BILL ANALYSIS Ó
AB 2252
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Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2252 (Gordon) - As Amended: April 23, 2012
Policy Committee: HealthVote:18-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires a 45-business day written notice before a
material change is made to a dental plan's rules, regulations,
guidelines, policies, or procedures concerning dental provider
contracting or coverage of or payment for dental services.
Specifically, this bill:
1)Allows each dentist the right to negotiate and agree to the
change.
2)Allows dentists the right to terminate a contract with the
plan prior to the implementation of the change.
3)Defines a material change for purposes of reporting as, at a
minimum, 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, or a
change to enrollees' benefit coverage policies.
4)Requires nonmaterial changes made to the dental plan's rules,
regulations, guidelines, policies, or procedures concerning
dental provider contracting or coverage of or payment for
dental services to be posted to an Internet web site.
FISCAL EFFECT
1)Minor one-time costs, in the range of $50,000, to the
Department of Managed Health Care and the Department of
Insurance, combined, to ensure plans are compliant with the
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bill's requirements during the licensure review process.
2)The significant administrative workload this bill requires of
dental plans is likely to indirectly increase state costs for
providing dental plans to its employees. Because the
notification requirements appear to be broad and open-ended,
the precise magnitude of the costs that would be passed on is
unknown, but cost increases would likely exceed $150,000
annually. One large plan, Delta Dental of California,
estimates cost increases of over $34 million for the first
year of implementation, $9 million of which they estimate
would be passed on to various state entities including
CalPERS, school districts, and state colleges and
universities.
COMMENTS
1)Rationale . 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.
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, thereby
impacting patients on what gets paid and how much is the
patient's responsibility. Moreover, system errors have
resulted in delays in preauthorization approvals for necessary
treatment plans and inaccuracies regarding refunds sought from
dentists and patients for incorrectly paid claims.
This bill is sponsored by the California Dental Association,
who notes there are gaps in current notification requirements
that can cause confusion and frustration among providers.
2)Opposition . Delta Dental of California (DDC) believes this
bill is overly broad. They argue the scope would require
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constant, never-ceasing notification to providers, and 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. They also cite the proprietary nature
of some of the changes, customer confidentiality, and concerns
about data security as reasons they oppose this bill.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081