BILL NUMBER: AB 2252	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Gordon

                        FEBRUARY 24, 2012

   An act to amend Section 1375.7 of the Health and Safety Code, and
to amend Section 10133.65 of the Insurance Code, relating to health
care service plans.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2252, as introduced, Gordon. Dental coverage: provider notice
of changes.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care and
makes a willful violation of the act a crime. Under the Knox-Keene
Act, the Health Care Providers' Bill of Rights prohibits a contract
between a health care service plan and a health care provider from
including a term authorizing the plan to change a material term of
the contract unless the parties have agreed to it or it is required
to comply with state or federal law or with accreditation
requirements of a private sector accreditation organization. Under
existing law, if a change is made by amending a manual, policy, or
procedure document referenced in the contract between a plan and a
provider, the plan is required to provide at least 45 business days'
notice to the provider, as specified.
    This bill would require a plan providing dental coverage to also
provide at least 45 business days' notice to dentists providing
services under its plan contracts of any change to the plan's rules,
regulations, guidelines, policies, or procedures concerning dental
provider contracting or coverage of or payment for dental services,
as specified. The bill would give the dentist the right to negotiate
and agree to the change and to terminate its contract with the plan
if an agreement cannot be reached. Because a willful violation of
these provisions would be a crime, the bill would impose a
state-mandated local program.
   Existing law also provides for the regulation of health insurers
by the Department of Insurance. Existing law authorizes health
insurers to contract with providers for alternative rates of payment
and authorizes the contract to contain provisions permitting a
material change to the contract if the insurer provides at least 45
business' days notice to the provider and the provider has the right
to terminate the contract prior to implementation of the change.
   This bill would require an insurer providing dental coverage to
also provide at least 45 business days' notice to dentists providing
services under its health insurance policies of any change to the
insurer's rules, regulations, guidelines, policies, or procedures
concerning dental provider contracting or coverage of or payment for
dental services, as specified. The bill would give the dentist the
right to terminate its contract with the insurer prior to
implementation of the change.
   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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 1375.7 of the Health and Safety Code is amended
to read:
   1375.7.  (a) This section shall be known and may be cited as the
Health Care Providers' Bill of Rights.
   (b) No contract issued, amended, or renewed on or after January 1,
2003, between a plan and a health care provider for the provision of
health care services to a plan enrollee or subscriber shall contain
any of the following terms:
   (1) (A) Authority for the plan to change a material term of the
contract, unless the change has first been negotiated and agreed to
by the provider and the plan or the change is necessary to comply
with state or federal law or regulations or any accreditation
requirements of a private sector accreditation organization. If a
change is made by amending a manual, policy, or procedure document
referenced in the contract, the plan shall provide 45 business days'
notice to the provider, and the provider has the right to negotiate
and agree to the change. If the plan and the provider cannot agree to
the change to a manual, policy, or procedure document, the provider
has the right to terminate the contract prior to the implementation
of the change. In any event, the plan shall provide at least 45
business days' notice of its intent to change a material term, unless
a change in state or federal law or regulations or any accreditation
requirements of a private sector accreditation organization requires
a shorter timeframe for compliance. However, if the parties mutually
agree, the 45-business day notice requirement may be waived. Nothing
in this subparagraph limits the ability of the parties to mutually
agree to the proposed change at any time after the provider has
received notice of the proposed change.
   (B) If a contract between a provider and a plan provides benefits
to enrollees or subscribers through a preferred provider arrangement,
the contract may contain provisions permitting a material change to
the contract by the plan if the plan provides at least 45 business
days' notice to the provider of the change and the provider has the
right to terminate the contract prior to the implementation of the
change.
   (C) If a contract between a noninstitutional provider and a plan
provides benefits to enrollees or subscribers covered under the
Medi-Cal or Healthy Families program and compensates the provider on
a fee-for-service basis, the contract may contain provisions
permitting a material change to the contract by the plan, if the
following requirements are met:
   (i) The plan gives the provider a minimum of 90 business days'
notice of its intent to change a material term of the contract.
   (ii) The plan clearly gives the provider the right to exercise his
or her intent to negotiate and agree to the change within 30
business days of the provider's receipt of the notice described in
clause (i).
   (iii) The plan clearly gives the provider the right to terminate
the contract within 90 business days from the date of the provider's
receipt of the notice described in clause (i) if the provider does
not exercise the right to negotiate the change or no agreement is
reached, as described in clause (ii).
   (iv) The material change becomes effective 90 business days from
the date of the notice described in clause (i) if the provider does
not exercise his or her right to negotiate the change, as described
in clause (ii), or to terminate the contract, as described in clause
(iii).
   (2) A provision that requires a health care provider to accept
additional patients beyond the contracted number or in the absence of
a number if, in the reasonable professional judgment of the
provider, accepting additional patients would endanger patients'
access to, or continuity of, care.
   (3) A requirement to comply with quality improvement or
utilization management programs or procedures of a plan, unless the
requirement is fully disclosed to the health care provider at least
15 business days prior to the provider executing the contract.
However, the plan may make a change to the quality improvement or
utilization management programs or procedures at any time if the
change is necessary to comply with state or federal law or
regulations or any accreditation requirements of a private sector
accreditation organization. A change to the quality improvement or
utilization management programs or procedures shall be made pursuant
to paragraph (1).
   (4) A provision that waives or conflicts with any provision of
this chapter. A provision in the contract that allows the plan to
provide professional liability or other coverage or to assume the
cost of defending the provider in an action relating to professional
liability or other action is not in conflict with, or in violation
of, this chapter.
   (5) A requirement to permit access to patient information in
violation of federal or state laws concerning the confidentiality of
patient information. 
   (c) With respect to a health care service plan contract covering
dental services or a specialized health care service plan contract
covering dental services, if a change is made to the health care
service plan's rules, regulations, guidelines, policies, or
procedures concerning dental provider contracting or coverage of or
payment for dental services, the plan shall provide at least 45
business days' written notice to the dentists providing services
under the plan's individual or group plan contracts, including
specialized health care service plan contracts, unless a change in
state or federal law or regulations or any accreditation requirements
of a private sector accreditation organization requires a shorter
timeframe for compliance. Each dentist has the right to negotiate and
agree to the change. If the plan and a dentist cannot agree to the
change, the dentist has the right to terminate its contract with the
plan prior to the implementation of the change. If the parties
mutually agree, the 45-business-day notice requirement may be waived.
Nothing in this subdivision limits the ability of the parties to
mutually agree to the proposed change at any time after the dentist
has received notice of the proposed change. This subdivision shall
apply in addition to the other applicable requirements imposed under
this section, except that it shall not apply where notice of the
proposed change is required to be provided pursuant to subparagraph
(C) of paragraph (1) of subdivision (b).  
   (c) 
    (d)  (1) When a contracting agent sells, leases, or
transfers a health provider's contract to a payor, the rights and
obligations of the provider shall be governed by the underlying
contract between the health care provider and the contracting agent.
   (2) For purposes of this subdivision, the following terms shall
have the following meanings:
   (A) "Contracting agent" has the meaning set forth in paragraph (2)
of subdivision (d) of Section 1395.6.
   (B) "Payor" has the meaning set forth in paragraph (3) of
subdivision (d) of Section 1395.6. 
   (d) 
    (e)  Any contract provision that violates subdivision
(b)  or   ,  (c)  , or (d)  shall
be void, unlawful, and unenforceable. 
   (e) 
    (f)  The department shall compile the information
submitted by plans pursuant to subdivision (h) of Section 1367 into a
report and submit the report to the Governor and the Legislature by
March 15 of each calendar year. 
   (f) 
    (g)  Nothing in this section shall be construed or
applied as setting the rate of payment to be included in contracts
between plans and health care providers. 
   (g) 
    (h)  For purposes of this section the following
definitions apply:
   (1) "Health care provider" means any professional person, medical
group, independent practice association, organization, health care
facility, or other person or institution licensed or authorized by
the state to deliver or furnish health services.
   (2) "Material" means a provision in a contract to which a
reasonable person would attach importance in determining the action
to be taken upon the provision.
  SEC. 2.  Section 10133.65 of the Insurance Code is amended to read:

