Senate Select Committee on Mental Health and Addiction

We'll call to order the Senate Select Committee on Mental Health and Addiction. I want to thank Senator Cortese for joining us. We'll have a few other Senators. I think shortly we will have remote public comment in addition to in person public comment at the end of the hearing for people who want to participate remotely. The participant number is 877-226-8163 and the access code is 736-2832.

I want to just note that, as always, we'll be maintaining decorum during the hearing today, and any individual who's disruptive may be removed from the remote meeting service or have their connection muted. We have one panelist participating remotely today. Everyone else will be in person. And I want to thank all of our panelists for joining us. And with that, we will proceed. So, today's hearing is about mental health parity.

And for Members of the public who may not be familiar with the phrase mental health parity, it's actually quite straightforward. It means that mental health, including addiction, will be treated exactly the same as physical health. The basic concept that if you break your arm or you have cancer, you go to your Doctor and your health insurance covers it and pays for it. And the same should be true if someone has a mental health or addiction disorder.

Unfortunately, historically, health insurance has not adequately covered mental health and addiction treatment and has not treated it in the same way that physical health has been covered. We have had a long history of people simply being unable to get insurance coverage for mental health treatment and insurance plans, effectively taking the position that you can only get treatment if you're basically in crisis. And of course, we want to get to people and get people the help they need before they're in crisis.

It would be similar to telling someone who was diagnosed with stage one cancer, we know you have stage one cancer, but it's not serious enough yet, so we're not going to cover your treatment. Come back and see us when you're at stage four cancer and then we'll cover it. We would never tolerate that for physical health, and yet for many years, we have tolerated it for mental health.

And as a result, we have so many people who have even good insurance who are unable to get the help that they need, and we need that to change. So in 2020, I authored Senate Bill 855, and this Legislature with strong bipartisan support passed it and the Governor signed it. And that puts California in the lead on mental health parity. It is the strongest mental health parity law in the country, and other states are seeking to replicate it.

There have even been efforts in Congress to take it national. It is a strong law making very, very clear that welcome, Senator Ashby making very clear that we're going to treat mental health and addiction treatment the same as physical health. It has now been nearly three years since SB 85 went into effect on January 1, 2021. But in those nearly three years, we still do not have finalized regulations from the Department of Managed Healthcare or the Department of Insurance.

We know that the only way that this strong law will have true meaning is for it to be fully implemented and fully enforced with full compliance by the health plans. It is so important that strong regulations be finalized as quickly as possible. It's taken too long. I am grateful that the Department of Managed Healthcare has been working to significantly improve its proposed regulations, but I think they can be strengthened even further to protect consumers and make sure people can access the health care that they need.

It's also critically important that DMHC's behavioral health investigations to thoroughly review compliance with federal and state parity laws happen as quickly as possible and as thoroughly as possible. DMHC has the tools and the authority that it needs to effectively regulate plans mental health parity compliance. And so we need to make sure that that compliance happens and that accountability happens when the health plans fall short.

We also know that there continue to be lengthy delays for expedited independent medical reviews when a health plan does deny mental health coverage. These delays often exceed allowable time periods. We continue to hear from residents who are not able to get the care that they need on the timeline that is required. And that timeline, of course, under Senate Bill 221 for follow up mental health appointments, is 10 business days, two weeks.

I also just want to note that recently, the Department of Managed Healthcare entered into a resolution with Kaiser with a very large fine of, I believe, $50 million and a number of commitments by Kaiser to improve the availability of behavioral health treatment within the Kaiser system. And I want to thank DMHC for that work. That is a significant step forward.

So in today's hearing, we'll be hearing from a number of different perspectives from our departments, from advocates, from healthcare professionals, from patients, to really see where we are in terms of implementation of SB 85 enforcement and compliance. And we'll hear from the health plans as well. And I hope that after today, we will have a roadmap to ensuring full implementation and compliance. With that, I want to invite if any of my colleagues would like to make any opening remarks, now would be a good time.

Senator Rubio.

Good morning, everyone. Can you hear me? Well, first of all, Mr. Chair, thank you for arranging this. I know this is a topic That's important to you as well as all of us, but more importantly, all of those that are going to be presenting here today, it's so important that we hear all perspectives. And a lot of the times we pass bills and we don't come back together to ensure that implementation is happening and that it's doing what it's intending to do.

I know this issue is very important just across California. And as we continue to try to ensure that everyone has the best quality of care, I'm really eager to hear some of the testimonials and stories of those being impacted, to see what we can do as a Legislature, to continue to push, to make sure that, again, that we meet the mark and the goals that were intended by this Bill, SB 85, which I was proud to support and push forward as a Member of the Health Committee. But I know for me, of course, mental health and substance use disorders continue to be a big issue.

But what I'm seeing a lot personally and around my district is what's happening to our youth mental health, the distress after the pandemic, and so many things that we still have to dive deep into to see what we can do to help our youth and make sure that they don't continue to get worse at the end as they get older and become adults. I do a lot on domestic violence, and that continues to be something that worries me.

Most victims or survivors that end up on the street don't have the care that they deserve and should get. And so this hearing here today will help me understand better what we can do to continue to help those that are in distress, that are on the streets through no fault of their own. So I'll just leave it at that. I want to say once again, thank you, Mr. Chair and all of my colleagues. I know we all had to fly in or come from long distance to be here, and I look forward to learning and working with you on this. Thank you.

Thank you, Senator Cortese.

Well, first of all, Chair Wiener, thank you so much for convening and pulling this together and ensuring that we have a Senate Select Committee on Mental Health and Addiction. So I'm really happy to participate and happy to make the commute today to be here. I do want to say, and I hope this is consistent with the idea that we're really here to talk about SB 855.

I have done some work, as the chair knows, and the Chair was very supportive of on utilization review on a Bill previously numbered SB 99, which passed the Legislature but was vetoed. I only bring that up because foundationally, I want to make sure that we do get to the bottom, if we can, today or soon, to what is there, if anything, beyond parity.

And again, this is landmark legislation, 855, and I know my predecessor in the Senate from San Jose worked in this area as effectively as he could. At some point, we need to, of course, address the issue that a broken leg may very well mean discharge within 24 hours or 48 hours, or something a little more traumatic in terms of physical injury may mean discharge in two weeks.

We need to make sure that whoever is reviewing these cases understands clearly that serious addiction That's being treated isn't going to have parity in terms of length of treatment, even though we want parity in terms of coverage, in terms of making people whole, financially, fiscally, and so forth. So it's challenging to get into those issues. We took a stab at it previously with SB 999, but if it's not, I think we may hear today from providers. If it's not 999, what is it?

Because we need to get to the bottom of this issue of how do we parse things enough and trust our providers enough to know that we just can't be sending people out on the street two weeks after we sent them in for stabilization. Even CareCorp recognizes that right? That there's a need to have longer term plans for people, and we're just not seeing that yet in the results.

And frankly, if insurers want to talk about why that is, it would be great to hear from them as well. But wonderful if we can get to many outcomes today. But if one of the outcomes is maybe an idea as to how we go further on the utilization review side to make sure that parity really means parity. Thank you.

Thank you, Senator Ashby.

Thank you so much. And I'm probably the only one here that wasn't here for the passage of this, but am here now and interested to learn more about how SB 855 is being implemented. And for me, some of the things I'll be listening to closely today. I feel maybe coming from the local, that mental health often doesn't have a front door, and sometimes that front door is the emergency room.

So I'll be interested in how all of this interplays, how the health plans and the requirements of 855 necessitating mental health services. How that is being initiated and if that is being initiated in ways that are congruent with how people are actually seeking services. And this is a pretty actually systemic problem in some of our emergency rooms and emergency departments across the state that folks are in there on mental health holds, and it has become our De facto front door.

So I'll be interested in understanding how this interplays with the sort of boots on the ground issue and where people who really seek and need mental health services are popping up in our system. Because it isn't always a neat and tidy visit to the doctor with a family member who can explain everything and walk you through a process. So how are we getting to the folks that need this the most? And how is the program being implemented in ways that are meaningful and impactful to getting to the changes we need in mental health care?

Great, thank you. Okay, we will now go to our first panel, which is with healthcare providers and patients. So I'd like to convene that first panel with I don't want to mispronounce your name. Meirem Bendat. Did not mispronounce that. Who is PhD. and founder of Psych-Appeal; Rebecca Farmer, who is a Kaiser patient and will be joining us remotely; Joan Borston, the Executive Director of Summit Estate Recovery Center; and Michelle Cabrera, the Executive Director of the County Behavioral Health Directors Association.

And we'll start with Miss Bendat. What? Mr. I'm sorry.

Okay.

Mr. Bendat.

Do I have to press this button? I'm fine. Okay.

Okay.

Good morning, Chair Wiener, and Members of the Committee. My name is Meiram Bendat, and I'm a Santa Barbara based attorney, psychotherapist, and founder of Psych Appeal, a law firm helping patients, families, providers, and institutional stakeholders such as NUHW overcome systemic barriers to medically necessary mental health care. I have successfully spearheaded multiple consumer class actions, including Wit versus United Behavioral Health. In 2016, I sued DMHC for failing to timely administer California's independent medical review system.

I have testified in Congress and in multiple state legislatures, and I also consult to federal health plan regulators. In 2020, I helped draft SB 855, about which I am here today. Last week, in announcing a DMHC settlement with Kaiser, Governor Newsom hailed a tectonic shift in terms of our accountability on the delivery of behavioral health services. He emphasized that accountability of the private sector is foundational to ensuring our entire system of behavioral health care works for all Californians.

I'm here to remind the Committee that accountability of the public agencies charged with regulating the private managed care sector is also foundational, and that both DMHC and CDI have fallen far short of their mandates to enforce SB 855 in the midst of concurrent suicide and overdose epidemics. For starters, California's regulators are simply not addressing consumer complaints, including network inadequacy complaints within the timely access mandates of SB 855 and SB 221.

Whereas CDI lacks legal authority to compel insurers to respond to consumer complaints in less than 21 days, DMHC, which can legally require health plans to respond to urgent complaints within five days or less, takes months to process them. Violates its internal operating procedures, frequently disregards or suppresses glaring deficiencies, scapegoats patients and providers, and nearly always deprives consumers of due process. Namely, an advanced opportunity to review and respond to inaccurate or misleading information preferred by health plans, which DMHC treats like clients.

Moreover, unlike CDI, which promulgated longstanding geographic access standards, DMHC has not. Therefore, despite SB 85's promise of geographically accessible care, Californians with DMHC regulated plans lack protection through concrete geographic access standards, and are subject to arbitrary provider distance measures that are poorly, if ever, enforced. DMHC has also severely neglected California's independent medical review system established to resolve medical necessity disputes.

Although expedited IMRs concerning threats to life or health must be adjudicated within 72 hours, for the past seven years on average, DMHC has permitted its contractor Maximus, to decide expedited mental health IMRs in nearly double the time set by law. Evidence of this is already within the Committee's possession. These failings are but snippets of the pervasive regulatory dysfunction that this Committee must tackle. As the recent Kaiser settlement reads, the plan's responsibility is more than passive monitoring. This Committee should hold our state's regulators to no less a standard. Thank you.

Thank you. And I'll go to Rebecca Farmer, who's remote.

Good morning. My name is Rebecca Farmer, and I received mental health care treatment from Kaiser in San Francisco and Oakland for many years, starting in 2008. And up until this year, I'm living with major depression, anxiety, and ADHD. And I also want to point out I'm a sister, a daughter, an aunt, a partner, a friend and a colleague. And despite having wonderful support networks, these mental health challenges are incredibly difficult and often very isolating.

One of the places that I'm supposed to be able to turn for consistent support is from health providers. But for more years than I can remember, I met with obstacle after obstacle in trying to get timely and adequate mental health care from Kaiser. After the pandemic hit, my mental health plummeted like many of us, and I hit new lows that were, frankly, very frightening.

When I tried to schedule appointments with my Kaiser psychiatrist, I had to wait anywhere from four to six weeks, sometimes more, and this included urgent and follow up appointments. When I was able to get an appointment, they lasted 30 minutes, if that. I was usually told just to email my psychiatrist, which is not a replacement for seeing a provider, especially during a mental health crisis.

When I asked for an appointment with another Kaiser psychiatrist who might have earlier availability, I was told that I could only see my psychiatrist, which shocked me, because when my primary care physician is unavailable, I'm able to see another doctor. And it made no sense why it would be different here. I contacted DMHC multiple times, calling and filing complaints. I was told that I needed to file a grievance directly with Kaiser first.

I did that, but given the weeks of review this process can take, this just defeated the purpose. What I needed was timely mental health care in the midst of a major depressive episode and, frankly, struggling sometimes with wanting to live. Kaiser's therapy also is so inadequate and inaccessible has been for me that I had to pay roughly $4,000 per year out of pocket for an outside therapist.

And as a queer woman, I need to be able to make sure that my mental health providers understand how to support LGBTQ people, which is among the reasons I had to seek out mental health care therapists on my own. I'm very fortunate to have had the resources to pay for this, but even then, the cost is a stretch, and I had to reduce visits with my therapist.

I spent countless hours back and forth with Kaiser in recent years just trying to get access to mental health services that should be covered and timely, and doing all this while in the midst of an incredibly dark depression, which left me exhausted and with very little bandwidth for anything else. I also want to note that I've spent my career working in social change organizations like the ACLU and Breast Cancer Action.

So I understand how to advocate for myself in a healthcare system, but no one should have to have specialized knowledge to get basic access to health care that we deserve, let alone that we also pay for. All of us should have timely access to quality mental health care.

And for the challenges that I have faced as a white woman with a steady income, I know that the obstacles are even more difficult for anyone struggling to make ends meet for LGBTQ youth and for Black, Indigenous, and people of color. From my perspective, Kaiser's mental health care system in California has done a complete disservice to patients like me and is causing significant harm by continuing to routinely refuse timely and quality care.

Meanwhile, the recent settlement aside, the Department of Managed Healthcare has been an absent regulator, allowing Kaiser and likely other health insurance companies to effectively withhold adequate and timely mental health care when we need it the most.

So, unless DMHD aggressively upholds its role as a regulator, Kaiser will no doubt continue failing patients like me who need timely mental health care, as they have done for too many years. And without DMHC's close monitoring, I have no confidence that Kaiser will reimburse patients or meet any other terms of the settlement. Thank you for your time.

Thank you very much. We'll now hear from Joan Borsten, the Executive Director of Summit Estate Recovery Center.

Good morning. I'm also the co founder and former CEO of Malibu Beach Recovery Center, and a co founder and former VP of the Addiction Treatment Advocacy Coalition. I'm here to testify about a decade long problem in California and the nation insurance companies that incentivize doctors who do not currently practice addiction medicine to deny needed treatment. California's addiction treatment providers all breathed a sigh of relief when, five days after SB 855 became law.

