Advocacy Alert: California Licensure and Insurance Issues

Aug 23, 2018

CA AB 3162: Alcoholism or drug abuse treatment facilities

On February 16, 2018, Assemblymember Laura Friedman introduced AB 3162 along with five co-authors. The bill, if passed, will amend Sections 11834.31 and 11834.34 of, and repeal and add Sections 11834.09 and 11834.10 of, the Health and Safety Code as it relates to alcoholism or drug abuse.

The existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services. Violations of these provisions are currently punishable by a civil penalty of no less than $25 or more than $50 per day for each violation.

AB 3162 would raise some penalties to $2,000 per day. The bill would also allow the department to deny an application for a new facility license for any licensing application submitted on or after January 1, 2019, if the proposed location is in proximity to an existing facility that would result in overconcentration. It would also prohibit the expansion or intensification of licensed existing facilities.

The bill has been amended five times, the last time being August 20, 2018, and has been ordered to a third reading.

BHAP has no official position on this bill, as there is a concern as to how sober living environments will be treated by this and that there is no definition in the bill of addiction treatment. We encourage those who operate in California to reach out to your representative and make sure these issues are addressed in the legislation before being approved.

CA SB 1156: Health care service plans: 3rd-party payments

On February 14, 2018, Senator Connie Leyva introduced SB 1156. The bill, if passed, will amend Sections 1365 and 1399.810 of the Health and Safety Code, and to amend Sections 10273.4, 10273.6, 10713, 10753.13, 10755.13, and 10901.8 of the Insurance Code as it relates to health insurance.

The Knox-Keene Health Care Service Plan Act of 1975 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law requires a health care service plan or a health insurer to notify the Director of the Department of Managed Health Care or the Insurance Commissioner, as applicable, if the plan or insurer decides to cease providing new or existing health benefits in this state, and prohibits the plan or insurer from canceling the plan or policy for 180 days after providing that notice to the director or commissioner.

This bill would prohibit a plan or insurer from canceling the plan or policy for 270 days after providing that notice. Because a willful violation of these requirements by a health care service plan would be a crime, this bill would impose a state-mandated local program.

SB 1156 passed the Senate after some amendments on May 30, 2018, and has since moved onto the Assembly, where it has been ordered for a third reading.

BHAP opposes this bill. While the goal of SB 1156 is admirable, its implementation will exacerbate the problem, not decrease it. As written, this bill allows for an unrelated third party to pay for a patient's health care premiums. This can lead to corruption within the health care payer system as well as adding undue pressures on the patient for repayment. It will also most likely increase the number of treatment providers pursuing the payment of premiums and accepting the penalty of non-compliance.

We encourage those who operate in California to reach out to your representative and express your opposition to this bill.

For more information on the current laws governing treatment programs and sober living facilities in California, please visit our Frequently Asked Questions for the state.


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