Bill Text: CA SB294 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Health care coverage: independent medical review.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Engrossed) 2024-08-15 - August 15 hearing: Held in committee and under submission. [SB294 Detail]

Download: California-2023-SB294-Amended.html

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Amended  IN  Senate  January 03, 2024

Amended  IN  Senate  September 13, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 294

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Introduced by Senator Wiener

February 02, 2023

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An act relating to artificial intelligence. to add Sections 1368.012 and 1374.37 to the Health and Safety Code, and to add Sections 10169.4 and 10169.6 to the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL'S DIGEST

SB 294, as amended, Wiener. Artificial intelligence: regulation. Health care coverage: independent medical review.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of disability insurers by the Department of Insurance. Existing law establishes the Independent Medical Review System within each department, under which an enrollee or insured may seek review if a health care service has been denied, modified, or delayed by a health care service plan or disability insurer and the enrollee or insured has previously filed a grievance that remains unresolved after 30 days.

This bill, commencing July 1, 2025, would require a health care service plan or a disability insurer that upholds its decision to modify, delay, or deny a health care service in response to a grievance or has a grievance that is otherwise pending or unresolved upon expiration of the relevant timeframe to automatically submit within 24 hours a decision regarding a disputed health care service to the Independent Medical Review System, as well as the information that informed its decision, if the decision is to deny, modify, or delay specified services relating to mental health or substance use disorder conditions for an enrollee or insured up to 26 years of age. The bill would require a health care service plan or disability insurer, within 24 hours after submitting its decision to the Independent Medical Review System to provide notice to the appropriate department, the enrollee or insured or their representative, if any, and the enrollee’s or insured’s provider. The bill would require the notice to include notification to the enrollee or insured that they or their representative may cancel the independent medical review at any time before a determination, as specified.

This bill, commencing July 1, 2025, would require a health care service plan or disability insurer that provides treatment for mental health or substance use disorders to treat a modification, delay, or denial issued in response to an authorization request for coverage of treatment for a mental health or substance use disorder for an insured up to 26 years of age as if the modification, delay, or denial is also a grievance submitted by the enrollee or insured. The bill would require a plan or insurer to provide a written acknowledgment of a grievance that is automatically generated and would specify the circumstances under which that grievance is required to be submitted automatically to independent medical review.

The bill would apply specified existing provisions relating to mental health and substance use disorders for purposes of its provisions, and would be subject to relevant provisions relating to the Independent Medical Review System that do not otherwise conflict with the express requirements of the bill. With respect to health care service plans, the bill would specify that its provisions do not apply to Medi-Cal managed care plan contracts.

Because a willful violation of this provision by a health care service plan would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law requires the Secretary of Government Operations to develop a coordinated plan to, among other things, investigate the feasibility of, and obstacles to, developing standards and technologies for state departments to determine digital content provenance. For the purpose of informing that coordinated plan, existing law requires the secretary to evaluate, among other things, the impact of the proliferation of deepfakes, defined to mean audio or visual content that has been generated or manipulated by artificial intelligence that would falsely appear to be authentic or truthful and that features depictions of people appearing to say or do things they did not say or do without their consent, on state government, California-based businesses, and residents of the state.

This bill would express the intent of the Legislature to enact legislation related to artificial intelligence that would relate to, among other things, establishing standards and requirements for the safe development, secure deployment, and responsible scaling of frontier AI models in the California market by, among other things, establishing a framework of disclosure requirements for AI models, as specified.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

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Bill Text

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

SECTION 1.

 The Legislature finds and declares all of the following:

(a) Disputed health care service decisions under commercial health care coverage are already subject to review like the state’s Independent Medical Review System, but appeals must be initiated by enrollees and insureds.

(b) Mental health resources in California are disproportionately hard to access for low-income and minority children, and the online form to file an independent medical review is in English and Spanish only.

(c) The Legislature recently approved Chapter 151 of the Statutes of 2020, a mental health parity law that requires commercial health care service plan contracts and disability insurance policies to provide medically necessary mental health treatment.

(d) In California, 13 percent of children 3 to 17 years of age, inclusive, reported having at least one mental, emotional, developmental, or behavioral health problem, and 8 percent of children have a serious emotional disturbance that limits participation in daily activity.

