PEMCHA

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  1. PEMCHA

CalPERS statutory obligations regarding health benefits are governed in part by Public Employees’ Medical and Hospital Care Act (“PEMHCA”), Gov. Code, §§ 22750 to 22944.3 and include:

  1. The board shall make available to employees and annuitants eligible to enroll in a health benefit plan information that will enable the employees or annuitants to exercise an informed choice among the available health benefit plans. Each employee or annuitant enrolled in a health benefit plan shall be issued an appropriate document setting forth or summarizing the services or benefits to which the employee, annuitant, or family members are entitled to thereunder, the procedure for obtaining benefits, and the principal provisions of the health benefit plan. Government Code, §22863.
  2. CalPERS regulations require the payment schedule for such benefits must be sufficient in the judgment of the Board to meet the major share of usual, customary, or reasonable charges for such services. 2 CCR §599.510.[1]
  3. Each contract shall contain a detailed statement of benefits offered and shall include maximums, limitations, exclusions, and other definitions of benefits as the board deems necessary or desirable. Government Code, §22853.

PEMCHA incorporates prevailing practices in the medical community. Government Code, §22796 requires that the CalPERS board shall adopt all necessary rules and regulations to establish reasonable minimum standards for health benefit plans that are consistent with prevailing practices in the field of medical and hospital care. Government Code, §22796.

Government Code, §22859(a) A health benefit plan or contract may not provide any of the following: (1) An exception for other coverage where the other coverage is entitlement to Medi-Cal or medicaid benefits. (2) An exception for Medi-Cal or medicaid benefits. (3) A benefits reduction if the person has entitlement to Medi-Cal or medicaid benefits.

Premiums charged for enrollment in a health benefit plan shall reasonably reflect the cost of the benefits provided. Government Code, §22864.

Information disseminated by the board pursuant to Section 22863, and compliance with regulations of the board adopted pursuant to subdivision (a) of Section 22846 and Sections 22800 and 22831, shall be deemed to satisfy the requirements of Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. Government Code, §22869 (i.e. Knox Keene Act). Section 22863 is addressed to information requirements, and Section 22846, 22800 and 22831 address enrollment issues. These do not address the reasonableness of standards for reimbursement or California Code of Regulations, title 28, section 1300.71, or the minimum reimbursements.

Therefore, although PEMHCA sections §§22869, et seq. purport to satisfy the requirement of several provision of the Knox-Keene Health Care Service Plan Act, the specific “satisfied” sections in PEMCHA do not address the reasonable value of reimbursement, including (i) Government Code §22796, (ii) California Code of Regulations, title 28, section 1300.71 and (iii) 2 CCR §599.510.

2 CCR §599.510 is based in Government Code Sections 22794 and 22796, and reference Government Code Sections 227962285022853 and 22860 which do not involve reasonable reimbursements.

Therefore, the sections of the Knox Keene Act about the reasonableness of the reimbursement addressed above still apply. The reasonableness of the reimbursement requirement of the Knox Keene Act is not deemed satisfied.

In addition, PEMHCA does not supersede, modify, or in any manner alter or impair the effect of any provision of Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code or any provision of the Insurance Code. PEMCHA shall be interpreted and applied in a manner consistent with those provisions of the Business and Professions Code and the Insurance Code. Government Code, §22867.

Under 2 CCR, § 599.510. Minimum Scope and Content of Basic Health Benefits Plans:

 

(a) No contract shall be made or approved for a basic health benefits plan which does not include in its coverage the following benefits. The payment schedule for such benefits must be sufficient in the judgment of the Board to meet the major share of usual, customary or reasonable charges for such services.

Hospital benefits.

In-hospital.

Coverage must be extended to enrolled employees, annuitants, and family members to provide benefits in the event of confinement in a hospital because of injury or sickness.

Hospital “room and board benefits” must be provided for at least the first 31 days of hospital confinement. “Miscellaneous hospital benefits” must be provided for hospital charges incurred over and above those for room and board, such as charges for the use of operating and cystoscopic rooms, anesthetic supplies, anesthesia when supplied by the hospital as a regular service and administered by a salaried employee, ordinary splints, plaster casts, and surgical dressings.

