BILL NUMBER: AB 2389	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 2, 2010
	AMENDED IN SENATE  JUNE 16, 2010
	AMENDED IN ASSEMBLY  MAY 24, 2010
	AMENDED IN ASSEMBLY  MAY 20, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010

INTRODUCED BY   Assembly Member Gaines

                        FEBRUARY 19, 2010

   An act to add Section 1367.49 to the Health and Safety Code, and
to add Section 10133.64 to the Insurance Code, relating to health
care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2389, as amended, Gaines. Health care coverage: 
provider contracts.   health facilities: cost and
quality information. 
   Existing law, 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. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Existing law prohibits a contract between a plan or
insurer and a health care provider from containing certain terms.
   This bill would prohibit a contract by or on behalf of a plan or
insurer and a health care facility, as defined, to provide inpatient
hospital services or ambulatory care services to subscribers and
enrollees of the plan or policyholders and insureds of the insurer
from containing a provision that restricts the ability of the plan or
insurer to furnish information to subscribers or enrollees of the
plan or policyholders or insureds of the insurer concerning the cost
range of procedures at the facility or the quality of services
performed by the facility. The bill would require that the cost
information be  limited to certain elective, uncomplicated
procedures, and be  displayed in a specified manner and would
prohibit a health care service plan from disclosing negotiated
capitation rates or other prepaid arrangements to enrollees or
subscribers in either the cost or quality information, except as
specified. The bill would require a plan or insurer that furnishes
the cost or quality information to also disclose the location of its
facility  cost ranges and  quality measurements to
subscribers, enrollees, policyholders, and insureds, and to make
specified disclosures regarding those measurements  and the cost
information provided  .  If the quality information is
quality of care data developed and compiled by the plan or insurer,
the   The  bill would require plans and insurers to
provide affected facilities an opportunity to review the information
prior to furnishing it to subscribers, enrollees, policyholders, or
insureds, as specified, and would also, among other things, require
 , if the information is data developed and compiled by the plan
or insurer,  that the information be based on specified
guidelines and be updated  at appropriate intervals 
 regularly  , as specified. The bill would make a 
contractural   contractual  provision inconsistent
with the bill's requirements void and unenforceable.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1367.49 is added to the Health and Safety Code,
to read:
   1367.49.  (a) A contract issued, amended, renewed, or delivered on
or after January 1, 2011, by or on behalf of a health care service
plan and a health care facility to provide inpatient hospital
services or ambulatory care services to subscribers and enrollees of
the plan shall not contain any provision that restricts the ability
of the health care service plan to furnish information to subscribers
or enrollees of the plan concerning the cost range of procedures at
the facility or the quality of services performed by the facility.
   (b) Information on the cost range of procedures  furnished
pursuant to subdivision (a)   at a health care facility
furnished by a plan to enrollees o   r subscribers 
shall be displayed as an episode of care, unless an episode of care
is not applicable, and may include, but shall not be limited to,
applicable diagnostic tests, prescription drugs, hospital days, and
medical supplies that are associated with a typical procedure or
illness.  The information shall be limited to the cost range of
elective, uncomplicated procedures performed on patients without
malignancy or comorbidity, with a length of stay consistent with the
diagnosis-related group assignment. 
   (c) A health care service plan shall not disclose negotiated
capitation rates or other prepaid arrangements in the information
 furnished to enrollees or subscribers pursuant to
subdivision (a).   described in subdivision (a) that is
furnished to enrollees or subscribers.  However, if the health
care service plan includes in that information allocated capitation
payments to a health care facility for an episode of care, the plan
and the facility shall consult on an appropriate and reasonable
methodology formula.