The DMHC and CDI notified insurance companies and providers that the only criteria they could use going forward to determine length of stay and level of care were those of ASAM, the American Society of Addiction Medicine. But despite these reforms, most insurance companies continue to hire the very same doctors they've hired for years who use the same inappropriate reasons to deny coverage.

Across California, insurance companies prematurely send substance use disorder patients home early, disregarding the ASAM criteria, putting countless patients at risk of relapse, homelessness, and, in some tragic cases, even death. In November of 2021, Summit joined forces with several billing companies to track these denials across 38 facilities over the two years. Our results found that none of the approximately 80 external and internal doctors hired by insurance companies, primarily Anthem, to perform PeerToPeer reviews for addiction patients were ASAM accredited.

Nor did they base their decisions on ASAM criteria. Shockingly, the doctors most frequently assigned to review addiction cases in California have denial rates of 100%, 90%, 80%, 70%, and so on. Many of the worst deniers are the so called external doctors from Wisconsin based Preston Associates, followed by Anthem's internal doctors who uphold the press denials, followed by doctors from MSN.

In 2022, our local state Senator, Dave Cortese, authored SB 999 to Save lives and outlaw the practice of insurance companies using unqualified doctors to deny treatment determined necessary by ASAM. SB 999 also called for improved working conditions for PeerToPeer reviews, ending last minute scheduling of peer to peer reviews, eliminating the cut and paste denials. Devoid of patient specific information, the Bill was ultimately vetoed by the Governor.

In his veto message, the Governor stated the Bill was premature given the recent passage of SB 85, the regulations of which the DOI and DMHC were still finalizing. While waiting for these two agencies to act, our patients began submitting independent medical reviews IMRs to the DOI and DMHC to challenge the illegal denials. Remarkably, they won every case they fought, and Bloomberg News reported that 66% of all IMRs related to addiction and mental health filed after SB 85 became law, also overturned denials.

So I'd like to share one of many examples of summit patients who survived despite the denials. Patient number five is a 40 year old married business analytics manager with two small children. He'd been a problem drinker for 10 years. He came to treatment after being kicked out of his home by his wife. After 15 days, he was told to go home and attend outpatient by an external pressed psychiatrist with 100% denial rate, upheld by an Anthem geriatric psychiatrist with an 88% denial rate.

The patient said if I had left residential treatment early, I probably would have relapsed lost my job and my family. I know from experience that while I'm drinking, my mind stops responding to reason, even if it means getting arrested, stealing something, driving recklessly, injuring myself and others and making stupid decisions. In California, the future of mental health and addiction treatment centers is hanging in the balance, but we have the power to protect them.

We predict that if the final SB 855 regulations do not require use of qualified doctors currently practicing addiction medicine who use Asam criteria to determine length of stay and level of care, California's landmark Parity Bill will have no teeth, and substance use in mental health patients will again have no voice. And I just want to add that if you want to see more of what I can tell you, please go to www.dotfriendsofsb999.com. And there's a button on the upper right. Scroll down to Joan Testimonial.

Thank you. We'll now hear from Michelle Cabrera from the County Behavioral Health Directors Association.

Thank you, Mr. Chairman. Members. I am the Executive Director of the County Behavioral Health Directors Association of, California, and our Members are the leaders of the county behavioral health safety net throughout California's 58 counties. They are responsible for providing primarily medical specialty care to beneficiaries with significant mental health and substance use conditions throughout the lifespan.

However, for decades, counties have provided a broader safety net in the form of community based specialty behavioral health services to millions of Californians with private commercial insurance coverage who are either underserved or inappropriately served by their commercial plans, except to the extent that local resources are available. Counties have a stake in offering these broader safety net services because mental health and SUD conditions are the world's leading cause of disability and over half of all Californians have some form of private insurance.

Counties will serve these Members of the community when resources allow both to save lives in the immediate, but also to prevent their chronic conditions from progressing to the point of significant disability, which can lead to justice involvement, homelessness and premature mortality. As others have commented.

Early in 2022, following the passage of SB 855 landmarked legislation which you, chair, authored, DMHC did reach out to counties to better understand our agency's experiences with serving commercial plan beneficiaries as providers, but also as coordinators of specialty behavioral health services. CDBDA surveyed our Members and conducted focus groups and shared our members' experiences with state regulators to inform their rule-making processes.

Here's a sample of what we learned counties are serving a broad range of individuals with commercial insurance, primarily in the areas of crisis care, school based services and specialty services, both in mental health and substance use disorder programs. We end up touching these beneficiaries, and this goes to Senator Ashby's question for a variety of reasons.

First, the public has an expectation that certain behavioral health services, like crisis care will be there for them regardless of insurance status, and function with similar mechanisms for reimbursement to how physical health, emergency and crisis services function.

Second, plans have come to rely on counties as a backstop. Some of our state's largest, most well funded, sophisticated health plans directly refer their beneficiaries to our specialty programs such as full service partnerships funded under the Mental Health Services Act or first episode psychosis programs without the intention of paying for those services based on an expectation that counties will cover these treatments with MHSA and other funding sources. When counties could, they did.

However, they were overwhelmed with referrals from commercial plan beneficiaries in some cases and had to close off that access in order to ensure that MediCal beneficiaries remained the priority and moving forward. MHSA reforms will fundamentally change the nature of how our MHSA funds work and the availability of these services to individuals with commercial insurance. However, the reimbursement and regulatory structures to ensure payment are also simply not there today.

When we surveyed our Members, we found that counties billing commercial insurance plans often have their first claims routinely denied, regardless of the coverage those plans have or the codes that we used, with one commercial plan always denying claims submitted by the county, meaning 100% of the time for plans that did pay. Sometimes their practice was to pay the minimum rates, with counties needing to appeal to recoup sufficient reimbursement which ultimately required double the administrative workload.

Most counties simply do not have the workforce during this workforce crisis or the billing infrastructure necessary to chase down multiple appeals, and so they end up covering those unreimbursed claims through MHSA or Realignment. While the Legislature and the Administration have attempted to clean up reimbursement requirements included in AB 988 to remove the requirement that individuals meet medical necessity criteria for crisis services, counties are still today routinely denied reimbursement for crisis services to commercial beneficiaries.

County crisis services are today in high demand among these commercially insured beneficiaries. One local county reported that only about 20% to 25% of their mobile crisis calls are for medical. The remaining 75% to 80% are for our privately insured community Members who lack access to outpatient care that can prevent crisis and then later to the crisis services that they may need when they decompensate. County crisis services also go beyond mobile crisis.

I want to note and include crisis stabilization, psychiatric health facilities and inpatient services which are also routinely denied. Counties have also cited that block grants are used to fund substance use disorder residential treatment and while one county has been successful in getting in network with a commercial plan for these SUD services commented that commercial plans never reimburse for buprenorphine.

In addition, we have heard repeatedly from our beneficiaries with significant mental health conditions such as schizophrenia and others that their commercial insurance plans suggest to them directly that they drop their commercial insurance and become MediCal eligible so that they can access the more robust set of benefits that are available through our counties. This really shows that we have so much more work to do beyond parity.

And this goes to Senator Cortez's comments to improve coverage of life saving treatments that can assist individuals in preventing the worst outcomes. These include services such as first episode psychosis psychiatric health facilities and FSP services, but especially those that are designed to address the biosocial psychosocial nature of behavioral health.

In other words, field based and home based services are often denied on those basis, as are services delivered through non clinicians, such as peer support specialists, which can be far more effective, and insurance companies have a preference for physician and or licensed clinician delivered care. California has made significant progress in addressing the need for commercial plans to cover treatments such as ABA for autism, which has ensured that those with employer coverage are not relegated to the public safety net to live their best lives.

And the majority of county behavioral health agencies we surveyed, in summary, have attempted to Bill commercial insurance plans are rarely successful in Recouping, and really, at the end of the day, denial appears to be the default.

Our safety net will be given a new set of obligations if Proposition One is passed by the voters and assuming that the responsibility for contracting will come to county behavioral health plans, we will then need to build out new administrative capacity to chase down both contracts, as well as reimbursements for this out of network care. Coverage matters as much as parity in certain specialty services that are simply nonexistent for commercial plan beneficiaries.

And given the severe outcomes, including disability and premature mortality, as well as the cost shifting to the public sector, we believe it's important to continue to pursue broader coverage requirements to ensure that we live into the spirit of parity. Meaning that the coverage is as good for individuals with commercial coverage as it is for those with MediCal. Thank you for the opportunity to represent the perspective of county behavioral health, and I'm happy to take any questions.

Thank you very much, colleagues. Any questions for any of the Members of this panel? Senator Rubio.

Well, it's not a question. But as we move forward and I know that we're trying to figure out what the deficiencies are in terms of what's happening out in the field, but as people come up and present, I also want to just look at ourselves as a Legislature. What can we do to strengthen some of the deficiencies? By way of example, I think one of you stated that DMHC could take care of some complaints within five days, but yet they take months.

I know I had this experience with another Department last year that I worked with for about six months, and the rate approval and things like that were happening at a very slow pace. But after really diving deep, we really did come to the conclusion that they were lacking staff and support, and we were able to supplement some of the workforce. And so we're hopeful that that will move things forward.

But please, as we move forward with the conversation, I want to hear what is it that we can do on our side? Because it could be very legitimately that the capacity is not there. And if we're going to solve this problem, then we want to be helpful on this side to make sure that we provide the resources, the funding, whatever it is that we need to provide. But thank you for sharing that.

Senator Ashby.

I just want to thank you for walking through the Behavioral Health Services side of the equation and really more of a comment, but I noticed you talked about Prop one in there and I think we have to be really cautious that Prop one has a very finite focus, and it is to make sure that people have access to the behavioral, health, and addiction care that they need.

And if we don't want to throw everything onto Prop One and then it doesn't meet its goal. So it was interesting to hear you bring that up and mention it in that capacity. And also interesting to hear the perspective of sort of the county on trying to Bill. Obviously, there are many times I wanted to say, Tell me the name. Right.

But you can share that with us later and in a different venue if there are particular counties or entities that maybe we think are outliers in good ways or bad ways. Because maybe there are things we could learn from the one county That's being able to for example, maybe they should have a really good relationship with their provider or something. But there must be some trade secrets in there somewhere that we can still work on to bring greater success for more individuals across our state. But I really appreciate hearing that perspective from you.

Thank you, Senator. And if I may, the reason I referenced Proposition One is because there is a requirement included in that legislation that county behavioral health agencies seek to contract with all the commercial plans in their county. And so that will impose a new requirement on counties to attempt to be in network providers with those health plans.

And so to your point, yes, understanding the sort of tricks of how that one county was able to get in network will be important. And there is a lot of variation across plans. Even plans with the same brand name will have differences depending on where they're located in the state in terms of denial rates and the like.

I think in order to be successful this, we have to look beyond just counties to individual counties to stop treating counties like Silos. Because when you are even with Medi Cal, if you're certified through Sacramento and you walk 5 miles that way and you're in Yolo County, it's very difficult to get the approvals necessary from a separate county than the one that you're being seen.

So there are a lot of things that we need to work on here that are really just exchange of information but really are no fault of the patient themselves. And so we've got to find ways to streamline access to these resources, which is, I believe, Chair Wiener's point in the first place and Prop 1 may be the solution for some of those things. Certainly.

Chair Wiener.

Yes, Senator.

A couple questions. First one is for Ms. Borsten. Maybe you can clarify or explain the idea that as good and as powerful as 885 is that the guidelines, that the criteria may be set a little too narrow in terms of providing full access to folks who need it. Could you talk about that just a little more? I know you could probably write a volume of

I'm going to give you an extra, but

I just want to hear before we move away from the panel, what would be a solution? If we're going to be part of a solution, including you on the panel, what would we add on or how would we modify in any way the 885 approach to make sure some of these problems a couple of you have testified to don't happen?

I think that the peer to peer doctors who are asked to determine how many additional days of treatment a patient can have should be currently practicing addiction medicine. Otherwise, how do they know? And the fact that they so blatantly ignored the regulations put out five days after SB 855 became law is shocking to me. And it continues now it's three years. And some of them, none of them use ASAM criteria. They might mention it, but they don't use ASAM criteria.

I know that because we have ASAM doctors who spend a lot of time going through all these criteria, and then they just say, yeah, that person ought to be in treatment. But it's about money, isn't it? It's denied. So you need to have stronger you need to say it. You can't send a podiatrist to determine whether a stage four liver cancer patient needs more chemotherapy. And That's, in my opinion, I'm exaggerating, but it's essentially what they're doing, and they're being allowed to yeah--

If I can, I mean, it's probably not an exaggeration in a specialized world of medicine or healthcare, to say it more broadly. And this is healthcare that we're talking about. Ms. Cabrera, you talked about--Ms. Borsten was talking about peer to peer review of claims like utilization review. I think you were talking about peer to peer therapy at one point, correct me if I'm wrong.

It's stunning to me that, if I heard you correctly, that almost 100 years after the founding of AA, which is at a minimum, a peer to peer handoff post, maybe clinical work or psychiatric work, as is every other 12 step program I've seen, that that's not recognized. And it's not recognized that prior to 1935 or whenever that kind of therapy was founded, that there was a realization, the same realization we're talking about today, that you can't just send folks to a Doctor or a sanitarium, so to speak.

Which is what they were called then. Or to just clinical help, unless it works in some aspect of an addict communicating with another addict. Can you speak to that? And I only have one other question for her after this, Mr. Chair, which has to do with the justice system, but could you just talk about that a little more? Because I know you were time limited and you were moving quickly with your comments.

Thank you. Yes, I was referring to peer support specialists, and we have certification under Medicaid and now have a benefit in California, which counties are able to provide. The comment was based on when we asked about our attempts to Bill insurance plans. They will deny claims because certain claims are not delivered by physicians, or because they're delivered by waivered clinicians who are working towards licensure, for example.

And so essentially, these are folks who either are clinicians who are good enough for medical beneficiaries and to work in the county system with supervision, but determined not to meet adequate standards for commercial insurance plans, which have a bias towards physician directed care.

And that is fundamentally problematic in behavioral health because oftentimes what is most effective and what is most helpful to people is care that's delivered through paraprofessionals or through peer support specialists, for example. And in our case, they've got quite a bit of training and standards behind that. There's a scope of practice, et cetera. And so That's another kind of layer to some of the insurance denials that we think is merits looking at.

And it's particularly important with certain services like our mobile crisis services where peers might be delivering those services and therefore be denied by the commercial plans were it not for some of the protections that were included in AB 988 that allow for us to get reimbursement if they meet the Medicaid standard. So we need to look at more of those coverage kind of issues.

It sort of goes to a comment by Senator Rubio too, which is that there is just sort of a fundamental lack of expertise, I think both at commercial plans but also among our state regulators and I don't say this to disparage them. DMHC was great in that they brought in special consultants to assist them with working on the regulations to provide that behavioral health expertise.

