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SACRAMENTO – Today, Senator Scott Wiener’s (D-San Francisco) legislation to improve health plan accountability, Senate Bill 858, passed the Assembly by a vote of 51-18. It will now go to the Senate for final sign-off before heading to the Governor’s desk. SB 858, the Health Plan Accountability Act, updates and increases the penalty amount for health plans that violate state law in denying or delaying timely access to care.
“California has many strong consumer protections for patients in our healthcare system,” said Senator Wiener. “But if health plans don’t comply with these laws – and don’t face any meaningful consequences when they don’t – then California residents aren’t going to get the care they need. Fine amounts have stayed the same over the past 47 years, while health plan premiums have skyrocketed. SB 858 updates fine amounts for plans, so they have a real incentive not to break the law.”
Health plan premiums have quadrupled in the past 20 years, while fine amounts for health plan violations of the law haven’t changed since 1975. This allows plans to skirt responsibility and withhold care if they deem the fine amount inconsequential or just a cost of doing business. For example, in October 2020, California’s Department of Managed Health Care (DMHC) fined Anthem Blue Cross $1.2 million for not providing gender-affirming care, which is required by state law. Even after they were notified of the fine, they failed to provide these services to enrollees. This last March, the Department of Managed Health Care and Department of Health Care Services jointly imposed fines on the Local Initiative Health Authority for Los Angeles County totalling $55 million, which was prompted by an investigation by the Los Angeles Times. This is the largest penalty in state history, and yet comes down to only a few hundred dollars per violation.
SB 858 increases the penalty amounts for civil penalties from $2,500 to a maximum of $25,000 when they violate standards including: failing to provide coverage for medically-necessary care, behavioral health care services, gender-affirming care, timely access to care, or other critical consumer protections. When health plans fail to comply with state law, their actions can pose significant – and even life-threatening – health challenges. By strengthening California’s ability to levy behavior-changing fines on non-compliant health plans, access to health care will improve.
SB 858 gives the Department of Managed Health Care the additional authority to levy higher fines and impose corrective action plans when necessary. SB 858 will modernize penalty amounts every 5 years, and updates the methodology to ensure the penalty amounts reflect the true harm caused to enrollees. Effective civil and administrative penalties are enforcement actions that give regulators more tools to enforce the consumer protections we all support.
SB 858 is sponsored by Health Access California.
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