BILL NUMBER: AB 1503 CHAPTERED 10/05/01 CHAPTER 531 FILED WITH SECRETARY OF STATE OCTOBER 5, 2001 APPROVED BY GOVERNOR OCTOBER 4, 2001 PASSED THE ASSEMBLY SEPTEMBER 13, 2001 PASSED THE SENATE SEPTEMBER 10, 2001 AMENDED IN SENATE SEPTEMBER 4, 2001 AMENDED IN SENATE JULY 17, 2001 AMENDED IN SENATE JUNE 28, 2001 AMENDED IN ASSEMBLY MAY 17, 2001 AMENDED IN ASSEMBLY APRIL 19, 2001 INTRODUCED BY Assembly Member Nation FEBRUARY 23, 2001 An act to amend Section 1373.95 of the Health and Safety Code, and to amend Section 10133.55 of the Insurance Code, relating to health care. LEGISLATIVE COUNSEL'S DIGEST AB 1503, Nation. Health care: mental health. Existing law provides for regulation of health care service plans by the Department of Managed Health Care. Existing law requires every health care service plan that provides group coverage to file a written policy with the department describing how the plan contract shall facilitate continuity of care for new enrollees receiving services for an acute condition from a nonparticipating provider. Pursuant to existing law, a willful violation of provisions governing health care service plans is a crime. This bill would require, on or before July 1, 2002, when the enrollee's employer has changed health plans, a health care service plan or a specialized health care service plan that offers professional mental health services to file a written policy with the Department of Managed Health Care describing how the health plan would facilitate continuity of care for new enrollees who have been receiving services for acute, serious, or chronic conditions from a nonparticipating psychiatrist, licensed psychologist, licensed marriage and family therapist, or licensed clinical social worker. The bill would require that the health plan allow each new enrollee to continue his or her course of treatment with a nonparticipating provider for a reasonable transition period while transferring to another participating provider in order to effectuate a safe transfer. The bill would not require a health care service plan or a specialized health care service plan to cover services or provide benefits that are not already covered by the plan contract. The bill would not apply to health care service plans or specialized health care service plans that provide out-of-network coverage to its enrollees. The bill would provide that a health care service plan or a specialized health care service plan is not liable for the negligent, malicious, tortious, or wrongful acts arising out of the provision of services from an existing provider. Existing law provides for the regulation of policies of disability insurance administered by the Insurance Commissioner. Existing law requires that disability insurers provide coverage for certain benefits and services. Existing law requires every disability insurer that provides coverage for hospital, medical, and surgical expenses on a group basis to file a written policy with the Department of Insurance describing how the policy shall facilitate continuity of care for new enrollees receiving services for an acute condition from a noncontracting provider. This bill would require, by July 1, 2002, a disability insurer that provides coverage for hospital, medical, and surgical benefits with providers charging alternative rates, and that provides specified mental health services, to file a written policy with the commissioner that describes how the insurer shall facilitate continuity of care for insureds who have been receiving services for acute, serious, or chronic conditions from nonparticipating mental health providers. The bill would provide that a disability insurer is not required to accept a noncontracting service provider onto its network and would not require an insurer to provide services not otherwise covered. The bill would require the written policy to describe how requests to continue services with an existing nonparticipating mental health provider are reviewed and would require the policy to consider the potential clinical effect of a change of provider. The bill would make conforming changes. Because a willful violation of the bill's requirements with respect to health care service plans would be a crime, this bill would impose a state-mandated local program by creating a new crime. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1373.95 of the Health and Safety Code is amended to read: 1373.95. (a) (1) Except as provided in paragraph (2), every health care service plan that provides coverage on a group basis shall file with the Department of Managed Health Care, a written policy describing how the health plan shall facilitate the continuity of care for new enrollees receiving services during a current episode of care for an acute condition from a nonparticipating provider. This written policy shall describe the process used to facilitate the continuity of care, including the assumption of care by a participating provider. (2) On or before July 1, 2002, a health care service plan that provides coverage on an employer-sponsored group basis or a specialized health care service plan that offers professional mental health services on an employer-sponsored group basis shall file with the department a written policy describing how the health plan shall facilitate the continuity of care for new enrollees who have been receiving services for an acute, serious, or chronic mental health condition from a nonparticipating mental health provider when the enrollee's employer has changed health plans. Every written policy shall allow the new enrollee a reasonable transition period to continue his or her course of treatment with the nonparticipating mental health provider prior to transferring to another participating provider and shall include the provision of mental health services on a timely, appropriate, and medically necessary basis from the nonparticipating provider. The policy may provide that the length of the transition period take into account the severity of the enrollee' s condition and the amount of time reasonably necessary to effect a safe transfer on a case-by-case basis. Nothing in this paragraph shall be construed to require the health care service plan or specialized health care service plan to accept a nonparticipating mental health provider onto its panel for treatment of other enrollees. The health care service plan or specialized health care service plan may require the nonparticipating mental health provider, as a condition of the right conferred under this section, to enter into the standard mental health provider contract. (b) Notice of the policy and information regarding how enrollees may request a review under the policy shall be provided to all new enrollees, except those enrollees who are not eligible as described in subdivision (e). A copy of the written policy shall be provided to eligible enrollees upon request. The written policy required to be filed under subdivision (a) shall describe how requests to continue services with an existing provider are reviewed by the health care service plan or the specialized health care service plan. The policy shall ensure that reasonable consideration is given to the potential clinical effect that a change of provider would have on the enrollee's treatment for the condition. (c) A health care