But I think it's really important for us to be grounded in understanding our starting point which is that even among our state regulatory agencies and entities there's a need to build out a workforce that truly understands behavioral health. And when we try to submit claims for reimbursement we're seeing to the points of our colleagues here that the people reviewing those claims have no idea what they're looking at.

And I think that suggests to us that they're not getting a ton of requests for reimbursement outside of some of these discrete pockets of providers who are attempting to bill them. So their own networks maybe are not trying to bill for certain things. And the claims are either just totally unfamiliar to the people who are receiving them or the people who are receiving them don't have the training, education and background to understand what they're looking at. I think it's a little bit of both and but we have to try to peel back those layers and build in some better competencies across the board.

I appreciate that. Thank you. And the other question regarding the justice system and I asked this having been a county supervisor, Santa Clara County, and recognizing that you have some understanding of, I assume, cross systems, things that are going on in counties. But if it's an unfair question because it's a justice question, you don't feel you have to answer it. Both in the carceral system, jails, prisons and in our reentry systems, we're using programs that are basically what you just described.

But those systems are reentry centers. For example, reentry center in Santa Clara County has, in effect, its own expiration date. Right? The idea is to move people along so that they can become productive. Members of society. They're there two days after the release from prison under the old AB 109. They're entering into peer support programs and therapy, but then they're out.

How much of a problem is it in terms of recidivism or do we know for those folks, once they're out, to be having their claims denied? I got my job, I got my support of affordable housing. My job is providing me insurance, but now nobody's there to pay for my claims. I mean, do we know or is that something worth exploring further?

So in terms of the impact on individuals who are experiencing reentry from carceral settings, I can't speak to that as much because when I've asked our counties about the intersection with commercially insured individuals and incarceration for people with behavioral health conditions, it's often the case that by the time someone is bumping up against the justice system, they're already pretty far down the line in terms of the disease progression. Right. Whether it's mental health or SUD.

And so oftentimes those individuals, if they didn't qualify for MediCal, they do now. I think there's an element to this that I want to kind of unpack That's a bit upstream, though, which is something I didn't mention in my testimony. We learned, for example, that in the Central Valley where we provide school based access to school based services to all kids, regardless of insurance, in one of our counties, we have quite a number of kids who have job based coverage through their parents.

But the deductibles and copays are so high that those farm worker kid families cannot afford to pay for therapy out of pocket or do what they need to do to prevent them from getting into crisis in the first place, right. Or ending up involved with the justice system or whatever. And so even though they're commercially insured, we end up making up the difference to try to get that kid access to help.

And I think that goes back to this other point, which you've lifted up, which is that parity ensures that your behavioral health coverage is as bad as your physical health coverage. And your physical health coverage having high cost sharing might not be a big deal if your kid breaks their arm once every couple of years or, I don't know, hopefully every decade or not. But if you need therapy once a week or once a month, even that deductible that copay matters a lot more.

And so we don't often talk about the intensity and the duration That's required for behavioral health services. And I think that goes to some of the points that other folks have made as well. Right. And that is why the business behind this is really tough and it's going to be hard to turn around because of intensity and duration and just the wide range of needs that we have that are unmet currently.

Thank you. And I'll turn it back over to the chair but I don't know why it hadn't occurred to me, especially this is much work I've done on the youth justice side, that youth would be particularly vulnerable to this review system that we have. Thank you. Thank you, Mr. Chair.

Thank you. And just a bottom line in plain English, basically, there are members of the community who are commercially insured and they receive county mental health services. And then the health plans are not reimbursing the counties for providing those services. So effectively, we're seeing health plans dump their obligations to insure these patients onto taxpayers.

Currently, yes. And even with direct referrals into our programs with no expectation that they will pay. Correct.

Okay, thank you. And we've seen that in general, it's been an issue not just in mental health, but with taxpayers absorbing what health plans should be paying for for people who have commercial insurance. What you're saying is that as a workaround to avoid mental health parity, just have providers who are going to basically say that what is clearly appropriate care is actually not appropriate.

The providers or the insurance companies?

But it sounds like what you're saying is that the health plans have an incentive to have in network providers who are not going to say that what is appropriate care is actually appropriate in order.

Senator, I believe that in the scoreboard that we created over the two years, a lot of them were in network and also denied.

Right, but I'm just trying to make sure I understand what you were saying. You're saying there are providers I think you term that they're not qualified to provide, for example, substance.

The providers are, but the doctors that are sent to determine how many days of treatment someone needs--it has nothing to do with ASAM. It has to do with I don't know what, and they deny.

Okay. Are you saying the people who are employed by the health plans to review okay. So not the actual providers in network. Okay. And they are people who the health plans are employing reviewers who are not actually specialized in the area of substance use disorder treatment?

Some of who have been denying for a decade.

Okay. Thank you. Okay. Really appreciate our first panel. We'll now go to our second panel of policy experts. I'd like to invite up Dr. Emily Wood, who was the past chair of the California State Association of Psychiatrists Government Affairs Committee, Sheirin Ghoddoucy, senior legal counsel for the California Medical Association, Karen Larsen, the CEO of the Steinberg Institute, and Lauren Finke, who is the senior legislative advocate for the Kennedy Forum.

Thanks so much for having me. I'm a child, adolescent and adult psychiatrist, and I live and work in Los Angeles County, where I'm a supervising psychiatrist at the Los Angeles County Jail and have a very small private practice specializing in neurodevelopmental disorders. And I previously worked at the Los Angeles County Juvenile Halls. I'm here representing the California State Association of Psychiatrists and really want to say thank you to Senator Wiener and the Committee for inviting me to speak about this important issue.

Despite your efforts to legislate parity between mental and physical health treatment coverage, there remain major gaps. That's why we're here today. We continue to experience extremely high rates of prior authorization requirements and other hurdles in providing our patients with medications that have numerous studies demonstrating better outcomes. For example, long-acting injectable formulations of antipsychotic medications are absolutely the most effective treatment for psychotic spectrum disorders.

These medications are administered every one to six months and are associated with lower overall side effects when compared to their oral counterparts. Sadly, it is much easier for me to get long-acting injectable meds for my patients in the jail than for my patients in private practice. My colleagues at UCs and private hospitals and clinics report barrier after barrier to accessing these meds for their patients.

You can imagine the frustration experienced by an inpatient doctor arguing with a company that is both refusing to pay for the medication with the best chance of assuring stabilization and is denying coverage for further inpatient stabilization. We are struggling to get coverage for our novel and very effective treatments. Transcranial magnetic stimulation and ketamine can be revolutionary treatments for those suffering from medication-resistant depression or for individuals who do not want to take daily long term meds.

These treatments require some additional short term costs, but may dramatically improve the life and treatment courses for our patients. I am able to provide Esketamine treatment. When I offered this option to a patient with autism and chronic depression who I have been working with for many years, she was directed by her insurance to one of their approved programs. Of course, it took many weeks to get into the new program.

It was a long distance from the patient's home, and they had to go through multiple new patient assessments to establish care. Once treatment started, my patient reported abnormal side effects of the treatment. As I specialize in working with children and adults with autism and comorbid disorders, I have the expertise to parse their divergent experiences and change course to fit their specific needs.

But the program my patient was sent to was not so equipped. After all of that, they stopped the therapy after two or three sessions, and my patient felt more hopeless about her situation than before. The mental health carve-out system continues to encourage insurance companies to shirk payment by pointing fingers within different branches of their own institutions. When it was introduced, the carve-out system created a requirement for insurance companies to cover mental health care at all. Therefore, it was an early step towards parity.

We now face a situation where this system is severely limiting. For instance, while Medicare has created a comprehensive compensation model for the collaborative care model that involves billing through the primary care site, private insurance companies are behind the times because they separate the coverage for medical and mental health. Therefore, when a cost is not clearly one or the other, the company factions will deny payment on the grounds that the other one is responsible.

I am very excited about Prop. 1 and the passing of SB 43, and with these major steps forward, I foresee that publicly provided mental health services are likely to surpass those provided by private insurance in the coming years, and I hope that this Committee can work on that.

Thank you very much. We'll now hear from Sheirin Ghoddoucy. I'm sorry if I mispronounced your name.

This is on, correct? Good morning, Mr. Chair and Members of the Committee. Thank you for the opportunity to testify on this important issue. My name is Sheirin Ghoddoucy. I am senior legal counsel for the California Medical Association. Prior to joining CMA, I spent nearly 11 years regulating health insurance at the Department of Insurance, and one of my primary areas of expertise at the Department included implementing and enforcing mental health parity laws.

Before the enactment of the federal mental health parity law, health plans routinely limited access to treatment for mental health and substance use disorders through the use of draconian and arbitrary visit limits, benefit caps, exclusions, and high cost sharing. After the federal parity law took effect, state regulators gained powerful tools to implement parity in many of these areas, leading to the elimination of some of these inappropriate coverage limitations.

The tools in the federal parity law were less effective, however, when it came to utilization management, including medical necessity criteria where plans define when care is medically necessary and therefore covered by the plan. So, as regulators began to enforce parity in the more obvious areas affecting patient access, cost sharing, exclusions, visit limits, plans began increasingly applying those same draconian and arbitrary limitations through their utilization management practices, an area where federal parity standards were less clear and harder to enforce.

A federal lawsuit in 2019 highlighted the practice of plans imposing their own bespoke medical necessity criteria to deny plans critically needed mental health treatment. These criteria were designed primarily with claims costs, not patient care in mind, and were often substantially narrower than or at odds with the generally accepted standards of care. That case, Wit v. United Behavioral Health, highlighted a gap in California law which, at the time, lacked proper standards for plans' medical necessity criteria.

While the Affordable Care Act and state law required plans to cover medically necessary care for mental health and substance use disorders, plans were essentially free to dictate when that care was medically necessary. A judgment that should be left to experienced physicians and Clinicians practicing in that area of medicine, not health plans and insurance companies.

That case inspired one of the reforms enacted by SB 855 in 2020 an expressed requirement that health plans use generally accepted standards of care to determine medical necessity for mental health and substance use disorder treatment. Importantly, SB 855 also strengthened plans obligations to provide timely access and, particularly important to our physician members, adequate networks. And it gave state regulators powerful tools to enforce compliance. The protections of SB 85 are vital for patients at a vulnerable time.

That's why it's crucial that state regulators implement the law in a way that meaningfully ensures patients actually receive the benefits of SB 855's protections. As our state regulators work through the rule-making process, they must ensure the standards they adopt result in real compliance. This means adopting legal requirements that ensure plants adhere to the appropriate standards of care, so that compliance occurs on the front end and doesn't put the burden on patients and their providers to navigate an onerous complaint and appeals process.

Consumer complaints and independent medical review should not be the first line mechanism for regulatory oversight. They should be a measure of last resort. This also means adopting clear steps for how patients may access out of network care and clarifying plans obligations in the process so that patients and providers aren't left holding the bag. This includes requiring plans to inform patients about the right to obtain out of network care in the places enrollees are most likely to see them--provider directories--and to reimburse non-contracted providers appropriately.

And when patients do get out of network care under this law, the regulations should safeguard patients from premature transitions of care by their health plan before their course of treatment is completed. Disruptions to medical treatment can have serious consequences for patient recovery. This is especially true for mental health and substance use disorders. Finally, Californians won't have true access to care until plans provide robust networks with providers and facilities that are qualified and actually available to treat patients when they need it.

Out of network access is an important stopgap measure. But a lack of network providers often deters patients from seeking care in the first place and has broader reaching effects on the healthcare delivery system long term. SB 855 made significant progress in mental health coverage standards. It's imperative that state regulators implement the law in a way that ensures patients actually benefit from these critical protections. Thank you.

Thank you very much. We'll now hear from Karen Larsen from the Steinberg Institute.

Thank you. Thank you so much for holding this important hearing and for inviting me to join you today. My name is Karen Larsen. I'm the CEO for the Steinberg Institute. We're a nonprofit Public Policy Institute dedicated to transforming Californian's mental health and substance use care systems. We were also proud to partner with Senator Wiener and the Kennedy Forum on SB 855. But passing this Bill was only a piece of ensuring access to affordable, high quality care. Our implementation must meet our aspirations.

Any law is only as strong as our ability to enforce it. In the 2021 budget, DMHC received $2.7 million to conduct behavioral health investigations of all full-service commercial health plans, to evaluate their compliance with parity, and to assess whether their enrollees had consistent access to medically necessary behavioral health services. The Legislature clearly intended that DMHC thoroughly evaluate parity compliance as a part of their investigations when it approved this budget. Right now, their compliance evaluations are fundamentally flawed.

Here's why: In addition to SB 855, the federal parity law, the Mental Health Parity and Addiction Equity Act, is one of the strongest tools available for state regulators. This tool, referenced in our state law, requires commercial health plans to conduct detailed parity-compliance analyses on treatment limitations in each classification of care. These analyses often show a failure to comply with common parity violations, such as limitations on autism services, limitations on medications for opioid use disorders, and prior authorization requirements.

In the batch of compliance reports that were released yesterday, the agency did not include this analysis, saying it was too complicated. This explanation doesn't hold water. The plans are already required to complete these analyses for the federal government, and all DMHC has to do is release them.

In Illinois and New York, regulators looked at this analysis and found widespread non compliance across all types of services amongst plans. If other states can do it, why can't we? Public transparency is a critical piece of enforcement. It is essential that any results from these federal parity analyses be made public as a part of behavioral health investigations.

We further assert that failure to analyze compliance with federal parity is in direct opposition to the Legislature's intent when it improves the department's budget change proposal in the 2021 budget. The DMHC's failure to release the results of the Parity compliance reviews as a part of these public behavioral health investigations is deeply disturbing. We understand that fulfilling the promise of federal and state parity are hard work, and we expect nothing less for Californians.

Last week, the DMHC announced a record settlement agreement after an extensive investigation of Kaiser Permanente's behavioral health practices. We see this as an important precedent and believe that continued vigilance is required, as these practices are not just reserved to Kaiser and are hurting Californians on other plans. We call upon DMHC to release complete summaries of all reviews conducted of plan's federal parity compliance analyses when it releases the results of the behavioral health investigations.

We appreciate today's discussion and would welcome the opportunity to discuss how the DMHC is incorporating these reviews of plan's federal parity compliance into their behavioral health investigations. Thank you to Senator Wiener, for your partnership to advance parity in California, and to the Committee, for your collective efforts to improve the mental health of all Californians.

Thank you very much. Now, Lauren Finke from the Kennedy Forum.

Thank you, Chair Wiener and Members of this Committee for today's invitation and for your leadership on this issue. My name is Lauren Finke. I'm a policy Director with the Kennedy Forum. We co-sponsored SB 855 in 2020, and alongside a coalition of over 20 active advocates representing patients, their families and providers, have regularly met with the regulatory agencies detailing outstanding access issues to ensure health plans are following the requirements of SB 855 and the Federal Parity Act.

