[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6676899,"mediaKeyId","2346791-d6435d32b82639a98fa221947a505d3e","parentId",2346791,"title","Senate budget committee presses DMHC on enforcement after Kaiser settlement and high IMR overturn rates","audioSeconds",376,"startMs",2532000,"endMs",2155750,"viewUrl","/Search/View?dp=1&key=2346791-d6435d32b82639a98fa221947a505d3e&start=2532&end=2155","thumbnailUrl","https://assets.pipeline.soar.com/2346791-d6435d32b82639a98fa221947a505d3e/thumbnail_2532000.jpg","articleUrl","/articles/6676899/California/Senate-budget-committee-presses-DMHC-on-enforcement-after-Kaiser-settlement-and-high-IMR-overturn-rates","mediaUrl","https://secure.pipeline.soar.com/6676899-647118e24c0b493bf0737a0757fd4188/orig.mp4?Expires=1771135237&Signature=QW-uFxNq0uipYkJ0NCbw0Go~iafkhjRdnLaZTbGeQo0zDu9n9T1Z0GEMbRETMr6TgZx1yk2vuCxDdogTYi1yvePcrvqbiB7PFjw1h2fI9LZ77y-HLYyv8vRZiG8CAgm1tByef7idOleQDyjELbyp8qRjSQtwSz8jfO09ArwMqyKbvSnF3AHtIIBbJIjI5uCL~mom3WGZ9ucqdrTVbOfXYpmCr5Ih4KAl1wxysxB~m2gwf1ACL2KF4y-gZUsvyb2A4x38Pt6Ed5LZKbfO9OMXdPbloYbHRNFRCjFPm7watBG~dTXjg2QZMBhqj09hT-gA8hs9KmcR5nvPEZmwt6tltQ__&Key-Pair-Id=KUT5TJCACFTXG","author","California State Senate","date","2025-02-19T00:00:00Z","article","The California State Senate Budget and Fiscal Review Committee heard testimony on DMHC oversight of behavioral health coverage and enforcement of state parity and timely-access rules, with members pressing the regulator about high appeal reversal rates and ongoing network problems.

Chair Scott Wiener opened the hearing by saying the committee would examine “regulation of critical consumer protections in California's commercial health insurance market, and with enforcement by the Department of Managed Healthcare.”

Why it matters: Committee members and outside advocates told DMHC leadership the department’s enforcement must be stronger because many consumers never reach independent review, and when they do the denial is often overturned. Department witnesses described multi-year investigations and a high rate of reversals on independent medical reviews that the department said it is tracking and trying to address.

DMHC’s role and recent enforcement actions
Mary Watanabe, director of the Department of Managed Health Care, told the panel the agency licenses about 40 health plans that cover nearly 30 million Californians and that DMHC is funded by assessments on health plans rather than the general fund. She summarized the department’s tools for enforcing parity and timely access — routine triannual medical surveys, complaint-driven nonroutine surveys, focused behavioral-health investigations funded in the 2021 budget and a new regulation implementing SB 855 and SB 221.

Watanabe described a multistage enforcement response to systemic problems at Kaiser Permanente: \"The Kaiser settlement agreement is a good example of the various components of our oversight work and how we monitor compliance,\" she said, noting DMHC opened nonroutine surveys and a targeted enforcement investigation and later reached a settlement that required corrective actions and reporting. She said DMHC will monitor compliance through quarterly meetings, posted corrective-action work plans and follow-up on-site reviews.

Senators pressed DMHC about penalty totals and timetables. Testimony about financial terms varied in the hearing record: DMHC cited an administrative penalty in public remarks and later described a package of penalties, community investments and withholds when answering questions. DMHC said it will post quarterly reports on progress and validate plan changes with on-site reviews.

Independent medical reviews, grievance process and data gaps
Dan Southern, DMHC chief deputy director, described the enrollee grievance process and the independent medical review (IMR) pathway. He gave the committee IMR figures for recent years: \"In 2023, we resolved a total of 2,838 IMRs and 557 of those were related to behavioral services. For all IMRs, 72.7% resulted in overturn or reversing the plan's decision. And for the 557 behavioral health IMRs, 76.7 percent were overturned through that IMR process,\" he said. He also provided preliminary 2024 figures showing roughly 3,478 total IMRs with 483 behavioral IMRs and preliminary overturn rates near 70% overall and about 77% in behavioral health.

Committee members described those overturn rates as alarming and asked why so many denials are reversed. Watanabe and Southern said the state lacks comprehensive visibility into how many denials never reach IMR because the law generally requires enrollees to exhaust a plan’s internal grievance process before seeking department review, except in urgent cases. Watanabe said, \"I share your concern when we see very high, reversal rates,\" and both witnesses told the committee a bill this year could give DMHC more data-collection authority.

