grievance and appeal rights and the protections afforded to them under the law, including the right to pursue an independent medical review or file a complaint with the DMHC if they are dissatisfied with their health plan's decision. A robust grievance program also allows health plans to track and trend grievances for the purpose of uncovering systemic problems, thereby providing the opportunity for quality improvement.
2. Physical Therapy studies. A 2020 Workers Compensation Research Institute draft study writes that physical therapy is a common treatment for musculoskeletal conditions. Treatment guidelines and opioid prescribing guidelines often recommend physical therapy with uncomplicated conditions such as lower back pain and as the first line non-pharmocological treatment before considering opioid prescriptions and other invasive procedures. The study notes that outside workers' compensation, studies have reported that for lower back pain, early physical therapy treatment is associated with lower utilization of medical services and better outcomes. The study concluded that for workers with lower back pain conditions for which physical therapy is indicated, early physical therapy before 14 days of injury is likely to be beneficial, resulting in a lower utilization of medical services, lower overall medical costs, and shorter temporary disability duration. The findings of the study support the value of ordering physical therapy early rather than late, suggesting that clinicians and payors should be encouraged to work proactively to remove barriers to early physical therapy.

A 2020 New York Times article noted that people with back pain are often referred for physical therapy, though studies on its effectiveness have been mixed. A randomized trial suggests that, despite some limitations, physical therapy may have real benefits. Researchers, in an Annals of Internal Medicine study, studied 220 adults, aged 18 to 60 years, with back pain and sciatica (pain radiating down the leg) of less than three months' duration. All patients completed eight well-validated questionnaires covering back and leg pain, disability, physical activity, and quality of life. At four weeks, six months, and one year, the therapy group showed less disability and decreased back pain intensity compared with the controls. There was no difference between the treatment group and controls in how much additional health care they used or how many days of work they missed, but the therapy group was more likely to rate their treatment as successful at one month and one year.

According to the Author

One of the most notable barriers to a patient's assigned course of physical therapy treatment is the requirement for prior authorization. As a patient suffers through discomfort and pain, their assigned physical therapy treatment can be the only accessible path to long-term relief they have available. However, patients too frequently face barriers to accessing this treatment due to an insurer's requirement for prior authorization. The author states that prior authorization can significantly impact a patient's path to recovery by delaying the beginning of treatment and continually breaking up the consistency of treatment sessions due to a need for additional authorizations in between sessions. The author states that this bill addresses this barrier to physical therapy treatment by preventing insurers from requiring prior authorization for the first 12 visits related to a new episode of care. In doing so, the author concludes that this bill prevents the harms created by the denial or delay of care and unnecessary reviews for medically necessary physical therapy treatment.

Arguments in Support

The California Physical Therapy Association (CPTA) writes that an increasing number of health plans/insurers and third-party administrators are using computer algorithms and automated systems for decision-making over the care their beneficiaries may receive. Such practices often seem to have no basis in research and are inconsistent with community standards of care for the symptoms and diagnoses presented by patients and seem more directed toward limiting numbers of visits patients may obtain. These practices create barriers and challenges to patients by delaying access to medically necessary care and increasing the administrative burden required to navigate prior authorization, unnecessary reviews, and manage appeals. The only recourse for a patient is to file a complaint with DMHC, but this is an ineffective remedy because it results in the very delays and stoppages in care that produce the poor outcomes indicated by the studies referenced. It also places the provider in an odd position with his or her patient, who may be new to them. According to CPTA, research studies indicate that delays in treatment can result in poorer outcomes for patients.

Arguments in Opposition

The California Association of Health Plans and Association of California Life and Health Insurance Companies write that prior authorization serves a critical function within the health care system as it allows health plans and insurers the opportunity to evaluate specific services and ensure that they are not only medically necessary but are consistent with the appropriate clinical care guidelines. Prior authorization protocols promote safe, effective and affordable care for plan enrollees while ensuring that patients receive the right care, at the right time, from the right provider. This bill would undermine this process by allowing physical therapy providers to provide their patients with up to twelve visits without any oversight or review by the patient's health plan or primary care physician. In essence this policy change would grant unfettered access to this particular service, restricting the health plan or insurer's ability to determine if the treatments visits are medically necessary or follow the standard clinical guidelines. The Department of Finance is opposed to this bill, due to the significant General Fund costs and pressures to the Managed Care Fund, which could lead to increased health care premiums for consumers. The California Health and Human Services Agency notes this bill does not prohibit a health plan from conducting retrospective utilization management review, which could result in some physical therapy session being deemed medically unnecessary. Additionally, existing law provides timely access standards for physical therapy, even if prior authorization is required.

FISCAL COMMENTS

According to the Senate Appropriations Committee,

1. DMHC estimates minor and absorbable costs.
2. Unknown costs, likely minor, for the California Department of Insurance in 2024-25 for staffing resources (Insurance Fund).

VOTES:

ASM HEALTH: 12-0-3

YES: Wood, Aguiar-Curry, Arambula, Boerner Horvath, Wendy Carrillo, Vince Fong, Maienschein, McCarty, Rodriguez, Santiago, Villapudua, Weber

ABS, ABST OR NV: Waldron, Flora, Joe Patterson

ASM APPROPRIATIONS: 12-2-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Robert Rivas, Weber, Wilson

NO: Dixon, Mathis

ABS, ABST OR NV: Megan Dahle, Sanchez

ASSEMBLY FLOOR: 62-1-17

YES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Megan Dahle, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk‑Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Ting, Valencia, Villapudua, Ward, Wicks, Wilson, Wood, Zbur, Rendon

NO: Davies

ABS, ABST OR NV: Alanis, Chen, Dixon, Essayli, Flora, Hoover, Lackey, Mathis, McKinnor, Jim Patterson, Joe Patterson, Sanchez, Soria, Ta, Waldron, Wallis, Weber

SENATE FLOOR: 39-0-1

YES: Allen, Alvarado-Gil, 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, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Seyarto

UPDATED

VERSION: September 1, 2023

CONSULTANT: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0001706

 THIRD READING  

Bill No: AB 931

Author: Irwin (D)

Amended: 9/1/23 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 10-0, 6/14/23

AYES: Eggman, Glazer, Gonzalez, Hurtado, Limón, Menjivar, Roth, Rubio, Wahab, Wiener

NO VOTE RECORDED: Nguyen, Grove

SENATE APPROPRIATIONS COMMITTEE: 6-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Wahab, Wiener

NO VOTE RECORDED: Seyarto

ASSEMBLY FLOOR: 62-1, 5/1/23 - See last page for vote

SUBJECT: Prior authorization: physical therapy

SOURCE: California Physical Therapy Association

DIGEST:

1. This bill prohibits for a new episode of care, a health plan or health insurance policy from requiring prior authorization for the initial 12 physical therapy treatment visits. This bill defines, “new episode of care” to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment. This bill requires prior to treatment, a physical therapy provider to verify coverage and disclose the cost-sharing amount, including the maximum out-of-pocket expense that may be charged per visit if the health plan or insurer denies coverage for services rendered, and obtain consent, as specified.