(B) Outpatient -hospital.

Coverage must be extended to enrolled employees, annuitants, and family members to provide benefits because of accidental bodily injury, surgery or emergency treatment for sickness when not admitted to a hospital or confined as a registered bed patient. Such benefits shall include but are not limited to: 1. Charges for use of operating and cystoscopic rooms, 2. Charges for anesthetic supplies and anesthesia when supplied by the hospital as a regular service and administered by a salaried employee, and 3. Charges for ordinary splints, plaster casts and surgical dressings.

(2) Surgical Benefits In and Out of the Hospital.

Coverage must be extended to enrolled employees, annuitants and family members to provide benefits in the event of surgical operations performed because of injury or sickness.

In-hospital medical benefits.

Coverage must be extended to enrolled employees, annuitants, and family members to provide benefits for medical services rendered by attending physicians or physician anesthetists, other than those of a surgeon as described above, while a registered bed patient in a hospital.

Outpatient medical benefits.

Coverage must be extended to enrolled employees, annuitants and family members to provide benefits for medical services rendered on an outpatient basis. Such services shall include those of a physician and surgeon for usual medical services and a physician anesthetist.

Diagnostic, X-ray, and laboratory examinations benefits in and out of the hospital. Coverage must be extended to enrolled employees, annuitants, and family members and shall include those services of medical and paramedical personnel such as, but not restricted to, a pathologist, or a roentgenologist to provide for all ordinary clinical and pathological laboratory services and X-ray examinations. Such services may be rendered either by physicians or by salaried hospital or clinical personnel as appropriate.

Maternity benefits. Coverage must be extended to each enrolled employee, annuitant, and covered family member to provide medical and hospital benefits for maternity care.

Ambulance service benefits. Coverage must be extended to enrolled employees, annuitants, and family members to provide benefits for necessary local professional ambulance service to a hospital.

Determination of usual, customary, and reasonable charges for purposes of this subsection 599.510(a) shall take into account the Relative Value Studies of the California Medical Association with respect to any service included in such Studies. (emphasis added)[2]

(b) There shall be excluded from coverage set forth above:

charges incurred in connection with bodily injury or disease covered by worker’s compensation statutes or similar legislation.

charges for which the claimant has been or is entitled to be reimbursed under any other basic hospital, surgical or medical plan not subject to these rules for which the employer shall have paid any part of the costs. Premiums or other consideration paid for the coverage not provided shall be returned to the person, state agency or contracting agency equitably entitled thereto.

charges incurred during confinement in a hospital owned or operated by the United States Government, charges for services, treatments or supplies furnished by or for the United States Government or paid for by said United States Government, or charges incurred during confinement in a hospital owned or operated by a state, province, or political subdivision, unless there is an unconditional requirement to pay these charges without regard to any rights against others, contractual or otherwise.

services and charges for services for which the claimant is entitled to have payment made on his or her behalf under Part A or Part B, Title XVIII of the Social Security Act.

charges in accordance with such other exclusions as may be agreed to by the Board.

(c) There may be excluded from coverage set forth above:

charges incurred by or on behalf of a family member or services received by a family member during a continuous period of hospitalization which commenced before the effective date of the enrollment if eligibility to enroll including him or her in coverage of a plan derives from other than an open enrollment period; and

charges incurred or services received by an employee, annuitant, or family member during a continuous period of hospitalization which commenced before the effective date of his or her enrollment if eligibility to enroll derives from an open enrollment period. Such exclusion shall no longer apply upon the 91st day of enrollment in the plan.

 

Other PEMHCA sections also apply.

[1] Determination of usual, customary, and reasonable charges for purposes of this subsection 599.510(a) shall take into account the Relative Value Studies of the California Medical Association with respect to any service included in such Studies.

[2] Although the CMA no longer publishes Relative Value Studies, the legislation reflects the public policy that reimbursement would be at the UCR rates in the location.