Presentation to the California Health Benefit Exchange February 21, 2012 Deborah Reidy Kelch, MPPA Kelch Policy Group

 Reviewed history and statutory differences  Developed comparison overview between two frameworks  Identified state regulatory issues raised by the federal Accountable Care Act  Made some recommendations for strategies to improve consistency and accountability Health Insurance Alignment Project  Continuing to identify opportunities for coordination and uniformity through the Health Insurance Alignment Project 2 Kelch Policy Group

 Relative strengths and weaknesses of each regulatory process  Differences are based in law and history  Increasing efforts to coordinate both statute and implementation in recent years  The federal Accountable Care Act makes uniformity and coordination more important than ever Kelch Policy Group 3

During the first half of the decade, there were changes in the relative number of lives under each regulator, with notable increases in CDI covered lives, but recently enrollment has stabilized 4 Kelch Policy Group

CDI regulates the majority of commercial individual coverage while DMHC regulates the majority of the insured group market 5 Kelch Policy Group

 93% of covered lives under CDI are in products offered by eight companies that also have affiliates with products licensed by DMHC, including two companies that offer the same types of products (PPO plans) under CDI and DMHC, and must meet different regulatory requirements 6 Kelch Policy Group

DMHC Product Types CDI Product Types  HMO “full-service” health plans  (including Medi-Cal managed care plans)  PPO full service health plans  (Some of the Blue Shield and Anthem Blue Cross PPO products)  Point-of-Service plans  Specialized plans (dental, vision, mental health, etc.)  Medicare plans  PPO health insurance (disability insurance covering health)  Traditional indemnity insurance  Specialized health insurance (dental, vision, etc.)  Medicare policies, long term care insurance  Other related products (e.g., cash indemnity, disease-specific cash policies, short term coverage, etc.) 7 Kelch Policy Group

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 Essential health benefits as a minimum  Individual and small employer coverage  Inside and outside of the Exchange  Uniform cost sharing limits  Premium rate filings and review  Medical loss ratio standards  Standardized consumer disclosure 9 Kelch Policy Group

 Review of quality programs and systems?  Knox-Keene requires and DMHC conducts routine medical surveys of quality assurance programs and utilization review systems and requires health plans to conduct provider onsite reviews  Insurance Code does not 10 Kelch Policy Group

 Provider payment innovations, new structures (ACOs)?  Knox-Keene requires regulatory review and approval of provider contracts and risk-based payment arrangements  Provider solvency standards and protections to avoid insolvencies and care disruptions of the past  As innovation emerges, regulatory oversight to ensure provider solvency and consumer protections will be critical 11 Kelch Policy Group

 Sufficient provider networks in Exchange coverage?  Knox-Keene regulations include geographic and timely access standards (applicable to HMOs and PPOs)  Appointment waiting times (e.g., 48 hours for urgent care appointments)  Insurance Code regulations focus primarily on geographic access standards  No appointment waiting times 12 Kelch Policy Group

 Understand and consider differences as the Board sets qualified health plan standards  Continue to work collaboratively with both departments  Identify opportunities to better align and augment standards and expectations across regulators and markets 13 Kelch Policy Group

Full report available at: Kelch Policy Group