service plan or specialized health care service plan may require any nonparticipating provider or nonparticipating mental health provider whose services are continued pursuant to the written policy to agree in writing to meet the same contractual terms and conditions that are imposed upon the plan's participating providers, including location within the plan's service area, reimbursement methodologies, and rates of payment. If the health care service plan or specialized health care service plan determines that a patient's health care treatment should temporarily continue with the patient's existing provider or nonparticipating mental health provider, the health care service plan or specialized health care service plan shall not be liable for actions resulting solely from the negligence, malpractice, or other tortious or wrongful acts arising out of the provision of services by the existing provider or nonparticipating mental health provider. (d) Nothing in this section shall require a health care service plan or specialized health care service plan to cover services or provide benefits that are not otherwise covered under the terms and conditions of the plan contract. (e) The written policy shall not apply to any enrollee who is offered an out-of-network option, or who had the option to continue with his or her previous health plan or provider and instead voluntarily chose to change health plans. (f) This section shall not apply to health care service plan contracts or specialized health care service plan contracts that include out-of-network coverage under which the enrollee is able to obtain services from the enrollee's existing provider or nonparticipating mental health provider. (g) (1) For purposes of this section, "provider" refers to a person who is described in subdivision (f) of Section 900 of the Business and Professions Code. (2) For purposes of this section, "nonparticipating provider" refers to a psychiatrist, licensed psychologist, licensed marriage and family therapist, or licensed social worker who is not part of the health care service plan or specialized health care service plan. SEC. 2. Section 10133.55 of the Insurance Code is amended to read: 10133.55. (a) (1) Except as provided in paragraph (2), every disability insurer covering hospital, medical, and surgical expenses on a group basis that contracts with providers for alternative rates pursuant to Section 10133 and limits payments under those policies to services secured by insureds and subscribers from providers charging alternative rates pursuant to these contracts, shall file with the Department of Insurance, a written policy describing how the insurer shall facilitate the continuity of care for new insureds or enrollees receiving services during a current episode of care for an acute condition from a noncontracting provider. This written policy shall describe the process used to facilitate continuity of care, including the assumption of care by a contracting provider. (2) On or before July 1, 2002, every disability insurer covering hospital, medical, and surgical expenses on a group basis that contracts with providers for alternative rates pursuant to Section 10133 and limits payments under those policies to services secured by insureds and subscribers from providers charging alternative rates pursuant to these contracts, shall file with the department a written policy describing how the insurer shall facilitate the continuity of care for new enrollees who have been receiving services for an acute, serious, or chronic mental health condition from a nonparticipating mental health provider when the enrollee's employer has changed policies. Every written policy shall allow the new enrollee a reasonable transition period to continue his or her course of treatment with the nonparticipating mental health provider prior to transferring to another participating provider and shall include the provision of mental health services on a timely, appropriate, and medically necessary basis from the nonparticipating provider. The policy may provide that the length of the transition period take into account the severity of the enrollee's condition and the amount of time reasonably necessary to effect a safe transfer on a case-by-case basis. Nothing in this paragraph shall be construed to require the insurer to accept a nonparticipating mental health provider onto its panel for treatment of other enrollees. The insurer may require the nonparticipating mental health provider, as a condition of the right conferred under this section, to enter into the standard mental health provider contract. (b) Notice of the policy and information regarding how enrollees may request a review under the policy shall be provided to all new enrollees, except those enrollees who are not eligible as described in subdivision (e). A copy of the written policy shall be provided to eligible enrollees upon request. The written policy required to be filed under subdivision (a) shall describe how requests to continue services with an existing noncontracting provider are reviewed by the insurer. The policy shall ensure that reasonable consideration is given to the potential clinical effect that a change of provider would have on the insured's or subscriber's treatment for the acute condition. (c) An insurer may require any nonparticipating provider whose services are continued pursuant to the written policy to agree in writing to meet the same contractual terms and conditions that are imposed upon the insurer's participating providers, including location within the service area, reimbursement methodologies, and rates of payment. If the insurer determines that a patient's health care treatment should temporarily continue with the patient's existing provider or nonparticipating mental health provider, the insurer shall not be liable for actions resulting solely from the negligence, malpractice, or other tortious or wrongful acts arising out of the provision of services by the existing provider or nonparticipating mental health provider. (d) Nothing in this section shall require an insurer to cover services or provide benefits that are not otherwise covered under the terms and conditions of the policy contract. (e) The written policy shall not apply to any insured or subscriber who is offered an out-of-network option, or who had the option to continue with his or her previous health benefits carrier or provider and instead voluntarily chose to change. (f) This section shall not apply to insurer contracts that include out-of-network coverage under which the insured or subscriber is able to obtain services from the insured's or subscriber's existing provider or nonparticipating mental health provider. (g) (1) For purposes of this section, "provider" refers to a person who is described in subdivision (f) of Section 900 of the Business and Professions Code. (2) For purposes of this section, "nonparticipating provider" refers to a psychiatrist, licensed psychologist, licensed marriage and family therapist, or licensed social worker who is not part of the insurer's contracted provider network. (h) This section shall only apply to a group disability insurance policy if it provides coverage for hospital, medical, or surgical benefits. SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.