ANALYSIS:

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health and other insurers. [HSC §1340, et seq., and INS §106, et seq.]
2. Requires health plans and disability insurers and any contracted entity that performs utilization review or utilization management functions, prospectively, retrospectively, or concurrently, based on medical necessity requests to comply with specified requirements, including a decision within five business days of receiving reasonable information to make a decision, conducting retrospective review within 30 days and decisions associated with imminent and serious threat within 72 hours or sooner. [HSC §1367.01 and INS §10123.135]
3. Permits a person to initiate physical therapy treatment directly from a licensed physical therapist, within the physical therapists’ scope of practice, if specified conditions are met, including:
   1. Requires the physical therapist to refer to other specified health professionals if there is reason to believe the patient has a condition that is beyond their scope of practice or not progressing, as specified;
   2. Requires disclosure of financial interests, as specified;
   3. Requires notification of the patient’s physician and surgeon, with patient authorization; and,
   4. Prohibits the physical therapist from continuing treatment beyond 45 calendar days or 12 visits, whichever occurs first, without a signature on plan of care from specified physicians. [BPC §2620.1]
4. States nothing in 3) above requires a health plan, insurer, workers’ compensation insurance plan, employer, or state program to provide coverage for direct access to treatment by a physical therapist, and requires specified disclosures to the patient. [BPC §2620.1]

This bill:

1. Prohibits a health plan or health insurance policy contract issued, amended, or renewed on or after January 1, 2025, that provides coverage for physical therapy from requiring prior authorization for the initial 12 treatment visits for a new episode of physical therapy care.
2. Defines, “new episode of care” to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment.
3. Requires prior to treatment, a physical therapy provider to verify coverage and disclose the cost-sharing amount, including the maximum out-of-pocket expense that may be charged per visit if the health plan or insurer denies coverage for services rendered.
4. Requires the physical therapy provider to disclose if the physical therapy provider is not in the network.
5. Requires for costs that may not be covered by the enrollee’s plan or insured’s policy, the provider to obtain separate written consent that includes a written estimate of the cost of care for which the insured is responsible if coverage is denied or otherwise not applicable. Requires the consent document and cost estimate to be provided to the enrollee or insured in the language spoken by the enrollee or insured if the language is a Medi-Cal threshold language, as specified.
6. Requires the disclosure to encourage the enrollee or insured to contact the plan or insurer for coverage information and to indicate that by signing the consent, the enrollee or insured does not give up any rights otherwise applicable under law.
7. Indicates this bill does not exempt a noncontracting individual health professional providing services at a contracting health facility from the requirements of existing law, as specified.
8. Exempts a Medi-Cal managed care plan from this bill.

Comments

According to the author, one of the most notable barriers to a patient’s assigned course of physical therapy treatment is the requirement for prior authorization. As a patient suffers through discomfort and pain, their prescribed physical therapy treatment can be the only accessible path to long-term relief they have available. However, patients too frequently face barriers to accessing this treatment due to an insurer’s requirement for prior authorization. Prior authorization can significantly impact a patient’s path to recovery by delaying the beginning of treatment and continually breaking up the consistency of treatment sessions due to a need for additional authorizations in between sessions. This bill addresses this barrier to physical therapy treatment by preventing insurers from requiring prior authorization for the first 12 visits related to a new episode of care. In doing so, this bill prevents the harms created by the denial or delay of care and unnecessary reviews for medically necessary physical therapy treatment.

Physical Therapy. According to the Physical Therapy Board of California (PTBC) a physical therapist is a licensed health care professional who evaluates a patient's physical status, establishes a plan of care and goals, then administers treatments to promote optimal health. Physical therapists seek to relieve pain, improve the body's movement and function, maintain cardiopulmonary function, and limit disabilities resulting from injury or disease. Physical therapists, as part of the evaluation, will among other things, take a patient’s health history, observe a patient’s posture and movement or any limitations a patient may have, and use their hands to palpate and evaluate problem areas. From this evaluation, the physical therapist then establishes a plan of care (treatment) with goals and an estimated time to expect these goals to be achieved. Physical therapists practice in a wide variety of settings, including hospitals, rehabilitation clinics, private practices, home care, schools, and in industry. Treatment may include, but is not limited to, the following: therapeutic use of hands, exercise programs, application of therapeutic modalities such as ultrasound and electrical stimulation, training in daily living activities, and patient education.

Delays and cost. This bill’s sponsor, the California Physical Therapy Association, submitted two studies that suggest delays in access to physical therapy increase health care costs to the system. One study by Horn and Fritz (2018) published in BMC Health Services Research indicated there was an association with the timing of physical therapy consultation on healthcare utilization and costs, where later consultation was associated with increased costs and healthcare utilization. Specifically the increased utilization and costs were related to opioid prescription, MRI and CT Scans. Another study by Childs, et al. (2015) in BMC Health Services Research showed that early referral to guideline adherent physical therapy was associated with significantly lower utilization for all outcomes and 60% lower total lower back pain-related costs.

Oppose unless amended. The Association of California Life and Health Insurance Companies (ACLHIC) and the California Association of Health Plans (CAHP) write prior authorization serves a critical function within the health care system as it allows health plans and insurers the opportunity to evaluate specific services and ensure that they are not only medically necessary but are consistent with the appropriate clinical care guidelines. Prior authorization protocols promote safe, effective and affordable care for plan enrollees while ensuring that patients receive the right care, at the right time, from the right provider. This bill would undermine this process by allowing physical therapy providers to provide their patients with up to twelve visits without any oversight or review by the patient’s health plan or primary care physician. In essence, this policy change would grant unfettered access to this particular service, restricting the health plan or insurer’s ability to determine if the treatments visits are medically necessary or follow the standard clinical guidelines. ACLHIC and CAHP are concerned that this may result in patients receiving unnecessary and/or inappropriate care and believe this bill will unnecessarily increase administrative costs, decrease affordability and potentially lead to unneeded/unnecessary care delivery for our members. ACLHIC and CAHP requests that the bill be limited to in-network contracted providers and that the number of treatments be reduced from 12 to six per episode of care before health plans/insurers could require prior authorization if further treatment is needed. This amendment would ensure that patients would have immediate access to treatment while also preserving health plans/insurer’s ability to verify that the service a patient is receiving is medically appropriate and consistent with clinical care guidelines.

