Letter from Groups
September , 2015
The Honorable Rob Bonta
Chair, Assembly Health Committee
State Capitol
P.O. Box 94249
Sacramento, CA 94349-0018
Re: AB 17 x2, AB 1434
Dear Assemblymember Bonta
We write to strongly support passage of this legislation to stop the practice of regulator
shopping by health plans and ensure that the cost of medically necessary treatment to
California patients struggling to cope with mental illnesses will be covered by their health plans.
[Description of organization and interest]
Eating disorders such as anorexia nervosa and bulimia nervosa are severe mental illnesses
within the scope of California’s Mental Health Parity Act, section 1374.72 of the California
Health & Safety Code and section 10144.5 of the Insurance Code. The consequences of these
illnesses can be devastating. Eating disorders can prevent patients from engaging in the normal
activities of daily living because of cardiac arrhythmia, anemia, lethargy, osteoporosis, kidney
stones, cognitive impairment and other complications of the disease, as well as lead to
premature death from heart failure, kidney failure, malnutrition or suicide. Anorexia has the
highest mortality rate of any mental illness; 10% of people with that disease are estimated to
die within ten years of onset.
The Legislature mandated coverage for diagnosis and treatment of eating disorders and other
severe mental illnesses by enacting the Mental Health Parity Act in 1999. The Act specifies in
subsection (a) that:
Every health care service plan contract issued, amended, or renewed on or after July 1,
2000 that provides hospital, medical, or surgical coverage shall provide coverage for the
diagnosis and medically necessary treatment of severe mental illnesses of a person of
any age, and of serious emotional disturbances of a child, as specified in subdivisions (d)
and (e), under the same terms and conditions applied to other mental conditions as
specified in subdivision (c). (Emphasis added.)
Anorexia and bulimia are enumerated in subdivision (d) (8) and (9) of the Act, Unfortunately,
whether California enrollees in health care service plans receive legislatively mandated
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medically necessary treatment for these severe illnesses depends on which of California’s two
regulatory agencies governs the plan. That disparity, with life-threatening consequences, occurs
because current law permits certain plans, Blue Cross and Blue Shield, to shop for and select
the most plan friendly regulator. The Department of Managed Health Care has become the
regulator of choice for these plans because of its ineffectual oversight of plan misconduct and
lax enforcement of the law governing the treatment of mental illnesses.
The DMHC’s own records of its history of enforcement actions demonstrate the paucity of its
actions against violations of the Mental Health Parity Act. DMHC maintains an on-line data base
of all enforcement actions since 2000, searchable by the relevant sections of statutes or
regulations. See http://wpso.dmhc.ca.gov/enfactions/actionSearch.aspx. A review of that data
base shows that 24 entries ostensibly involving Health & Safety Code Sections 1374.72 and
1374.72(a). However, many of those entries are duplicative, with some matters appearing two
or three times, and even six times for one matter. Subtracting those duplicative entries, there
are only eleven total actions involving the Mental Health Parity Act. Moreover, they almost
always involve plan denials of speech or occupational therapy, or Applied Behavioral Analysis
treatment for children with autism.
The data base contains only one instance of an enforcement action involving a patient with an
eating disorder. In 2006, in matter number 06-141, DMHC fined Blue Cross of California $50,000
for denying nutritional counseling to a patient with anorexia. Notably absent from DMHC’s
database is any reference to ordering a plan to provide residential treatment for a patient with
anorexia, or penalizing a plan for failing to do so despite the facts that residential treatment is
often medically necessary to treat patients with this eating disorder. A single enforcement
action over the past 15 years involving any kind of treatment for eating disorders has been
wholly ineffectual in policing the marketplace.
By contrast, the Department of Insurance is an effective regulator. For example, in 2014, the
Department disapproved Blue Shield’s products for non-compliance with the provisions of the
Affordable Care Act and for failing to provide an adequate network of health care providers. In
response, instead of complying with the requirements of those laws, Blue Shield filed the
products with the Department of Managed Health Care.
The DMHC’s deficient enforcement history of the Mental Health Parity Act, and this blatant
example of forum shopping by Blue Shield, underscore the need to enact AB 17 x2. Unless the
existing regulator shopping loophole is closed, insured patients struggling with severe mental
illnesses will continue to be denied the right to coverage of potentially lifesaving medically
necessary treatment which the Legislature has provided them since 1999.
Sincerely yours,
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