CALIFORNIAS EXCHANGE California Medical Association Physicians dedicated to

CALIFORNIA’S EXCHANGE California Medical Association Physicians dedicated to the health of Californians

Basics of the California Exchange • California’s Exchange is an independent public entity within state government • Governed by a five-member board appointed by the Governor and Legislature • Exchange Board in CA will be an active purchaser – Similar to Massachusetts – Unlike Utah (open marketplace) California Medical Association Physicians dedicated to the health of Californians

California Health Benefit Exchange Vision • The vision of the California Health Benefit Exchange is to improve the health of all Californians by assuring their access to affordable, high quality care. • The mission of the California Health Benefit Exchange is to increase the number of insured Californians, improve health care quality, lower costs and reduce health disparities through an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that give them the best value. • The California Health Benefit Exchange is guided by the following values: Consumer-focused, Affordability, Catalyst for reform, integrity, partnership and results oriented. California Medical Association Physicians dedicated to the health of Californians

Federal ACA Requirements • 10 required benefit categories – Ambulatory patient services – Emergency services – Hospitalization – Maternity and newborn care – Mental health and substance use disorder services, including behavioral health treatment – Prescription drugs – Rehabilitative and habilitative services and devices – Laboratory services – Preventive and wellness services and chronic disease management – Pediatric services, including oral and vision care California Medical Association Physicians dedicated to the health of Californians

California Health Insurance Mandates • Breast Cancer Testing and Treatment • Cancer Screening Tests • Cervical Cancer Screening • Mammography • Mastectomy and Lymph Node Dissection-LOS • Cancer Clinical Trials • Prostate Cancer Screening • Diabetes Management and Treatment • HIV Vaccine • HIV Testing California Medical Association Physicians dedicated to the health of Californians

California Health Insurance Mandates • Osteoporosis • Phenylketonuria • Home Health Care (offer) • Hospice Care • Dementing Illness Exclusion Prohibition • Alcohol and Drug Exclusion Inhibition • Alcoholism Treatment (offer) • Coverage and Premiums for Persons with Physical or Mental Impairment • Coverage for Mental and Nervous Disorders (offer) California Medical Association Physicians dedicated to the health of Californians

California Health Insurance Mandates • Nicotine or Chemical Dependency Treatment in Licensed Alcoholism or Chemical Dependency Facilities • Parity Coverage for Severe Mental Illness • Behavioral Health Treatment for Autism and Related Disorders • Orthotic and Prosthetic Devices and Services (offer) • Prosthetic Devices for Laryngectomy • Special Footwear for Persons suffering from Foot Disfigurement • Acupuncture (offer) • General Anesthesia for Dental Procedures • Pain Management Medication for Terminally Ill California Medical Association Physicians dedicated to the health of Californians

California Health Insurance Mandates • Asthma Management • Comprehensive Preventive Care for Children under 16 • Comprehensive Preventive Care Ages 17 or 18 (offer) • Coverage for Effects of Diethylstilbestrol • Screening Children for Blood Lead Levels (offer) • Emergency 911 Transportation • Medical Transportation Services-Direct Reimbursement • OB-GYNs as Primary Care Providers • Pharmacists-Compensation for Services within their Scope of Practice California Medical Association Physicians dedicated to the health of Californians

California Health Insurance Mandates • Contraceptive Devices Requiring a Prescription • Prenatal Alpha Feto Protein Testing • Infertility Treatments (offer) • Maternity-LOS • Maternity-Amount of Copayment or deductible • Prenatal Diagnosis of Genetic Disorders (offer) • Maternity Services • Sterilization Rationale Exclusion Prohibition • Jawbone or Associated Bone Joints • Reconstructive Surgery California Medical Association Physicians dedicated to the health of Californians

California Health Insurance Mandates • Authorization for Nonformulary Prescription Drugs • Blindness or Partial Blindness • Coverage of Previously Prescribed Drugs • Prescription Coverage for “Off-Label” Use • Compliance with Federal Laws and Regulations regarding Preventive Services without Cost Sharing California Medical Association Physicians dedicated to the health of Californians