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

According to the Senate Appropriations Committee:

• DMHC estimates minor and absorbable costs.
• Unknown costs, likely minor, for CDI in 2024-25 for staffing resources (Insurance Fund).

SUPPORT: (Verified 8/31/23)

California Physical Therapy Association (source)

Benicia Bay Physical Therapy
California Academy of Family Physicians

California Chronic Care Coalition

Independent Physical Therapists of California

National Health Law Program
National Multiple Sclerosis Society

Physical Therapy Board of California

Several individuals

OPPOSITION: (Verified 8/31/23)

America’s Health Insurance Plans

Association of California Life and Health Insurance Companies
California Association of Health Plans

Department of Finance

ARGUMENTS IN SUPPORT: The California Physical Therapy Association writes an increasing number of health plans/insurers and third-party administrators are using computer algorithms and automated systems for decision-making over the care their beneficiaries may receive. Such practices often have no basis in research and are inconsistent with community standards of care for the symptoms and diagnoses presented by patients and seem more directed toward limiting the number of visits patients may obtain. These practices create barriers and challenges to patients by delaying access to medically necessary care and increasing the administrative burden required to navigate prior authorization, unnecessary reviews, and manage appeals. The only recourse for a patient is to file a complaint with DMHC, but this is an ineffective remedy because it results in the very delays and stoppages in care that produce the poor outcomes indicated by the studies referenced. It also places the provider in an odd position with his or her patient, who may be new to them. The Physical Therapy Board of California recognizes that this bill is an important patient care and access to care issue and prevents unnecessary review and administrative burden and allows for early access to medically necessary physical therapy treatment by allowing physical therapists to provide 12 visits before continued authorization is needed which is a great benefit to the consumer. Computer algorithms and automated systems for determining care are inconsistent with community standards of care for symptoms and diagnoses presented by patients and can directly limit the numbers of visits patients may obtain. Unfortunately, these barriers can result in delays and stoppages in care for consumers and these delays in treatment can result in poorer outcomes for the patient and increased health care costs.

ARGUMENTS IN OPPOSITION: The Department of Finance is opposed to this bill, due to the significant General Fund costs and pressures to the Managed Care Fund, which could lead to increased health care premiums for consumers. The California Health and Human Services Agency notes this bill does not prohibit a health plan from conducting retrospective utilization management review, which could result in some physical therapy session being deemed medically unnecessary. Additionally, existing law provides timely access standards for physical therapy, even if prior authorization is required.

ASSEMBLY FLOOR: 62-1, 5/1/23

AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Megan Dahle, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Ting, Valencia, Villapudua, Ward, Wicks, Wilson, Wood, Zbur, Rendon

NOES: Davies

NO VOTE RECORDED: Alanis, Chen, Dixon, Essayli, Flora, Hoover, Lackey, Mathis, McKinnor, Jim Patterson, Joe Patterson, Sanchez, Soria, Ta, Waldron, Wallis, Weber

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

9/2/23 16:58:17

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 931 (Irwin) - Prior authorization: physical therapy

Bill Summary:

AB 931 would prohibit for a new episode of care, a health plan or health insurance policy from requiring prior authorization for the initial 12 physical therapy treatment visits.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on September 1, 2023

Fiscal Impact:

• The Department of Managed Health Care (DMHC) estimates minor and absorbable costs.
• Unknown costs, likely minor, for the California Department of Insurance (CDI) in 2024-25 for staffing resources (Insurance Fund).

Author Amendments:

Author amendments exempt Medi-Cal managed care plans and revise the requirements on providers to obtain written consent from the enrollee/insured.

-- END --

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 931 (Irwin) - Prior authorization: physical therapy

Bill Summary:

AB 931 would prohibit for a new episode of care, a health plan or health insurance policy from requiring prior authorization for the initial 12 physical therapy treatment visits.

Fiscal Impact:

• The Department of Managed Health Care (DMHC) estimates costs for additional workload to its Help Center to be approximately $306,000 in 2023-24, $322,000 in 2024-25, and $306,000 in 2025-26 and annually thereafter (Managed Care Fund).
• The California Department of Insurance (CDI) estimates costs of $18,000 (Insurance Fund) in 2024-25 for staffing resources.
• The Department of Health Care Services estimates Medi-Cal managed care costs of $7 million to $14 million ($3.5 million to $7 million General Fund) annually resulting from increased utilization of physical therapy treatment services.

Background:

The DMHC regulates health plans and the CDI regulates health insurance. Prior authorization is a form of utilization review or utilization management used by health plans and insurers to determine whether to authorize, modify, or deny health care services. Utilization review can occur prospectively, retrospectively, or concurrently and a plan or insurer can approve, modify, delay or deny in whole or in part a request based on its medical necessity. California law requires written policies and procedures that are consistent with criteria or guidelines that are supported by clinical principles and processes. These policies and procedures must be filed with regulators, and disclosed, upon request, to providers, plans and enrollees or insureds. There are timelines in the law for plans and insurers to respond to requests once any requested medical information that is reasonably necessary to make the determination is provided. California also has a standardized form for prior authorization submissions. If a health plan or insurer fails to respond to the prior authorization request within 72 hours for non-urgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed form, the request is deemed granted.

Proposed Law:

Specific provisions of the bill would:

• Prohibit a health plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, that provides coverage for physical therapy from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. 
• Require, prior to treatment, a physical therapy provider to verify the enrollee’s or insured’s coverage and disclose their cost-sharing, as specified.
• Require the physical therapy provider to disclose if the physical therapy provider is not in the network of the enrollee’s or insured’s coverage and require the provider to obtain the enrollee’s or insured’s consent, as specified, prior to initiating care.

Related Legislation:

AB 1468 (Cunningham, 2021) would have, among other provisions, prohibited for a new episode of care, a health plan or health insurance policy from requiring prior authorization for the initial 12 physical therapy treatment visits. The bill was held on the suspense file in the Assembly Appropriations Committee.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Dr. Susan Talamantes Eggman, Chair

BILL NO: AB 931

SUBJECT: Prior authorization: physical therapy

SUMMARY:

1. Prohibits for a new episode of care, a health plan or health insurance policy from requiring prior authorization for the initial 12 physical therapy treatment visits. Defines, “new episode of care” to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment.
   

