State Codes and Statutes

Statutes > California > Hsc > 1385.01-1385.13

HEALTH AND SAFETY CODE
SECTION 1385.01-1385.13



1385.01.  For purposes of this article, the following definitions
shall apply:
   (a) "Large group health care service plan contract" means a group
health care service plan contract other than a contract issued to a
small employer, as defined in Section 1357.
   (b) "Small group health care service plan contract" means a group
health care service plan contract issued to a small employer, as
defined in Section 1357.
   (c) "PPACA" means Section 2794 of the federal Public Health
Service Act (42 U.S.C. Sec. 300gg-14), as amended by the federal
Patient Protection and Affordable Care Act (P. L. 111-48), and any
subsequent rules, regulations, or guidance issued under that section.
   (d) "Unreasonable rate increase" has the same meaning as that term
is defined in PPACA.


1385.02.  This article shall apply to health care service plan
contracts offered in the individual or group market in California.
However, this article shall not apply to a specialized health care
service plan contract; a Medicare supplement contract subject to
Article 3.5 (commencing with Section 1358.1); a health care service
plan contract offered in the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code); a health care service plan contract offered in
the Healthy Families Program (Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code), the Access for Infants
and Mothers Program (Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code), the California Major Risk Medical
Insurance Program (Part 6.5 (commencing with Section 12700) of
Division 2 of the Insurance Code), or the Federal Temporary High Risk
Pool (Part 6.6 (commencing with Section 12739.5) of Division 2 of
the Insurance Code); a health care service plan conversion contract
offered pursuant to Section 1373.6; or a health care service plan
contract offered to a federally eligible defined individual under
Article 4.6 (commencing with Section 1366.35) or Article 10.5
(commencing with Section 1399.801).



1385.03.  (a) (1) All health care service plans shall file with the
department all required rate information for individual and small
group health care service plan contracts at least 60 days prior to
implementing any rate change.
   (2) For individual health care service plan contracts, the filing
shall be concurrent with the notice required under Section 1389.25.
   (3) For small group health care service plan contracts, the filing
shall be concurrent with the notice required under subdivision (a)
of Section 1374.21.
   (b) A plan shall disclose to the department all of the following
for each individual and small group rate filing:
   (1) Company name and contact information.
   (2) Number of plan contract forms covered by the filing.
   (3) Plan contract form numbers covered by the filing.
   (4) Product type, such as a preferred provider organization or
health maintenance organization.
   (5) Segment type.
   (6) Type of plan involved, such as for profit or not for profit.
   (7) Whether the products are opened or closed.
   (8) Enrollment in each plan contract and rating form.
   (9) Enrollee months in each plan contract form.
   (10) Annual rate.
   (11) Total earned premiums in each plan contract form.
   (12) Total incurred claims in each plan contract form.
   (13) Average rate increase initially requested.
   (14) Review category: initial filing for new product, filing for
existing product, or resubmission.
   (15) Average rate of increase.
   (16) Effective date of rate increase.
   (17) Number of subscribers or enrollees affected by each plan
contract form.
   (18) The plan's overall annual medical trend factor assumptions in
each rate filing for all benefits and by aggregate benefit category,
including hospital inpatient, hospital outpatient, physician
services, prescription drugs and other ancillary services,
laboratory, and radiology. A plan may provide aggregated additional
data that demonstrates or reasonably estimates year-to-year cost
increases in specific benefit categories in major geographic regions
of the state. For purposes of this paragraph, "major geographic
region" shall be defined by the department and shall include no more
than nine regions. A health plan that exclusively contracts with no
more than two medical groups in the state to provide or arrange for
professional medical services for the enrollees of the plan shall
instead disclose the amount of its actual trend experience for the
prior contract year by aggregate benefit category, using benefit
categories that are, to the maximum extent possible, the same or
similar to those used by other plans.
   (19) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.
   (20) A comparison of claims cost and rate of changes over time.
   (21) Any changes in enrollee cost-sharing over the prior year
associated with the submitted rate filing.
   (22) Any changes in enrollee benefits over the prior year
associated with the submitted rate filing.
   (23) The certification described in subdivision (b) of Section
1385.06.
   (24) Any changes in administrative costs.
   (25) Any other information required for rate review under PPACA.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following aggregate data for all rate filings
submitted under this section in the individual and small group health
plan markets:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of subscribers.
   (E) Number of covered lives affected.
   (2) The plan's average rate increase by the following categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
   (d) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.
   (e) A plan shall submit any other information required under
PPACA. A plan shall also submit any other information required
pursuant to any regulation adopted by the department to comply with
this article.