   (d) If the information proposed to be furnished  pursuant
to subdivision (a)   to enrollees and subscribers 
on the quality of services performed by a health care facility is
quality of care data that the plan has developed and compiled, all of
the following requirements shall be satisfied:
   (1) The information shall be based on nationally recognized
 evidence-based   evidence-  or
consensus-based clinical recommendations or guidelines. When
available, a plan shall use measures endorsed by the National Quality
Forum or other entities  whose work in the area of quality
performance is generally accepted in the health care industry.
  nationally recognized for quality or performance
review. 
   (2) The plan shall utilize appropriate risk adjustment factors to
account for different characteristics of the population, such as case
mix, severity of patient's condition, comorbidities, outlier
episodes, and other factors to account for differences in the use of
health care resources among health care facilities.
   (3) The information, and the data used as the basis for that
 information, shall be updated at appropriate intervals, but
not less   information, shall be updated regularly, and
no less  than annually.
   (4) If the health care service plan is evaluating quality
measurements for which it is also furnishing the cost range of
procedures to its enrollees or subscribers, it shall link the two
together for comparison purposes when appropriate. 
   (5) The 
    (e)    A  health care service plan
shall, prior to furnishing the information  described in
subdivision (a)  to its enrollees or subscribers, provide all of
the following to the affected health care facility: 
   (A) 
    (1)  At least 45-days written notice to review the
information. 
   (B) The criteria used in the development and evaluation of quality
measurements and reasonable access to these criteria. The criteria
shall be sufficiently detailed and reasonably understandable to allow
the facility to verify the data against its records.  
   (2) A summary of the criteria and methodology used in the
development and evaluation of cost range and quality measurements.
This summary shall be sufficiently detailed and reasonably
understandable to allow the facility to verify the data against its
own records.  
   (C) 
    (3)  An explanation to the facility that it has the
right to correct errors and seek review of the data used to measure
the quality of services provided at the facility  and to provide
  supplemental information to the plan if the facility finds
discrepancies in the data or cost range criteria used by the plan
 . 
   (D) 
    (4)  A reasonable, prompt, and transparent appeal
process. If the facility makes an appeal prior to the expiration of
the time period provided under  subparagraph (A) 
 paragraph (1)  , the health care service plan shall make no
 material  changes to its current information about the
facility until the appeal is completed. 
   (5) Notice of, and an annual update of, the information furnished
to enrollees or subscribers on the cost range of procedures at the
facility. A plan may satisfy this requirement by providing an
electronic copy to the facility or by providing the facility with
access to the plan's cost information through an Internet Web site or
electronic portal made available by the plan.  
   (e) 
    (f)  A health care service plan that furnishes
information concerning the cost range of procedures at a health care
facility or the quality of services provided by the facility to its
subscribers or enrollees  pursuant to subdivision (a)
 shall also disclose the following to its subscribers or
enrollees:
   (1) Where the plan's facility  cost ranges and  quality
measurements can be found.
   (2) That facility  cost ranges and  quality measurements
provided by the plan are only a guide to choosing a facility, that
enrollees or subscribers should confer with their existing facility
before making a decision, and that these  ranges and 
measurements have a risk of error and should not be the sole basis
for selecting a facility.
   (3) Information explaining the facility quality measurement
process, including the basis upon which quality is measured and any
limitation of the data used.
   (4) Reasonable details on the factors and criteria used by the
facility quality measurement system, including whether severity cost
adjustments have been utilized.
   (5) How an enrollee or subscriber may register a complaint
 about the plan's facility quality measurements or provide
feedback on the quality measurement system.   about, or
provide feedback on, the quality measurement   system or the
cost range information provided   by the plan. 