Exchange Enrollment Estimates Enrollees’ Health Insurance Coverage by Source California Medical Association Physicians dedicated to the health of Californians

California Healthcare Coverage 2016 • Commercial Exchange • 45% 3. 5% Medicaid 33% Expanded to Undocumented children 2017 • Medicare 10% • Uninsured 11% Undocumented Adults Middle Class without Employer Coverage Medicaid has become the public option California Medical Association Physicians dedicated to the health of Californians

Exchange Enrollment Update Bay Area at nearly 300 k L. A. at approx. 420 k * Source: ASPE Issue Brief (March 2015) California Medical Association Physicians dedicated to the health of Californians

2015 State Enrollment by Plan California Medical Association Physicians dedicated to the health of Californians

Patient Cost-Sharing Issues • Much of Exchange’s offerings are catastrophic coverage • Standard cost-sharing caps: $6, 250 indiv. ; $12, 500 family – Cost-sharing reductions for those ≤ 250% FPL ($28, 725 + ~$10 k per dependent) in silver plans • No cost for a preventive care visit • Cost-sharing challenges for patients: – Significant co-pays for specialist services and imaging – High brand drug deductibles – Inexperience with premiums & cost-sharing California Medical Association Physicians dedicated to the health of Californians

The Exchange’s 3 -Month Grace Period for Nonpayment of Premiums 1 st month of delinquency 2 nd & 3 rd months of delinquency Terminated after 3 months of delinquency Normal payment of claims Plan effectively treats this month as paid even if enrollee is eventually terminated for non-payment No provider notification of the patient’s delinquency SUSPENSION proposal = Plan has the option to deny eligibility verification all claims for services shows inactive coverage performed in the 2 nd & 3 rd Plan has the option to pend months of delinquency. claims for services Providers may seek performed until the payment for denied claims enrollee pays balance from the patient. Providers notified of the Patient may then enroll in a potential for denial. different Exchange plan at If enrollee pays off the next open enrollment premium balance, despite the delinquency. providers’ claims are paid at that time and enrollee’s coverage is reinstated. California Medical Association Physicians dedicated to the health of Californians

Provider Issues: Out-of-Network Services • Exchange hostile towards out-of-network care • Plan must disclose what it will pay on out-of-network, non-emergent services to an enrollee • In-network physicians must disclose the use of or referral to an out-of-network provider or facility – “In a manner that allows the enrollee the opportunity to act upon. . . the recommendation” – Anthem & Blue Shield require patient signature • Safe harbor: Physician may rely upon plan-published information sources California Medical Association Physicians dedicated to the health of Californians

Provider Issues: Networks & Directories • 9 class action suits filed in California: – Felser v. Blue Cross of California, no. BC 550739 – Cowart v. Blue Cross of California, no. BC 549438 – Brown et al. v. Blue Cross of California, no. BC 554949 – Harrington v. Blue Shield of California, SF Superior Ct. , no 14 -539283 – Weiss v. Blue Shield of California and Blue Shield Life & Health Ins. Co. , LA Super. Ct. , no. BC 550977 – Daum v. Blue Shield of California, San Diego Superior Ct. , no. 37 -201400023350 – Mc. Carthy v. Blue Shield, LA Super. Ct. , no. BC 558549 – Davidson v. Cigna, LA Super. Ct. , no. BC 558566 – La. Rue v. Health Net, LA Super. Ct. no. BC 566095 California Medical Association Physicians dedicated to the health of Californians

Provider Issues: Networks & Directories • Most causes of action based on bait-and-switch: – Breach of implied covenant of good faith and fair dealing • Misrepresentation in marketing of network and subsequent denial of out-of-network claims – Breach of contract • Failure to ensure timely access of care under terms – Concealment of material facts • Transitioning enrollee into narrow network product with misleading or nonexistent notice California Medical Association Physicians dedicated to the health of Californians