1385.04.  (a) For large group health care service plan contracts,
all health plans shall file with the department at least 60 days
prior to implementing any rate change all required rate information
for unreasonable rate increases. This filing shall be concurrent with
the written notice described in subdivision (a) of Section 1374.21.
   (b) For large group rate filings, health plans shall submit all
information that is required by PPACA. A plan shall also submit any
other information required pursuant to any regulation adopted by the
department to comply with this article.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following aggregate data for all rate filings
submitted under this section in the large group health plan market:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of subscribers.
   (E) Number of covered lives affected.
   (2) The plan's average rate increase by the following categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
   (d) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.


1385.05.  Notwithstanding any provision in a contract between a
health care service plan and a provider, the department may request
from a health care service plan any information required under this
article or PPACA.


1385.06.  (a) A filing submitted under this article shall be
actuarially sound.
   (b) (1) The plan shall contract with an independent actuary or
actuaries consistent with this section.
   (2) A filing submitted under this article shall include a
certification by an independent actuary or actuarial firm that the
rate increase is reasonable or unreasonable and, if unreasonable,
that the justification for the increase is based on accurate and
sound actuarial assumptions and methodologies. Unless PPACA requires
a certification of actuarial soundness for each large group contract,
a filing submitted under Section 1385.04 shall include a
certification by an independent actuary, as described in this
section, that the aggregate or average rate increase is based on
accurate and sound actuarial assumptions and methodologies.
   (3) The actuary or actuarial firm acting under paragraph (2) shall
not be an affiliate or a subsidiary of, nor in any way owned or
controlled by, a health care service plan or a trade association of
health care service plans. A board member, director, officer, or
employee of the actuary or actuarial firm shall not serve as a board
member, director, or employee of a health care service plan. A board
member, director, or officer of a health care service plan or a trade
association of health care service plans shall not serve as a board
member, director, officer, or employee of the actuary or actuarial
firm.
   (c) Nothing in this article shall be construed to permit the
director to establish the rates charged subscribers and enrollees for
covered health care services.



1385.07.  (a) Notwithstanding Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code, all
information submitted under this article shall be made publicly
available by the department except as provided in subdivision (b).
   (b) The contracted rates between a health care service plan and a
provider shall be deemed confidential information that shall not be
made public by the department and are exempt from disclosure under
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code). The
contracted rates between a health care service plan and a large group
shall be deemed confidential information that shall not be made
public by the department and are exempt from disclosure under the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code).
   (c) All information submitted to the department under this article
shall be submitted electronically in order to facilitate review by
the department and the public.
   (d) In addition, the department and the health care service plan
shall, at a minimum, make the following information readily available
to the public on their Internet Web sites, in plain language and in
a manner and format specified by the department, except as provided
in subdivision (b). The information shall be made public for 60 days
prior to the implementation of the rate increase. The information
shall include:
   (1) Justifications for any unreasonable rate increases, including
all information and supporting documentation as to why the rate
increase is justified.
   (2) A plan's overall annual medical trend factor assumptions in
each rate filing for all benefits.
   (3) A health plan's actual costs, by aggregate benefit category to
include hospital inpatient, hospital outpatient, physician services,
prescription drugs and other ancillary services, laboratory, and
radiology.
   (4) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.




1385.08.  (a) On or before July 1, 2012, the director may issue
guidance to health care service plans regarding compliance with this
article. This guidance shall not be subject to the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code).
   (b) The department shall consult with the Department of Insurance
in issuing guidance under subdivision (a), in adopting necessary
regulations, in posting information on its Internet Web site under
this article, and in taking any other action for the purpose of
implementing this article.



