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Public Involvement in Managed Care Licensing?

Thirteen bills came before the Assembly Committee on Health yesterday and all 13 were approved, but not all them got a red-carpet reception.

One of the bills that stirred up opposition from health plans was a proposal by Assembly member Roger Dickinson (D-Sacramento) to open the managed care licensing process to public scrutiny and input.

“We know that millions more Californians will attain coverage under the Affordable Care Act, along with millions more in the impending Medi-Cal expansion, and [the effort] to move current enrollees in Healthy Families and other programs into Medi-Cal managed care,” Dickinson said, “making it an opportune time to apply for managed care licensure.”

Dickinson said there have been 19 new applicants for managed care licenses in the last three years and he expects that number to rise. With so many state beneficiaries moving into managed care plans, he said there should be more public involvement in the licensing process.

“The public will subsidize a lot of that coverage and the public has a right to have input on any applicant for licensure,” Dickinson said.

AB 578 would require the director of the Department of Managed Health Care to publish a notice and solicit public comment, if necessary, on new applications.

“Coming from local government … public hearings are the accepted tradition, not the unusual occurrence,” Dickinson said. “This is an important step for transparency and openness.”

Nick Louizos, director of legislative affairs for the California Association of Health Plans, said he’s not sure exactly what AB 578 would accomplish, though he did have opinions on what it could cause.

“This bill creates a new, lengthy and possibly costly process. It sets a bad precedent,” Louizos said. “We don’t know what problem exists right now, or if the current licensure process has resulted in any harm.”

Louizos said if the number of managed care licenses increases because of the ACA that’s exactly the time when you would not want to impede them.

“This bill comes at a time when the health plans need to be ready to serve [managed care beneficiaries],” he said. We don’t know what the author wants in this legislation. And we are concerned the vague licensure process may lead to [problems].”

“The presumption of this bill is a simple one,” Dickinson said. “What we do in government ought to be open to everyone. What we have today is a closed process, and in the ensuing days, when public involvement in health care becomes more dominant, it only makes sense that the public has a chance for comment.”

The bill passed on an 11-2 vote and heads to the Assembly Committee on Appropriations.