2023 Year in Review
Message from the Director
I want to wish everyone a very happy New Year! As we kick off another year, it’s a good time to also look back on all we have achieved together over the last year to accomplish the DMHC’s mission of protecting consumers’ health care rights and ensuring a stable health care delivery system.
The DMHC took several actions in 2023 to improve the delivery of behavioral health care services across the state. This includes reaching a settlement agreement with Kaiser Permanente to transform how the plan delivers behavioral health care services to its members. While the settlement includes a historic $50 million penalty, it requires Kaiser to make significant changes to improve its delivery of care and invest $150 million in programs to improve the delivery of behavioral health services for plan members and all Californians.
The DMHC released the results from the first phase of Behavioral Health Investigations (BHIs) in October. The BHIs are critical to better understanding the challenges health plan members face in accessing behavioral health care. One of my highest priorities as Director of the DMHC is to make sure health plan members can access appropriate behavioral health care services when they need them.
The Department established the transgender, gender diverse or intersex (TGI) Working Group and held several listening sessions around the state to inform the important work of developing quality standards and recommending a training curriculum. I appreciate the members of the TGI community who joined the listening sessions and were willing to share their personal experience with the health care system.
With the end to the federal public health emergency in 2023, the DMHC shared updated information in a consumer fact sheet about COVID-19 testing, vaccines and treatment. Health plan members can continue to access these COVID-19 services with no cost-sharing or prior authorization requirements. Additionally, the Department continues to provide guidance to health plans, and more information is provided further on in this newsletter.
The DMHC Help Center is an important resource available to help health plan members facing issues with their health plan. The first step for a health plan member facing an issue is to reach out to their plan to file an appeal or grievance. If the health plan does not fix the issue within 30 days for non-urgent issues, the next step is to contact the DMHC Help Center for assistance at 1-888-466-2219 or www.DMHC.ca.gov. If the issue is urgent, the health plan member should contact the DMHC Help Center immediately.
I know that we will continue to build on these accomplishments to achieve our mission throughout 2024. Thank you for your support and continued interest in the DMHC.
Sincerely,
Mary Watanabe
Director
California Department of Managed Health Care
$200 Million Kaiser Permanente Settlement Agreement to Transform Plan's Behavioral Health Care Delivery System, Improve Behavioral Health Statewide
The DMHC announced a settlement agreement with Kaiser Foundation Health Plan, Inc. (Kaiser Permanente) in October to make significant changes to the plan’s delivery of behavioral health care services. The settlement agreement includes a $50 million fine and requires Kaiser Permanente to take corrective action to address deficiencies in the plan’s delivery and oversight of behavioral health care to health plan members. Kaiser Permanente has also pledged to make additional significant investments, totaling $150 million over 5 years, into programs to improve the delivery of behavioral health services for all Californians beyond Kaiser Permanente’s existing obligations to its members under the law.
This settlement means Kaiser health plan members will have full access to the behavioral health care services they are entitled to under California law. California law says that plan members must be offered a first mental health or substance use disorder treatment or support appointment within 10 business days of request, and a follow up appointment, if needed, within 10 business days of the prior appointment.
The DMHC encourages health plan members experiencing issues with accessing care to first contact their health plan. If the plan member is not satisfied with their health plan's response, the DMHC Help Center can work with the member and health plan to resolve the issue. The health plan member can contact the DMHC Help Center at www.DMHC.ca.gov or 1-888-466-2219.
Behavioral Health Investigations (BHIs)
The DMHC released the results of the first phase of Behavioral Health Investigations (BHIs) in October.
The main purpose of conducting the BHIs is to help identify if and why health plan members may be experiencing delays in obtaining behavioral health care services across the state’s commercial health care delivery system, help identify systemic changes that can be made to improve the delivery of care, and detect non-compliant practices or barriers to care in specific health plans that may lead to delays in access to care.
The DMHC created a phased approach to conduct BHIs of all licensed full service, commercial health plans. The Department will conduct BHIs of an average of five health plans per phase. The Department selected the plans based on enrollment size, counties of operation, and how the plan provides behavioral health services to their health plan members, such as the use of a specialized behavioral health plan. In addition, the Department sought to avoid scheduling the investigations near or during a routine medical survey.
In addition to issuing separate reports outlining the Department’s findings for each plan, the Department issued a Phase One Summary Report to provide a summary of the Knox Keene Act violations and other barriers contributing to challenges health plan members may experience to access care. The Department identified 27 Knox-Keene Act violations, and 14 barriers to care across all five health plans.