1385.11.  (a) Whenever it appears to the department that any person
has engaged, or is about to engage, in any act or practice
constituting a violation of this article, including the filing of
inaccurate or unjustified rates or inaccurate or unjustified rate
information, the department may review the rate filing to ensure
compliance with the law.
   (b) The department may review other filings.
   (c) The department shall accept and post to its Internet Web site
any public comment on a rate increase submitted to the department
during the 60-day period described in subdivision (d) of Section
1385.07.
   (d) The department shall report to the Legislature at least
quarterly on all unreasonable rate filings.
   (e) The department shall post on its Internet Web site any changes
submitted by the plan to the proposed rate increase, including any
documentation submitted by the plan supporting those changes.
   (f) If the department finds that an unreasonable rate increase is
not justified or that a rate filing contains inaccurate information,
the department shall post its finding on its Internet Web site.
   (g) Nothing in this article shall be construed to impair or impede
the department's authority to administer or enforce any other
provision of this chapter.


1385.13.  The department shall do all of the following in a manner
consistent with applicable federal laws, rules, and regulations:
   (a) Provide data to the United States Secretary of Health and
Human Services on health care service plan rate trends in premium
rating areas.
   (b) Commencing with the creation of the Exchange, provide to the
Exchange such information as may be necessary to allow compliance
with federal law, rules, regulations, and guidance.


State Codes and Statutes

Statutes > California > Hsc > 1385.01-1385.13

HEALTH AND SAFETY CODE
SECTION 1385.01-1385.13



1385.01.  For purposes of this article, the following definitions
shall apply:
   (a) "Large group health care service plan contract" means a group
health care service plan contract other than a contract issued to a
small employer, as defined in Section 1357.
   (b) "Small group health care service plan contract" means a group
health care service plan contract issued to a small employer, as
defined in Section 1357.
   (c) "PPACA" means Section 2794 of the federal Public Health
Service Act (42 U.S.C. Sec. 300gg-14), as amended by the federal
Patient Protection and Affordable Care Act (P. L. 111-48), and any
subsequent rules, regulations, or guidance issued under that section.
   (d) "Unreasonable rate increase" has the same meaning as that term
is defined in PPACA.


1385.02.  This article shall apply to health care service plan
contracts offered in the individual or group market in California.
However, this article shall not apply to a specialized health care
service plan contract; a Medicare supplement contract subject to
Article 3.5 (commencing with Section 1358.1); a health care service
plan contract offered in the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code); a health care service plan contract offered in
the Healthy Families Program (Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code), the Access for Infants
and Mothers Program (Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code), the California Major Risk Medical
Insurance Program (Part 6.5 (commencing with Section 12700) of
Division 2 of the Insurance Code), or the Federal Temporary High Risk
Pool (Part 6.6 (commencing with Section 12739.5) of Division 2 of
the Insurance Code); a health care service plan conversion contract
offered pursuant to Section 1373.6; or a health care service plan
contract offered to a federally eligible defined individual under
Article 4.6 (commencing with Section 1366.35) or Article 10.5
(commencing with Section 1399.801).