The Legislature has heard seemingly countless stories from patients, their families and providers concerning wrongful denials for medically necessary mental health and addiction care. On paper, California has among the strongest mental health access laws in the country. But the unacceptable reality is that there are wide gaps between what is the law and what is experienced by Californians seeking care. In the midst of an ongoing mental health and addiction crisis, health plans continue to inappropriately limit access to care.

The first critical step regulators must take is to issue strong and comprehensive SB 855 regulations as soon as possible. SB 855 was signed into law more than three years ago. While health plans have been required to follow the statutory requirements of the law since then, every day without regulations is a day in which plans are not consistently following components of existing law. Banking on a lack of guidance from the Department, plans utilization review practices are of top concern.

While DMHC's proposed rules are clear that nonprofit, professional association criteria are the only criteria allowed, we believe the practice of using non-compliant criteria to deny care continues to be widespread. Only last week, DMHC's settlement with Kaiser found that although Kaiser represented that it used required criteria, of the 100 files reviewed, zero showed evidence that the required criteria had been used. Regulators simply cannot take health plan's word that they are complying with parity laws. Crisis services also remain an urgent concern.

While CDI's draft language includes crisis services, DMHC's proposed regulations are silent. SB 855 requires coverage of medically necessary care for all mental health and substance use disorders. This unequivocally includes emergencies and crisis services, which are routinely denied by health plans. These services are critical to saving lives. Plans are also failing to arrange out of network services after they fail to arrange treatment from an in-network provider within time and distance standards.

We believe DMHC is not appropriately enforcing this requirement by allowing plans to interrupt ongoing courses of treatment and forcing patients to return to an in-network provider even when it is inconsistent with the standard of care or is being done for the economic benefit of the plan. CDI's drafted language prohibits this practice outright. It is no coincidence that SB 855 was frequently cited in last week's settlement with Kaiser. The settlement makes it ever clear the critical role that investigations can play in assessing health plan compliance.

Regulators should conduct thorough investigations of every health plan and include detailed reviews of plans compliance with both state and federal laws. Unfortunately, just yesterday, DMHC released findings from its first phase of flawed behavioral health investigations. In it, DMHC stated that it did not review non-quantitative treatment limitations, or NQTLs, which is where nearly all parity violations exist. Numerous other states have done such reviews and found widespread non-compliance. Yet DMHC states such reviews are complex and would have taken significant time to determine plan compliance.

Californians regularly face complex coverage barriers and don't have the luxury of more time while regulators determine compliance. Without strong and continued oversight from regulators, Californians will continue to experience illegal barriers and delays of care. The recent settlement findings are very similar to those we saw in DMHC's 2017 Kaiser settlement. Investigations and subsequent settlements must lead to practice change, and DMHC should make every effort to do so.

It is also critical that DMHC ensure all findings are remedied and individual enrollees that were inappropriately denied access to care are made whole. Given California's ongoing mental health and addiction crisis, it is as critical as ever that regulators keep up this momentum to ensure that Californians get the care to which they are entitled. Thank you.

Thank you very much. Colleagues, any questions for this panel? Senator Cortese.

Very much appreciate all the testimony, and it seems very consistent, actually, across the panel. I don't know if it seems that way to you, but if not, you can correct me on that. I appreciate sort of the emphasis on, if I can put it this way, kind of in the vernacular, "hurry up and get the regulations done," because there's this problem that's happening without them that we've all been talking about today. Is there another option, a quicker option?

And I'm not asking you to staff us on legislative options, but it seems to me that when agencies are slow in the rule-making process, the Legislature can come in and speed things up by basically taking its own action. Do you think the regulations that need to be in place are too complex for that? I mentioned SB 999 earlier, is maybe a stab at taking a portion of what needs to be done.

Listening to all of you, it sounds like a more thorough rule-making process needs to just get done. But again, we're the Legislature, and I'm just curious as to any kind of specific recommendations. If you had the ability to author a Bill like we do, and you could move things along more quickly than they're moving right now, what would you do? And anyone who feels like they'd like to respond to that, I'd like to hear.

I'm happy to start. SB 855, I think for many of us, that we co-sponsor with the Steinberg Institute, was really an ideal parity Bill. It has so much in it in terms of consumer protections. And this has been a multi-year process, kind of waiting for the departments and engaging with the departments, really. And we do appreciate that engagement that they've had with us to really have the most comprehensive set of regulations possible.

I think in my testimony, I noted a couple of areas where we're really hoping for that to be as detailed as possible so that the burden isn't placed on consumers to fight denials, but it's just sort of on the front end that they're getting that care. And I will note that the Department has until the end of this year, so only a couple of months from now to issue those regulations.

And so what we're really hoping for is to push the most comprehensive set of recommendations as possible and regulations for health plans to follow across a large number of categories that SB 855 pretty painstakingly detailed out. And so I think it's really important that we continue to ask for those things and get those as soon as possible.

Every day without those regulations is really days in which we see and hear from providers and from patients that they just aren't getting that care and their engagement with the departments has been tough for them. And That's what we've been continuing to hear.

And again, just to clarify, first of all, I'm a big supporter of Senate Bill 855. I agree that it's the right prescription, if you will, for going forward a roadmap. Obviously, the rule-making is supposed to sort of build on the Bill itself, right? But it is possible for us to work around rule-making without ceasing the rule-making process or stopping the rule-making process. So I understand if the rule-making is done and it's adequate by the end of the year, then we shouldn't have to do that.

Our legislative session really doesn't pick up until after then. But if it's delayed or it's inadequate, I guess where I'm going is, does the Legislature just come in and say, without prejudicing any further rule-making process, these are the elements that need to happen right now, would be in effect calendar year 2024? Maybe I'm putting people in a bad spot to respond to that. I do appreciate your response, though. It's both a comment and a question, I guess.

Senator, I would be happy to respond, and I can't tell if this is on. I think it's on now. I do think that anytime the Legislature puts really specific requirements in legislation, that will ease the implementation and in some cases obviate the need for rulemaking. Rulemaking is done to clarify or make specific a statutory requirement. And SB 85 does tackle some very complex areas that can be very technical.

So I think that SB 855 did go very far in putting in very specific requirements. But anytime a Bill can be more specific on a particular requirement and put in those parameters and guardrails, it will help facilitate rule-making or maybe even avoid the need for one.

Or augmented.

Or augmented. Absolutely.

Thank you. Senator Rubio?

Thank you, Mr. Chair. And forgive me for not knowing this, but I know we talked about the rule-making and regulations being completed at the end of this year. And as I believe my colleague here stated, then we have to see what that looks like. Can someone share, as we're going through the rule-making process, just a little bit of how that happens? Is there like, input from providers, yourselves? Can you give me a little bit of sense of who's doing the rule-making? Is there input? I guess that's the question I'm getting to.

I would be happy to answer that. There are formal public comment periods that are provided in statute in the government code. And so that is something that will happen in the course of regular rule-makings that would be truncated if it's an emergency rule-making, not something that's at issue here. But yes, there will be and have been public comment periods anytime an agency puts out proposed rules.

Okay, thank you.

Thank you. Just a few questions. First of all, and we'll know senior folks from DMHC and CDI here, but for the fact that the final regulation has not been adopted by DMHC, can you just put that in context? Is that usual for it to take that long? I know rule-makings can take a long time, but sometimes they can be quick. Can you just sort of put that in context?

Yeah, I mean, certainly rule-making has been known to take a long time. I would, I think, just reiterate how dire this is for patients. We keep hearing these stories. I know that this is not the first time you've all sat here and listened to folks tell you stories and people in your districts are telling you stories. It really is sort of a crisis situation.

And I think the need to have really detailed regulations, maybe to speak to Senator Rubio's question earlier, too, in the same way is we have been with a group of 20 plus advocates sort of working together to submit detailed letters to the Department over the last few years on the issues we're seeing and what we feel are clear, detailed solutions for how to solve those issues through the regulations.

So the last comment and the last letter went out just recently and has made some progress from the first time we saw it. So I think we've been making progress and then seeing more protections being put in. But it has been a lengthy process.

And then you talked about non quantitative treatment limitations, NQTLs, just to be clear, that is things like utilization, management, and other ways that health plans sometimes employ to effectively deny coverage, even though even if it's not an explicit, like, blanket denial of coverage, it's sort of other tools that the plan sometimes use to make it impossible to actually access care?

Yeah, That's right. Non quantitative treatment patients are where the majority of parity violations are happening, and the quantitative treatment limitations are the other side of that and that they're a little bit easier to regulate because they're more straightforward. So it is more complex in terms of regulating.

And so DMHC is saying that it would just be too time-intensive. And I know I'll ask the Director when she's up at table, but just it's too time intensive to sort of analyze that.

Yesterday's Behavioral Health Investigation summary had sort of they basically said as much, that it was too complex and would take quite a bit of time and effort. And that was in yesterday's summary. I don't know if colleagues.

But other states have analyzed the NQTLs for the different plans.

Yes. So the federal government has also, in two different reports, recently found sort of widespread non-compliance with the NQTLs. And I think, as Karen mentioned just earlier, New York and Illinois have issued a large amount of fines and found widespread non-compliance, pretty universal compliance along many of their state plans. So other states have done it and have used those parity compliance analyses effectively.

Great, thank you.

May I just ask just a request, if I may. You said that you provided a letter with clear details on solutions. Can we get a copy of that? Would that be okay?

Absolutely.

Thank you.

Okay.

I just wanted to add in from the provider side is that the NQTLs are the bane of our existence, right? Because we can't figure out what they are for each insurance company, for each patient. They're completely different. So not only does it lead us to have these very difficult regulations that are holding up the patient care, but we have to, the only way we can get through them is sort of by trial and error. And that's really a struggle.

Thank you. Okay, well, thank you to our panel. We'll now proceed to our third panel, which are the agencies or departments. We have Director Watanabe from Department of Managed Care. We're appreciative of Director being here. And Stesha Hodges, who's the Assistant Chief Counsel at the Department of Insurance.

Thank you for joining us. Appreciate it. And we'll start with the Director's on. The agenda first, but I'm happy to. Go with I'm sorry, we'll start with CDI first. Okay.

Good morning, Mr. Chair and Members. I am Stasha Hodges, and my pronouns. Are she, her, her. I'm Assistant Chief Counsel at Chief of Insurance Commissioner Ricardo Lara's Health Equity and Access Office at the California Department of Insurance. Commissioner Lara established this office to ensure continuity and coordination of his major health initiatives, focusing on health equity coverage and accessibility, especially for historically disadvantaged and underserved communities. First, Commissioner Lara would like to thank the chair and Members for convening this hearing to bring more attention to problems with coverage of mental health and substance disuse disorder care.

And would like to thank Chair Wiener for authoring SB 85 in 2020, a chapter Bill that we believe to be instrumental in strengthening California's mental health parity law. This morning, I will discuss efforts that the Department has undertaken to enforce SB 85 and the Federal Mental Health Parity and Addiction Equity Act or Federal Act, including some areas where we have found noncompliant by health insurers that we regulate. I will conclude by identifying areas where additional tools such as legislation could be explored.

In 2021, the Department issued a consumer fact sheet. And in 2020, an Insurer notice on compliance with SB 855. The notice specifies that the Nonprofit Professional Association guideline that insurers must use for substance use disorder level of care placement is the American Society of Addiction Medicine or Asam criteria, and for mental health conditions, it is the Level of Care Utilization System or locust family of instruments.

Additionally, health insurers must provide benefits for gender dysphoria and conduct utilization review consistent with the World Professional Association of Transgender Health or WPAs Standards of Care. In 2022, pursuant to SB 855, the Department noticed a proposed regulation text in October and held a public workshop in November.

We have made changes to the proposed text in response to stakeholder comments received in connection with that workshop, and we have also amended in response to AB 988, which was signed by the Governor in 2022 by integrating rules for covering behavioral health crisis services into the regulation. Currently, the proposed text is in final form for noticing and the rulemaking package is in process. We expect to notice the regulation the first quarter of next year.

In the meantime, I want to highlight a few points in our proposed regulation. Under the regulation, insurers must exclusively use guidelines developed by nonprofit professional associations for the relevant clinical specialty. If nonprofit guidelines do not exist, then insurers must follow currently generally accepted standards of mental health and Substance use Disorder or Mhsud care.

We intend to adopt standards for the qualifications of providers who conduct utilization review of Mhsud benefits to ensure they have appropriate training and expertise to make medical necessity determinations for substance use disorders or Suds. Providers who issue adverse benefit determination for intensive, outpatient residential and inpatient Sud care must be actively practicing physicians who are board certified specialists in addiction care.

The regulation specifies that any non quantitative treatment limitation or Nqtl related to utilization review that an insurer imposes on MH said benefits must comply with the Federal Act. In terms of the Department's enforcement efforts, we have reviewed health insurance policies as well as policies and procedures for utilization review for compliance with SB 855 and the Federal Act. As part of this, we have enforced the Federal Act's rule on Nqtls regarding utilization management of MHS benefits since 2014.

In those reviews, we have found that health insurers cannot demonstrate that they comply with the Federal Act with regard to prior authorization for outpatient MHS benefits, and therefore, they cannot apply that Nqtl. Since 2016, the Department has reviewed prescription drug formularies for clinically appropriate drug coverage and utilization management restrictions for Mhsud conditions. This review includes many drug classes, including antidepressants, antipsychotics for schizophrenia and medication assisted treatment and reversal drugs for opioid use disorder.

In response to SB 855, the Department incorporated a specific review of geographic network Adequacy for facilities that provide adult residential Sud treatment as well as outpatient narcotic treatment programs for opioid use disorder. We also review for geographic access to inpatient MH Sud facilities and nine provider specialties through assisting consumers with complaints. We have recently cited insurers for violation of SB 85's requirement to arrange out of network coverage when care is unavailable from network providers within the Department's geographic and timely access standards.

One of these cases is the subject of an ongoing enforcement action, and the Department's Market Conduct Division is currently conducting our first health insurer exam that includes a review for compliance of SB 855. While the exam results are not yet public, we have found one instance of wrongful denial of Sud treatment based upon medical necessity and another instance of enforcement of a benefit exclusion that is inconsistent with SB 855.

I'd also like to highlight areas where the Department could use additional tools to protect consumers. Our utilization management statute was originally enacted in 1999, and it was updated to comply with the federal Affordable Care Act in only one respect in 2010. We recommend further legal authority on adverse benefit determinations and greediness handlings that aligns with the Affordable Care Act. The Department also believes specific administrative, enforcement and monetary penalty authority for all health statutes, not just SB 855, would be beneficial to help protect consumers.

We have made great strides in the almost decade since the Affordable Care Act and was fully implemented to expand the Federal Act to all market segments. And SB 855 built upon these requirements by making California's MH Sud parity law the strongest in the nation. Thank you again for inviting me here to talk today on behalf of Commissioner Lara.