DMHC Reviews 2024 Health Plan Rate Filings
Health plans must file proposed premium rate changes for individual and small group plans with the DMHC. Actuaries perform an in-depth review of these proposed changes and ask health plans to demonstrate that proposed rate changes are supported by data, including underlying medical costs and trends. The DMHC does not have the authority to approve or deny rate changes; however, the Department’s rate review efforts hold health plans accountable through transparency, ensure consumers get value for their premium dollar and saves Californians money. To date, the Department’s premium rate review program has saved Californians over $296 million.
If the DMHC finds a health plan rate change is not supported, the DMHC negotiates with the plan to reduce the rate, called a modified rate. If the health plan refuses to modify its rate, the Department can find the rate to be unreasonable, and the health plan must notify members of the unreasonable finding.
The DMHC received and reviewed 13 individual rate filings with an effective date of January 1, 2024. This included 12 on-exchange filings. A new plan entered the individual market for 2024 – Inland Empire Health Plan. Additionally, Oscar Health Plan exited the individual market in 2024.
For the 13 individual rate filings, the rate changes ranged from -0.9% to 15% with a weighted average increase of 10.4%. The primary drivers of premium increases include a rise in health care utilization following the pandemic, increases in pharmacy costs, and inflationary pressures in the health care industry, such as the rising cost of care, labor shortages and salary and wage increases.
Additionally, the DMHC received and reviewed 12 small group rate filings with an effective date of January 1, 2024. The rate changes ranged from -6.5% to 13.4% with a weighted average increase of 8.4%.
The final rates can be found on the Department’s website.
Report Shows Health Plan Prescription Drug Costs Increased by $1.3 Billion in 2022
The DMHC Prescription Drug Cost Transparency Report for Measurement Year 2022 looks at the impact of the cost of prescription drugs on health plan premiums and compares this data across the reporting years, 2017 through 2022. Among other findings, the report reveals that health plan spending on prescription drugs increased by $3.4 billion since 2017, including an increase of almost $1.3 billion in 2022.
This report provides greater transparency into prescription drug costs and the impact of prescription drug costs on health plan premiums. In developing the report, the DMHC considered the total volume of prescription drugs covered by health plans and the total cost paid by health plans for those drugs. The Department also analyzed how the 25 most frequently prescribed drugs, the 25 most costly drugs, and the 25 drugs with the highest year-over-year increase in total annual spending impacted health plan premiums.
TGI Working Group
Following the adoption of Senate Bill (SB) 923 (Wiener, 2022), the DMHC established the transgender, gender diverse, or intersex (TGI) working group (working group). The working group is tasked with developing a quality standard for patient experience to measure cultural competency related to the TGI community and recommending a trans-inclusive training curriculum to be used by health care plan staff who are in direct contact with health plan members in the delivery of health care services. The DMHC convened the first working group meeting on April 12, 2023.
SB 923 required the working group to hold four public listening sessions across the state, which occurred in September and October. The purpose of these listening sessions was to hear directly from the TGI community about their experiences with health plan staff and health care providers while seeking health care services. The TGI working group will hold its two final meetings in January and February. The working group will be discussing and finalizing the training curriculum and quality measures recommendations. A report with the final recommendations and summaries of the working group and listening sessions will be issued on or before March 1, 2024. For more information, please visit the TGI Health Care Quality Standards and Training Curriculum Working Group page on the DMHC’s website.
COVID-19 Health care Rights
The DMHC has taken several actions to support the state’s response to COVID-19 and protect consumers’ health care rights. Health plan members in DMHC-regulated plans can continue to access COVID-19 testing (including eight free at-home tests a month), vaccines, and therapeutics without prior authorization, cost-sharing, or in-network requirements.
After November 11, 2023, six months after the end of the federal public health emergency, health plan members can be charged cost-sharing if these services are provided out-of-network. However, plan members can continue to access these services with no cost-sharing when provided through their health plan’s network.
The DMHC has a consumer fact sheet on COVID-19 tests, vaccines and treatment to inform consumers of these changes.
Departments throughout the state are also continuing to ensure Californians have the resources they need to stay safe and healthy. You can find additional state resources below to stay informed on the latest information and guidance regarding COVID-19.
Health Plans Must Assist Health Plan Members Impacted by Natural Disasters
During the rainy winter season, the DMHC is reminding impacted Californians that health plans must ensure health plan members displaced by natural disasters, including floods, earthquakes and wildfires, continue to have appropriate access to medically necessary health care services.
