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SB-402 Multipayer Payment Reform Collaborative.(2021-2022)



Current Version: 06/14/21 - Amended Assembly

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SB402:v94#DOCUMENT

Amended  IN  Assembly  June 14, 2021
Amended  IN  Senate  May 20, 2021
Amended  IN  Senate  April 12, 2021
Amended  IN  Senate  March 25, 2021
Amended  IN  Senate  March 07, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 402

Introduced by Senator Hurtado

February 12, 2021

An act to add Division 117 (commencing with Section 150300) to the Health and Safety Code, relating to health care.


LEGISLATIVE COUNSEL'S DIGEST


SB 402, as amended, Hurtado. Multipayer Payment Reform Collaborative.
Existing law establishes the California Health and Human Services Agency, which consists of various departments and offices, including the Department of Managed Health Care, the State Department of Health Care Services, the State Department of Public Health, and the Office of Statewide Health Planning and Development. Under existing law, those entities administer programs and services related to health care and perform various duties, including providing for the licensure and regulation of health care service plans, administering various public health programs, and performing health policy and planning for the state.
By June 1, 2022, or within 90 days of receiving funding after June 1, 2022, this bill would require the California Health and Human Services Agency to convene a Multipayer Payment Reform Collaborative composed of specified individuals and entities, including representatives of organizations representing consumers and the Secretary of California Health and Human Services, and would require the collaborative to propose to the agency Multipayer Payment Reform Pilots (pilots) for the purpose of establishing pilots for primarily fee-for-service primary care practices in areas hit hardest by the COVID-19 pandemic. The bill would require the agency, in collaboration with the collaborative, to work with state regulators, agencies, and departments to ensure that the pilots include as participating payers specified entities, such as health care service plans, would authorize the collaborative to include certain entities as participating payers, and would require the collaborative to propose to the agency matters related to the pilots, including criteria to be adopted by the pilots for primary care practice participation and uniform payment methods to be adopted across payers in the pilots. The bill would also require the agency, at least 3 months before the implementation of a pilot, to provide the Legislature, including the appropriate policy committees of the Assembly and the Senate, with a summary of the proposed pilot, including the structure, eligibility, geography, payment methods, quality and equity metrics, and evaluation criteria. By the 2nd and 4th year following the implementation of the pilots, the bill would require the agency to provide to the Legislature comprehensive evaluations of the pilots that include prescribed information, such as the number of enrollees in the pilots and the health characteristics of the enrollees. The bill would require participating payers in the pilots to provide the agency with information necessary to complete these evaluations. The bill would make related legislative findings and declarations.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) The COVID-19 pandemic has exposed our health care system’s weaknesses and pre-existing conditions, including an unsupported primary care foundation, inequitable health care delivery and outcomes, and payment system failure. These shortcomings impact one another. One reason for health inequity and the disproportionate impact of COVID-19 on minority and marginalized communities is inadequate access to primary and preventive care. And, one of the reasons for the inadequate access to primary and preventive care is the current predominant payment scheme of fee-for-service payments, which is not structured to support or sustain a comprehensive primary care system.
(2) The underfunding of primary care is also leading the way to increased consolidation as larger health systems purchase financially fragile and independent practices.
(3) Although these problems are exacerbated by COVID-19, they are not caused by COVID-19. After the pandemic, these problems will remain because they are underlying conditions of our health care system. There have been efforts to address these issues through health payer payment reform and quality measurement. However, these efforts have been isolated, limited, inconsistent, and disjointed, partly due to a lack of consensus on the best payment model and quality measures to adopt.
(4) Disjointed efforts, however, will not achieve the necessary changes to our health care system. In order to make impactful, overall health care system changes, payers, health care providers, and consumers must collaborate and have direct conversations to achieve alignment and consensus on a payment reform model, quality measurements, and reporting.
(5) There is consistent and growing evidence that investing in primary care promotes health equity, improves patient outcomes and experience, and reduces health care spending. Primary care-oriented health care systems are associated with fewer hospitalizations and emergency department visits, lower mortality, and increased self-rated health scores. Research published in 2019 found that having 10 additional primary care physicians in an area was associated with an increase in life expectancy by 51.5 days.
(6) Other states that have invested in primary care have seen significant reductions in expenditures and an increased supply of primary care providers. Oregon found that for every $1 increase in primary care expenditures, that $1 increase resulted in $13 in savings in other services, such as specialty care, emergency department services, and inpatient care. In addition, Oregon saved an estimated $240 million over the first three years of the initiative. Rhode Island experienced an increased supply of primary care providers per capita during the time period in which the state increased primary care investments.
(7) Initiatives in California have also seen reductions in expenditures and improvements in health outcomes. In a primary care initiative launched by the self-insured Fresno Unified School District’s Joint Health Management Board and the California Academy of Family Physicians, the district saved nearly $1 million, and health outcomes and patient satisfaction improved significantly one year after the launch of the initiative.
(b) Therefore, it is the intent of the Legislature to do all of the following:
(1) To direct payers, health care providers, and health care consumer representatives to come to the table and collaborate to establish multipayer payment reform pilots for primarily fee-for-service primary care practices.
(2) To ensure that the pilots described under paragraph (1) are established in areas hit hardest by the COVID-19 pandemic, particularly in regions where the impact has been greatest among communities of color, which face health disparities and lower access to culturally and linguistically competent care. Communities in these regions often rely on small- to medium-sized primary care practices that have been financially threatened by COVID-19 due to their predominant payment model of fee-for-service.
(3) (A) To make prescribed exemptions on state antitrust laws, and, to the extent possible, to ensure that entities be granted immunity from federal antitrust laws, pursuant to the state action doctrine, for any activities undertaken pursuant to this act that otherwise might be constrained by those laws.
(B) It is not the intent of the Legislature to authorize any person or entity to engage in, or to conspire to engage in, any activity that would constitute a per se violation of state or federal antitrust laws.
(4) To articulate a clear and affirmative policy describing its intent to manage competition with respect to the implementation of this act, and to actively supervise anticompetitive conduct and its results with ongoing oversight.