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health and other insurers. [HSC §1340, et seq., and INS §106, et seq.]
   
2. Requires the criteria or guidelines used by health plans and insurers, or any entities with which plans or insurers contract for utilization review or utilization management functions, to determine whether to authorize, modify, or deny health care services to:
   1. Be developed with involvement from actively practicing health care providers;
   2. Be consistent with sound clinical principles and processes;
   3. Be evaluated, and updated if necessary, at least annually;
   4. If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the enrollee or insured in that specified case; and,
   5. Be available to the public upon request. [HSC §1363.5 and INS §10123.135]
      
3. Requires health plans and disability insurers and any contracted entity that performs utilization review or utilization management functions, prospectively, retrospectively, or concurrently, based on medical necessity requests to comply with specified requirements, including a decision within five business days of receiving reasonable information to make a decision, conducting retrospective review within 30 days and decisions associated with imminent and serious threat within 72 hours or sooner. [HSC §1367.01 and INS §10123.135]
   
4. Prohibits any individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, from denying or modifying requests for authorization of health care services for an enrollee or insured for reasons of medical necessity. Requires the decision to be communicated to the provider within 24 hours of the decision, and the enrollee or insured (in writing) within two business days of the decision. In the case of concurrent review, prohibits discontinuance of care until the treating provider has been notified and has agreed to a care plan that is appropriate for the medical needs of the patient. [HSC §1367.01 and INS §10123.135]
   
5. Requires a health plan contract or health insurance policy to require that when an enrollee or insured receives covered services from a contracting health facility, as defined, at which, or as a result of which, the enrollee or insured receives covered services provided by a noncontracting individual health professional, as defined, the enrollee or insured pays the same cost sharing required if the services were provided by a contracting individual health professional, as specified. Requires if an enrollee or insured has coverage for out-of-network benefits, a noncontracting individual health professional may bill or collect from the enrollee the out-of-network cost sharing, if applicable, only when the enrollee or insured consents in writing and that written consent demonstrates satisfaction of specified criteria, such as, requires:
   1. At least 24 hours in advance of care, the enrollee or insured to consent in writing to receive services from the identified noncontracting individual health professional;
   2. The consent to be obtained in a document that is separate from the document used to obtain the consent for any other part of the care or procedure, not be obtained by the facility or any representative of the facility, and not be obtained at the time of admission or at any time when the enrollee or insured is being prepared for surgery or any other procedure;
   3. At the time consent is provided, the noncontracting individual health professional to give the enrollee a written estimate of the enrollee’s total out-of-pocket cost of care, based on the professional’s billed charges for the service to be provided. The noncontracting individual health professional not attempt to collect more than the estimated amount without receiving separate written consent from the enrollee or insured or the enrollee’s or insured’s authorized representative, unless circumstances arise during delivery of services that were unforeseeable at the time the estimate was given that would require the provider to change the estimate;
   4. The consent to advise the enrollee or insured that he or she may elect to seek care from a contracted provider or may contact the enrollee’s health plan or insured’s policy in order to arrange to receive the health service from a contracted provider for lower out-of-pocket costs;
   5. The consent and estimate to be provided to the enrollee or insured in the language spoken by the enrollee, if the language is a Medi-Cal threshold language, as defined; and,
   6. The consent to also advise the enrollee or insured that any costs incurred as a result of the enrollee’s or insured’s use of the out-of-network benefit are in addition to in-network cost-sharing amounts and may not count toward the annual out-of-pocket maximum on in-network benefits or a deductible, if any, for in-network benefits. [HSC § 1371.9 and INS § 10112.8]
      
6. Permits a person to initiate physical therapy treatment directly from a licensed physical therapist, within the physical therapists’ scope of practice, if specified conditions are met, including:
   1. Requires the physical therapist to refer to other specified health professionals if there is reason to believe the patient has a condition that is beyond their scope of practice or not progressing, as specified;
   2. Requires disclosure of financial interests, as specified;
   3. Requires notification of the patient’s physician and surgeon, with patient authorization; and,
   4. Prohibits the physical therapist from continuing treatment beyond 45 calendar days or 12 visits, whichever occurs first, without a signature on plan of care from specified physicians. [BPC §2620.1]
      
7. States nothing in 6) above requires a health plan, insurer, workers’ compensation insurance plan, employer, or state program to provide coverage for direct access to treatment by a physical therapist, and requires specified disclosures to the patient. [BPC §2620.1]

This bill:

1. Prohibits a health plan or health insurance policy contract issued, amended, or renewed on or after January 1, 2025 that provides coverage for physical therapy from requiring prior authorization for the initial 12 treatment visits for a new episode of physical therapy care.
   
2. Defines, “new episode of care” to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment.
   
3. Includes finding and declarations that:
   1. The Legislature remains committed to ensuring that health plans and health insurers provide patients with the right care at the right time, without requiring patients or the clinicians who provide that care to have to navigate arduous, opaque, or clinically inappropriate authorization processes that delay access to care;
   2. Recent practices by various health plans, health insurers, and their agents to limit the availability of physical therapy, including the use of computer-generated denials or modifications of treatment plans recommended by the patient’s treating clinician, are interfering in this ongoing goal of timely, appropriate care; and,
   3. The practice to create barriers to physical therapy at levels significantly below the number of visits recognized in research literature as medically necessary to treat various conditions and consistent with visit limits specified in patients’ “Evidence of Coverage” disclosures creates confusion for patients’ reasonable expectations of coverage and puts patients at risk for poor outcomes, which affects their long-term health.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, a one-time cost of $18,000 to the CDI (Insurance Fund). Minor and absorbable costs to the DMHC.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, one of the most notable barriers to a patient’s assigned course of physical therapy treatment is the requirement for prior authorization. As a patient suffers through discomfort and pain, their prescribed physical therapy treatment can be the only accessible path to long-term relief they have available. However, patients too frequently face barriers to accessing this treatment due to an insurer’s requirement for prior authorization. Prior authorization can significantly impact a patient’s path to recovery by delaying the beginning of treatment and continually breaking up the consistency of treatment sessions due to a need for additional authorizations in between sessions. This bill addresses this barrier to physical therapy treatment by preventing insurers from requiring prior authorization for the first 12 visits related to a new episode of care. In doing so, this bill prevents the harms created by the denial or delay of care and unnecessary reviews for medically necessary physical therapy treatment.
2. Physical Therapy. According to the Physical Therapy Board of California (PTBC) a physical therapist is a licensed health care professional who evaluates a patient's physical status, establishes a plan of care and goals, then administers treatments to promote optimal health. Physical therapists seek to relieve pain, improve the body's movement and function, maintain cardiopulmonary function, and limit disabilities resulting from injury or disease. Physical therapists, as part of the evaluation, will among other things, take a patient’s health history, observe a patient’s posture and movement or any limitations a patient may have, and use their hands to palpate and evaluate problem areas. From this evaluation, the physical therapist then establishes a plan of care (treatment) with goals and an estimated time to expect these goals to be achieved. Physical therapists practice in a wide variety of settings, including hospitals, rehabilitation clinics, private practices, home care, schools, and in industry. Treatment may include, but is not limited to, the following: therapeutic use of hands, exercise programs, application of therapeutic modalities such as ultrasound and electrical stimulation, training in daily living activities, and patient education.
   
