Fall 2023
Message from the Director
This fall season is an important time for the Department of Managed Health Care (DMHC).
The Department recently announced a settlement agreement and $200 million enforcement action against Kaiser Permanente related to how they deliver behavioral health services. The settlement, which you can read more about in this newsletter, includes a historic fine of $50 million. Kaiser has also agreed to invest $150 million over the next 5 years in programs that will improve the delivery of behavioral health services for Kaiser enrollees and all Californians.
The DMHC recently released the results from our first phase of Behavioral Health Investigations (BHIs). The BHIs are critical to better understanding the barriers consumers face with accessing behavioral health care. One of my highest priorities as Director of the DMHC is to make sure health plan enrollees can access appropriate behavioral health care services when they need them.
The Department recently completed reviews of health plan’s proposed rate changes for 2024. Through the rate review program, the DMHC reviews proposed rates, considers public comments and asks health plans questions about their proposed changes. The goal is to make sure plans are providing the information to the public to support rate changes. More information on the final rate changes filed with the Department is included in this newsletter.
The DMHC recently completed listening sessions across the state with members of the transgender, gender diverse or intersex (TGI) community, which will inform the work of the TGI Working Group. The TGI Working Group was created to develop a quality standard for patient experience to measure cultural competency related to the TGI community and recommend a trans-inclusive training curriculum to be used by health care plan staff who are in direct contact with enrollees in the delivery of health care services. 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.
The DMHC Help Center is an important resource available to help enrollees facing issues with their health plan, like accessing care, coverage or treatment denials, or wrongful billing. The first step for an enrollee facing an issue is to reach out to their health 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.HealthHelp.ca.gov. If the issue is urgent, the enrollee should contact the DMHC Help Center immediately.
Thank you for your support and continued interest in the DMHC.
Sincerely,
Mary Watanabe
Director
California Department of Managed Health Care
DMHC, Kaiser Permanente Reach $200 Million Settlement Agreement to Transform Plan's Behavioral Health Care Delivery System and Improve Behavioral Health Statewide
The DMHC announced a settlement agreement with Kaiser Foundation Health Plan, Inc. (Kaiser Permanente) 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 enrollees. 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.
"With this historic agreement, Kaiser Permanente will undertake a systemic overhaul and transformational change of the plan’s behavioral health care delivery system to improve enrollee experiences, access to care and treatment outcomes. I appreciate Kaiser working proactively and in good faith to reach this agreement for the benefit of its members,” said DMHC Director Mary Watanabe. “In addition to paying the highest fine the DMHC has ever levied against a health plan, Kaiser Permanente has agreed to make significant improvements to the plan’s operations, processes and procedures and business model to better assist enrollees with accessing care. The DMHC is committed to using its full authority to hold Kaiser accountable and ensure enrollees have access to behavioral health care when they need it."
Under the settlement agreement, Kaiser Permanente will focus on corrective actions including:
- Oversight
- Access
- Network & Referrals
- Grievance and Appeals
- Mental Health Parity
This settlement will mean Kaiser enrollees will have full access to the behavioral health care services they are entitled to under California law. California law says that enrollees 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 enrollees experiencing issues with accessing care to first contact their health plan. If the enrollee is not satisfied with their health plan's response, the DMHC Help Center can work with the enrollee and health plan to resolve the issue. The health plan enrollee can contact the DMHC Help Center at www.HealthHelp.ca.gov or 1-888-466-2219.
Behavioral Health Investigations (BHIs)
The Department of Managed Health Care (DMHC) released the results from its first phase of behavioral health investigations (BHIs) in October.
The main purpose of conducting the BHIs is to help identify if and why enrollees 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 enrollees, such as the use of a specialized behavioral health plan. In addition, the Department sought to avoid scheduling the investigations near or during a Department 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 enrollees’ challenges accessing care across all five plans. 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
Under state law, proposed premium rate changes for individual and small group health plans must be filed 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 increases; 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 includes 12 on-exchange filings. There is a new plan entering the individual market for 2024 – Inland Empire Health Plan. Oscar Health Plan is exiting 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 DMHC has published the final rates on the Department's website.
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). They are 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 enrollees 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. To learn more about the working group and upcoming meetings, 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. Enrollees 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, which is six months after the end of the federal public health emergency, enrollees can be charged cost-sharing if these services are provided out-of-network. However, enrollees 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.
DMHC 2022 Annual Report
The Department of Managed Health Care (DMHC) released the 2022 Annual Report in June, highlighting the Department’s achievements and activities during the year. The DMHC protects the health care rights of 29.7 million people in California and regulates the majority of health care coverage statewide, including 96% of commercial and public enrollment in state-regulated health plans.
In 2022, the DMHC implemented a number of new initiatives, including the adoption of standard health equity and quality measures for health plans with the goal of ensuring the equitable delivery of high-quality health care services for all enrollees. The Department also implemented several new laws that took effect in 2022 and continued to protect Californian’s health care rights. This included implementing a new timely access standard for behavioral health care follow-up appointments, protecting reproductive health care rights and ensuring continued access to important COVID-19 care and resources. Additionally, the Department took enforcement actions against health plans that broke the law and violated consumers’ health care rights. The Department’s enforcement actions involved many diverse legal issues including mishandling enrollee grievances and authorization for care requests, incorrect application of co-payments, untimely acknowledgment and resolution of provider disputes, improper adjudication of emergency room claims, inadequate administrative oversight, and failure to meet timely access standards.
The 2022 Annual Report and Infographic are available on the DMHC website.
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 is reviewing comments, and anticipates filing the final regulation package with OAL soon.
Average Contracted Rate – Inflation AdjustmentThe 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 will be 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 enrollees 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 enrollee 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 enrollee should contact the DMHC Help Center. The DMHC Help Center will work with the enrollee and health plan to resolve the issue. The health plan enrollee can file a complaint with the DMHC Help Center at www.HealthHelp.ca.gov or 1-888-466-2219. If a health plan enrollee 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 enrollee 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 consumers 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.HealthHelp.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 28.4 million Californians and ensures a stable health care delivery system. The Department has helped 2.6 million Californians resolve health plan problems through the Help Center. Information and assistance is available at www.HealthHelp.ca.gov or by calling 1-888-466-2219.