(e) In 2021, mental health disorder diagnosis cases made up 48 percent of all total youth independent medical reviews, up from 36 percent in 2017.

(f) Since 2017, the percentage of health care service plan and disability insurer decisions about youth mental health disorders that were overturned by the Independent Medical Review System has more than doubled to 79 percent.

(g) Like older adults, children and youth represent a vulnerable population. However, children and youth covered by commercial health care coverage do not have the protections afforded by Medicare procedures. If a Medicare Advantage (Part C) health plan upholds its initial adverse organization determination to deny a drug or service, the plan must automatically submit the case file and its decision for review by the Part C Independent Review Entity.

SEC. 2.

 Section 1368.012 is added to the Health and Safety Code, to read:

1368.012.

 (a) Commencing July 1, 2025, a health care service plan that provides treatment for mental health or substance use disorders pursuant to Section 1374.72 shall treat a modification, delay, or denial issued in response to an authorization request for coverage of treatment for a mental health or substance use disorder for an enrollee up to 26 years of age as if the modification, delay, or denial is also a grievance submitted by the enrollee in accordance with Sections 1368, 1368.01, and 1368.015.

(b) A grievance automatically generated pursuant to subdivision (a) shall be treated by the plan and the department in the same manner as a grievance seeking to appeal the decision of the health care service plan to modify, delay, or deny the requested treatment for the enrollee, and shall be considered to have been submitted by the enrollee or the enrollee’s representative to the plan on the same date as the decision to modify, delay, or deny the requested treatment is issued by the plan. The plan shall not require the enrollee or the enrollee’s representative to take any additional action to initiate or continue the grievance processing procedure. The plan shall provide the written acknowledgment of the grievance generated pursuant to subdivision (a) as required pursuant to paragraph (4) of subdivision (a) of Section 1368 concurrent with the notification to the enrollee of the decision to modify, delay, or deny the requested treatment. The acknowledgment shall include an explanation of the grievance process and relevant timeframes for completion, criteria for treatment of a grievance as an expedited case, including whether the present grievance is to be processed on an expedited basis, contact information for the plan, including a telephone number through which the enrollee may receive a status update on the grievance or withdraw the automatically generated grievance, and contact information for the department.

(c) The acknowledgment described in subdivision (b) shall include a statement that the enrollee may choose to withdraw the automatically generated grievance. A withdrawal by the enrollee or their representative of a grievance automatically generated pursuant to this section before the health care service plan’s determination on the grievance shall not, by itself, disqualify the enrollee or their representative from later submitting a grievance related to the same underlying modification, delay, or denial of the requested mental health or substance use disorder treatment.

(d) Grievances automatically generated pursuant to subdivision (a) that are pending or unresolved upon expiration of the relevant timeframe specified in Sections 1368.01 and 1374.30 or for which the health care service plan upholds its decision to modify, delay, or deny the requested treatment are subject to automatic submission to independent medical review pursuant to Section 1374.37.

(e) This section does not apply to Medi-Cal managed care plan contracts entered into with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code.

SEC. 3.

 Section 1374.37 is added to the Health and Safety Code, to read:

1374.37.

 (a) (1) Commencing July 1, 2025, a health care service plan that, itself or through its delegates, upholds its decision, in whole or in part, to modify, delay, or deny a health care service in response to a grievance submitted by an enrollee or processed pursuant to Section 1368.012, or has a grievance that is otherwise pending or unresolved upon expiration of the relevant timeframe specified in Sections 1368.01 and 1374.30, shall automatically submit within 24 hours a decision regarding a disputed health care service to the Independent Medical Review System and all information that informed the health care service plan’s conclusion if the health care service plan’s decision is to deny, modify, or delay either of the following with respect to an enrollee up to 26 years of age:

(A) A mental health care or substance use disorder service based on the lack of medical necessity of the requested covered health care service, in whole or in part.

(B) The use of experimental or investigational therapies, drugs, devices, procedures, or other therapies, if the enrollee has a seriously debilitating or life-threatening mental health or substance use disorder condition, as defined in Section 1370.4. The independent medical review for experimental or investigational therapies, drugs, devices, procedures, or other therapies shall be consistent with Section 1370.4.