   10133.65.  (a) This section shall be known and may be cited as the
Health Care Providers' Bill of Rights.
   (b) No contract issued, amended, or renewed on or after January 1,
2003, between a health insurer and a health care provider for the
provision of covered benefits at alternative rates of payment to an
insured shall contain any of the following terms:
   (1) A provision that requires a health care provider to accept
additional patients beyond the contracted number or in the absence of
a number if, in the reasonable professional judgment of the
provider, accepting additional patients would endanger patients'
access to, or continuity of, care.
   (2) A requirement to comply with quality improvement or
utilization management programs or procedures of a health insurer,
unless the requirement is fully disclosed to the health care provider
at least 15 business days prior to the provider executing the
contract. However, the health insurer may make a change to the
quality improvement or utilization management programs or procedures
at any time if the change is necessary to comply with state or
federal law or regulations or any accreditation requirements of a
private sector accreditation organization. A change to the quality
improvement or utilization management programs or procedures shall be
made pursuant to subdivision (c).
   (3) A provision that waives or conflicts with any provision of the
Insurance Code.
   (4) A requirement to permit access to patient information in
violation of federal or state laws concerning the confidentiality of
patient information.
   (c) If a contract is with a health insurer that negotiates and
arranges for alternative rates of payment with the provider to
provide benefits to insureds, the contract may contain provisions
permitting a material change to the contract by the health insurer if
the health insurer provides at least 45 business days' notice to the
provider of the change, and the provider has the right to terminate
the contract prior to implementation of the change. 

   (d) With respect to a health insurance policy covering dental
services or a specialized health insurance policy covering dental
services, if a change is made to the health insurer's rules,
regulations, guidelines, policies, or procedures concerning dental
provider contracting or coverage of or payment for dental services,
the insurer shall provide at least 45 business days' written notice
to the dentists providing services under the insurer's individual or
group health insurance policies, including specialized health
insurance policies. Each dentist shall have the right to terminate
its contract with the insurer prior to the implementation of the
change. This subdivision shall apply in addition to the other
applicable requirements imposed under this section.  
   (d) 
    (e)  Any contract provision that violates subdivision
(b)  or   ,  (c)  , or (d)  shall
be void, unlawful, and unenforceable. 
   (e) 
    (f)  The Department of Insurance shall annually compile
all provider complaints that it receives under this section, and
shall report to the Legislature and the Governor the number and
nature of those complaints by March 15 of each calendar year.

   (f) 
    (g)  Nothing in this section shall be construed or
applied as setting the rate of payment to be included in contracts
between health insurers and health care providers. 
   (g) 
   (h)  For purposes of this section, the following
definitions apply:
   (1) "Health care provider" means any professional person, medical
group, independent practice association, organization, health
facility, or other person or institution licensed or authorized by
the state to deliver or furnish health care services.
   (2) "Health insurer" means any admitted insurer writing health
insurance, as defined in Section 106, that enters into a contract
with a provider to provide covered benefits at alternative rates of
payment.
   (3) "Material" means a provision in a contract to which a
reasonable person would attach importance in determining the action
to be taken upon the provision.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B 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 XIII B of the California
Constitution.