Behavioral health investigations, network adequacy and Kaiser
Watanabe described the Behavioral Health Investigations (BHIs) funded in 2021 as separate from triannual surveys, focused specifically on behavioral health access and barriers. DMHC said it has completed two phases of BHIs, found multiple Knox-Keene violations and identified operational barriers; the third phase is expected this summer with investigations continuing through 2029.

On Kaiser specifically, DMHC described a nonroutine survey and an enforcement investigation prompted by consumer complaints, media reports and a strike by health system employees. The settlement requires Kaiser to submit corrective-action plans, meet quarterly with DMHC and accept monitoring that DMHC said will include file reviews and an on-site nonroutine follow-up survey. When pressed about the corrective-action work plan’s level of specificity, Watanabe said the settlement agreement, the plan and the quarterly reports together define the department’s oversight: \"I think you need to kind of look at those three pieces,\" she told the committee.

Network adequacy questions also arose after Anthem Blue Cross left a contract with Scripps Health in San Diego. Senator leaders said DMHC reviews block transfer filings when a plan terminates a group contract and evaluates whether receiving providers have the capacity to take on transferred members, while noting DMHC cannot compel a plan to continue contracting with a specific provider.

Stakeholder testimony and workforce issues
Advocates and provider groups told the committee many people cannot navigate the grievance and IMR process, and that denial overturn rates likely represent a small visible fraction of inappropriate denials. Leandra Clark Harvey of the California Behavioral Health Association and John Drebinger of the Steinberg Institute urged DMHC to require more parity reporting, use federal parity templates for nonquantitative treatment limits (NQTLs) and impose clearer timelines and public reporting on corrective-action plans.

Health plan representatives and plan associations cited workforce shortages and difficulties contracting with behavioral health providers as a root cause of access problems. A plan representative told the committee that plans often encounter providers who will not sign full contracts or who seek one-off agreements, complicating network arrangements and continuity of care.

What the department wants from the Legislature
DMHC officials told the committee they are tracking overturn rates and grievance volumes and said more statutory authority to collect data would help them identify where denials occur and whether patterns require enforcement. Watanabe and Southern urged the Legislature to consider data-collection bills and sustained funding for enforcement staff; DMHC said it has sought additional resources in budget change proposals to support BHIs and follow-up enforcement.

Ongoing oversight
Senators emphasized the urgency of improving access to behavioral health services and expressed interest in legislation to give DMHC stronger data and enforcement tools. DMHC said it will continue monitoring Kaiser through the settlement’s reporting requirements, finish the behavioral health investigations, and seek to validate improvements with on-site reviews and complaint monitoring.

Ending note
Committee members and witnesses agreed that higher levels of public reporting, clearer corrective-action timelines and better data on denials and grievances would help clarify where patients are losing access and what legislative fixes are needed next.

Speakers quoted: Mary Watanabe, Dan Southern, Scott Wiener, and multiple senators and outside advocates from the hearing.","mediaType","Video","parentTitle","California State Senate - Senate Budget and Fiscal Review Committee - Feb 19, 2025","oneSentenceSummary","The California State Senate Budget and Fiscal Review Committee heard testimony on DMHC oversight of behavioral health coverage and enforcement of state parity and timely-access rules, with members pressing the regulator about high appeal reversal rates and ongoing network problems.","taxTitle","California State Senate, Senate, Legislative, California","taxId",77650,"location","California","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6676894,"CalRx update: Civica progress on biosimilar insulin, naloxone deal in distribution and list of 15 priority drugs",830,7614770,8445330,"/Search/View?dp=1&key=2346791-d6435d32b82639a98fa221947a505d3e&start=7614&end=8445","https://assets.pipeline.soar.com/2346791-d6435d32b82639a98fa221947a505d3e/thumbnail_7614770.jpg","/articles/6676894/California/CalRx-update-Civica-progress-on-biosimilar-insulin-naloxone-deal-in-distribution-and-list-of-15-priority-drugs","https://secure.pipeline.soar.com/6676894-a8008a6b66c27b924d049ea340b631c5/orig.mp4?Expires=1771135237&Signature=ljcXz6cNseAe2orAqcOg~RyO0~iw4cAFSQgzsaylk-K1mzhin1EbCCjkI1J2rBSDICdXyBYuR3ikd9TH-eFzrxks5knJb0Rp68LQko~vgEbCP5LUuZUaWn0HWV9vzHYOBnalaCQvwB80cIViYgWG~~jgIy~XWKRLVqwsjAaOto-7ebNnQ8YQ0WGT9CaGv~vQEEs7fEFhpIJ4dD2NF7ZScDr9TQhDS8mwpOR3ZP1wb2~ygs3ftqpLqMlGFVTW4eq93VjWaxtkvPNp~K6qCVEpgg22GJFkkYwxU-GKzQ-0iTew0nW0gaeffMp8FJEWMSqOtq6HkM-A71IflCpE5qjXDg__&Key-Pair-Id=KUT5TJCACFTXG","State health officials updated the Senate Budget and Fiscal Review Committee on CalRx activities aimed at lowering prescription drug prices, reporting progress on a Civica biosimilar-insulin project, a low-cost naloxone contract and a prioritized list of drugs CalRx is exploring for market interventions.

