California Health Insurance Enforcement and Consumer Protections Grant Award

Cycle I Grant Application Summary

California Grantee: California Department of Insurance

Award Date: October 31, 2016

Total Award: $1,844,585.00

Baseline Award: $476,998

Selected Market Reforms Amount: $570,000

Workload Award Amount: $797,587.06

• Section 2707 - The California Department of Insurance will develop templates and training materials to enhance staff training in reviewing plans and networks for discriminatory formulary and network design. The Department of Insurance will develop guidelines for MH/SUD provider network standards for adequacy and discriminatory design. California will compile and analyze health insurance issuers’ network and other data for patterns of potential discrimination. If initial review indicates existing data is incomplete or not sufficiently granular to accomplish this analysis, the Department of Insurance will develop templates for insurers to submit the requisite data.

• Section 2713 - The California Department of Insurance will develop reference and training materials for staff, and consumer education materials to improve compliance with preventive service coverage requirements. The Department of Insurance will prepare an internal reference manual for use in form review, consumer services, and market conduct enforcement activities. California will develop enhanced preventive care disclosure and coverage standards based on the manual. The enhanced standards will be incorporated into the Department’s form review checklists and its annual issuer filing instructions. Additionally, the Department of Insurance will add consumer-friendly educational content on preventive care to enhance consumer knowledge in order to both assist consumers in accessing preventive benefits and reporting complaints.

• Section 2718 - The California Department of Insurance will conduct verification, methodology and trend analysis, and quality improvement activity evaluation to expand review of Medical Loss Ratio (MLR) reports. The Department of Insurance will expand on its current implementation of the requirements of PHS Act § 2718 by conducting more detailed and more frequent review of the CMS MLR Annual Reporting Form submitted by health insurance issuers.

• Section 2726 - The California Department of Insurance will enhance the existing mental health parity quantitative analysis template and supporting documentation template by expanding the templates’ functionality and allowing for greater automation to facilitate insurer compliance and the Department’s review. The Department of Insurance will publish consumer content regarding mental health parity rights on its website, which will enable consumers to identify and report violations of mental health parity laws for investigation. The Department of Insurance will enhance the current review process for Non Quantitative Treatment Limits (NQTLs), and develop review processes and strategies for effective enforcement of parity requirements as to NQTLs generally, medical necessity criteria and utilization management standards, provider network admission standards including reimbursement rates, and methods to determine usual and customary rates. The Department of Insurance will enhance the review process of prescription drug formulary tiering factors for mental health parity, and will develop recommendations as well as a reference manual concerning the enforcement of the special parity rule on prescription drug tiering factors as well as guidance on how to review formulary design for compliance with the NQTL parity standard.