BILL ANALYSIS                                                                                                                                                                                                    



                                                                AB 2275
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        CONCURRENCE IN SENATE AMENDMENTS
        AB 2275 (Hayashi)
        As Amended  August 17, 2010
        Majority vote
         
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        |ASSEMBLY:  |     |(May 10, 2010)  |SENATE: |33-0 |(August 18,    |
        |           |     |                |        |     |2010)          |
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                  (vote not relevant)


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        |COMMITTEE VOTE:  |18-0 |(August 24, 2010)   |RECOMMENDATION: |concur    |
        |                 |     |                    |                |          |
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        Original Committee Reference:    B.P. & C.P.  

         SUMMARY  :  Prohibits contracts issued, amended, or renewed on or  
        after January 1, 2011, between a health care service plan, a  
        specialized health care service plan, or an insurer, and a dentist  
        from requiring a dentist to accept a payment amount set by the plan  
        or insurer for dental care services provided to an enrollee or  
        insured that are not covered under the contract.  Prohibits a  
        provider from charging more for non-covered dental services than  
        his or her usual and customary rate for those services.
        
         The Senate amendments  delete the Assembly approved version of this  
        bill and instead:

        1)Prohibit a full service or specialized health plan or insurer,  
          with respect to plan contracts and policies issued, amended, or  
          renewed on or after January 1, 2011, that cover dental services,  
          from requiring a dentist to accept an amount set by the plan or  
          insurer as payment for non-covered dental care services provided  
          to an enrollee or insured.

        2)Prohibit providers from charging more for non-covered dental  
          services under a plan contract or insurance policy than their  
          usual and customary rate for those services. 

        3)Requires the evidence of coverage (EOC) and disclosure form, or  
          combined EOC and disclosure form, with respect to plan contracts  
          and policies issued, amended, or renewed on or after July 1,  








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          2011, that cover dental services, to include the following  
          statements:

           a)   If a patient opts to receive non-covered dental services, a  
             participating dental provider may charge his or her usual and  
             customary rate for those services;

           b)   Prior to providing a patient with dental services that are  
             not a covered benefit, the dentist should provide to the  
             patient a treatment plan that includes each anticipated  
             service to be provided and the estimated cost of each service;  
              

           c)   If the patient would like more information about dental  
             coverage options, the patient may call member services at  
             [insert appropriate telephone number], or his or her insurance  
             broker; and,

           d)   To fully understand his or her coverage, the patient may  
             wish to carefully review this EOC document.

        4)Define "covered services" to mean dental care services for which  
          the plan or insurer is obligated to pay pursuant to an enrollee's  
          plan contract or insured's policy or for which the plan or  
          insurer would be obligated to pay pursuant to an enrollee's plan  
          contract or insured's policy but for the application of  
          contractual limitations, such as deductibles, copayments,  
          coinsurance, waiting periods, annual or lifetime maximums,  
          frequency limitations, or alternative benefit payments.

         AS PASSED BY THE ASSEMBLY  , this bill required annual state property  
        inventory reports by the Department of General Services to be  
        completed and updated by January 1 of each year.

         FISCAL EFFECT  :  According to the Senate Appropriations Committee,  
        costs to the California Department of Insurance would be minor and  
        absorbable and costs to the Department of Managed Health Care would  
        continue to be about $60,000 - $70,000 in fiscal year 2010-2011,  
        but would likely be minor ongoing.  

         COMMENTS  :  Covered dental services often include preventive and  
        diagnostic services, such as cleaning and routine dental exams;  
        basic dental care and procedures, such as fillings and extractions;  
        and major dental care, usually involving root canals and crowns.   
        Generally, orthodontia, cosmetic services, and implants are  








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        excluded from benefits and are considered "non-covered dental  
        services." Cost-sharing for dental benefits is structured similarly  
        to general health benefits, with the amount of deductibles and  
        cost-sharing depending on the type of service.  Often basic dental  
        care and procedures have lower deductibles and cost-sharing  
        amounts, while major services, such as crowns and root canals have  
        higher deductibles and out-of-pocket costs.  Many dental plans have  
        an annual cap for covered services, at which point the plan stops  
        contributing to the cost of services until the next enrollment  
        year.  

        According to the author, this bill is intended to prohibit dental  
        benefit plans regulated by DMHC and CDI from setting fees charged  
        by dental practices for procedures that the dental plan does not  
        cover in its scope of benefits.  The author asserts that the policy  
        of dental benefit plans capping fees for procedures they do not  
        cover is an intrusion into the marketplace, and results in the  
        plans dictating fees for services they have no financial stake in,  
        and for which the plan bears no risk.  Furthermore, the author and  
        sponsor state that dentists are not given the opportunity to refuse  
        provisions requiring dentists to adhere to discounted fees for  
        procedures that a dental plan doesn't cover, but must accept them  
        along with the entire contract if they want to participate in the  
        plan's provider network.  The author and sponsor maintain that the  
        capping of fees for non-covered services is used as a marketing  
        tool by plans and insurers with prospective subscribing groups, and  
        has given an advantage to the larger dental benefit companies which  
        have a larger market share and more negotiating power.  The sponsor  
        states that this bill seeks to level the playing field among all  
        dental plans.  
          

         Analysis Prepared by :    Cassie Rafanan / HEALTH / (916) 319-2097


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