Why it matters: Californians and lawmakers pressed HCAI and CalRx for specific timelines and asked what interim consumer protections are feasible while manufacturing, clinical testing and Food and Drug Administration (FDA) review proceed. Insulin affordability was a recurrent focus; witnesses, advocates and clinicians said many Californians continue to ration insulin while the state’s program proceeds through multi-step manufacturing and regulatory processes.

Civica, biosimilar insulin and timeline
Elizabeth Landsberg, director of the Health Care Access and Information (HCAI) office, said the March 2023 $50 million CalRx–Civica agreement remains the foundation of the state’s insulin work and that Civica has completed several manufacturing and regulatory milestones: Landsberg told the committee Civica has \"passed initial facility inspections by regulatory authorities and has started manufacturing both glargine vials and pens at a new United States facility to support the clinical trial.\" She added Civica is conducting product quality and stability testing and has been meeting with the FDA and planning clinical trials.

Landsberg said Civica’s work is phased: the glargine (long‑acting insulin) program is under active development and Civica has begun planning for a fast‑acting insulin program that the company expects to develop more quickly after the first product. HCAI staff told senators the department is reviewing Civica’s nonpublic development updates and that outside experts consider Civica’s timeline “within industry norms,” though not as fast as the legislature and advocates had hoped.

Officials did not provide a fixed date for FDA submission and approval. Landsberg said Civica is preparing clinical trials and that a regulatory filing would follow completion of those studies; HCAI staff said an FDA review period after filing typically takes on the order of about a year but that trial and filing timing depends on study outcomes.

Naloxone, procurement and distribution
Landsberg also reported that CalRx executed a contract with Amneal Pharmaceuticals in 2024 to supply a CalRx‑branded naloxone twin pack for $24 per twin pack that the department describes as roughly a 40% savings compared with a prior state contract. HCAI said the contract supplies the Department of Health Care Services’ Narcan distribution program (the NDP) and that since May 2024 the Amneal product has been the primary supplier for the NDP. Landsberg said the NDP has distributed over 5,000,000 naloxone twin packs since the program began and estimated the program has reversed nearly 297,000 overdoses.

Target list and other drugs under consideration
HCAI said it considered public‑health impact, population size, unit price and whether new entrants could address market failures to identify priority drugs. Landsberg said the agency has developed a list of 15 priority drugs across 12 disease categories for initial focus; examples discussed in the hearing included epinephrine (EpiPen alternatives), asthma inhalers, certain cancer generics, and GLP‑1 diabetes/weight‑loss medications such as semaglutide (Ozempic/Wegovy). HCAI is evaluating options for market interventions, including biosimilars and partnerships with domestic manufacturers.

Manufacturing in California and state facility feasibility
Committee members asked whether HCAI intended to build a California‑based manufacturing facility. Landsberg said HCAI and the governor’s Office of Business and Economic Development have discussed feasibility and that HCAI is conducting due diligence; she had no near‑term announcement about a California plant and noted Civica has already established production capacity at a U.S. site (described in testimony as Virginia) that is manufacturing pens and vials to support the clinical program.

Stakeholder views and interim protections
Advocates and clinicians urged HCAI and the Legislature to pursue near‑term protections while CalRx products are developed. The American Diabetes Association told the committee that state action is urgently needed because people with diabetes are rationing insulin; clinician groups and oncologists asked CalRx to include cancer generics and to prioritize items that address shortages. HCAI said CalRx’s naloxone initiative demonstrates the program’s ability to supply low‑cost medicines quickly when an on‑market manufacturer will partner.

What HCAI asked of the Legislature
Landsberg urged continued support for CalRx’s mandate-driven market work and said HCAI will report results as Civica advances trials and as procurement programs (like naloxone) scale. The agency also signaled further updates will be posted on progress and that it will continue consultations with stakeholders, PBMs, wholesalers and health plans to support distribution once products are approved.

Ending note
HCAI officials asked the committee to view CalRx as one element of a broader drug‑cost strategy while the Legislature and administration weigh complementary policies — from PBM transparency to other market interventions — to protect consumers now and expand long‑term supply competition.

Speakers quoted: Elizabeth Landsberg, Michael Valle, and other HCAI/CalRx officials; public advocates and health‑care providers from the hearing.","State health officials reported progress on CalRx’s biosimilar insulin project with Civica and described a $24 twin‑pack naloxone contract now supplying the state distribution program.","actionData","errors"]

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Senate budget committee presses DMHC on enforcement after Kaiser settlement and high IMR overturn rates

CalRx update: Civica progress on biosimilar insulin, naloxone deal in distribution and list of 15 priority drugs