1385.03.  (a) (1) All health care service plans shall file with the
department all required rate information for individual and small
group health care service plan contracts at least 60 days prior to
implementing any rate change.
   (2) For individual health care service plan contracts, the filing
shall be concurrent with the notice required under Section 1389.25.
   (3) For small group health care service plan contracts, the filing
shall be concurrent with the notice required under subdivision (a)
of Section 1374.21.
   (b) A plan shall disclose to the department all of the following
for each individual and small group rate filing:
   (1) Company name and contact information.
   (2) Number of plan contract forms covered by the filing.
   (3) Plan contract form numbers covered by the filing.
   (4) Product type, such as a preferred provider organization or
health maintenance organization.
   (5) Segment type.
   (6) Type of plan involved, such as for profit or not for profit.
   (7) Whether the products are opened or closed.
   (8) Enrollment in each plan contract and rating form.
   (9) Enrollee months in each plan contract form.
   (10) Annual rate.
   (11) Total earned premiums in each plan contract form.
   (12) Total incurred claims in each plan contract form.
   (13) Average rate increase initially requested.
   (14) Review category: initial filing for new product, filing for
existing product, or resubmission.
   (15) Average rate of increase.
   (16) Effective date of rate increase.
   (17) Number of subscribers or enrollees affected by each plan
contract form.
   (18) The plan's overall annual medical trend factor assumptions in
each rate filing for all benefits and by aggregate benefit category,
including hospital inpatient, hospital outpatient, physician
services, prescription drugs and other ancillary services,
laboratory, and radiology. A plan may provide aggregated additional
data that demonstrates or reasonably estimates year-to-year cost
increases in specific benefit categories in major geographic regions
of the state. For purposes of this paragraph, "major geographic
region" shall be defined by the department and shall include no more
than nine regions. A health plan that exclusively contracts with no
more than two medical groups in the state to provide or arrange for
professional medical services for the enrollees of the plan shall
instead disclose the amount of its actual trend experience for the
prior contract year by aggregate benefit category, using benefit
categories that are, to the maximum extent possible, the same or
similar to those used by other plans.
   (19) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.
   (20) A comparison of claims cost and rate of changes over time.
   (21) Any changes in enrollee cost-sharing over the prior year
associated with the submitted rate filing.
   (22) Any changes in enrollee benefits over the prior year
associated with the submitted rate filing.
   (23) The certification described in subdivision (b) of Section
1385.06.
   (24) Any changes in administrative costs.
   (25) Any other information required for rate review under PPACA.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following aggregate data for all rate filings
submitted under this section in the individual and small group health
plan markets:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of subscribers.
   (E) Number of covered lives affected.
   (2) The plan's average rate increase by the following categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
   (d) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.
   (e) A plan shall submit any other information required under
PPACA. A plan shall also submit any other information required
pursuant to any regulation adopted by the department to comply with
this article.



1385.04.  (a) For large group health care service plan contracts,
all health plans shall file with the department at least 60 days
prior to implementing any rate change all required rate information
for unreasonable rate increases. This filing shall be concurrent with
the written notice described in subdivision (a) of Section 1374.21.
   (b) For large group rate filings, health plans shall submit all
information that is required by PPACA. A plan shall also submit any
other information required pursuant to any regulation adopted by the
department to comply with this article.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following aggregate data for all rate filings
submitted under this section in the large group health plan market:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of subscribers.
   (E) Number of covered lives affected.
   (2) The plan's average rate increase by the following categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
   (d) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.


1385.05.  Notwithstanding any provision in a contract between a
health care service plan and a provider, the department may request
from a health care service plan any information required under this
article or PPACA.


1385.06.  (a) A filing submitted under this article shall be
actuarially sound.
   (b) (1) The plan shall contract with an independent actuary or
actuaries consistent with this section.
   (2) A filing submitted under this article shall include a
certification by an independent actuary or actuarial firm that the
rate increase is reasonable or unreasonable and, if unreasonable,
that the justification for the increase is based on accurate and
sound actuarial assumptions and methodologies. Unless PPACA requires
a certification of actuarial soundness for each large group contract,
a filing submitted under Section 1385.04 shall include a
certification by an independent actuary, as described in this
section, that the aggregate or average rate increase is based on
accurate and sound actuarial assumptions and methodologies.
   (3) The actuary or actuarial firm acting under paragraph (2) shall
not be an affiliate or a subsidiary of, nor in any way owned or
controlled by, a health care service plan or a trade association of
health care service plans. A board member, director, officer, or
employee of the actuary or actuarial firm shall not serve as a board
member, director, or employee of a health care service plan. A board
member, director, or officer of a health care service plan or a trade
association of health care service plans shall not serve as a board
member, director, officer, or employee of the actuary or actuarial
firm.
   (c) Nothing in this article shall be construed to permit the
director to establish the rates charged subscribers and enrollees for
covered health care services.



1385.07.  (a) Notwithstanding Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code, all
information submitted under this article shall be made publicly
available by the department except as provided in subdivision (b).
   (b) The contracted rates between a health care service plan and a
provider shall be deemed confidential information that shall not be
made public by the department and are exempt from disclosure under
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code). The
contracted rates between a health care service plan and a large group
shall be deemed confidential information that shall not be made
public by the department and are exempt from disclosure under the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code).
   (c) All information submitted to the department under this article
shall be submitted electronically in order to facilitate review by
the department and the public.
   (d) In addition, the department and the health care service plan
shall, at a minimum, make the following information readily available
to the public on their Internet Web sites, in plain language and in
a manner and format specified by the department, except as provided
in subdivision (b). The information shall be made public for 60 days
prior to the implementation of the rate increase. The information
shall include:
   (1) Justifications for any unreasonable rate increases, including
all information and supporting documentation as to why the rate
increase is justified.
   (2) A plan's overall annual medical trend factor assumptions in
each rate filing for all benefits.
   (3) A health plan's actual costs, by aggregate benefit category to
include hospital inpatient, hospital outpatient, physician services,
prescription drugs and other ancillary services, laboratory, and
radiology.
   (4) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.




