Department of Managed Health Care’s Financial Solvency Standards Board Quarterly Update – August 2020


By Meena Kaypour

On August 19, 2020, the Department of Managed Health Care’s (DMHC) Financial Solvency Standards Board (FSSB) held its quarterly meeting via Zoom. DMHC staff provided a number of updates to FSSB, namely the Department of Health Care Services Update, DMHC’s Response to COVID-19, 2020–21 Budget, Provider Solvency Quarterly Update, and a Health Plan Quarterly Update.

Of note, DMHC Acting Director Mary Watanabe provided an update to the Board with respect to the Department’s response to COVID-19.  Specifically, she reported that DMHC has launched a COVID-19 resource website where the public can find important information about the virus, including DMHC’s various All-Plan Letters (APLs), directing health plans to provide certain essential services to patients in light of the pandemic, and a fact sheet advising individuals as to how to obtain health care coverage if they lost their employer-sponsored health care as a result of the economic crisis. The Department has been consistently issuing APLs since the beginning of the pandemic, include DMHC’s direction that plans reduce cost-sharing to zero for all emergency COVID-related testing and screening, and telehealth instructions to allow providers to provide the same level of care with the same reimbursement to patients despite closure of in-person office visits. Additionally, an APL was issued with Covered California to extend coverage for people who lost their healthcare coverage. DMHC asked health plans to notify DMHC on how they are reaching their vulnerable, high-risk populations (people with chronic illness, elder, disabled). [25:2 CRLR 17–20] Additional and updated APLs can be found on the DMHC website.

Ms. Watanabe also updated the Board on the Department’s Emergency Regulations, effective July 17, 2020, to ensure appropriate coverage and payment for diagnostic testing for COVID-19. These regulations provide that, in working with plans and providers, cost-sharing for COVID relief is split into three categories. Under Category One (positive symptoms, or COVID exposure), no cost-sharing is allowed per federal statutes. Categories Two and Three (no symptoms, COVID exposure) allow cost-sharing per existing Knox-Keene Act provisions. Plans may not pass the financial risk of COVID-19 testing to providers unless the providers and plan negotiated and agreed that the provider will assume the risk. Additionally, plans may not delay payment based on a claim the plan delegated financial risk to the provider or demand “proof” that an enrollee is an essential worker. Under the Families First Coronavirus Response Act (FFRCA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES), Category One enrollees (symptomatic or exposed) have a negotiated rate or follow the provider’s cash price if no negotiated rate. Categories Two and Three require a negotiated rate if in-network, or no negotiated rate if out-of-network. The Emergency Regulations will remain in effect through May 14, 2021.

FSSB also received a budget update from the Department. DMHC’s Fiscal Year (FY) 2019–20 budget consisted of $91,093,000 in spending authority and 482 authorized positions. DMHC’s FY 2020–21 budget is $96,034,000 in spending authority and 505 authorized positions.

The next FSSB meeting is scheduled for Wednesday, November 18, 2020, from 10:00 a.m. to 1:00 p.m. The meeting will be conducted exclusively through videoconference and teleconference.


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