This could include speeding up approvals for care, replacing lost prescriptions and ID cards, or quickly arranging health care at other facilities if a hospital or doctor’s office is not available due to the disaster. Read the DMHC’s consumer-focused fact sheet in English and Spanish for more information about what health plans are required to do to help health plan members impacted by a natural disaster.
New Year, New Laws
The Governor signed several bills in 2023 that directly impact the DMHC. The DMHC will continue working to implement these bills over the coming year. Below is an overview of some of these bills:
Pharmacist service coverage
AB 317 (Weber) requires a health plan that offers coverage for a service that is within the scope of practice of a licensed pharmacist to pay or reimburse the cost of services performed at an in-network pharmacy, or by a pharmacist at an out-of-network pharmacy if the health plan has an out-of-network pharmacy benefit. This bill took effect on January 1, 2024.
Cancer Prevention Act
AB 659 (Aguiar-Curry) requires a health plan to provide coverage without cost-sharing for the human papillomavirus (HPV) vaccine, as approved by the U.S. Food and Drug Administration (FDA), for individuals up to age 45. This bill took effect on January 1, 2024.
Ground Medical Transportation
AB 716 (Boerner) limits an enrollee’s financial responsibility to the in-network cost-sharing amount for ground ambulance services, and requires health plans to reimburse noncontracted ground ambulance providers the difference between the in-network cost-sharing amount and the established or approved rate by the relevant local government entity. This bill took effect on January 1, 2024.
Health Care Coverage: Doulas
AB 904 (Calderon) requires a health plan to develop a maternal and infant health equity program by January 1, 2025, that addresses racial health disparities in maternal and infant health outcomes using doulas. The bill also requires the DMHC, in consultation with the California Department of Insurance (CDI), to collect data and submit a report describing the doula coverage to the Legislature by January 1, 2027. This bill begins to take effect on January 1, 2025.
Prescription Drugs
AB 948 (Berman) eliminates the sunset date for a cost-sharing limit for prescription drugs and defines health plan drug formulary tiers. Current law states that cost-sharing for prescription drugs shall not exceed $250 for up to a 30-day supply unless the health plan is equivalent to a bronze health plan, in which a maximum payment is $500. This bill took effect on January 1, 2024.
Dental Coverage Disclosures
AB 952 (Wood) requires health plans that cover dental services to disclose whether a particular enrollee’s dental plan product is subject to regulation by the state of California through a provider portal (when applicable), and upon a provider’s request. The bill also requires dental plans to specify whether an enrollee’s dental plan product is regulated by a state agency on an enrollee’s physical and/or electronic member I.D. card. This bill goes into effect on January 1, 2025.
Dental Benefits and Rate Review
AB 1048 (Wicks) prohibits health plans that cover dental services from imposing dental waiting periods to dental coverage in the large group market and would also prohibit plan contracts or policies covering dental services in all market segments from containing exclusions for preexisting conditions. The bill also establishes a premium rate review process for dental plans and requires specified information for dental rate changes to be filed with the DMHC and CDI. The DMHC and CDI are required to issue guidance regarding compliance with dental rate review requirements on or before July 1, 2024. This begins to take effect on July 1, 2024.
The Behavioral Health Services Act
SB 326 (Eggman) would rename the Mental Health Service Act the Behavioral Health Services Act and would expand its scope to include housing and treatment for substance use disorders. The bill also expands services for which counties and the state can use behavioral health funds. Counties would be authorized to report issues with managed care plans to the DMHC, and the DMHC would be required to investigate complaints. The bill would become effective July 1, 2026, if approved by the voters in the statewide primary election on March 5, 2024.
Health Care Coverage: Cancer Treatment
SB 421 (Limón) eliminates the sunset date for a cost-sharing limit on a prescription of a 30-day supply of a prescribed oral anticancer medication. Current law states that cost-sharing for prescription drugs shall not exceed $250 for up to a 30-day supply of prescribed oral anticancer medication. This bill took effect on January 1, 2024.
Abortion: Provider Protections
SB 487 (Atkins) prohibits health plans from terminating, discriminating against, or penalizing a provider of health care services based on a civil judgment, criminal conviction, or another disciplinary action in another state if the action is based on another state’s law that interferes with an individual’s right to receive abortion services and gender affirming care that would otherwise be lawful in California. This bill took effect on January 1, 2024.
Biomarker Testing
SB 496 (Limón) requires a health plan contract amended, delivered, or renewed on or after July 1, 2024, to cover medically necessary biomarker testing for the diagnosis, treatment, appropriate management, or ongoing monitoring of an enrollee’s disease or condition. This bill would not apply to Medi-Cal managed care plans, but the bill includes Medi-Cal provisions in the California Welfare and Institutions Code. This bill goes into effect on July 1, 2024.