1385.08.  (a) On or before July 1, 2012, the director may issue
guidance to health care service plans regarding compliance with this
article. This guidance shall not be subject to the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code).
   (b) The department shall consult with the Department of Insurance
in issuing guidance under subdivision (a), in adopting necessary
regulations, in posting information on its Internet Web site under
this article, and in taking any other action for the purpose of
implementing this article.



1385.11.  (a) Whenever it appears to the department that any person
has engaged, or is about to engage, in any act or practice
constituting a violation of this article, including the filing of
inaccurate or unjustified rates or inaccurate or unjustified rate
information, the department may review the rate filing to ensure
compliance with the law.
   (b) The department may review other filings.
   (c) The department shall accept and post to its Internet Web site
any public comment on a rate increase submitted to the department
during the 60-day period described in subdivision (d) of Section
1385.07.
   (d) The department shall report to the Legislature at least
quarterly on all unreasonable rate filings.
   (e) The department shall post on its Internet Web site any changes
submitted by the plan to the proposed rate increase, including any
documentation submitted by the plan supporting those changes.
   (f) If the department finds that an unreasonable rate increase is
not justified or that a rate filing contains inaccurate information,
the department shall post its finding on its Internet Web site.
   (g) Nothing in this article shall be construed to impair or impede
the department's authority to administer or enforce any other
provision of this chapter.


1385.13.  The department shall do all of the following in a manner
consistent with applicable federal laws, rules, and regulations:
   (a) Provide data to the United States Secretary of Health and
Human Services on health care service plan rate trends in premium
rating areas.
   (b) Commencing with the creation of the Exchange, provide to the
Exchange such information as may be necessary to allow compliance
with federal law, rules, regulations, and guidance.



State Codes and Statutes

State Codes and Statutes

Statutes > California > Hsc > 1385.01-1385.13

HEALTH AND SAFETY CODE
SECTION 1385.01-1385.13



1385.01.  For purposes of this article, the following definitions
shall apply:
   (a) "Large group health care service plan contract" means a group
health care service plan contract other than a contract issued to a
small employer, as defined in Section 1357.
   (b) "Small group health care service plan contract" means a group
health care service plan contract issued to a small employer, as
defined in Section 1357.
   (c) "PPACA" means Section 2794 of the federal Public Health
Service Act (42 U.S.C. Sec. 300gg-14), as amended by the federal
Patient Protection and Affordable Care Act (P. L. 111-48), and any
subsequent rules, regulations, or guidance issued under that section.
   (d) "Unreasonable rate increase" has the same meaning as that term
is defined in PPACA.


1385.02.  This article shall apply to health care service plan
contracts offered in the individual or group market in California.
However, this article shall not apply to a specialized health care
service plan contract; a Medicare supplement contract subject to
Article 3.5 (commencing with Section 1358.1); a health care service
plan contract offered in the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code); a health care service plan contract offered in
the Healthy Families Program (Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code), the Access for Infants
and Mothers Program (Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code), the California Major Risk Medical
Insurance Program (Part 6.5 (commencing with Section 12700) of
Division 2 of the Insurance Code), or the Federal Temporary High Risk
Pool (Part 6.6 (commencing with Section 12739.5) of Division 2 of
the Insurance Code); a health care service plan conversion contract
offered pursuant to Section 1373.6; or a health care service plan
contract offered to a federally eligible defined individual under
Article 4.6 (commencing with Section 1366.35) or Article 10.5
(commencing with Section 1399.801).