(2) An independent medical review required under this subdivision is subject to any relevant provisions of this article that do not otherwise conflict with the express requirements of this section, including notice requirements and provisions regarding the department’s authority to determine the nature of a grievance as a matter of coverage or medical necessity, in whole or in part.

(3) The requirement that an enrollee complete the health care service plan grievance process before automatic submission of a decision to the Independent Medical Review System pursuant to paragraph (1) shall not apply to cases involving an imminent and serious threat to the health of the patient, as described in subparagraph (A) of paragraph (1) of subdivision (b) of Section 1368. In those circumstances, the health care service plan shall immediately submit the case to the Independent Medical Review System and coordinate with the enrollee or the enrollee’s representative on the submission of all information and documentation required by the department to process the expedited independent medical review.

(b) (1) Within 24 hours after submitting its decision to the Independent Medical Review System pursuant to subdivision (a), the health care service plan shall provide notice to the department, the enrollee, the enrollee’s representative, if any, and the enrollee’s provider. The notice shall include both of the following:

(A) Notification to the enrollee that the enrollee or their representative may cancel the independent medical review at any time before the rendering of a determination and may provide additional information or documentation as described in paragraph (3) of subdivision (m) of Section 1374.30.

(B) Instructions for canceling the independent medical review and submitting additional information or documentation.

(2) Concurrent with the notice specified in paragraph (1), the health care service plan shall provide the enrollee and the enrollee’s provider with copies of all documents described in subdivision (n) of Section 1374.30. The health care service plan shall coordinate with the enrollee and provider for the completion of a signed independent medical review application and, if necessary, an authorized assistant form.

(3) The department may close independent medical review cases submitted automatically pursuant to this section if the enrollee or authorized assistant fails to complete an independent medical review application within 30 days of the department notifying the enrollee or authorized assistant and provider of the incomplete application.

(c) Sections 1374.72, 1374.721, 1374.724, and 1374.73 apply for purposes of this section.

(d) If an enrollee or their representative cancels the independent medical review consistent with this section, they may seek an independent medical review consistent with Section 1370.4 or this article.

(e) This section does not apply to Medi-Cal managed care plan contracts entered into with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code.

(f) The department shall provide a quarterly public report on the number of automatic grievance cases, the number of automatic grievance cases resolved and closed, and the number of Independent Medical Review applications sent from the Department of Managed Health Care and returned to the Department of Managed Health Care.

SEC. 4.

 Section 10169.4 is added to the Insurance Code, to read:

10169.4.

 (a) Commencing July 1, 2025, a disability insurer that provides treatment for mental health or substance use disorders pursuant to Section 1374.72 shall treat a modification, delay, or denial issued in response to an authorization request for coverage of treatment for a mental health or substance use disorder for an insured up to 26 years of age as if the modification, delay, or denial is also a grievance submitted by the insured in accordance with this article.

(b) A grievance automatically generated pursuant to subdivision (a) shall be treated by the insurer and the department in the same manner as a grievance seeking to appeal the decision of the disability insurer to modify, delay, or deny the requested treatment for the insured, and shall be considered to have been submitted by the insured or the insured’s representative to the insurer on the same date as the decision to modify, delay, or deny the requested treatment is issued by the insurer. The insurer shall not require the insured or the insured’s representative to take any additional action to initiate or continue the grievance processing procedure. The insurer shall provide the written acknowledgment of the grievance generated pursuant to subdivision (a) concurrent with the notification to the insured of the decision to modify, delay, or deny the requested treatment. The acknowledgment shall include an explanation of the grievance process and relevant timeframes for completion, criteria for treatment of a grievance as an expedited case, including whether the present grievance is to be processed on an expedited basis, contact information for the insurer, including a telephone number through which the insured may receive a status update on the grievance or withdraw the automatically generated grievance, and contact information for the department.

(c) The acknowledgment described in subdivision (b) shall include a statement that the insured may choose to withdraw the automatically generated grievance. A withdrawal by the insured or their representative of a grievance automatically generated pursuant to this section before the disability insurer’s determination on the grievance shall not, by itself, disqualify the insured or their representative from later submitting a grievance related to the same underlying modification, delay, or denial of the requested mental health or substance use disorder treatment.