Here with me, I have two attorneys, Jessica Ryan and Katie Fisher, who also work in my office on mental parity issues over the last 10 years, to assist me with any questions that you may have. Thank you.

Thank you so much. Now, Director

Hi Good morning. Good afternoon. Yet? I don't know. Morning. We'll go with morning. Senator Wiener, Members of the Select Committee. I'm Mary Watanabi. I'm the Director of the Department of Managed Healthcare. Before I get started, I just want to take a moment to really express my appreciation for the opportunity to be here to speak about the important work that the Department does. Well, I know everybody's framing this. As I'm in the hot seat, I'm happy to be here.

This is an issue that is deeply important and personal to me. It's the one issue, if I'm going to dig in on anything, it's this. So it's an honor to be here. Senator Wiener, I also just want to thank you for your leadership and partnership with the Department on the Implementation activities related to this landmark mental health parity statute.

As you're going to hear today, this is one of my highest priorities as the Director, and I want to make sure that all health plan enrollees under our jurisdiction have access to appropriate behavioral health services when they need them. With that, the Department's mission is to protect consumers health care rights and ensure a stable health care delivery system. If you don't know who we are, we license and regulate 143 health plans that provide health care coverage to almost 30 million Californians.

We regulate 96% of state regulated commercial and government health plan enrollment in the state. Authored by Senator Wiener and signed in law by Governor Newsom, SB 855 substantially overhauled California's mental health parity law, both in terms of coverage and access to services. I'm going to skip the overview of all that it did, because I think you've heard a lot about that. I do.

Just want to note that while SB 855 made significant changes to health plan coverage of behavioral services, it did preserve a health plan's ability to impose common managed care tools, such as what you've heard today, the requirements for prior authorization. The DMHC has taken a number of steps to implement SB 855 since its enactment in 2020. We've issued two all plan letters to the health plans requiring them to demonstrate compliance with SB 855.

They were required to submit updated evidence of coverage documents, disclosure documents, policies and procedures, as well as proof of contractual arrangements with the nonprofit associations demonstrating compliance with SB 855. The DMHC has also created a Consumer Fact Sheet to help health plan enrollees understand the changes under SB 855. That fact sheet is publicly available on our website and can be downloaded for ease of access.

Additionally, as you've heard quite a bit today, we're in the process of promulgating regulations related to the implementation of SB 855, which will provide greater specificity and support our enforcement of existing law. The DMHC initiated the formal rulemaking process in early 2023. The final comment period ended earlier this month and we are currently reviewing the most recent comments. We anticipate the regulation will go to the Office of Administrative Law in the first half of November.

We're hoping that all goes well and it will take effect on April 1 of 2024. The DMHC monitors compliance with SB 855 in several ways. If you've heard me testify on the Department's activities, these will not be new to you. We have our routine medical surveys which we conduct. Really, this is an audit of health plan operations every three years.

While routine medical surveys currently include a review of access to behavioral health services, once the SB 855 regulations are final, the surveys will expand significantly to include all of the additional detail and specifications in the regulation. This will include a review of how plans are authorizing services and using the nonprofit criteria, and also, most importantly, how they're arranging for out of network services when services are not available in network within the timely and Geographic Access standards.

The DMHC also conducts nonroutine surveys when specific issues or problems require a focused review of a health blend's operations. As was noted yesterday, we announced our first phase of the behavioral health investigations in fiscal year 2021. We received authority and funding to conduct investigations to assess commercial plans, delivery of mental health and substance use disorder services. The investigations were really focused on the consumer experience and identifying and evaluating barriers experienced by enrollees in obtaining behavioral health services and unveiling provider challenges.

We are conducting investigations of five commercial health plans a year, and it is possible that through these investigations, we will also see violations of SB 855. Since SB 855 took effect, the DMHC help center has seen a 28% decrease in the number of behavioral health independent medical reviews, which likely means there are fewer denials related to medical necessity. However, we have seen an increase in what we call consumer standard complaints.

This means these are other issues enrollees are having that are not medical necessity denials or denials related to experimental or investigational issues. Our behavioral health standard complaints concerning benefits or coverage increased by 16%. Probably most significantly, the complaints related to access to care increased by nearly 100% in the last year. We will continue to monitor help center complaints and may conduct a non routine survey or take enforcement action if we find patterns of non compliance.

As you are likely aware, last week we announced a historic settlement agreement with Kaiser to make significant changes to the plan's delivery of behavioral health services. The settlement agreement includes a $50 million administrative penalty and requires Kaiser to take corrective action to address the deficiencies in the plan's delivery of behavioral health care to enrollees.

Additionally, Kaiser has pledged to make significant investments totaling 150,000,000 over five years into innovative programs to improve the delivery of behavioral health services for all Californians beyond Kaiser's existing obligations under the law. The settlement agreement is the result of the DMHC's non routine survey of Kaiser's behavioral health delivery system and an enforcement action, both that were initiated last year.

The settlement agreement includes several findings related to Kaiser's compliance with SB 855, including that the plan was not consistently arranging for out of network appointments when they could not provide timely access to an appointment in network. The plan was not documenting the use of nonprofit clinical criteria in the enrollees medical records, and the plan failed to demonstrate it conducted reliability testing to ensure consistency in how those utilization review decisions were made. I do want to mention one issue that we are seeing at the help center.

While SB 855 added powerful consumer protections to ensure health plan enrollees have timely access to medically necessary behavioral health services, unfortunately, we are seeing an instant where providers appear to be using the requirements of SB 855 to circumvent the requirement that enrollees must first attempt to obtain a timely appointment from an in network provider.

In addition, these providers are using our independent medical review and complaint process to demand that the plan authorize services out of network and pay Bill charges that are more than four times the market rate. If the DMHC's review determines the plan is not required to pay for the out of network charges, in some cases, the provider is attempting to balance Bill the enrollee. To date, the DMHC help center has helped consumers avoid $4.2 million related to these balance billing practices.

These are very challenging cases because the provider often tells the consumers not to talk to the DMHC. In addition, the provider refuses to provide medical records to the health plan and in some instances, even to the Department, which impedes our ability to determine whether the services were medically necessary and for the DMHC to determine whether the plan complied with SB 855. I just want to reiterate that the protections of SB 855 are invaluable in helping to ensure enrollees receive timely and appropriate behavioral health services.

It is unfortunate that a small subset of providers appear to be abusing SB 855 protections, possibly to the detriment of these very vulnerable patients. These practices can also lead to a significant increase in cost to our healthcare system. For many of us that just went through open enrollment, we're well aware of the increases that are coming to our premiums next year. We're seeing double digit premium increases for many consumers, so I'm acutely aware of the potential impact of this to the cost of the healthcare system.

In conclusion, I would like to encourage anyone who is having a problem accessing behavioral health services to contact our help center. Our phone number is 1888-466-2219 or HealthHelp CA gov. This really allows us to help individual consumers get the care they need and deserve.

In addition to providing valuable information to the Department about where plans may not be complying with the law, it also informs the other work we do, including some of the activities I cited earlier, such as our routine and non routine surveys and our behavioral health investigations. With that, I'm sure you have lots of questions. I'll pause and see if you have anything for me.

Thank you, Director. I do have a few questions. Okay. I appreciate you being here, and it's a hot seat in a good way, right?

I'm happy to be in the hot seat.

I think we're all trying to row in the same direction, and I know the Department is a challenging job. So, a few questions. First of all, when do you anticipate that the final regulation will be adopted?

So we're hoping it will go over to the Office of Administrative Law here in the next couple of weeks. We are on a clock. If you're familiar with the regulation process, we have about a year to get it finalized. We're hoping that goes smoothly and it'll be in effect April 1 of 2024. Okay.

And can you tell me just at a General level, do you think that health plans right now are in compliance with SB 85?

I sure hope so. Or with state and federal yeah, with Parity, maybe. One of the things let me talk a little bit about parity. I think when I hear parity, there's always some confusion. We have the state Parity, which SB 855 significantly overhauled. We have the federal parity requirements, which we call Mapia. There was recently new federal guidance around nonaquatitated treatment limits. Specifically, the Department did a comprehensive review of federal parity requirements back in 2014, I believe. We did surveys to verify compliance.

So we have been looking at federal parity compliance for a very long time. I know there were some other states that were cited as being ahead of us. That's actually not true. As we've talked to some of these other states, they're actually doing a review That's very similar to what we did back in 2014 to 2017. These new requirements that came out and I'm forgetting the Consolidated Appropriation Act. Thank you. Okay.

There's an acronym for that, but this is guidance that came out actually after SB 855. So this is, I think, 2021. And that is the piece that in response to some of the stakeholder feedback we initially were going to include in our behavioral health investigations. We try very hard to be responsive to our stakeholders. And I'll acknowledge this is one of those where I think if we had paused and maybe looked more into what that was going to require, it is a very complex review.

This is not just plan saying, yes, I'm meeting all the requirements and our policies and procedures, our prior authorization requirements for behavioral health are not more stringent than what we do on the medical surgical side. This is filing both their behavioral health policies and procedures and their medical surgical policies and procedures and doing what I call the new math that our kids are doing showing their work, they're actually showing how they came to the conclusion that they're in compliance.

Just to give you some sense of this, our template that we're going to ask to have plans fill out with a minimal amount of instructions is over 70 pages. They will need to fill that in with a narrative explanation of showing their work. They will have to file those policies and procedures with us, and we will do that review.

Part of why we removed these from the behavioral health investigations is the intent of the behavioral health investigations was to really say we have some of the strongest protections in California. We've done everything in law that we could possibly think of to date. Right. I think there's more in the works, but what I hear and what I have experienced is it is too hard. If you are in crisis, you cannot call 50 people on a provider directory. You cannot navigate a bunch of websites.

You're going to make one call and then you're going to the emergency room. This is why or to our county systems. What we really wanted to understand is, despite all these strong consumer protections, what are the other barriers? If you read our behavioral investigation report, I think what I thought we would see is a lot more barriers, things we may need to shore up in the law.

What we saw were a lot of the policies and procedures say they're going to do X, and in practice we're seeing Y. Some of these things that appeared to be barriers, we actually feel they fall squarely into a violation of the law. So again, that comprehensive. It is a complex review of Nqtl compliance. Makes more sense for us to have a dedicated team of attorneys really digging in to look at that.

Just a reminder, our behavioral health investigations are going to span probably five to six years. We've added more plans. That's a long time to wait for a parity compliance review. We're going to start with the first five large commercial plans, which cover about 95% of the state. Our goal with these reviews is not just to say plans, you didn't get it right because this is too complicated.

It's to work with them, to bring them into compliance and actually verify that those policies and those procedures are compliant. That was a long explanation. I know.

Yeah. I appreciate I mean, in terms of compliance, I'll be honest, from what we hear on the ground, it seems like there is pretty widespread non compliance, and I'm sure the truth is probably somewhere in between. But I think there is a problem, and I just want to stress the importance, which I know you agree with, of robust enforcement. And what happened with Kaiser was great, and I hope that that can be a template for other problem situations.

So in terms of the Nqtls, what is the exact plan for that. Are you committing to doing that analysis?

Sure, yeah. Just to be clear, we didn't stop doing Parity compliance review. It is something we did back in 2014 to 2017 and then incorporated into everything that we do, including when plans come to us for a new Licensure, when they hire a new sub delegate, someone they're contracting with, they make changes. We've been doing those reviews ever since. So we are going to start this I'm going to call it a non quantitative treatment limit compliance project.

We will be issuing guidance to the plans here probably in the next maybe month or two. Again, we're starting with the five largest plans, and so that work will go on into the coming year. Just to be very clear, we got some somewhat limited resources as part of the behavioral health investigations to do this work because that was our initial plan. Those resources are moving to do this compliance project. So we're still doing the work.

We're just going to do it as a very focused project rather than the behavioral health investigations because we want those to move quickly to really identify those barriers.

Will those reviews be made public? Because I think one of the concerns was that the Parity compliance reviews were not necessarily released.

Yeah, we will be sharing, and we have already shared a lot of our doc, our templates and our instructions for that Parity review. Anything that the plans submit to us are disclosable. Someone can request anything. We have now through a Public Records Act request. We're thinking through how we can kind of share the outcome of those. But again, the filings are available. The plans have the ability to request a confidentiality of some documents. There may be some things that related to reimbursement that wouldn't be disclosable.

For the most part, all of those can be shared and disclosed to anybody who wants them.

Okay, but the Nqtl reviews that you're going to do, those will be public?

Yes. So the plan filings can be disclosed. Someone can request those. What we're thinking about is how we share our review and the outcomes of those. They could result in potentially an enforcement referral. But I think we're trying to think about how we summarize our review and the outcomes. But again, if someone wants to see what the plans are filing, they could request both.

But in terms of the department's own review, will that be public?

So the outcomes? Yes. I think our internal workings of what our review looks like, we're just trying to think about how we could share that in a succinct way.

Yeah, I do think that that transparency is important so that the public can know what's happening because otherwise it becomes a little bit anecdotal. So I want to encourage that transparency. In terms of some of the earlier testimony we heard from the county behavioral health directors that you had commercially insured patients who were seeking services from the counties, and then the counties were being denied coverage from the health plans. Are you the Department familiar with that issue, and can you just talk to me about it?

Yeah. No. I've worked at Healthcare Now for 22 years, and I will say this is one of those issues that I've heard it personally. If you have a family Member with a serious mental illness, figure out how to get into Medi Cal. It's something that we've had on many discussions since in my time at the Department, and I think you heard some good examples of why that is. Peers, family support, in home support, intense care management is a big one for me.

Some of those are not required for commercial plans to cover peers is a really good example. We would need a statutory change to require commercial health plans to cover peers.

I think we've tried that before.

Yes, they're technically not licensed. They're licensed, I believe, under a waiver or something for the Medi Cal program. Absolutely appreciate the important role that peers and those with a lower level of education can provide, particularly as we look at workforce shortages. One of the things that the Governor announced in his State of the State, I think road tour was for the Department to work with the Department of Health Care Services to really understand and do the crosswalk of what?

Is required for our commercial plans to cover what is covered in our Medi Cal program, both through the Medi Cal managed care plans as well as through the county. So I'm excited because I don't know that I have ever fully understand what those differences are. I hear things like wraparound services, whatever it takes to help enrollees. But I think historically, even how we Bill and code things on the commercial side versus Medi Cal have been very different. We're moving in a direction for more alignment.

So I'm excited to see what comes out of that kind of that analysis of the difference in the recommendations for potential alignment. I will just caution that we are being very mindful that we don't want to pull our safety net workforce out to support commercial enrollees. As we increase coverage requirements on the commercial side, that also can lead to increased costs.

So I think there's a lot of more work that we'll be doing engaging with stakeholders as we head into the next year on kind of recommendations on that.

