BILL ANALYSIS Ó
AB 2252
Page 1
Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2252 (Gordon) - As Amended: April 10, 2012
SUBJECT : Dental coverage: provider notice of changes.
SUMMARY : Requires, if a change is made to the rules,
regulations, guidelines, policies, or procedures governing
contracting, coverage, or payment for dental services to a
health care service plan (health plan) contract, specialized
health plan contract covering dental, a health insurance policy
or specialized health insurance policy covering dental services,
the plan or insurer to provide notice of at least 45 business
days and give the dentist an opportunity to negotiate or
terminate the contract. Specifically, this bill :
1)Requires, with respect to a health plan or specialized health
plan contract covering dental services, or a health insurance
policy, or a specialized health insurance policy covering
dental services, if a change is made to the plan's or
insurer's rules, regulations, guidelines, policies, or
procedures governing dental provider contracting, or coverage
of, or payment for, dental services, the plan or insurer to
provide at least 45 business days' written notice to the
dentists unless a change in state or federal law or
regulations or any accreditation requirements require a
shorter time frame.
2)Provides that each dentist has the right to negotiate and
agree to the change, and if an agreement cannot be reached,
the dentist has a right to terminate its contract prior to the
change. Provides if both parties mutually agree, the
45-business-day notice requirement may be waived.
3)Provides that nothing in this bill 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.
4)Requires this bill to apply in addition to the other
applicable requirements imposed in existing law, except where
the proposed change is required pursuant to the Medi-Cal or
Healthy Families programs and specified requirements are met.
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5)Provides that a change made as described in 1) above, includes
but is not limited to: a change to the system by which the
plan adjudicates and pays claims for treatment; 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; a change to the
coverage or general policies of the plan that affect rates and
fees paid to providers; and, a change to enrollees' benefit
coverage.
6)Requires a plan or insurer that automatically renews a
contract with a dental provider to, at least 45 business days
prior to the contract renewal date, provide to the provider a
summary of the changes described in this bill that have been
made since the contract was issued or last renewed, whichever
is later.
7)Requires the provider to have the right to terminate the
contract within 30 business days of receiving the summary.
Requires if the provider does not notify the plan or insurer
of its desire to terminate the contract within that
30-business-day period, the contract to be automatically
renewed.
EXISTING LAW :
1)Regulates health plans at the Department of Managed Health
Care and health insurers at the California Department of
Insurance.
2)Establishes the Health Care Provider's Bill of Rights, which
prohibits contracts between a plan, or health insurer for
covered benefits at alternative rates of payment, and a
provider from containing specified terms such as the 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 insurer, or the change is necessary
to comply with state or federal law or regulations or
accreditation requirements.
a) Requires, if a change is made by amending a manual,
policy or procedure document referenced by the contract,
the plan or insurer to provide 45 business days' notice to
the provider and gives the provider the right to negotiate
and agree to the change. Permits, if the plan or insurer
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and provider cannot agree to the change, the provider to
terminate the contract prior to the implementation of the
change. Requires the plan or insurer to 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 requires a
shorter timeframe for compliance.
b) Permits, if a contract between a provider and a plan
provides benefits to enrollees or subscribers through a
preferred provider arrangement, the contract to 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.
3)Defines "material" to mean a provision in a contract to which
a reasonable person would attach importance in determining the
action to be taken upon the provision.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, dentists often
practice in solo practitioner or small group settings, where
changes to plans can impact practice staffing, cost of care,
and patient access to services. If a dentist does not have
current information on preauthorization timing, reimbursement
rates, or claims processing, then he or she is unable to
convey to the patient what is expected of them so that they
can make a fully informed decision. This bill seeks to
require dental plans to provide contracting dentists notice of
any changes to the plan's rules, regulations, guidelines,
policies or procedures concerning contract, coverage, or
payment for dental services. The author describes a situation
where a recent dental plan operating in California installed a
new system for claims review and payment, provider
identification, and patient eligibility confirmation in which,
system problems have affected aspects of how claims for
treatment are paid, impacting patients on what gets paid and
how much is the patient's responsibility. Moreover, system
errors have arisen leading to delays in preauthorization
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approvals for necessary treatment plans and inaccuracies have
resulted in plans seeking refunds from dentists and patients
for incorrectly paid claims.