(d) Grievances automatically generated pursuant to subdivision (a) that are pending or unresolved upon expiration of the relevant timeframe specified in Section 10169 or for which the disability insurer upholds its decision to modify, delay, or deny the requested treatment are subject to automatic submission to independent medical review pursuant to Section 10169.6.

SEC. 5.

 Section 10169.6 is added to the Insurance Code, immediately following Section 10169.5, to read:

10169.6.

 (a) (1) Commencing July 1, 2025, a disability insurer that, itself or through its delegates, upholds its decision, in whole or in part, to modify, delay, or deny a health care service in response to a grievance submitted by an insured or processed pursuant to Section 10169.4, or has a grievance that is otherwise pending or unresolved upon expiration of the relevant timeframe specified in Section 10169, shall automatically submit within 24 hours a decision regarding a disputed health care service to the Independent Medical Review System and all information that informed the disability insurer’s conclusion if the disability insurer’s decision is to deny, modify, or delay either of the following with respect to an insured up to 26 years of age:

(A) A mental health care or substance use disorder service based on the lack of medical necessity of the requested covered health care service, in whole or in part.

(B) The use of experimental or investigational therapies, drugs, devices, procedures, or other therapies, if the insured has a seriously debilitating or life-threatening mental health or substance use disorder condition, as defined in Section 10145.3. The independent medical review for experimental or investigational therapies, drugs, devices, procedures, or other therapies shall be consistent with Section 10145.3.

(2) An independent medical review required under this subdivision is subject to any relevant provisions of this article that do not otherwise conflict with the express requirements of this section, including notice requirements and provisions regarding the department’s authority to determine the nature of a grievance as a matter of coverage or medical necessity, in whole or in part.

(3) The requirement that an insured complete the disability insurer grievance process before automatic submission of a decision to the Independent Medical Review System pursuant to paragraph (1) shall not apply to cases involving an imminent and serious threat to the health of the patient, as described in subdivision (c) of Section 10169.3. In those circumstances, the disability insurer shall immediately submit the case to the Independent Medical Review System and coordinate with the insured or the insured’s representative on the submission of all information and documentation required by the department to process the expedited independent medical review.

(b) (1) Within 24 hours after submitting its decision to the Independent Medical Review System pursuant to subdivision (a), the disability insurer shall provide notice to the department, the insured, the insured’s representative, if any, and the insured’s provider. The notice shall include both of the following:

(A) Notification to the insured that the insured or their representative may cancel the independent medical review at any time before the rendering of a determination and may provide additional information or documentation as described in paragraph (3) of subdivision (m) of Section 10169.

(B) Instructions for canceling the independent medical review and submitting additional information or documentation.

(2) Concurrent with the notice specified in paragraph (1), the disability insurer shall provide the insured and the insured’s provider with copies of all documents described in subdivision (n) of Section 10169. The disability insurer shall coordinate with the insured and provider for the completion of a signed independent medical review application and, if necessary, an authorized assistant form.

(3) The department may close independent medical review cases submitted automatically pursuant to this section if the insured or authorized assistant fails to complete an independent medical review application within 30 days of the department notifying the insured or authorized assistant and provider of the incomplete application.

(c) Sections 10144.5, 10144.51, 10144.52, and 10144.57 apply for purposes of this section.

(d) If an insured or their representative cancels the independent medical review consistent with this section, they may seek an independent medical review consistent with Section 10145.3 or this article.

(e) The commissioner may promulgate regulations 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) to implement and enforce this section.

(f) The department shall provide a quarterly public report on the number of automatic grievance cases, the number of automatic grievance cases resolved and closed, and the number of Independent Medical Review applications sent from the Department of Managed Health Care and returned to the Department of Managed Health Care.

SEC. 6.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SECTION 1.

(a)The Legislature finds and declares all of the following:

(1)The Legislature is aware of rapid advancements in artificial intelligence (AI), specifically regarding large language models and other foundation models developed at the frontier of the discipline, that have demonstrated remarkable abilities and proficiency across various domains, including passing the bar exam and other professional and academic examinations, producing text that plausibly imitates the style of particular individuals, producing highly realistic images, and writing working computer code.

