BILL NUMBER: AB 2252 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 25, 2012
AMENDED IN ASSEMBLY APRIL 23, 2012
AMENDED IN ASSEMBLY APRIL 10, 2012
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 amended, 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
that automatically renews dental provider contracts to
also , at least 45 business days prior to a contract
renewal date, provide to the provider a summary of all of those
changes made since the contract was issued or last renewed, whichever
is later, and would allow the provider to terminate the contract
within 30 business days of receiving that summary. The bill would
also require a plan providing dental coverage to provide at
least 45 business days' notice to dentists providing services under
its plan contracts of any material 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 require a plan to post
notification of any nonmaterial changes made to those rules,
regulations, guidelines, policies, or procedures on its Internet Web
site, as specified. The bill would give the dentist the right to
negotiate and agree to a material change and to terminate its
contract with the plan if an agreement cannot be reached. The bill
would also require a plan providing dental coverage that
automatically renews dental provider contracts to, at least 45
business days prior to a contract renewal date, provide to the
provider a summary of all the changes made, as specified, since the
contract was issued or last renewed, whichever is later. The bill
would allow the provider to terminate the contract within 30 business
days of receiving the summary. Because a willful violation
of these provisions requirements 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
that automatically renews dental provider contracts to, at least 45
business days prior to a contract renewal date, provide to the
provider a summary of all those changes made since the
contract was issued or last renewed, whichever is later, and would
allow the provider to terminate the contract within 30 business days
of receiving that summary. The bill would also 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 material 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 require a health
insurer to post notification of any nonmaterial changes made to those
rules, regulations, guidelines, policies, or procedures, on its
Internet Web site, as specified. The bill would give the dentist the
right to terminate its contract with the insurer prior to
implementation of a material change. The bill would also require an
insurer providing dental coverage that automatically renews dental
provider contracts to, at least 45 business days prior to a contract
renewal date, provide to the provider a summary of all the changes
made, as specified, since the contract was issued or last renewed,
whichever is later. The bill would allow the provider to terminate
the contract within 30 business days of receiving the summary.
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, all of the following shall apply:
(1) (A) If a material 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
subparagraph 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.
(B) If a nonmaterial 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, on a monthly basis, post
notification of those changes on its Internet Web site in an area
that is readily available for provider access.
(C) compliance.
For purposes of this paragraph, written notice shall include
notice by electronic mail or facsimile transmission. This
paragraph 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).
(2) For purposes of subparagraph (A) of
paragraph (1), a material change made to a health care service plan's
rules, regulations, guidelines, policies, or procedures concerning
dental provider contracting or coverage of or payment for dental
services includes, but is not limited to, a change to the system by
which the plan adjudicates and pays claims for treatment that
may cause delays or disruptions to processing claims or making
eligibility determinations , a change to the
manner in which the plan identifies patients and providers,
a change to the fee and rate schedule for the product for which the
dentist is in-network, and a change to the
general coverage or general policies of the plan that affect
rates and fees paid to providers , and a change to enrollees'
benefit coverage policies .
(3) A plan that automatically renews a contract with a dental
provider shall, at least 45 business days prior to the contract
renewal date, provide to the provider a summary of the changes
described in this subdivision and paragraph (1) of
subdivision (b) that have been made since the contract was issued or
last renewed, whichever is later. The provider shall have the right
to terminate the contract within 30 business days of receiving the
summary. If the provider does not notify the plan of its desire to
terminate the contract within that 30-business-day period, the
contract shall be automatically renewed.
(4) This subdivision shall not apply to a health care service plan
that exclusively contracts with no more than two medical groups in
the state to provide or arrange for the provision of professional
medical services to the enrollees of the plan.
(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.
(e) Any contract provision that violates subdivision (b), (c), or
(d) shall be void, unlawful, and unenforceable.
(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.
(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.
(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, all of the following shall apply:
(1) (A) If a material 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.
(B) If a nonmaterial 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 health insurer shall, on a monthly basis, post notification of
those changes on its Internet Web site in an area that is readily
available for provider access.
(C) insurance policies.
For purposes of this paragraph, written notice shall include notice
by electronic mail or facsimile transmission. This paragraph
shall apply in addition to the other applicable requirements imposed
under this section.
(2) For purposes of subparagraph (A) of
paragraph (1), a material change made to a health insurer's rules,
regulations, guidelines, policies, or procedures concerning dental
provider contracting or coverage of or payment for dental services
includes, but is not limited to, a change to the system by which the
insurer adjudicates and pays claims for treatment that may cause
delays or disruptions to processing claims or making eligibility
determinations , a change to the manner
in which the insurer identifies patients and providers, a
change to the fee and rate schedule for the product for which the
dentist is in-network, and a change to the
general coverage or general policies of the insurer that affect
rates and fees paid to providers , and a change to insureds'
benefit coverage policies .
(3) An insurer that automatically renews a contract with a dental
provider shall, at least 45 business days prior to the contract
renewal date, provide to the provider a summary of the changes
described in this subdivision and subdivision (c)
that have been made since the contract was issued or last renewed,
whichever is later. The provider shall have the right to terminate
the contract within 30 business days of receiving the summary. If the
provider does not notify the insurer of its desire to terminate the
contract within that 30-business-day period, the contract shall be
automatically renewed.
(e) Any contract provision that violates subdivision (b), (c), or
(d) shall be void, unlawful, and unenforceable.
(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.
(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.
(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.