1385.03.  (a) (1) All health care service plans shall file with the
department all required rate information for individual and small
group health care service plan contracts at least 60 days prior to
implementing any rate change.
   (2) For individual health care service plan contracts, the filing
shall be concurrent with the notice required under Section 1389.25.
   (3) For small group health care service plan contracts, the filing
shall be concurrent with the notice required under subdivision (a)
of Section 1374.21.
   (b) A plan shall disclose to the department all of the following
for each individual and small group rate filing:
   (1) Company name and contact information.
   (2) Number of plan contract forms covered by the filing.
   (3) Plan contract form numbers covered by the filing.
   (4) Product type, such as a preferred provider organization or
health maintenance organization.
   (5) Segment type.
   (6) Type of plan involved, such as for profit or not for profit.
   (7) Whether the products are opened or closed.
   (8) Enrollment in each plan contract and rating form.
   (9) Enrollee months in each plan contract form.
   (10) Annual rate.
   (11) Total earned premiums in each plan contract form.
   (12) Total incurred claims in each plan contract form.
   (13) Average rate increase initially requested.
   (14) Review category: initial filing for new product, filing for
existing product, or resubmission.
   (15) Average rate of increase.
   (16) Effective date of rate increase.
   (17) Number of subscribers or enrollees affected by each plan
contract form.
   (18) The plan's overall annual medical trend factor assumptions in
each rate filing for all benefits and by aggregate benefit category,
including hospital inpatient, hospital outpatient, physician
services, prescription drugs and other ancillary services,
laboratory, and radiology. A plan may provide aggregated additional
data that demonstrates or reasonably estimates year-to-year cost
increases in specific benefit categories in major geographic regions
of the state. For purposes of this paragraph, "major geographic
region" shall be defined by the department and shall include no more
than nine regions. A health plan that exclusively contracts with no
more than two medical groups in the state to provide or arrange for
professional medical services for the enrollees of the plan shall
instead disclose the amount of its actual trend experience for the
prior contract year by aggregate benefit category, using benefit
categories that are, to the maximum extent possible, the same or
similar to those used by other plans.
   (19) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.
   (20) A comparison of claims cost and rate of changes over time.
   (21) Any changes in enrollee cost-sharing over the prior year
associated with the submitted rate filing.
   (22) Any changes in enrollee benefits over the prior year
associated with the submitted rate filing.
   (23) The certification described in subdivision (b) of Section
1385.06.
   (24) Any changes in administrative costs.
   (25) Any other information required for rate review under PPACA.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following aggregate data for all rate filings
submitted under this section in the individual and small group health
plan markets:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of subscribers.
   (E) Number of covered lives affected.
   (2) The plan's average rate increase by the following categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
   (d) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.
   (e) A plan shall submit any other information required under
PPACA. A plan shall also submit any other information required
pursuant to any regulation adopted by the department to comply with
this article.



1385.04.  (a) For large group health care service plan contracts,
all health plans shall file with the department at least 60 days
prior to implementing any rate change all required rate information
for unreasonable rate increases. This filing shall be concurrent with
the written notice described in subdivision (a) of Section 1374.21.
   (b) For large group rate filings, health plans shall submit all
information that is required by PPACA. A plan shall also submit any
other information required pursuant to any regulation adopted by the
department to comply with this article.
   (c) A health care service plan subject to subdivision (a) shall
also disclose the following aggregate data for all rate filings
submitted under this section in the large group health plan market:
   (1) Number and percentage of rate filings reviewed by the
following:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (D) Number of subscribers.
   (E) Number of covered lives affected.
   (2) The plan's average rate increase by the following categories:
   (A) Plan year.
   (B) Segment type.
   (C) Product type.
   (3) Any cost containment and quality improvement efforts since the
plan's last rate filing for the same category of health benefit
plan. To the extent possible, the plan shall describe any significant
new health care cost containment and quality improvement efforts and
provide an estimate of potential savings together with an estimated
cost or savings for the projection period.
   (d) The department may require all health care service plans to
submit all rate filings to the National Association of Insurance
Commissioners' System for Electronic Rate and Form Filing (SERFF).
Submission of the required rate filings to SERFF shall be deemed to
be filing with the department for purposes of compliance with this
section.


1385.05.  Notwithstanding any provision in a contract between a
health care service plan and a provider, the department may request
from a health care service plan any information required under this
article or PPACA.