3. Delays and cost. This bill’s sponsor, the California Association of Physical Therapy (CAPT), submitted two studies that suggest delays in access to physical therapy increase health care costs to the system. One study by Horn and Fritz (2018) published in BMC Health Services Research indicated there was an association with the timing of physical therapy consultation on healthcare utilization and costs, where later consultation was associated with increased costs and healthcare utilization. Specifically the increased utilization and costs were related to opioid prescription, MRI and CT Scans. Another study by Childs, et al. (2015) in BMC Health Services Research showed that early referral to guideline adherent physical therapy was associated with significantly lower utilization for all outcomes and 60% lower total lower back pain-related costs.
4. Prior legislation. AB 1468 (Cunningham of 2021) would have prohibited health plans and insurers from imposing prior authorization for the initial 12 treatment visits for chiropractic services, physical therapy, occupational therapy, acupuncture and traditional medicine, speech language pathology and auditory therapies. AB 1468 would have required plans and insurers that implement an automated prior authorization system to base the system on evidence-based clinical guidelines, and ensure a licensed health care provider reviews requests for authorization of health care services. AB 1468 was held on the Assembly Appropriations Committee suspense file.
   
5. Support. CAPT writes an increasing number of health plans/insurers and third-party administrators are using computer algorithms and automated systems for decision-making over the care their beneficiaries may receive. Such practices often have no basis in research and are inconsistent with community standards of care for the symptoms and diagnoses presented by patients and seem more directed toward limiting the number of visits patients may obtain. These practices create barriers and challenges to patients by delaying access to medically necessary care and increasing the administrative burden required to navigate prior authorization, unnecessary reviews, and manage appeals. The only recourse for a patient is to file a complaint with DMHC, but this is an ineffective remedy because it results in the very delays and stoppages in care that produce the poor outcomes indicated by the studies referenced. It also places the provider in an odd position with his or her patient, who may be new to them. The PTBC recognizes that this bill is an important patient care and access to care issue and prevents unnecessary review and administrative burden and allows for early access to medically necessary physical therapy treatment by allowing physical therapists to provide 12 visits before continued authorization is needed which is a great benefit to the consumer. Computer algorithms and automated systems for determining care are inconsistent with community standards of care for symptoms and diagnoses presented by patients and can directly limit the numbers of visits patients may obtain. Unfortunately, these barriers can result in delays and stoppages in care for consumers and these delays in treatment can result in poorer outcomes for the patient and increased health care costs.
   
6. Oppose unless amended. The Association of California Life and Health Insurance Companies (ACLHIC) and the California Association of Health Plans (CAHP) writes prior authorization serves a critical function within the health care system as it allows health plans and insurers the opportunity to evaluate specific services and ensure that they are not only medically necessary but are consistent with the appropriate clinical care guidelines. Prior authorization protocols promote safe, effective and affordable care for plan enrollees while ensuring that patients receive the right care, at the right time, from the right provider. This bill would undermine this process by allowing physical therapy providers to provide their patients with up to twelve visits without any oversight or review by the patient’s health plan or primary care physician. In essence, this policy change would grant unfettered access to this particular service, restricting the health plan or insurer’s ability to determine if the treatments visits are medically necessary or follow the standard clinical guidelines. ACLHIC and CAHP are concerned that this may result in patients receiving unnecessary and/or inappropriate care and believe this bill will unnecessarily increase administrative costs, decrease affordability and potentially lead to unneeded/unnecessary care delivery for our members. ACLHIC and CAHP requests that the bill be limited to in-network contracted providers and that the number of treatments be reduced from 12 to six per episode of care before health plans/insurers could require prior authorization if further treatment is needed. This amendment would ensure that patients would have immediate access to treatment while also preserving health plans/insurer’s ability to verify that the service a patient is receiving is medically appropriate and consistent with clinical care guidelines.
   
7. Policy comment. Should this bill become law it may trigger more retrospective review by the plans since prior authorization for the first 12 visits would be prohibited. This and since patients can seek direct access to physical therapy without a referral could result in an increase of health plan denials based on the plan’s determination that the visits are not medically necessary or because the physical therapy provider is not in the plan’s network. To ensure patients are aware of their coverage for physical therapy and the extent of their potential financial liability, the committee may wish to request amendments to ensure the patient’s coverage is verified by the physical therapy provider and the patient consents to treatment based on a good faith estimate of their costs for treatment.
   
8. Amendments. The author has agreed to the following amendments to ensure the patient is informed about their coverage and receives the maximum out of pocket expense the patient may be charged.
   
   (c) Prior to treatment, a physical therapy provider shall verify the enrollee’s coverage and disclose the enrollee’s cost-sharing, including the maximum out of pocket expense the patient may be charged per visit if the health care service plan denies coverage for services rendered. The physical therapy provider shall disclose if the physical therapy provider is not in the network of the enrollee’s health care service plan. If an enrollee has a health care service plan with out-of-network benefits, or, does not have a plan with out-of-network benefits but chooses to seek care knowing the provider is out-of-network, the physical therapy provider shall do the following:
   (1) Prior to initiating care, the enrollee shall consent in writing to receive services from the identified noncontracting physical therapy provider.

(2) The consent shall be obtained by the noncontracting physical therapy provider in a document that is separate from the document used to obtain the consent for any other part of the care or procedure.

(3) At the time consent is provided, the noncontracting physical therapy provider shall give the enrollee a written estimate of the enrollee’s per visit out-of-pocket cost of care. The noncontracting physical therapy provider shall not attempt to collect more than the estimated amount without receiving separate written consent from the enrollee or the enrollee’s authorized representative, unless circumstances arise during delivery of services that were unforeseeable at the time the estimate was given that would require the provider to change the estimate.

(4) The consent shall advise the enrollee that he or she may elect to seek care from a contracted physical therapy provider.