Although I suspect that one of the reasons that commercially insured people are seeking public mental health services is because that's the only way they can get it right. These people who are at their wits end, they just simply cannot access it because through private, they have perhaps good insurance and the health plans, making it absolutely impossible to get care. And this is something, I mean, just sort of big picture. People just cannot get care.

They just cannot get coverage, and they can't afford to pay it out of pocket. And so they're desperate, and they go to the county where, you know you can get it, and then the county is left holding the bag. The health plan has just shifted all this cost to the taxpayers, which is totally inappropriate. So what do we need to do to stop that?

Yeah, so again, I think there's a lot of pieces that are happening with the behavioral health reform as well. There will be some transparency bound reporting about just how many people the counties are seeing. I think that's a big unknown. I've heard huge numbers of small numbers. So I think there's some transparency there.

The other piece that I don't want to make excuses, but it is the reality of our managed care system is essentially enrollees need to attempt to go in network before they go out of network. And so a lot of times, what we see is people end up in the county accessing services, and they haven't tried to access services and network. And so that's where we see a lot of the health plan denials of care because they didn't try to access services and network.

Again, I don't want to make excuses because I absolutely agree we have to hold the commercial health plans accountable because people are ending up in our public system because we're failing them on the commercial side, I think you heard of some of the comments about the contracting that will be encouraged between our commercial health plans and the counties.

We will actually be getting a position, I believe, to help with we'll be requesting a position to help with the coordination on that when there's challenges with either the contracting or the reimbursement. We wanted to try to help be the liaison with that. So I think all of that to say we absolutely need to hold the commercial health plans accountable for doing their job so that we're maximizing those county resources for those that need it.

And then I think you heard testimony about the health plans not necessarily employing in terms of the people who are reviewing, particularly substance use disorder treatment claims are not necessarily specialized in that area. Can you comment on that issue?

Yeah, I mean, they do have to have the clinical expertise to review claims. They have to be trained on the nonprofit criteria specific to eight SB 855. They do not have to go through the certification. I think one of the challenges you raised with the SB 99 is if the reviewer had to have the same training and credentials as the person making the decision on kind of the provider side, the plans would need to employ a huge number of providers.

And I think that was one of the challenges and concerns that we had, is just given the huge number of services that may need to be reviewed, how do you employ enough people to review those being mindful too? We don't want to pull more people out. Of the workforce seeing patients to do utilization management reviews. So the law is clear right now that they have to have the expertise. They have to go through the nonprofit criteria training.

They have to use the nonprofit criteria when making those decisions, but they do not have to have the exact training and credentials as the person who's prescribing the service.

But in terms of the testimony, I know you were here when that testimony happened. Do you think it's just not an issue at all?

I don't want to say it's not an issue at all. I think this is part of the intent with our independent medical review process, is there is a next level of appeal to come to the Department. And when we send these out for an independent medical review, it is someone with an expertise, clinical expertise, in that condition. When those reviews come back, they cite to kind of the latest journal articles or the evidence to support their decision.

One of the things that the plan should be doing, and we talked to them about this, is they should be reviewing those decisions. So when the decisions come back and the reviewer is saying, here's the latest science or guidelines on this issue, they should be looking at that to see if their policies need to be updated.

Okay. And speaking of IMRs, we've gotten a lot of feedback that they're taking too long, and also that I think you heard this testimony about how DMHC has the authority to act within five days, and sometimes it takes months. Can you just talk about timeliness, both of the departments reviews and also of the IMR's.

So, and just to be clear, we have the IMR process, which is for denials based on either medical necessity or experimental or investigational. We have an expedited process. We have the normal time frame. We also have a complaint process for, as I mentioned, issues that don't meet the criteria of a medical necessity denial. For example, these cover anything from timely access, benefits and coverage. Now claims, payment. We have a number of timeframes that are associated with all of those.

I will tell you that I believe Mr. Bendett's claim is primarily related to how long it takes us to qualify an IMR complaint before it goes to our review organization for review. For the most part, we are meeting most of those timeframes. The tricky piece is we have a short form. It's about two pages. You can give us a minimal amount of information just describing your issue. We then have to take that and qualify it for an IMR.

Part of what we have to find out is, is this case even under our jurisdiction? Some of the examples I heard today, I believe, are not under either our jurisdiction or CDIs. And so they don't have to follow SB 855. So we have to make that determination. Is it even under our jurisdiction? Do we send it over to CDI to review, then we need medical records.

Sometimes if this is an out of network provider, which we see sometimes on the behavioral health side, we have to get medical records. Then we have to review and say, okay, is this an IMR or does this fall into the complaint category? That can take time. And so we do all of that review to qualify it. Then it either goes the IMR path or the complaint path. I will say that we have had a significant amount of growth in our Department.

We've had a growth in the number of consumers under our jurisdiction. We always seem to need more people. These cases are getting more complex. But I think the trickier piece is that initial review often takes more time as we get new information. So if someone emails us or calls us and said, zero, I forgot to tell you this, we have to pause the whole process. The clock stops, we review that information, go to the plans to get additional information, then things restart.

So I say that just to say it's very nuanced and case specific, but appreciate the urgency and the need to move these as quickly as possible.

Okay. Thank you, Senator Kratosi.

Thank you, Mr. Chair. I guess I'll just start off by making a comment, and you're certainly welcome to respond to it if you want to, but I'm troubled by what I'm hearing. Is resistance to enforcing Asam qualifications. Basically an understanding of those at a minimum. At a minimum. As well as again, what I'm hearing, I'll go back to some earlier comments I made, is sort of such a preference over a medical diagnosis, regardless of the background of that practitioner.

That's what we've seen, that evidence is out there. Without folding in. Without folding in. Other addiction treatment practice standards, if you will, that have been around that we use in our systems both in counties and at the state. I talked about justice systems earlier. There just seems to be a complete disconnect between who gets to qualify these claims when people are on the outside of our system versus who gets to qualify people for treatment and what's prescribed when they're inside our systems.

And I think that needs to be reconciled. I'm a little confused about the regulations in terms of where they are right now in the rulemaking process. When will a draft actually be available?

Yeah, so maybe let me take the regulation question. I want to go back to your asAMP question. So the regulations have been in draft form available. We've actually been through several public comment periods. If you want to see them, they are incredibly detailed. They are on our website, HealthHelp. CA gov go to about us there's regulations. I think it's open pending regulations. We've been through a series of public comments, so once we start regulations, everything has to be kind of on the record.

People send us a letter. Many of the people here have sent us letters, and then we review those, make updates to the regulation. We go out for another comment period. I think we just mentioned. I think we closed our third comment period. We have a clock where we need to get this to the Office of Administrative Law. So we are probably done with our comment periods. Those will get filed. There's a whole clock associated with regulations.

I do have my General counsel here if you want to do a deep dive on that, but they'll take effect in April.

I just want to know if we're going to have your final draft before our legislative deadline for introducing bills. To be blunt about it, I don't want to get sandbagged on that.

Yeah. So you could see the latest version right now.

Great.

Yeah, it's on our website.

But you're saying there's still going to be iterative changes?

No, probably not. We're out of time. So there's just this process where we've gone through the public comment period, and then we need to file them with the Office Administrative Law because we want them to take effect quickly.

All right, well, then that would be very helpful for us in this interim recess period. This is our time to take a look at what we think needs to be done going forward. That may be something that would be nothing. I don't know.

As Senator Rubio alluded to, until we see what your best shot is at this, certainly I'll be open minded about whether we need to do anything, but I also want to be prepared if we need to move forward with something, um, you know, similar or beyond or different than SB 999.

There's been an issue brought up, which over and over again to me, mostly by providers, that the patterns that are out there in terms of denials and in terms of who gets to do peer to peer review for the insurers is is troubling in terms of a pattern that appears to be reward for high denials. Is that something that falls under your jurisdiction? Or is that at some point, just an Attorney General issue or a private Attorney General issue?

If you feel like that, I would assume that's fraud and that's criminal at some point, or something that falls at the highest level of civil penalties. Again, I came to this hearing today to try to figure out what action I want to take, because I'm absolutely convinced we get hundreds of constituent inquiries in our offices, sometimes thousands. It depends on what the issue is.

You could call that anecdotal, but it's people who get a determination that they should be in treatment and then get denied two weeks later sustaining that treatment as if you're healed, you should be healed. I'm a Doctor. You should be done by now. And the frequency that that's happening, I think, is not only a concern about how do we deal with that and do we increase costs in terms of insurance premiums, but again, without even really going to intentional patient and dumping or anything like that.

How about the costs in our carcil systems? How about the costs that we just put $20 billion since 2019 into homelessness? Our data in Santa Clara County says about 38% of those folks are dual diagnosed out in the street. Out on the street. Unsheltered, completely unsheltered. Some of those folks were private covered before they ended up out in the street. We're hearing that testimony. I think we all know that.

So I'm just trying to get to a point here of what actions do we take in what is an extraordinarily urgent situation of humanitarian crisis? Quickly, That's the reason I'm asking these questions.

No, and I appreciate your questions. I mean, I think the examples you gave of the denials and the early discharge, they are the examples of a lot of the cases that come into our help center. Our help center, particularly when those are the types of cases that do go down the IMR route. We have about a 68% average overturn rate that overturns the plan's decision. Just to be clear, again, 96% of state regulated government and commercial enrollment is under my jurisdiction or the DMHC.

So it is very likely that many of these cases do fall under our jurisdiction. The policies and procedures for how plans make what we call utilization management decisions about what you get and what you don't get is part of what we're reviewing across all of these things that I talked about. So again, we would be happy to work with you if you have specific examples. I know the ones that were cited here.

We've met with many of the folks that were in the room and gave testimony today. So these are examples of things that we are currently looking at. SB 855 significantly strengthened those protections by requiring the use of the nonprofit criteria. Again, the person reviewing doesn't have to have a certification from each of these nonprofit criteria organizations, but they do have to go through training on how to use them. They have to use the guidelines.

This is a big change from where we used to be, where utilization management decisions were made essentially in a black box. Nobody knew how they were being made. So there's transparency That's brought through this process. So again, I think we've made some big improvements. You saw the big enforcement action we took last week, and part of what we saw was some violations of these protections. So we will continue to look into this.

If you haven't worked with our office, please, on these specific cases, we'll work with you to get those to our help center. We want to be able to help those individual consumers while we work on the bigger policy issues.

All right, thank you for responding. Again, I think for me, the proof will be in the pudding. The idea that the draft that you say is essentially final is either going to get us there or not. And I think we need to be the judge of that as legislators as to whether or not we need to go beyond or augment or use other tools that we have, including audit tools.

As a Member of the Joint Legislative Audit Committee, it occurs to me that this issue that's been brought up by our county associations is probably something that should be drilled down on by an extensive audit to figure out what the cost of these denials is to our government systems. I think it would probably take 5000 or 6000 hours of audit to come to a conclusion on that. But it sounds like we also have that information in the 58 counties available to us.

I know when we did a basic cost study of what it was costing us in Santa Clara County, just a little more recent than the review that you did, the cost of having people untreated was about $85,000 per person to the county. I don't know what that is in today's dollars, and I don't know what the analytics look like. That was some years ago.

But again, it strikes me that that's the direction, one direction that we might want to go, so that we're not sitting here saying, well, I don't know if what we're hearing is true. I don't know how much cost shifting there is. I don't know what the reasons are that people are seeking county assistance versus their private insurance. There's too many I don't know there for me. And again, I think we potentially have other avenues to go investigate and find out what those answers really are.

But again, I appreciate, obviously the very important hearing today and appreciate your testimony.

Sure. Rubio thank you. Well, first of all, I think both of these gentlemen here tackled some of the questions I had. So I'm glad to know that the Behavioral Health Investigation reports are public. But what I'm hearing is you're somewhat trying to protect, I suppose, really important information. So you're trying to summarize versus put out the entire investigation that you do, which I can appreciate, but they're out on your website, and we can look to see or request it through public records.

Request?

Is that what I'm hearing?

Yeah.

No, just to be clear. So our behavioral Health investigations, we released the report yesterday, so it's posted on our website, and there's a summary report that summarizes all of our findings. If you really want to dig into it, there's an individual report for each of the five plans that summarizes our review and the violations we found, as well as the barriers.

The piece that you can request through a Public Records Act request is our non quantitative treatment limit review, which is related to federal mental health parity. Again, I think this is how do you show the analytical work that an attorney is doing to go through these massive documents? I think what you'll be interested in is what did we conclude, what did they fix? And so That's the piece, I think we'll think about how we can summarize our findings.

But if you want to see what the plans filed with us, you could request that.

Thank you. Well, I heard you say earlier today that you do routine medical surveys and That's how you gather your data. But I also heard you say something very specific. You said, by way of example, that providers are telling people not to speak to you. So I'm trying to determine how do you get that specific? So do you conduct these verbally surveys, leading questions, what does that look like? To get that specific answer?

Yeah, I'm going to separate those a little bit. So our routine survey we do every three years of all of our plans. And so what we do is I'm going to get sorry, a little technical. We have what's called a Technical Assistance guide or a tag that it's posted on our website. We're transparent about this that walks through all the things we look at when we go out and do an audit of the plan.

So as we have new laws that are passed, plans demonstrate they're complying with the law. They file a lot of paper with us. The routine surveys are intended to go out and say, okay, you told us you're doing all of this, but how is that really working in practice? Give us data. We do interviews. So That's our routine survey process. The providers telling enrollees not to talk to us, that comes through our help center.

So we get a complaint from an enrollee saying, I'm not getting a service, or my provider is trying to balance bill me. And we will ask questions. They'll email us. I get these emails, they'll call us, and That's where they will tell us, I was told not to talk to you. So those are different issues. We look at both when we meet with stakeholders. When we get help center complaints, we look at that.

To give you an example, the Kaiser Enforcement action we took last week, part of that was related to a non routine survey that was started because we saw an uptick in complaints to our help Center for Kaiser enrollees, and we said something's going on there. So we opened a specific non routine survey related to timely access to behavioral health services. I hope I answered your question.

Yeah, no, it helped tremendously. Thank you. But I guess ultimately, just like my colleagues here today, I showed up just like Senator Cortese was discussing. That, realistically for me, is trying to see what can we do on our end, because we need to see what are the actions needed to not only strengthen the process clearly there's deficiencies throughout the process, but also how do we improve outcomes? And it's trying to figure out what I can do on the legislative side, what is our responsibility.

As I mentioned earlier, a lot of times we can complain a lot about what people are doing outside. But is there a role that we have to play to make sure that we're doing our part to support, like, the Department and just what is needed? So I will continue to reach out and let us know if there's anything more that hasn't been discussed here that we can do to strengthen what you do.

In fact, I worked with your Department last year, earlier this year actually, on how do we provide that support to ensure that at least we're doing what we can so that you can do what you can. So thank you for the work you do.

Thank you, Mr. Chair.