Another example provided by the author is that without
formally notifying providers, a dental plan recently changed
its policy of paying claims. Under the new policy, if an
associate in a dental practice is not personally enrolled in
the plan's network, then they are deemed a non-contracted
provider, even if the practice owner is a long-standing
contracted provider with the plan. As a result, payment on
the claim would be reduced to the out-of-network level and
sent on to the patient directly. The author asserts that this
change impacts not only the provider reimbursement, but also
communication with the patient.
2)SUPPORT . The California Dental Association (CDA) has
sponsored this bill to strengthen the partnership that already
exists between providers and plans by ensuring that adequate
notification of significant changes in plan polices are
communicated in a transparent and timely manner. CDA states
that while existing law and regulations require the plans to
notify contracted providers of certain changes, there are gaps
in these requirements that can cause disruption, confusion and
frustration among providers. Dentists need to be aware of
these modifications, if for no other reason, so they can
explain them to their patients. CDA provides an example of a
plan which previously updated its individual provider fees on
an annual basis but in 2011 froze fees and didn't inform
dentists of this change for six months.
3)OPPOSITION . Delta Dental of California (DDC) believes this
bill is overly broad. Provider participation requirements,
claims processing policies, credentialing policies, and
language assistance capabilities may relate to provider
contracts, or may relate to coverage but are not typically
part of the contract. Moreover, for dental plans, this bill
dispenses with the materiality requirement of current law and
allows providers to negotiate with a plan for immaterial
items. DDC argues the broad scope would require constant,
never-ceasing notification to providers. The cost of these
notices, including postage, paper and staffing to track all
these notices could significantly increase administrative
costs which are ultimately reflected in higher premiums for
consumers. Additionally, Section 1375.7(b)(1)(B) allows a
AB 2252
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slightly modified requirement for PPOs to be "thrown out" and
DDC would prefer it be kept in. The California Association of
Health Plans believes this bill places an administrative
burden on plans which would be reflected in higher premiums
for consumers. Western Dental Services, Inc., contends this
bill would require the plan to inundate their contracting
dentists with volumes of information about changes, even if
they are unrelated to their contract with the plan, which
would have to be reviewed, considered, and reacted to for each
one. The California Association of Dental Plans (CADP) states
that this bill would single out dental care service plans and
dental insurers to comply with more extensive notice
requirements than required by current law for all health plans
and health insurers in the Health Care Providers' Bill of
Rights. According to CADP, recent amendment attempt to
provide guidance to the types of changes that would trigger
notice, but the words "not limited to" leave the flood gates
wide open for dentists to be given notice of any and all
changes, whether material or not.
4)PREVIOUS LEGISLATION .
a) AB 2429 (Chavez), Chapter 348, Statutes of 2004,
permits contracts between a non-institutional
fee-for-service provider and a Medi-Cal or Healthy Families
health plan to be amended without the signature of the
provider under specified circumstances.
b) AB 175 (Cohn), Chapter 203, Statutes of 2003, requires,
when a contracting agent sells, leases, or transfers a
health provider's contract to a payor that the rights and
obligations of the provider are governed by the underlying
contract between the provider and the contracting agent.
c) AB 2907 (Cohn), Chapter 925, Statutes of 2002,
establishes a "Health Care Providers Bill of Rights,"
prohibits certain provisions in contracts between a health
plan or a health insurer and a health care provider.
5)AUTHOR'S AMENDMENTS .
a) On page 5, line 9 and on page 8, line 1 after "a," add
" material "
b) On page 5, line 25 and on page 8, line 9 after "change"
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add
" If a non-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,
on a monthly basis, post notification of those changes on
its website in an area that is readily available for
provider access."
c) On page 8, line 25 after "in" add " the subdivision and "
REGISTERED SUPPORT / OPPOSITION :
Support
California Dental Association (sponsor)
Opposition
California Association of Dental Plans
California Association of Health Plans
Delta Dental of California
Western Dental Services, Inc.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097