1385.06.  (a) A filing submitted under this article shall be
actuarially sound.
   (b) (1) The plan shall contract with an independent actuary or
actuaries consistent with this section.
   (2) A filing submitted under this article shall include a
certification by an independent actuary or actuarial firm that the
rate increase is reasonable or unreasonable and, if unreasonable,
that the justification for the increase is based on accurate and
sound actuarial assumptions and methodologies. Unless PPACA requires
a certification of actuarial soundness for each large group contract,
a filing submitted under Section 1385.04 shall include a
certification by an independent actuary, as described in this
section, that the aggregate or average rate increase is based on
accurate and sound actuarial assumptions and methodologies.
   (3) The actuary or actuarial firm acting under paragraph (2) shall
not be an affiliate or a subsidiary of, nor in any way owned or
controlled by, a health care service plan or a trade association of
health care service plans. A board member, director, officer, or
employee of the actuary or actuarial firm shall not serve as a board
member, director, or employee of a health care service plan. A board
member, director, or officer of a health care service plan or a trade
association of health care service plans shall not serve as a board
member, director, officer, or employee of the actuary or actuarial
firm.
   (c) Nothing in this article shall be construed to permit the
director to establish the rates charged subscribers and enrollees for
covered health care services.



1385.07.  (a) Notwithstanding Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code, all
information submitted under this article shall be made publicly
available by the department except as provided in subdivision (b).
   (b) The contracted rates between a health care service plan and a
provider shall be deemed confidential information that shall not be
made public by the department and are exempt from disclosure under
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code). The
contracted rates between a health care service plan and a large group
shall be deemed confidential information that shall not be made
public by the department and are exempt from disclosure under the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code).
   (c) All information submitted to the department under this article
shall be submitted electronically in order to facilitate review by
the department and the public.
   (d) In addition, the department and the health care service plan
shall, at a minimum, make the following information readily available
to the public on their Internet Web sites, in plain language and in
a manner and format specified by the department, except as provided
in subdivision (b). The information shall be made public for 60 days
prior to the implementation of the rate increase. The information
shall include:
   (1) Justifications for any unreasonable rate increases, including
all information and supporting documentation as to why the rate
increase is justified.
   (2) A plan's overall annual medical trend factor assumptions in
each rate filing for all benefits.
   (3) A health plan's actual costs, by aggregate benefit category to
include hospital inpatient, hospital outpatient, physician services,
prescription drugs and other ancillary services, laboratory, and
radiology.
   (4) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.




1385.08.  (a) On or before July 1, 2012, the director may issue
guidance to health care service plans regarding compliance with this
article. This guidance shall not be subject to the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code).
   (b) The department shall consult with the Department of Insurance
in issuing guidance under subdivision (a), in adopting necessary
regulations, in posting information on its Internet Web site under
this article, and in taking any other action for the purpose of
implementing this article.



1385.11.  (a) Whenever it appears to the department that any person
has engaged, or is about to engage, in any act or practice
constituting a violation of this article, including the filing of
inaccurate or unjustified rates or inaccurate or unjustified rate
information, the department may review the rate filing to ensure
compliance with the law.
   (b) The department may review other filings.
   (c) The department shall accept and post to its Internet Web site
any public comment on a rate increase submitted to the department
during the 60-day period described in subdivision (d) of Section
1385.07.
   (d) The department shall report to the Legislature at least
quarterly on all unreasonable rate filings.
   (e) The department shall post on its Internet Web site any changes
submitted by the plan to the proposed rate increase, including any
documentation submitted by the plan supporting those changes.
   (f) If the department finds that an unreasonable rate increase is
not justified or that a rate filing contains inaccurate information,
the department shall post its finding on its Internet Web site.
   (g) Nothing in this article shall be construed to impair or impede
the department's authority to administer or enforce any other
provision of this chapter.


1385.13.  The department shall do all of the following in a manner
consistent with applicable federal laws, rules, and regulations:
   (a) Provide data to the United States Secretary of Health and
Human Services on health care service plan rate trends in premium
rating areas.
   (b) Commencing with the creation of the Exchange, provide to the
Exchange such information as may be necessary to allow compliance
with federal law, rules, regulations, and guidance.