Appreciate it.

Thank you. Thank you to both of you for taking the time today for your work. Appreciate it. Okay, so those are all of our panels. We'll now proceed to public. What? zero, I'm sorry. My apologies. We have one final panel of one person for the health plans. And my apologies. That'll be Jed Hampton. Who's? The Director of Legislative Affairs with the California Association of Health Plans. We invited the various plans, and Mr. Hampton, I think, is representing the plans.

So welcome and thank you for coming today.

Thank you, Mr. Chair, Members of the Committee, thank you for not forgetting me. I appreciate the opportunity to speak here today. Again. My name is Jed Hansen. I am the Director of Legislative affairs for the California Association of Health Plans. We appreciate the opportunity today to discuss our role in delivering high quality, affordable health care coverage for our enrollees, which includes coverage for mental health and substance use disorder treatment.

Caps membership includes 44 public and private healthcare service plans that provide health care coverage to nearly 28 million Californians. I just want to start by being absolutely clear that California's health plans absolutely understand that mental health is an essential part of one's overall health and well being, and we support established state and federal laws requiring parity between coverage for mental health and physical health.

Health plans have been working collaboratively with state and national leaders to ensure compliance with existing mental health parity laws and to ensure patients receive the Mental Health Services they need that are on par with medical and surgical care. As you know, the demand for behavioral health services and substance use for treatments has been steadily increasing, and the demand really has peaked quite exponentially since the COVID-19 pandemic.

Despite many systemic challenges that exist within the behavioral health delivery system, including a persistent behavioral health provider shortage and other workforce related issues, health plans have taken a number of positive steps to strengthen California's mental health care system and its workforce to meet the California's existing and future behavioral health care demand.

Addressing the current workforce challenges will be critical, as I'm sure many of you on the Committee know, in 2019, the California Future Health Workforce Commission has stated that by 2028, which is only four years away four and a half years away here.

Now that California will have 28% fewer psychologists, marriage and family therapists, licensed counselors and social workers, and 50% fewer psychiatrists, health plans recognize the impact that the existing workforce challenges have on access to behavioral health care and have undertaken a concerted effort to increase the level of providers within our behavioral healthcare system.

For example, health plans are making substantial investments to build broader networks of behavioral health providers that will boost the pipeline of ethnically and geographically diverse Clinicians required to meet this increasing demand for care and connect Members with the right supports when they need it. Health plans are also investing in their own in house mental health Clinicians recruitment efforts, education and training programs to meet this growing demand.

Many health plans are also offering scholarships and loan forgiveness programs to promote and incentivize qualified candidates to choose mental health care as a career moving forward. In addition to some of the work that health plans are doing to address the behavioral health workforce shortage, health plans are working closely with providers to help Members receive mental health care at many different touch points beyond the typical office setting, including by embedding mental health providers in emergency room departments and primary care clinics and offices.

Health plans are also providing online wellness and coaching programs and free access to trusted mental health apps, engaging and investing in anti stigma educational campaigns to increase awareness and encourage Californians to seek mental health care and support when they need it. Now, we understand that these additional benefits are not intended to replace treatment in any way. But evidence does show that these types of additional benefits can provide significant relief to those, especially with mild to moderate anxiety or depression.

As mentioned previously, health plans are continuing to focus on compliance with existing mental health parity laws, including working in good faith with the Department of Managed Healthcare and the California Department of Insurance on the implementation of SB 855. While it is not yet clear to determine the full impact of the law, since the regulations have yet to be finalized, health plans have come across some challenges and hurdles with respect to implementation.

Some of those challenges really center around the use of the specified not for profit Association guidelines that have been mentioned earlier today. Prior to the passage of SB 855, health plans really utilized well established criteria like Asam and their utilization review processes to determine the medically necessary levels of care for treatment.

The requirements outlined in SB 855 t's various nonprofit Association guidelines in the utilization review process to determine medically necessary levels of care has regrettably created a situation whereby health plans have been subjected to sometimes uneven and oftentimes contradictory guidelines. Some of these guidelines include very explicit objective parameters regarding the frequency of services, the intensity of treatment, and so forth. Other guidelines do not. So it does create sort of this imbalance or this incongruency of which guidelines should be applied, at what particular time.

Given the confusion around which guidelines should be used and how to address newly emerging guidelines, midstream has created some of these challenges with respect to compliance, which we acknowledge. Cat believes that the final regulation should strive to provide clarity for everyone who is covering, providing and receiving these important services. Additionally, health plans have faced some challenges with respect to the out of network requirements outlined in SB 855.

SB 855 requires that health plans cover and pay for out of network care if the service is not available in network. And while we certainly understand the benefits of that requirement globally, it certainly has created some unintended consequences excuse me. And we have started to see them bear out.

Health plans have seen several instances of questionable and sometimes downright fraudulent practices from certain out of network providers whereby some are charging exorbitantly high rates for out of network care, which only increases cost to the healthcare system as a whole. I believe the Department of Managed Healthcare and their testimony had mentioned one example of this regrettable trend. But this is something that we are starting to see with more frequency right now. It is important to note that the value of in network providers.

When a health plan brings providers in network, it gives the plans the opportunity to vet providers thoroughly and ensure that they're meeting health plan quality standards and other standards and regulations established by our regulators. While health plans are complying with this provision, we are ultimately concerned about the healthcare cost component should out of network providers continue this regrettable practice? While challenges remain, health plans are committed to ensuring that we meet our responsibility to deliver high quality and affordable care to our enrollees.

We understand as an industry that there is more that we must do to increase the treatment needs of those suffering from addiction and mental illness. And we'll continue to invest in the mental health of all Californians. By working collaboratively with the spirit of shared responsibility, health plans, providers, state leaders and advocates can effectively address the mental health challenges in California, save lives, and improve the mental and physical well being of all Californians.

Thank you very much again for the opportunity to testify today, and I am happy to answer any questions.

Thank you. In terms of just plan compliance overall with SBA, I should say with state and federal parity laws, like just generally, how do you think that's going?

I think, as I mentioned in my testimony, there are some challenges. I think it would be disingenuous for us to not acknowledge that there are some challenges with some of the clinical guidelines and understanding how those work together to create a system where we're all operating on the same page. I think the health plans are certainly committed to that challenge. We are heavily invested in it. The amount of money that we've spent in behavioral health services just in the last several years has nearly doubled.

So there's a strong commitment to continuing to invest in that, a strong investment into being in compliance with both federal and state parity laws. Obviously, there are quite a few carrots and sticks, if you will, to ensure that we are under compliance, and we take that responsibility very seriously. So, again, I think we are working our hardest to be in full compliance with both federal and state parity laws. We understand that there's still some challenges out there, and we're working to address those.

Senator Cortese, did you have a question?

I'm just wondering, in your comment about cases of fraud that you've seen on the provider side, what percentage of claims are denied for that reason?

I don't have a specific number or percentage of claims that are denied if there's suspected fraud. I have heard anecdotally from my Member plans that oftentimes when we see a case where a certain service or a particular prescription drug is rather obviously inflated well above market value, again, three, four, five times higher than what would have normally been paid, that the plan may initially deny, though not always.

I have an example of one plan who had provided that they suspect that there is a fraudulent, I should say a bad actor. Let me rephrase that. There's a bad actor out of network provider in the system who has requested certain services and drugs for one particular Member that has at this point, cost almost $1.2 million in services. They refuse to come in network where that service could be provided and so that's one particular example of a challenge.

But again, to your point, Senator, I don't think at this juncture I could tell you this is the percentage of claims that come in that we think are fraud that we are denying. Those are typically handled on a case by case basis. I mean, some are very obvious and egregious, some may not be. And I do want to highlight in my testimony, again, we are seeing this as an emerging trend.

I certainly don't want to cast a wide net and say any sort of out of network care is fraudulent. Obviously, we do not believe that's the case. But we've just started to see that That's becoming more commonplace as the regulations get closer to being finalized. That that's something that we've started to see.

Would your Members be willing to share that information with the Committee?

I can certainly follow up with you and talk with them and see if they would be able to. There is sometimes proprietary information that they would probably have to parse through, but I can circle back to them and see if we can at least get you something to look at and examine to give you a better picture of what is potentially going on.

Yeah, it'd be interesting to know whether all this discussion we've been doing around the process and I don't think anybody argues with the idea of utilization review. We have to have utilization review in the system. But whether the quality of that utilization review and the guidelines and the standards, the qualifications of the individuals doing it are appropriate and then you kind of just threw a little bombshell out there and saying, well, their denials are happening because of fraud, which is to me a whole other issue.

So I want to know what percentage of your Members, the percentage of denials that your Members are actually attributing to fraud. Because maybe we're chasing the wrong problem here. I don't think we are. I suspect that's a fraction at best of the denials based on what I've seen. But I think you got to put your analytics where your mouth is on this.

If you're going to sit here in front of the Senate Committee and say fraud is the problem, then show us the numbers on yeah, so I don't think that's the case. I don't even know that it was appropriate to bring it up, but maybe it was. But if it is, show us the numbers.

Senator, thank you for that. I appreciate it. In no way was alluding to the fact that all denials are related to fraud or even a majority. Again, it's just a trend that we've been seeing that's been increasing in terms of denials. There's a variety of reasons why a plan may issue a denial for a certain service or a certain treatment. And again, all of those are not related to fraud in any way. We're just highlighting a trend that we've been noticing in that space.

So again, I want to be clear that we don't think that we're only denying claims because we think they're fraudulent. That was not my intent in bringing that up. It was just to highlight something that we've been noticing as an emerging trend within this space and wanted to highlight.

That sort of a standard case. That our fact pattern that we run into regularly and I speak of my own, let me just say, I run into regularly and so I'm not imputing that on anyone else. Here is an individual who in effect dual diagnose, has an underlying bipolar condition, for example, starts self medicating with meth, has to have inpatient at that point to stabilize if there's any hope of moving on and treating that addiction.

And then two weeks later, two weeks into inpatient, is told by the insurer that there's no more coverage, you should be fine now, essentially, is the message. Is the message. So that's the issue I'm here to chase as opposed to fraud. But if fraud's an issue, again, if those kind of cases are being viewed as fraud, I'd like to know that because we may have a problem in terms of how they're being analyzed.

But I would say that there are thousands and thousands of fact patterns out there in the State of California and hundreds and hundreds of them in my own county. That just like the one I described right now, where people are being cut off very prematurely in terms of sustained treatment on the addiction side, not because their meds are too expensive, not because there's a question about the diagnosis, but just, in effect, what seems to be an arbitrary cost saving measure by the insurer.

Either they don't know what it takes to stabilize somebody who's in the throes of meth addiction, for example, like that fact pattern, or they do know and they just don't want to pay for it. Again, we could talk offline. If you think I'm chasing a phantom problem, I'd want to hear about that. But that's what we see. That's what I see.

Just one question in terms of the cost associated with out of network, I guess the question is what are the plans doing to actually beef up their networks so that people can get in network care? Because that's a real challenge.

Yeah. So I had mentioned, Senator, in my testimony about some of the things that we're doing in terms of increasing access to healthcare providers. Obviously there is the issue around workforce, but as I had mentioned in my notes here, sorry we are investing in building that network to boost the pipeline of ethnically and geographically diverse clinicians. We're investing in our own clinicians and putting them in primary care clinics, schools, et cetera.

We're obviously building out our networks for those who contract with additional providers to ensure that we have a broad based network. Obviously, we have pretty prescriptive regulations and statutes that we follow around how broad our networks are.

So there's a variety of things that we're trying to do because we certainly understand that with some of the challenges in the workforce and the increasing demand for these services that health plans need to invest as much as possible to ensuring that we have a strong and stable workforce to meet the demand for these services.

Okay, yeah, I think one of the challenges around network adequacy is just the reimbursement rates are not where they need to be. And so you have a lot of mental health providers who choose not to go in network because of those inadequate reimbursement rates. So I think it's tough for the plans to sort of note that costs associated with out of network care when the reason that's happening is because of network inadequacy, I think in significant part because of inadequate reimbursements.

Yeah, it's certainly a challenge in terms of building up that network. I would say we oftentimes come across providers, like you said, who don't want to contract with the plans. Those rates are negotiated between the provider and the plans when we're having those discussions about coming in network. So the providers are at the table to have those discussions and those negotiations. So oftentimes it is unfortunate because there are two parties at the table to negotiate those rates.

I know anecdotally we've had some of our Member plans go above and beyond to really go beyond reasonable and customary payments to bring folks in network. But unfortunately, at times we do see that providers sometimes just don't want to work with us by coming in network and there are a variety of reasons for that from the perspective of the provider. But it has been a challenge to bring bring some folks in network.

And so we will continue to work with providers, negotiate in good faith and get our networks as large as we can to serve the rest of the Californians.

Thank you. Okay, we will now go to public comments and folks can come and make public comment here and we will then go to the phone lines so you may.

Hi, I'm Karen Fessel, I'm with the Mental Health and Autism Insurance Project. We are a nonprofit and we mainly work with families trying to get mental health and autism issues covered through insurance. And we work a lot with the DMHC Help Center in trying to get them covered. And we've had a lot of obstacles. I do think they probably need more money to hire more staff, but there's been a lot of recent issues with competence.

The DMHC has an ongoing policy that they've had for about three or four years now where they will not have their people, their frontline people that work the cases. You don't get to communicate with them as a consumer and it's very hard to they don't leave their full names and they don't leave their emails or their phone numbers and what happens is they talk back and forth.

They have a lot of back and forth with the health plans, and then we'll get a disposition, and they won't have either understood our position or they've been manipulated by the health plan. And I have a case where there was a single case agreement with a provider and the consumer was trying to get paid, and they didn't understand how much money the provider had been paid. They hadn't been fully paid. So that is one example. I have several examples of these.

I don't know if you want me to go into detail, but there's been several issues with competence and incompetence and poor training of staff. Let's see, I have submitted many parity disclosure requests, federal parity disclosure requests, and I don't think I've ever gotten a response from a California plan. Typically in Washington state, I get a response. I get a response right away. And if I don't, I've gone to the regulator, and the regulator has gone to the plan and they've gotten a response back.

They're often not adequate. But it's clear that California is not following the parity disclosure requirements that the federal government is expecting. Let's see, I work a lot with clients in residential treatment centers. I've had cases where it's taken so long for the Department to respond for expedited requests that the clients have had to discharge because they couldn't afford to pay. And then they were later, after the fact, they got covered, but they had already had to discharge because they couldn't afford to stay there.

The turnaround is often like on an expedited will be like four to six weeks, which is too long, and the patient is paying in the process. They're paying out of pocket, and that shouldn't happen out of network claims. I have had single case agreements where they haven't paid, and so the patients have been discharged where there's been no payment, and so the providers are supposed to wait and they're not supposed to balance Bill.