SEC. 2.

 Division 117 (commencing with Section 150300) is added to the Health and Safety Code, to read:

DIVISION 117. MultiPayer Payment Reform Collaborative and Pilot Programs

150300.
 (a) The California Health and Human Services Agency (agency) shall convene a Multipayer Payment Reform Collaborative (collaborative) composed of all of the following:
(1) Representatives A representative of health care service plans, as defined in subdivision (f) of Section 1345.
(2) Representatives A representative of insurers licensed to provide health insurance, as defined in subdivision (b) of Section 106 of the Insurance Code.

(3)(A)Representatives of primary care practices, as defined in subdivision (d) of Section 150301.

(3) (A) A representative of each primary care physician specialty listed in subdivision (e) of Section 150301.
(B) A At least one representative of a primary care practice shall be a primary care physician from a small or solo independent practice.
(4) Representatives A representative of self-insured employers.
(5) Representatives A representative of multiemployer self-insured plans that are responsible for paying for health care services provided to beneficiaries, or the trust administrator for a multiemployer self-insured plan.

(6)Representatives of organizations representing consumers.

(6) A representative of a consumer organization that represents diverse communities.
(7) An exclusive representative of county and noncounty primary care workers, such as allied health professionals.

(7)

(8) The Secretary of California Health and Human Services, or an officially designated representative.

(8)

(9) The Executive Director of the California Health Benefit Exchange, or an officially designated representative.

(9)

(10) The Director of the Department of Managed Health Care, or an officially designated representative.

(10)

(11) The Insurance Commissioner, or an officially designated representative.

(11)

(12) The Chief Executive Officer of the Public Employees’ Retirement System, or an officially designated representative.
(b) (1) The agency shall convene the collaborative only after sufficient state or nonstate funds have been received to implement this division. The collaborative shall be convened by June 1, 2022, or within 90 days of receiving sufficient state funding if that funding is received after June 1, 2022.
(2) The collaborative shall dissolve by June 1, 2028.