(5) The consent and estimate shall be provided to the enrollee in the language spoken by the enrollee, if the language is a Medi-Cal threshold language, as defined in subdivision (d) of Section 128552.

(6) The consent shall also advise the enrollee that any costs incurred as a result of the enrollee’s use of the out-of-network benefit shall be in addition to in-network cost-sharing amounts and may not count toward the annual out-of-pocket maximum on in-network benefits or a deductible, if any, for in-network benefits.
(d) Nothing in this section shall be construed to exempt a noncontracting individual health professional providing services at a contracting health facility from Section 1371.9.

SUPPORT AND OPPOSITION:

Support: California Physical Therapy Association (sponsor)

Benicia Bay Physical Therapy
California Academy of Family Physicians

Independent Physical Therapists of California

National Health Law Program
National Multiple Sclerosis Society

Physical Therapy Board of California

Oppose: America’s Health Insurance Plans

Association of California Life & Health Insurance Companies (unless amended)
California Association of Health Plans (unless amended)

ASSEMBLY THIRD READING

ATR Bill Id:AB 931

Author:(Irwin)

As Introduced Ver:February 14, 2023

Majority vote

SUMMARY

Prohibits a health plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. Defines new episode of care to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment. Makes various findings and declarations, including that recent practices by various health plans, health insurers, and their agents to limit the availability of physical therapy, including the use of computer-generated denials or modifications of treatment plans recommended by the patient's treating clinician, are interfering in this ongoing goal of timely, appropriate care.

Major Provisions

COMMENTS

1. Prior Authorization. Prior authorization is a decision by a health plan or insurer that a health care service, treatment plan, prescription drug, or durable medical equipment is medically necessary. The health plan or insurer may require preauthorization for certain services before an individual receives them, except in an emergency.

Health plans and insurers are subject to various requirements in California, as stated in existing law above, including an obligation to file policies and procedures that describe utilization review or utilization management functions, used to authorize, modify, or deny health care services under the benefits provided by the health plan. Additionally, existing law requires these policies and procedures to ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes.

Furthermore, California law requires the Department of Managed Health Care (DMHC) to conduct a routine medical survey of each licensed full service and specialty health plan at least once every three years. DMHC may also perform an investigative medical survey as often as deemed necessary by DMHC's Director. The medical survey is a comprehensive evaluation of the plan's compliance with the law in the following health plan program areas:

• 1. Quality Assurance;
  2. Grievances and Appeals (enrollee complaints);
  3. Access and Availability;
  4. UM (referrals and authorizations); and,
  5. Overall plan performance in meeting enrollees' health care needs.

1. Existing consumer protections. In California, consumers have many health care rights, including the right to know why a plan denies a service or treatment, and the right to file a grievance if the consumer disagrees. Health plans are required to have grievance and appeals systems to assist consumers in resolving these issues. A health plan's grievance program informs consumers of their full grievance and appeal rights and the protections afforded to them under the law, including the right to pursue an independent medical review or file a complaint with the DMHC if they are dissatisfied with their health plan's decision. A robust grievance program also allows health plans to track and trend grievances for the purpose of uncovering systemic problems, thereby providing the opportunity for quality improvement.
2. Physical Therapy studies. A 2020 Workers Compensation Research Institute draft study writes that physical therapy is a common treatment for musculoskeletal conditions. Treatment guidelines and opioid prescribing guidelines often recommend physical therapy with uncomplicated conditions such as lower back pain and as the first line non-pharmocological treatment before considering opioid prescriptions and other invasive procedures. The study notes that outside workers' compensation, studies have reported that for lower back pain, early physical therapy treatment is associated with lower utilization of medical services and better outcomes. The study concluded that for workers with lower back pain conditions for which physical therapy is indicated, early physical therapy before 14 days of injury is likely to be beneficial, resulting in a lower utilization of medical services, lower overall medical costs, and shorter temporary disability duration. The findings of the study support the value of ordering physical therapy early rather than late, suggesting that clinicians and payors should be encouraged to work proactively to remove barriers to early physical therapy.

A 2020 New York Times article noted that people with back pain are often referred for physical therapy, though studies on its effectiveness have been mixed. A randomized trial suggests that, despite some limitations, physical therapy may have real benefits. Researchers, in an Annals of Internal Medicine study, studied 220 adults, aged 18 to 60 years, with back pain and sciatica (pain radiating down the leg) of less than three months' duration. All patients completed eight well-validated questionnaires covering back and leg pain, disability, physical activity, and quality of life. At four weeks, six months, and one year, the therapy group showed less disability and decreased back pain intensity compared with the controls. There was no difference between the treatment group and controls in how much additional health care they used or how many days of work they missed, but the therapy group was more likely to rate their treatment as successful at one month and one year.

According to the Author

One of the most notable barriers to a patient's assigned course of physical therapy treatment is the requirement for prior authorization. As a patient suffers through discomfort and pain, their assigned physical therapy treatment can be the only accessible path to long-term relief they have available. However, patients too frequently face barriers to accessing this treatment due to an insurer's requirement for prior authorization. The author states that prior authorization can significantly impact a patient's path to recovery by delaying the beginning of treatment and continually breaking up the consistency of treatment sessions due to a need for additional authorizations in between sessions. The author states that this bill addresses this barrier to physical therapy treatment by preventing insurers from requiring prior authorization for the first 12 visits related to a new episode of care. In doing so, the author concludes that this bill prevents the harms created by the denial or delay of care and unnecessary reviews for medically necessary physical therapy treatment.

Arguments in Support

The California Physical Therapy Association (CPTA) writes that an increasing number of health plans/insurers and third-party administrators are using computer algorithms and automated systems for decision-making over the care their beneficiaries may receive. Such practices often seem to have no basis in research and are inconsistent with community standards of care for the symptoms and diagnoses presented by patients and seem more directed toward limiting numbers of visits patients may obtain. These practices create barriers and challenges to patients by delaying access to medically necessary care and increasing the administrative burden required to navigate prior authorization, unnecessary reviews, and manage appeals. The only recourse for a patient is to file a complaint with DMHC, but this is an ineffective remedy because it results in the very delays and stoppages in care that produce the poor outcomes indicated by the studies referenced. It also places the provider in an odd position with his or her patient, who may be new to them. According to CPTA, research studies indicate that delays in treatment can result in poorer outcomes for patients.