(2)The Legislature is aware of AI’s potential to improve people’s lives by widening access to, and substantially improving the quality of, medical care, education, software development tools, mental health services, translation services, academic research, and other applications no one has yet anticipated.

(3)The Legislature is cautious about the potential of these frontier AI models, and their future versions and variants, to be used for automated cybercrime, large-scale social engineering and propaganda campaigns, or biological weapon design, as well as other unforeseen malicious uses. The Legislature is aware that in some cases, companies have released large language models that demonstrated early versions of these and other dangerous capabilities despite guardrails intended to prevent these behaviors. Additionally, the Legislature understands that even leading experts are unable to fully account for how frontier AI models execute complex tasks or thoroughly predict the emergent capabilities future variants of the technology are likely to display.

(4)The Legislature is concerned about the potential for dangerous or even catastrophic unintended consequences to arise from the development or deployment of future frontier AI models.

(5)The Legislature anticipates that, due to the unique potential for self-reinforcing feedback loops, the rapid pace of technical advancements in AI requires a legislative approach that is proactive in anticipating the risks that current and future variants of the technology present to public safety in order to enable the safe harnessing of the technology’s full potential for public benefit.

(6)The Legislature acknowledges the importance of ensuring that measures intended to safeguard the interests of society at large do not also, inadvertently, concentrate power in the hands of a select few corporations, stifle broad-based innovation, or make new beneficial medical, educational, and myriad other technologies inaccessible or less affordable to those who need them.

(b)It is the intent of the Legislature to enact legislation that would relate to all of the following:

(1)Establishing standards and requirements for the safe development, secure deployment, and responsible scaling of frontier AI models in the California market. This will be achieved by establishing a framework of disclosure requirements for AI models developed using a quantity of computation above a level to be specified either via legislation, or via guidance from an existing or new public agency, intended to apply exclusively to models on the cutting edge of current capabilities. This framework may include, but is not limited to, requirements that companies and AI laboratories submit concrete plans for responsible scaling of new models when increasing the scale of training computation used beyond that of the largest models currently available, detailed analyses of the risks their models could pose to public safety by malicious use or unintended consequence, the safeguards they have in place to lower these risks, analysis of whether there are levels of AI capabilities that current safeguards aren’t sufficient for, details on what tests they run and how frequently those tests are run in order to get early warnings of those capabilities emerging, and roadmaps for how safeguards would need to improve if risks increase over time. Under those requirements, evidence about model capabilities, risks, and safeguards may be required in advance of model development, at checkpoints during model development for very large model training runs, and at regular intervals throughout the process in light of additional advancements in tooling and fine-tuning techniques. The reviewing body would have authority to conduct further audits of laboratories whose analysis is not satisfactory.

(2)Measures to ensure that frontier AI models are subject to high standards of precautions against harm to society, including both of the following:

(A)Information security requirements in order to ensure that frontier AI models are protected from advanced persistent threats, including foreign state actors.

(B)Establishing liability for those who fail to take appropriate precautions to prevent both malicious uses and unintended consequences that threaten public safety, to be specified by this legislation or accompanying agency guidance, against significant harm. Measures to this effect may include data retention requirements to ensure that the role of cutting-edge AI models in damaging incidents can be investigated and understood and that liability for harms can be shared between malicious actors and parties that foreseeably made powerful AI systems available to those actors without appropriate safeguards.

(3)Requiring that commercial cloud-computing vendors implement prudent “Know Your Customer” practices for offerings powerful enough to be used in the development of the most advanced models.

(4)Taking additional steps to ensure that the economic impacts of a transition to a world with highly capable AI systems do not intensify already severe economic inequality and painful workforce dislocation and that the economic benefits of this new technology are widely distributed.

(5)Leveraging California’s world-leading public university and community college systems to advance research into the safe and secure development of AI systems. With appropriate security protocols in place, a state-level version of a national research cloud could help ensure that California plays a globally central role in the rigorous evaluation and development of AI systems. CalCompute would be a collaboration between academics, policymakers, and industry experts from large institutions to guide the development of AI in responsible and secure directions and ensure the benefits of this technology are spread widely.