   (f) Any contractural 
    (g)     Any contractural  provision
inconsistent with this section shall be void and unenforceable.

   (g) For purposes of this section, the following definitions apply:
 
   (1) "Health care facility" means a licensed hospital or any other
licensed health care facility owned by a licensed hospital. 

   (2) "Licensed hospital" has the same meaning as set forth in
Section 4028 of the Business and Professions Code.  

   (3) "Licensed health care facility" means any institution or
health facility, other than a long-term health care facility as
defined pursuant to Section 1418, licensed by the State Department of
Public Health to deliver or furnish health care services. 

   (h) For purposes of this section, "health care facility" means a
health facility defined in subdivision (a), (b), or (f) of Section
1250.  
   (h) 
    (i)  Section 1390 shall not apply for purposes of this
section.
  SEC. 2.  Section 10133.64 is added to the Insurance Code, to read:
   10133.64.  (a) A contract issued, amended, renewed, or delivered
on or after January 1, 2011, by or on behalf of a health insurer and
a health care facility to provide inpatient hospital services or
ambulatory care services to policyholders and insureds of the insurer
shall not contain any provision that restricts the ability of the
health insurer to furnish information to policyholders or insureds
concerning the cost range of procedures at the health care facility
or the quality of services provided by the facility.
   (b) Information on the cost range of procedures  furnished
pursuant to subdivision (a)   at a health care facility
furnished by an insurer to policyholders or insur   eds
 shall be displayed as an episode of care, unless an episode of
care is not applicable, and may include, but shall not be limited to,
applicable diagnostic tests, prescription drugs, hospital days, and
medical supplies that are associated with a typical procedure or
illness.  The information shall be limited to the cost range of
elective, uncomplicated procedures performed on patients without
malignancy or comorbidity, with a length of stay consistent with the
diagnosis-related group assignment. 
   (c) If the information proposed to be furnished  pursuant
to subdivision (a)   to policyholders or insureds 
on the quality of services performed by a health care facility is
quality of care data that the insurer has developed and compiled, all
of the following requirements shall be satisfied:
   (1) The information shall be based on nationally recognized
 evidence-based   evidence- or
consensus-based clinical recommendations or guidelines. When
available, an insurer shall use measures endorsed by the National
Quality Forum or other entities  whose work in the area of
quality performance is generally accepted in the health care
industry.   nationally recognized for quality or
performance review. 
   (2) The insurer shall utilize appropriate risk adjustment factors
to account for different characteristics of the population, such as
case mix, severity of patient's condition, comorbidities, outlier
episodes, and other factors to account for differences in the use of
health care resources among health care facilities.
   (3) The information, and the data used as the basis for that
 information, shall be updated at appropriate intervals, but
not less   information, shall be updated regularly, but
no less  than annually.
   (4) If the health insurer is evaluating quality measurements for
which it is also furnishing the cost range of procedures to its
policyholders or insureds, it shall link the two together for
comparison purposes when appropriate. 
   (5) The 
    (d)     A  health insurer shall, prior
to furnishing the information  described in subdivision (a)
 to its policyholders or insureds, provide all of the following
to the affected health care facility: 
   (A) 
    (1)  At least 45-days written notice to review the
information. 
   (B) The criteria used in the development and evaluation of quality
measurements and reasonable access to these criteria. The criteria
shall be sufficiently detailed and reasonably understandable to allow
the facility to verify the data against its records.  
   (2) A summary of the criteria and methodology used in the
development and evaluation of cost range and quality measurements.
This summary shall be sufficiently detailed and reasonably
understandable to allow the facility to verify the data against its
own records.  
   (C) 
    (3)  An explanation to the facility that it has the
right to correct errors and seek review of the data used to measure
the quality of services provided at the facility  and to provide
supplemental information to the insurer if the facility finds
discrepancies in the data or cost range criteria used by the insurer
 . 
   (D) 
    (4)  A reasonable, prompt, and transparent appeal
process. If the facility makes an appeal prior to the expiration of
the time period provided under  subparagraph (A) 
 paragraph (1)  , the health insurer shall make no 
material  changes to its current information about the facility
until the appeal is completed. 
   (5) Notice of, and an annual update of, the information furnished
to policyholders or insureds on the cost range of procedures at the
facility. A health insurer may satisfy this requirement by providing
an electronic copy to the facility or by providing the facility with
access to the insurer's cost information through an Internet Web site
or electronic portal made available by the insurer.  
   (d) 
    (e)  A health insurer that furnishes information
concerning the cost range of procedures at a health care facility or
the quality of services provided by the facility to its policyholders
or insureds  pursuant to subdivision (a)  shall
also disclose the following to its policyholders or insureds:
   (1) Where the insurer's facility  cost ranges and 
quality measurements can be found.
   (2) That facility  cost ranges and  quality measurements
provided by the insurer are only a guide to choosing a facility, that
policyholders or insureds should confer with their existing facility
before making a decision, and that these  ranges and 
measurements have a risk of error and should not be the sole basis
for selecting a facility.
   (3) Information explaining the facility quality measurement
process, including the basis upon which quality is measured and any
limitation of the data used.
   (4) Reasonable details on the factors and criteria used by the
facility quality measurement system, including whether severity cost
adjustments have been utilized.
   (5) How a policyholder or insured may register a complaint
 about the insurer's facility quality measurements or provide
feedback on the quality measurement system.   about, or
provide feedback on, the quality measurement system or the cost
range information provided by the insurer.  
   (e) Any contractural 
    (f)     Any contractural  provision
inconsistent with this section shall be void and unenforceable.

   (f) For purposes of this section, the following definitions apply:
 
   (1) "Health care facility" means a licensed hospital or any other
licensed health care facility owned by a licensed hospital. 

   (2) "Licensed hospital" has the same meaning as set forth in
Section 4028 of the Business and Professions Code.  

   (3) "Licensed health care facility" means any institution or
health facility, other than a long-term health care facility as
defined pursuant to Section 1418 of the Health and Safety Code,
licensed by the State Department of Public Health to deliver or
furnish health care services.  
   (g) For purposes of this section, "health care facility" means a
health facility defined in subdivision (a), (b), or (f) of Section
1250 of the Health and Safety Code.