Health Care Coverage: Biosimilar Drugs
SB 621 (Caballero) authorizes a health plan, or utilization review organization to require an enrollee to try a biosimilar drug before providing for the equivalent branded prescription drug, if it does not prohibit or supersede a step therapy exception request. The bill also clarifies that a requirement to try biosimilar, generic, and interchangeable drugs does not prohibit or supersede a step therapy exception request. This bill took effect on January 1, 2024.
Health Care Coverage: Pervasive Developmental Disorders or Autism
SB 805 (Portantino) expands the definition of qualified autism service professionals who provide behavioral health treatment for autism spectrum disorder, by including more types of qualified providers in the definition. This bill begun to take effect on January 1, 2024.
Regulation Update
Mental Health and Substance Use Disorder Coverage
The purpose of this regulation package is to address health plans prior authorization and utilization management requirements, as well as network adequacy for mental health and substance use disorder providers. The regulation follows the passage of SB 855 (Wiener, 2020), and will ensure health plans use the most recent criteria and guidelines developed by a nonprofit professional association for the relevant clinical specialty when conducting a utilization review of mental health and substance use disorder medical services requested by an enrollee or provider. The package was submitted to the Office of Administrative Law (OAL) on December 6, 2022, and noticed to the public on December 16, 2022. The initial 45-day comment period ended on January 30, 2023. The second 15-day comment period ended on July 31, 2023. A third 15-day comment period ended on October 3, 2023. The Department filed the final regulation package with OAL on November 30, 2023. OAL approved the regulation package on January 12, 2024, and the regulation takes effect April 1, 2024.
Average Contracted Rate – Inflation Adjustment
The purpose of this regulation is to address the application of the inflation adjustment to the average contracted rate health plans are currently paying to applicable out-of-network providers and to address the effective date of the inflation adjustment requirement. The package was submitted to OAL and noticed to the public on March 17, 2023. The initial 45-day comment period ended on May 1, 2023. The Department held a second 15-day comment period ended on June 26, 2023. The regulation package was finalized and approved by OAL and became effective January 1, 2024.
DMHC Help Center
The DMHC Help Center educates consumers about their health care rights, resolves consumer complaints, helps consumers navigate and understand their coverage and ensures access to appropriate health care services.
The DMHC encourages health plan members experiencing issues with their health plan to first file a grievance or appeal with their health plan. Common issues include getting timely access to care, receiving an inappropriate charge or bill, or a denial or delay in care or treatment. If the plan member does not agree with their health plan's response to the grievance or appeal, or the plan takes more than 30 days to fix the problem for non-urgent issues, the plan member should contact the DMHC Help Center. The DMHC Help Center will work with the member and health plan to resolve the issue. The health plan member can file a complaint with the DMHC Help Center at www.DMHC.ca.gov or 1-888-466-2219. If a health plan member is experiencing an urgent issue, they should contact the DMHC Help Center immediately.
If a health plan denies, changes or delays a request for medical services, denies payment for emergency treatment or refuses to cover experimental or investigational treatment, a health plan member can apply for an Independent Medical Review (IMR) through the DMHC Help Center. Independent providers will review the case, and the health plan must follow the IMR determination. Approximately 68% of health plan members who file an IMR with the DMHC receive their requested service or treatment from their health plan. For more information about the IMR process or to apply for an IMR, please visit www.DMHC.ca.gov.
DMHC Career Opportunities
The DMHC has many exciting career opportunities available and is committed to attracting, hiring, and retaining quality employees who can help fulfill the mission of the Department to protect consumers' health care rights and ensure a stable health care delivery system. More information about exciting careers with the DMHC is located on the CalCareers website and the DMHC website under career opportunities. We encourage you to see what the DMHC has to offer!
DMHC Web Banners
You can help the DMHC raise awareness about consumers’ health care rights and the DMHC Help Center. The DMHC created the following web banners to help raise consumer awareness of the DMHC Help Center.
If your organization is interested in hosting the DMHC web banners on your website, please visit the DMHC website or email stakeholder@dmhc.ca.gov. The web banners are also available in additional languages, including Spanish.
About DMHC:
The DMHC protects the health care rights of 29.7 million Californians and ensures a stable health care delivery system. The Department has helped 2.8 million Californians resolve health plan problems through the Help Center. Information and assistance is available at www.DMHC.ca.gov or by calling 1-888-466-2219.