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Other Budget Issues

Last Updated: 2/24/2014
Budget Issue: Reduce funding proposed for coordination with Office of Patient Advocate
Program: Department of Insurance
Finding or Recommendation: Reduce proposed funding by $54,000 to fund only 1 one-year limited-term position.
Further Detail


Office of Patient Advocate (OPA) Informs Consumers on Health Care Issues. The OPA was created in the Department of Managed Health Care (DMHC) in 1999. Chapter 552, Statutes of 2011 (AB 922, Monning), moved the OPA out of DMHC into the Health and Human Services Agency on July 1, 2012 and further expanded the responsibilities of the OPA (effective on January 1, 2013). The OPA is responsible to advocate for all Californians, no matter their health coverage source (or lack thereof)—to help them obtain health care services, resolve problems with their health plan or health care provider(s), and provide them with access to information about health care. The California Department of Insurance (CDI) partially funds the operations of the OPA—$273,000 Insurance Fund in 2014-15—and, further, provides certain information and assistance to the OPA.

New Requirement To Collect and Report Demographic Information. The CDI receives and handles consumer questions and complaints regarding certain types of health insurance in its consumer services division. A provision of AB 922 requires CDI to begin collecting some additional demographic information—unspecified in the statute—from consumers with complaints about their health insurance and to report that information to the OPA. While this provision was effective January 1, 2013, the OPA and CDI still have not agreed upon what demographic information to collect as of February 1, 2014. Regardless, CDI estimates that it will take staff an additional 9 minutes per complaint and an additional 5 minutes per telephone call to collect the statutorily required additional demographic information for the OPA.

Considerable Time Spent Assisting Consumers. The CDI currently devotes a considerable amount of staff time toward assisting consumers with health insurance questions and complaints. The numbers of telephone calls and complaints handled by the consumer services division have remained relatively constant over the past several years. However, CDI reports that it is spending significantly more time handling complaints than it did several years ago. In 2008-09, CDI spent about 1.4 staff hours per complaint on average. That average has steadily increased to more than 5.6 staff hours in 2012-13, an increase of 417 percent over five years.

Administration’s Budget Proposal

In its 2014-15 budget plan, the administration proposes appropriating $163,000 from the Insurance Fund to CDI for 1.5 permanent positions to collect new demographic data from consumers and coordinate with the OPA.

LAO Recommendation

Reduce Proposed Funding By $54,000. We recommend that the Legislature reduce the proposed appropriation to $109,000 to fund only 1 one-year limited term position. Implementing AB 922 will require initial coordination with the OPA. In addition, CDI will need to revise certain protocols and forms to collect the required demographic information. However, the amount of ongoing work generated by AB 922 is currently unknown. Given the significant recent increase in time devoted to handling each complaint, it seems reasonable for CDI to absorb some of the marginal amount of time necessary to collect the demographic information with existing staff resources.

LAO analysis prepared by: Brian Weatherford. Reviewed by: Jason Sisney.