150301.
 (a) The collaborative shall propose Multipayer Payment Reform Pilots (pilots) to the agency for the purpose of establishing pilots for primarily fee-for-service primary care practices in areas hit hardest by the COVID-19 pandemic, particularly in regions where the impact has been greatest among minority and marginalized communities.
(b) (1) The collaborative and the agency shall consult with the State Department of Public Health to determine regions hardest hit by the COVID-19 pandemic and where the impact has been greatest among minority and marginalized communities. The collaborative and the agency shall establish factors for determining those regions that shall be included in the pilots.
(2) The agency shall work with state regulators, agencies, and departments to ensure adoption of these pilots.
(c) The pilots shall be established by January 1, 2023.
(d) At least three months before the implementation of a pilot under this division, the agency shall provide the Legislature, including the appropriate policy committees of the Assembly and the Senate, with a summary of the proposed pilot, including the structure, eligibility, geography, payment methods, quality and equity metrics, and evaluation criteria.
(e) For purposes of this division, “primary care practice” means a practice with one or more physicians who have the responsibility for providing initial and primary care to patients, for maintaining the continuity of patient care, and for initiating referral for specialist care. The majority of physicians in that practice shall limit their practice of medicine to general practice. A physician shall be a board-certified or board-eligible internist, pediatrician, family physician, obstetrician-gynecologist, or geriatrician, or they shall specialize in general adolescent medicine, including behavioral health.

150302.
 (a) The agency, in collaboration with the collaborative, shall work with state regulators, agencies, and departments to ensure that the pilots include as participating payers all of the following:
(1) Health care service plans, including a specialized health care service plan, and its delegated entities.
(2) Insurers licensed to provide health insurance, as defined in Section 106 of the Insurance Code.
(3) Self-insured plans subject to Section 1349.2, or any state entity, city, county, or other political subdivision of the state, or a public joint labor management trust, that offers self-insured or multiemployer-insured plans that pay for, or reimburse any part of, the cost of health care services.
(b) The agency and collaborative may include as participating payers all of the following:
(1) Self-insured employers that are not subject to Section 1349.2.
(2) Multiemployer self-insured plans that are responsible for paying for health care services provided to beneficiaries.
(3) Trust administrators for multiemployer self-insured plans.
(c) The collaborative shall propose to the agency a payer size threshold for participation, which may include market share or premium revenue.

150303.
 The collaborative shall propose to the agency all of the following:
(a) Criteria to be adopted by the pilots for primary care practice participation. This criteria may include practice competencies, including the use of electronic health records and health information technology, and the level of care coordination and patient engagement. The nature of any criteria shall not prevent small or rural primary care practices from participating in the pilots.
(b) Uniform payment methods to be adopted across payers in the pilots. Methods may include, at a minimum, the following:
(1) Prospective, risk-adjusted, primary care global payments for direct patient care.
(2) Prospective, risk-adjusted, population-based payments.
(3) Performance-based incentive payments.
(c) Uniform payment methods, including practice transformation payments, that are paid by participating payers to primary care practices to support the participation of small or rural practices.
(d) A common set of core quality metrics and reporting mechanisms to be adopted by the pilots to measure performance.
(e) A standardized means of reporting quality metrics.
(f) A plan for expanding the pilots to a larger number of primary care practices throughout the state.

150304.
 (a) By the second and fourth year following the implementation of the pilots, the agency shall provide to the Legislature comprehensive evaluations of the pilots. The evaluations shall include all of the following:
(1) The number of enrollees in the pilots and the health characteristics of the enrollees.
(2) The number and geographic distribution of pilots and the number of primary care practices in the pilot per thousand populations.
(3) The payment methods and costs related to implementation paid by participating payers to primary care practices.
(4) The performance and quality of care of the pilots based on the common set of core quality metrics adopted by the pilots.
(5) With respect to the enrollees, the estimated impact of the pilots on both of the following:
(A) Consumer access to preventive care.
(B) Health status and health disparities.
(6) The estimated savings from the pilots.
(b) Participating payers shall provide the agency with information necessary to complete these evaluations.
(c) (1) The requirement for submitting a report imposed under subdivision (a) is inoperative on the fourth year following the date that the last evaluation is due, pursuant to Section 10231.5 of the Government Code.
(2) A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.