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CALIFORNIA LEGISLATIVE HEALTH CARE UPDATE OCTOBER 3, 2013

Affordable Care Act Overview On Tuesday, October 1, Governor Brown signed legislation to continue implementation of the Affordable Care Act ("Obamacare") in California. The Governor chose October 1 to coincide with the day that Covered California, the States health insurance exchange, began its first open enrollment period, allowing Californians to obtain insurance coverage through the health care exchange for the first time. The slate of bills signed into law include provisions to support streamlined Medi-Cal enrollment for children participating in the National School Lunch Program, revisions to exemptions that will make contracts between Covered California and its contracted carriers more transparent, and changes to the budgeting methodology for calculating Medi-Cal related county administrative costs. In total, Governor Brown signed nine bills into law. Below is a summary of the legislative package of bills: AB 422 (Assemblymember Adrin Nazarian) Requires information on Covered Californias health care coverage and the continued availability of Medi-Cal options to be included on the National School Lunch Program (NSLP) notifications that school districts may provide to students, as specified, effective on January 1, 2014. This bill significantly expands the ability of schools and counties to support the enrollment of children in Medi-Cal, and to a lesser extent, subsidized insurance through the Exchange. Specifically it authorizes school districts or County Superintendents to incorporate a request in the school lunch application for the applicants consent for the child to participate in Medi-Cal, and to share information from the school lunch application (after receiving consent from the parent/guardian to do so) with the county for the purposes of enrolling in Medi-Cal. In other words the School Lunch program can serve as an important enrollment vehicle for MediCal. It does not allow information to be shared with Covered California, but it does allow information about Covered California to be incorporated into the NSLP application. SB 332 (Senator Bill Emmerson) Makes Covered Californias contracts and rates of payment to vendors and contractors, and other board and staff work open to public inspection under the California Public Records Act (PRA), except for health plan contracts and their rates, which are made public in three and four years respectively. This bill addresses concerns that were raised by some stakeholders during Covered Californias health plan selection process. The concerns (raised by advocates,
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among others) focused on contract provisions between the Exchange and health plans that would not be made public. This bill makes those provisions and rate information public, though it only unseals those three years after the contract or contract amendment is open to inspection. Specifically: The bill would provide that the one year exemption from disclosure for contracts with participating carriers apply to those contracts entered into on or after the effective date of the bill. The bill would also require that the portion of the contract or amendment containing the rates of payment be open to inspection 3 years after a contract or amendment is open to inspection pursuant to these provisions . (http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml? bill_id=201320140SB332) This bill is to take effect immediately as an urgency statute. SB 28 (Senator Ed Hernandez) Furthers implementation of the states expansion of Medi-Cal, authorized and required by the ACA, by giving the Department of Health Care Services greater flexibility in issuing all-county letters until regulations are adopted, and updating the budgeting methodology for Medi-Cal county administrative costs. There are three aspects of this bill that may merit additional attention: (1) It requires the Major Risk Medical Insurance Program (MRMIP) to provide the exchange with MRMIP subscriber and applicant information in order to assist Covered California in conducting outreach to them. (2) It requires the Covered California board to provide a specified notice informing MRMIP subscribers and applicants that they may be eligible for reduced-cost coverage through the Exchange or no-cost coverage through Medi-Cal. (3) It provides DHCS with the authority to issue all county letters, and updates the County Administrative Cost Control Plan budgeting methodology, specifically by authorizing: the development of the new budgeting methodology to include, among other things, county survey of costs, time and motion studies, and in-person observations by department staff. (http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml? bill_id201320140SB28) This bill would require that the new budgeting methodology be implemented no sooner than the 2015-16 fiscal year. AB 1180 (Assemblymember Richard Pan) Updates California law implementing the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other individual coverage rights related to losing group coverage to conform with the federal ACA. The bill also requires health plans and health insurers to notify specified individuals about the availability of guaranteed issue coverage through Covered California. SB 138 (Senator Ed Hernandez)

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Requires health care service plans and health insurers to take specified steps to protect the confidentiality of an insured individual's medical information for purposes of sensitive services or if disclosure will endanger an individual, as specified. SB 161 (Senator Ed Hernandez) Establishes new regulatory requirements for stop-loss insurance sold to small employers but allows stop-loss insurance issued prior to September 1, 2013, to be renewed or reissued by the same or different insurer under the same terms and conditions, without meeting the new requirements.

SB 249 (Senator Mark Leno) Authorizes the Department of Public Health and qualified entities to share health records involving the diagnosis, care, and treatment of human immunodeficiency virus (HIV) or acquired immunodeficiency syndrome (AIDS) related to a beneficiarys enrollment in federal Ryan White Act (RWA) funded programs to coordinate care and enrollment as beneficiaries transition to new health coverage programs. SB 353 (Senator Ted W. Lieu) Requires health plans and health insurers that provide essential health benefits to translate specified coverage documents in the same language they use to market or advertise to an individual or small employer, if that language is not already required to be translated under existing law. SB 800 (Senator Ricardo Lara) Requires the Department of Health Care Services (DHCS) to provide Covered California with information about parents or caretakers of children enrolled in the Healthy Families program (HFP) or the targeted low-income Medi-Cal program in order to conduct outreach to potentially eligible individuals. Transfers specified employees of the Managed Risk Medical Insurance Board (MRMIB) to Covered California and DHCS, as specified. California continues to lead the nation in both health care reform and implementation of a State exchange. As the States economic condition improves, the debate will continue in further expansion of health programs, further restoration of funding to previously reduced programs, and coverage for more individuals and families in the State. If you have further questions, or need additional information, please contact: Jonah Frohlich, Managing Director, JFrohlich@manatt.com Tom McMorrow, Partner, tmcmorrow@manatt.com Richard Costigan, Senior Director of State Government Affairs, rcostigan@manatt.com

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