And that's really hard for a provider that does not work in network with plans to wait as long as they've been expected to wait to get paid. Networks for mental health is way worse than for medical health. And so network adequacy has been a huge problem. In response to the testimony from the gentleman last, I have aba providers who have not received raises in 10 years. They've been in network for over 10 years, and they've tried to negotiate raises.

And the health plans have been unwilling to negotiate changes raises in pay for over 10 years. So they don't make it easy for providers to work with them. Let's see.

Thank you. If you can.

Okay.

All right, thank you very much.

Appreciate it.

Thank you.

Thanks for your work. Thank you.

Good afternoon. Thank you for having us today and for having this really important hearing. I'm Sherry Daly. I'm with the California Consortium of Addiction Programs and Professionals. Representing over 100 programs throughout the state, over 20,000 addiction focused counselors, and over 300 recovery residents throughout California. Thank you also to Senator for introducing 855 and getting it passed. And thank you to the Administration for implementing it.

I want to drill down, just for a moment on why some of the implementation of 855 we predict will not be completely successful. For people specific to Sud, it has to do with when a person with addiction is denied treatment or stepped down. They aren't our best advocates for filing complaints. Typically, these people will relapse. There is still a lot of stigma where family friends are exhausted and see this as a moral failing that they have not completed treatment.

That leaves it on the backs of the providers to chase down all of the reimbursement, which becomes very time consuming. And just from a personal perspective, I think Senator Cortese kind of went around the edges of this. There is no better night's rest for a person with a young person who is experiencing addiction than when that young person enters treatment. That family gets a sigh of relief.

Imagine, three days later, that young person is deemed cured and sent back out of the safety of medically appropriate services because an insurance company has performed what we would consider re reviews that are against parity. So, being the anchor leg here today, I feel very special in that I can provide some solutions for you from our Association. The first one would be to look at these circumstances from a global perspective. Individual complaint driven responses will not get the job done.

We believe that the constant re review first Sud in specific, is against parity. My mother had a shoulder replacement. She was prescribed six weeks of rehabilitative therapy. She wasn't re reviewed every three days. Every time she made a little progress, she wasn't told she's done with that medically necessary service she was given. We believe it is a violation of parity to have frequent re reviews that are not seen for physical ailments.

The other issue has to do with connecting Asam requirements and best practices to the private practice market. Under the ODS Waiver County situation, everything is prescribed down to how many hours of treatment is necessary. That is the best practice in California. The State of California is the biggest provider of services. That is the model for best practice. Why is that not being required of the private insurance services that are provided? And two more items.

One, to answer Senator Cortezi's question about shouldn't it be illegal to incentivize a reviewer to deny or prohibit a claim? Well, yes. Section 1348.6 of the Health and Safety Code specifically prohibits any payments made as an inducement to deny, delay, reduce or limit appropriate medically necessary services to enrollees or groups of enrollees with similar medical conditions.

That's exactly what they're doing now, me and Joan, if she's still here, we can say all day we think that they're being paid exorbitantly to do what they're doing, but we can't open their books. So what place in regulation do those books get opened and determine from an objective standpoint, is it twice the regular pay to a physician? Four times, five times, ten times? When does that physician pass the limit of what would be considered an inducement under 1348.6.

And lastly, I'll just close with what Senator Wiener opened this hearing with, which is treating addiction at stage four is heart wrenching wasteful deadly in this state. We don't have a stage one capacity. We don't have independent licensed practitioners for alcohol and drug abuse treatment. 32 other states, almost every populous state in this country licenses this profession.

And you can go to your drop down menu, which many now when you've been on Norco for eight weeks for your broken ankle and all of a sudden the pain is less, but you sure feel good when you take your Norco. I might have a problem, I want to talk to somebody about that. But go to your private insurance portal. There isn't a licensed alcohol drug counselor to speak to you about a problem you've recognized at stage one.

So that is something that California really needs to fix so that we can address upstream harms from this disease. Thank you.

Thank you. Next speaker.

Good afternoon, Chair Wiener and Members. Tyler Bindi. On behalf of the California Alliance of Child and Family Services, representing children's behavioral health providers, we were proud supporters of SB 855 as it moved through the legislative process in 2020. We appreciate the continued attention on the Bill and its implementation by the Legislature and especially Senator Wiener. We also appreciate the collaboration of the Department of Managed Healthcare and implementation of the act, and are eager to see the finalized regulations.

One area I'd like to stress today is the continued need to see an alignment of a consistent definition of the healthcare providers with the staffing requirements in SB 855. The current draft regulations continues to refer to licensed staff, while SB 855 is broader than that, it includes associates under supervision of a licensed professional on their pathway themselves to Licensure. This is important to ensure coverage and alignment of behavioral health services across our public and our private systems.

And this is already something that is done within MEDICAL. And additionally, just like to mention, as it's been mentioned today around the workforce crisis, and that we should be utilizing and maximizing as much of our qualified workforce to deliver as much care to Californians in need. Thank you.

Next speaker.

Hola yo mi llamo. Alicia Hernandez. So infamerantas ConerA Bebe Siama. Diego Rivera. Hi. My name is Alicia Hernandez. I'm a nurse of 30 years, and I have a son who was vaccine injured when he was two with his MMR vaccine. He is now autistic nonverbal. I'm here today because I sit in these meetings and I hear a bunch of nonsense. Yostoyoi aqui porquengo escuchar ESTAS juntas Ketianin Atrazelas Puertos Avlando De lo Nasidas nostros Ijos elosque.

I sit behind these closed doors, behind these meetings, behind closed doors, when people don't have a clue what's going on. And I feel that our children, they're being used as targets for people, using them to ingest and put drugs into them. Empia SACON Las Vacunas tolascos De Mentalis and psacon. Los lazacunas catien and muccos Venetos adentro. And I think the start not only think, but I know the start of all these mental issues and health problems come from vaccinations. All vaccinations.

I'm not talking about COVID I'm talking about baby vaccines. I lugaris on the Puerto LA Jinte mazelas vacunask.org ipuenira. There are many people that don't know the side effects of vaccines and medications. I do. I've worked psych facilities. I've been a traveling nurse for 30 years. I've worked every area you can think of surgical, medical, psychiatric, jail, assisted living and convalescent. And I have been one to pass out these drugs. And I'm telling you, people, they're no good.

And it's once they get you hooked on a drug, they get you sick first. They get you on a drug and they make tons of money off of it. And you, Scott Wiener. You're number one. You know about this. And I'm here to tell you, you're going to keep your hands off our kids. This is where the Bill stops. This is where it stops. This is the end. Thank you very much.

Thank you next speaker.

My name is Andrea Hedstrom and I am the mother of four children and I represent a number of organizations. I represent Goat Farmers for Good Government, I represent Mothers Who Are Against the Pharmaceutical Poisoning of Children, I represent the organization: Californians Who Are Against the Medical Fascist Takeover of California, and I could keep going, but I think you get my point. So I'll read, since it sounds like we have time to get our viewpoints on record. There's your eye contact, Scott Wiener.

I knew you had it in you. The modern pharmaceutical industry has in many ways proved to be a great benefit to humankind. Its ability to make medicines and vaccines safely available has helped save countless lives, but in the wake of America's opioid epidemic and the COVID Pandemic, the reputation of this industry has come under scrutiny and attack. America has a broken health care system. We need to examine the relationship between Big Pharma and the government.

We need to consider the Pfizer documents, and we need to look at the origins of Big Pharma and the opioid epidemic, and, frankly, we need to examine Anthony Fauci and the public health establishment. We as Californians are concerned about the rise of Big Pharma, its role in the declining state of health of Californians, particularly our children, and, frankly, how to reform this industry.

Thank you for your time and I will finish with this, and this is a quote by Alexander Solzhenitsyn: 'We know they are lying. They know they are lying. We know they are lying. They know we know they are lying. We know they know. We know they are lying, but they are still lying.' And in this case, the they is you, and we are done with your lies.

Thank you, Andrea.

Okay, any additional public comment in the room? Seeing none, we'll go to the phone lines. I believe we have someone on the phone line.

Yes, and if you wish to ask a question, please press one then zero at this time.

It's not a question. It's not a question. It's a public comment.

I'm sorry. Comment, one then zero. We'll start with line 84. Please go ahead.

Yes. Hi. Good afternoon. My name is Stephanie. I just want to read something because I've listened to several of you talk about the 501[c]s and the big health care such as Sutter and Kaiser and all this, but under the Federal and State False Claims Act, health care providers that knowingly submit false claims for payments in Medicare, Medi-Cal, and other government programs are liable for damages and penalties which often range in millions of dollars.

The False Claims Act has been implemented to enable private citizens such as myself, my grandchildren, and parents to sue fraudulent behind the government, and that is for every pharmaceutical and every health care. Bonta sued Kaiser for 40 million dollars for getting rid of waste. Sutter has an audit department and was sued for 40 million. When is this going to stop? Money is going out the door and nothing's being done. Thank you.

Is there any additional public comment on the line?

Yeah. Next we'll go to line 76. Please go ahead.

Yes, my name is Nicole Young and I have a mentally ill uncle who is on state Medi-Cal and the state solution for his psychosis is to drug him into oblivion. He gets a three day stay and then he gets drugged into oblivion. And by oblivion, I mean he is a zombie incapable of any human emotion and the terrifying part of this whole hearing was hearing that psychiatrist talk about doing that to autistic children.

My wish as somebody who loves somebody with a severe mental illness is that the California Democrats stay out of this. You make everything worse. Everything you touch turns to trash, to garbage. Our streets are lined with the mentally ill people. This system has failed. Please let the bureaucrat bureaucrat, and you politicians stay in your lane. Thank you.

And we'll move to line 85. Please go ahead.

That me. Can you hear me?

Yep. Line 85, go ahead.

Great. Good afternoon, Chair and fellow Members. My name is Sharina Latch. I bring firsthand insight into the mental health crisis in California as a mother of a daughter grappling with health, mental, and psychological challenges. Since the age of 14, she has been misdiagnosed and underdiagnosed, subjected to a barrage of medications that only exacerbated her issues. Instead of addressing the root causes, the state tends to blame parents. Due to the state's regulations and laws, my daughter found herself homeless recently, a consequence of the system's incompetence.

Without my advocacy, she could have been homeless or worse, even dead. It's imperative to explore and implement alternative and holistic treatments to solving these issues in dealing with mental, drug, or health issues and having insurance cover it. If my daughter had access to other prescribed treatments, including nursing care, a bed, monitoring, she would be suffering with chest pain and back pain now, not being qualified to receive help due to her age. She's 24. You are not mental health experts sitting on this panel.

You need to listen to the parents of--the parents voices in this matter and you need to stay in your lane. Thank you very much and have a great day.

Thank you. Is there additional public comment on the phone?

Yes. We'll go to line 48. Please go ahead.

Yes, good afternoon. My name is Benjamin Eichert and I'm with the National Union of Healthcare Workers. We are the largest union of private sector behavioral health therapists in California. Our state has taken important strides, thanks in part to work by Members of this Committee to establish laws and standards to improve the availability and quality of behavioral health services, and now that these laws are on the books, we need to ensure that enforcement is both thorough and effective, one of the reasons we thank this Committee for convening this hearing, and it's why we stand ready to assist in this work across the state. Thank you very much.

And we'll go to line 90. Please go ahead.

Hi, my name is Rhonda Murray, and I'm here today to discuss the mental illness crisis and how it's going to affect your new LGBTQ community. They already have a mental illness to want to go that far and whoever is writing this bill has a mental illness and needs to take all of this money and spend it on their mental illness and maybe the country would get a little bit better. It's absolutely ridiculous.

Okay, what are they going to do when the kids want to turn back to a boy or a girl? How is the mental health crisis going to be affected then? How is our taxpayer dollar going to be affected then, is what I want to know, because my taxpayer dollar--I worked for the State of California for 25 years. My taxpayer dollar is going to a bunch of ferocious crap, and you, Scott Wiener, need some mental health care yourself. Goodbye. I'm done.

And we'll go to line 71. Please go ahead.

Oh, great, thank you. Michael Fitzgerald with Zayante Group Consulting and contrary to previous callers, just want to thank everybody working on this, both Democrats and Republicans for mental health wellness of California. Very much appreciate this advocacy work.

I want to just point out that among the payers, the most difficult challenges with partial hospitalization and intensive outpatient programs or step downs from hospital treatment is with the Medi-Cal patients, though they're not eligible for partial hospitalization or IOP services under what's called a rehab model with the expansion of the Medi-Cal beneficiaries. Now it's something like 30 percent of Californians. So it's more of an economic rather than a disability requirement that gets you into the entitlement, that gets you into Medi-Cal.

These services not being available to those patients really does hamper their access to mental health parity. It's something I think the Department of Healthcare should look at; very much so to ensure better access for all Californians. Thank you.

And again, if you wish to comment, please press one then zero at this time. And just a moment, Mr. Chair. We have one more queue up. Okay, and thank you, Mr. Chair. We'll go to line 92. Please go ahead.

And allowing public to call in to hear about this important issue. I want to comment on the testimony of Dr. Woods. I want it to be known, and I hope that you've taken into consideration that where she used injectable psychiatrics were in the LA County Jail. Now, I have been in there where I've seen people at their worst and they're at their worst so much, the police had to detain them and bring them in and they still maintain the problem in custody.

So injectables may have been necessary at that point in time, but she did speak that she was having a hard time getting those requests filled, and I do think that's a good thing because there's a lot of repercussions with those injectable psychiatrics, such as tardive dyskinesia, where you're going to have mental motor control, and this has happened with a lot of people with motor control have suffered for the rest of their lives.

But regarding LA jobs or regarding Los Angeles, I just want to make mention of Figueroa Street where we now have open air prostitution sex trade, and because of your bill, Senator Wiener, SB 367 last year, you've allowed it to happen, and there's a lot of mental health crisis that's happening with children down there that are having to witness half naked women out there being trafficked. Not only the mental illness for them, but the actual trafficking of those women and they're having to deal with that.

Now if they're unfortunate enough to get caught up in the legal system and you put in the penitentiary system because your bill SB 132, you're going to have them housed with men, not trans women, but men is what is happening right now, and from my understanding of the women that are locked up in there right now, that these men are allowed to harass them and intimidate them.

And as I said, it's men. The way you wrote it, you allowed for men to go in with women's prisons. So those men that are transitioning, that's a whole other story, and of course, they're not there to harass any women, but men are taking advantage of this. So it is ironic that you're chairing a Committee on mental health while the legislation that you are passing is creating more mental health issues for the people of California. Thank you for taking the time to listen to me. Y'all have a good day. Especially you, Senator Ochoa Bogh.

Mr. Chair, we have no one else in queue wishing to speak at this time.

Okay, I want to thank everyone for being here today and particularly all the panelists. Very, very appreciative. We've done a lot of, I think, important work around mental health treatment access, but there's a lot more work to do and so I look forward to that work, and with that, we are adjourns.