BILL ANALYSIS Ó
AB 1579
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ASSEMBLY THIRD READING
AB 1579 (Campos)
As Amended April 23, 2012
Majority vote
HEALTH 19-0 APPROPRIATIONS 16-0
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|Ayes:|Monning, Logue, Ammiano, |Ayes:|Fuentes, Harkey, |
| |Atkins, Bonilla, Eng, | |Blumenfield, Bradford, |
| |Garrick, Gordon, Hayashi, | |Charles Calderon, Campos, |
| |Roger Hernández, | |Davis, Gatto, Hall, Hill, |
| |Bonnie Lowenthal, | |Lara, Mitchell, Nielsen, |
| |Mansoor, Mitchell, | |Norby, Solorio, Wagner |
| |Nestande, Pan, | | |
| |V. Manuel Pérez, Silva, | | |
| |Smyth, Williams | | |
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SUMMARY : Requires a health care service plan (health plan) or
health insurer (collectively issuers) to pay a noncontracting
dental provider directly for covered services after submitting a
written "assignment of benefits" (AOB) signed by an enrollee or
insured. Specifically, this bill :
1)Requires an issuer, if the issuer pays a contracting dental
provider directly for covered services rendered to an enrollee
or insured, to also pay a noncontracting dental provider
directly for covered services rendered to an enrollee or
insured where the noncontracting provider submits to the
issuer a written AOB signed by the enrollee or insured.
2)Requires an issuer to give written notice to the enrollee,
insured, or legal representative when payment is made to the
noncontracting dental provider containing the following:
a) Notification that the provider is not in the network of
the enrollee's plan;
b) The estimated full cost of the planned treatment and the
estimated amount for which the enrollee is responsible;
and,
c) The estimate of the treatment cost covered by the health
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plan, if available prior to treatment. States that nothing
in this bill shall be construed to require a delay in
treatment to an enrollee.
3)Requires an issuer to, upon inquiry from the provider, provide
treatment cost estimate information as soon as possible but
not later than three business days from the date of the
request.
4)Requires the notice to be made available by the provider in
the primary languages of the two largest populations seen by
the provider who either do not speak English or who are unable
to effectively communicate in English because it is not their
native language, and who comprise 5% or more of the patients
served by the provider.
5)Requires in addition to the notice in 2) above, prior to
providing treatment, a noncontracting dental provider
accepting an AOB to provide the enrollee on a single page
without any additional information a specified written notice,
in 12-point type, and obtain a signature from the enrollee or
the enrollee's legal representative indicating receipt
thereof.
6)Limits the payment amount to an amount not to exceed the
amount of the benefit covered by the contract or policy with
respect to the provider of the service, the amount of expenses
incurred on account of the dental care or treatment provided,
and states that the payment discharges the issuer's obligation
with respect to the amount paid.
7)Permits a provider accepting an AOB to only collect from the
enrollee the enrollee's estimated cost according to the
written treatment plan. Requires a provider to refund any
overpayment to the enrollee within 30 business days after
receiving the direct payment from the enrollee's plan if the
actual payment is more than the estimated payment.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Minor, absorbable costs to the Department of Managed Health
Care and the Department of Insurance to ensure plans comply
with the new requirement to directly reimburse non-contracting
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providers.
2)This bill could potentially lead to indirect state cost
pressure associated with the provision of dental plans to its
employees. By making it easier for a non-contracting provider
to receive payment from a dental plan, this bill is likely to
somewhat reduce incentives for dental providers to join or
maintain participation in a plan network. If these reduced
incentives led to a significant decrease in the number of
participating providers, there could be pressure to increase
fees to providers in order to entice a sufficient number of
providers to join plan networks, the cost of which could be
passed on to consumers as increased premiums. These market
effects are difficult to predict and potential state costs are
indeterminate.
COMMENTS : The California Dental Association (CDA) is the
sponsor of this bill. CDA cites many advantages to patients in
having the option to assign their right to treatment payments to
their dental care providers: the patient can designate to their
dentist the responsibility of filling out the claim form and
assuring that all the necessary documentation is attached,
eliminating confusion that patients often have over using
correct insurance codes and procedure descriptions; the patient
does not need to attend to the specific details of recordkeeping
associated with billing and payment of the care they were
provided; and, any difficulties or disputes arising from a
dental insurer's failure to properly reimburse the claim can be
handled by the dental office rather than by the patient. CDA
asserts that a dental plan's refusal to accept patients'
assignment of rights for benefit payment is a denial of the
patient's wishes and choice. Since a Preferred Provider
Organization (PPO) allows enrollees to seek care from a dentist
of their choice, whether in-network or out-of-network, a plan's
refusal to honor an enrollee's assignment of payment punishes
the patient for receiving care from a dentist of their choice
who happens to be outside of the plan's provider network. CDA
states in response to claims that AOB laws erodes provider
networks that Colorado passed legislation in 2005 and in 2010
Delta Dental's network saw a net growth of 2.1%. According to
CDA, quality of care is a matter for the Dental Board of
California and in keeping with their obligation of service to
the public, CDA and its 32 component dental societies have
established a statewide peer review system to resolve disputes
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regarding dental treatment, utilization, and irregular billing
practices.
Delta Dental opposes this bill because they believe it targets
them, will result in the erosion of their provider network, and
impact patient quality. Terms of participation in Delta Dental
networks includes the provider's agreement to limit fees,
guarantee that treatment quality meets professional standards,
and accept an assortment of terms and conditions that protect
patients; such as not charging for filling out forms, and
providing subordinate parts of treatment. Delta Dental
indicates that only about 8% of California dentists are not
currently in one of their networks. Delta Dental believes that
patients are unaware that their average out-of-pocket costs will
roughly double what they would pay an in-network provider.
Delta Dental argues that most out-of-network providers make that
choice because they want the ability to charge more than their
network fee limits, and do not want to be subject to Delta
Dental's Quality Management Program. Delta Dental states that
California is different from any other state where mandated
assignment of benefits has been enacted. Delta Dental believes
AOB is the main reason why its Premier network enjoys 92%
participation. Delta Dental states that for every 5% reduction
in dentists, there will be a corresponding increase of $97
million in total out-of-pocket costs for their California
enrollees. With regard to consumer protections, Delta Dental
enrollees are guaranteed the right to a second opinion and
should Delta Dental determine a procedure was done improperly or
insufficiently, Delta Dental can withhold payment from the
provider, require retreatment, or authorize care from a
different dentist at no additional cost to the enrollee.
Lastly, Delta Dental indicates that participating dentists agree
to be subject to ongoing Quality Management, with a host of
protections that neither the California State Board of Dental
Examiners, nor CDA's statewide peer review system can extend.
Both the Association of California Life & Health Insurance
Companies and America's Health Insurance Plans (AHIP) oppose
this bill because it reduces incentive to contract with insurers
and exposes consumers to potential harm without appropriate
transparency. AHIP indicates that this bill threatens the
efforts of all health care stakeholders to provide consumers
with meaningful health care choices and affordable coverage
options.
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Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0003555