Arguments in Opposition

The California Association of Health Plans and Association of California Life and Health Insurance Companies write that prior authorization serves a critical function within the health care system as it allows health plans and insurers the opportunity to evaluate specific services and ensure that they are not only medically necessary but are consistent with the appropriate clinical care guidelines. Prior authorization protocols promote safe, effective and affordable care for plan enrollees while ensuring that patients receive the right care, at the right time, from the right provider. This bill would undermine this process by allowing physical therapy providers to provide their patients with up to twelve visits without any oversight or review by the patient's health plan or primary care physician. In essence this policy change would grant unfettered access to this particular service, restricting the health plan or insurer's ability to determine if the treatments visits are medically necessary or follow the standard clinical guidelines.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, one-time cost of $18,000 to the Department of Insurance (Insurance Fund). Minor and absorbable costs to the DMHC.

VOTES

ASM HEALTH: 12-0-3

YES: Wood, Aguiar-Curry, Arambula, Boerner Horvath, Wendy Carrillo, Vince Fong, Maienschein, McCarty, Rodriguez, Santiago, Villapudua, Weber

ABS, ABST OR NV: Waldron, Flora, Joe Patterson

ASM APPROPRIATIONS: 12-2-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Robert Rivas, Weber, Wilson

NO: Dixon, Mathis

ABS, ABST OR NV: Megan Dahle, Sanchez

UPDATED

VERSION: February 14, 2023

CONSULTANT: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0000273

Date of Hearing: April 26, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 931

Author:(Irwin) – As Introduced Ver:February 14, 2023

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

SUMMARY:

This bill prohibits a health plan contract or health insurance policy from imposing prior authorization for the initial 12 treatment visits for a new episode of care, as defined, for physical therapy.

FISCAL EFFECT:

One-time cost of $18,000 to the Department of Insurance (Insurance Fund).

Minor and absorbable costs to the Department of Managed Health Care (DMHC).

COMMENTS:

1. Purpose. This bill is sponsored by the California Physical Therapy Association. According to the author:

One of the most notable barriers to a patient’s assigned course of physical therapy treatment is the requirement for prior authorization.

As a patient suffers through discomfort and pain, their assigned physical therapy treatment can be the only accessible path to long-term relief they have available. However, patients too frequently face barriers to accessing this treatment due to an insurer’s requirement for prior authorization. Prior authorization can significantly impact a patient’s path to recovery by delaying the beginning of treatment and continually breaking up the consistency of treatment sessions due to a need for additional authorizations in between sessions.

AB 931 addresses this barrier to physical therapy treatment by preventing insurers from requiring prior authorization for the first twelve visits related to a new episode of care. In doing so, this bill prevents the harms created by the denial or delay of care and unnecessary reviews for medically necessary physical therapy treatment.

1. Prior Authorization. Prior authorization is a decision by a health plan or insurer that a health care service, treatment plan, prescription drug, or durable medical equipment is medically necessary. A health plan or insurer may require prior authorization for certain services before an individual receives them, except in an emergency.
   Health plans and insurers are subject to various requirements in California, including an obligation to file policies and procedures that describe utilization review (UR) or utilization management (UM) functions (such as prior authorization), used to authorize, modify, or deny health care services under the benefits provided by the health plan. Additionally, existing law requires these policies and procedures to ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes.
   
   Furthermore, California law requires DMHC to conduct a routine medical survey of each licensed full service and specialty health plan at least once every three years. DMHC may also perform an investigative medical survey as often as deemed necessary by DMHC's director. The medical survey is a comprehensive evaluation of the plan's compliance with the law in several health plan program areas, including UM.
2. Related Legislation. SB 598 (Skinner) prohibits a health plan or health insurer from requiring a contracted health professional to complete or obtain prior authorization for any covered health care services if the plan or insurer approved or would have approved not less than 90% of the prior authorization requests they submitted in the most recent one-year contracted period. SB 598 is pending in Senate Appropriations Committee.
3. Prior Legislation.
   1. AB 250 (Pan), of the 2021-22 Legislative Session, was similar to SB 598 and was held in this committee.
   2. AB 1468 (Cunningham), of the 2021-22 Legislative Session, would have prohibited a health plan contract or health insurance policy that provides coverage for a specified service, including physical or occupational therapy, from requiring prior authorization for the initial 12 treatment visits for that service within a new episode of care, among other provisions related to prior authorization. AB 1468 was held in this committee.

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

Date of Hearing: April 11, 2023

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 931

Author:(Irwin) – As Introduced Ver:February 14, 2023

SUBJECT: Prior authorization: physical therapy.

SUMMARY: Prohibits a health plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2025, from imposing prior authorization for the initial 12 treatment visits for a new episode of care for physical therapy. Defines new episode of care to mean treatment for a new or recurring condition for which the enrollee or insured has not been treated by the provider within the previous 90 days and is not currently undergoing active treatment. Makes various findings and declarations, including that recent practices by various health plans, health insurers, and their agents to limit the availability of physical therapy, including the use of computer-generated denials or modifications of treatment plans recommended by the patient’s treating clinician, are interfering in this ongoing goal of timely, appropriate care.

EXISTING LAW:

1. 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 to regulate health insurance. [Health and Safety Code (HSC) §1340, et seq., Insurance Code (INS) §106, et seq.]
2. Establishes as California's essential health benefits benchmark the Kaiser Small Group Health Maintenance Organization, existing California mandates, and 10 federal Patient Protection and Affordable Care Act mandated benefits. [HSC §1367.005 and INS §10112.27]
   
3. Requires the criteria or guidelines used by health plans and insurers, or any entities with which plans or insurers contract for utilization review (UR) or utilization management (UM) functions, to determine whether to authorize, modify, or deny health care services to:
   1. Be developed with involvement from actively practicing health care providers;
   2. Be consistent with sound clinical principles and processes;
   3. Be evaluated, and updated if necessary, at least annually;
   4. If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the enrollee or insured in that specified case; and,
   5. Be available to the public upon request. [HSC §1363.5 and INS §10123.135]
      
4. 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 or insured and any of the following:
5. Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service;
6. Nationally recognized professional standards;
7. Expert opinion;
8. Generally accepted standards of medical practice; or,
9. 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 INS §10169.3]

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, one of the most notable barriers to a patient’s assigned course of physical therapy treatment is the requirement for prior authorization. As a patient suffers through discomfort and pain, their assigned physical therapy treatment can be the only accessible path to long-term relief they have available. However, patients too frequently face barriers to accessing this treatment due to an insurer’s requirement for prior authorization. The author states that prior authorization can significantly impact a patient’s path to recovery by delaying the beginning of treatment and continually breaking up the consistency of treatment sessions due to a need for additional authorizations in between sessions. The author states that this bill addresses this barrier to physical therapy treatment by preventing insurers from requiring prior authorization for the first 12 visits related to a new episode of care. In doing so, the author concludes that this bill prevents the harms created by the denial or delay of care and unnecessary reviews for medically necessary physical therapy treatment.
2. BACKGROUND.
   1. Prior Authorization. Prior authorization is a decision by a health plan or insurer that a health care service, treatment plan, prescription drug, or durable medical equipment is medically necessary. The health plan or insurer may require preauthorization for certain services before an individual receives them, except in an emergency.
      
      Health plans and insurers are subject to various requirements in California, as stated in existing law above, including an obligation to file policies and procedures that describe UR or UM functions, used to authorize, modify, or deny health care services under the benefits provided by the health plan. Additionally, existing law requires these policies and procedures to ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes.
      
      Furthermore, California law requires DMHC to conduct a routine medical survey of each licensed full service and specialty health plan at least once every three years. DMHC may also perform an investigative medical survey as often as deemed necessary by DMHC's Director. The medical survey is a comprehensive evaluation of the plan's compliance with the law in the following health plan program areas:
      1. Quality Assurance;
      2. Grievances and Appeals (enrollee complaints);
      3. Access and Availability;
      4. UM (referrals and authorizations); and,
      5. Overall plan performance in meeting enrollees' health care needs.
   2. Existing consumer protections. In California, consumers have many health care rights, including the right to know why a plan denies a service or treatment, and the right to file a grievance if the consumer disagrees. Health plans are required to have grievance and appeals systems to assist consumers in resolving these issues. A health plan’s grievance program informs consumers of their full grievance and appeal rights and the protections afforded to them under the law, including the right to pursue an IMR or file a complaint with the DMHC if they are dissatisfied with their health plan’s decision. A robust grievance program also allows health plans to track and trend grievances for the purpose of uncovering systemic problems, thereby providing the opportunity for quality improvement.

Physical Therapy studies. A 2020 Workers Compensation Research Institute draft study writes that physical therapy is a common treatment for musculoskeletal conditions. Treatment guidelines and opioid prescribing guidelines often recommend physical therapy with uncomplicated conditions such as lower back pain and as the first line non-pharmocological treatment before considering opioid prescriptions and other invasive procedures. The study notes that outside workers’ compensation, studies have reported that for lower back pain, early physical therapy treatment is associated with lower utilization of medical services and better outcomes. The study concluded that for workers with lower back pain conditions for which physical therapy is indicated, early physical therapy before 14 days of injury is likely to be beneficial, resulting in a lower utilization of medical services, lower overall medical costs, and shorter temporary disability duration. The findings of the study support the value of ordering physical therapy early rather than late, suggesting that clinicians and payors should be encouraged to work proactively to remove barriers to early physical therapy.

A 2020 New York Times article noted that people with back pain are often referred for physical therapy, though studies on its effectiveness have been mixed. A randomized trial suggests that, despite some limitations, physical therapy may have real benefits. Researchers, in an Annals of Internal Medicine study, studied 220 adults, aged 18 to 60 years, with back pain and sciatica (pain radiating down the leg) of less than three months’ duration. All patients completed eight well-validated questionnaires covering back and leg pain, disability, physical activity, and quality of life. At four weeks, six months, and one year, the therapy group showed less disability and decreased back pain intensity compared with the controls. There was no difference between the treatment group and controls in how much additional health care they used or how many days of work they missed, but the therapy group was more likely to rate their treatment as successful at one month and one year.

1. SUPPORT. The California Physical Therapy Association (CPTA) writes that an increasing number of health plans/insurers and third-party administrators are using computer algorithms and automated systems for decision-making over the care their beneficiaries may receive. Such practices often seem to have no basis in research and are inconsistent with community standards of care for the symptoms and diagnoses presented by patients and seem more directed toward limiting numbers of visits patients may obtain. These practices create barriers and challenges to patients by delaying access to medically necessary care and increasing the administrative burden required to navigate prior authorization, unnecessary reviews, and manage appeals. The only recourse for a patient is to file a complaint with DMHC, but this is an ineffective remedy because it results in the very delays and stoppages in care that produce the poor outcomes indicated by the studies referenced. It also places the provider in an odd position with his or her patient, who may be new to them. According to CPTA, research studies indicate that delays in treatment can result in poorer outcomes for patients.
2. OPPOSITION. The California Association of Health Plans (CAHP) and Association of California Life and Health Insurance Companies (ACLHIC) write that rior authorization serves a critical function within the health care system as it allows health plans and insurers the opportunity to evaluate specific services and ensure that they are not only medically necessary but are consistent with the appropriate clinical care guidelines. Prior authorization protocols promote safe, effective and affordable care for plan enrollees while ensuring that patients receive the right care, at the right time, from the right provider. This bill would undermine this process by allowing physical therapy providers to provide their patients with up to twelve visits without any oversight or review by the patient’s health plan or primary care physician. In essence this policy change would grant unfettered access to this particular service, restricting the health plan or insurer’s ability to determine if the treatments visits are medically necessary or follow the standard clinical guidelines.
3. RELATED LEGISLATION. SB 598 (Skinner) prohibits a health plan or health insurer from requiring a contracted health professional to complete or obtain a prior authorization for any covered health care services if the plan or insurer approved or would have approved not less than 90% of the prior authorization requests they submitted in the most recent one-year contracted period. SB 598 is pending in Senate Health Committee.
4. PREVIOUS LEGISLATION.
   1. AB 250 (Pan) of 2021 was similar to SB 598 and would have prohibited a health plan or health insurer from requiring a contracted health professional to complete or obtain a prior authorization for any health care services if the plan or insurer approved or would have approved not less than 90% of the prior authorization requests they submitted in the most recent one-year contracted period. AB 250 was held in Assembly Appropriations Committee.
   2. AB 1468 (Cunningham) of 2021 would have required a health plan or health insurer that implements an automated prior authorization system to use evidence-based clinical guidelines to program the system and to make the algorithms used for the system available for download on the plan’s or insurer’s provider internet website. Would have required a plan or insurer that implements an automated prior authorization system to ensure that a licensed physician or a licensed health care professional makes the decision to deny or modify a request by examining the request specific to the enrollee or insured and not simply ratify an automated response. Would have prohibited a health plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2022, that provides coverage for a specified service, including chiropractic services, physical or occupational therapy, and acupuncture and traditional medicine, from requiring prior authorization for the initial 12 treatment visits for that service within a new episode of care. AB 1468 was held in Assembly Appropriations Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Physical Therapy Association

National Multiple Sclerosis Society

Opposition

America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

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