BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2252
AUTHOR: Gordon
AMENDED: June 19, 2012
HEARING DATE: June 27, 2012
CONSULTANT: Trueworthy
SUBJECT : Dental coverage: provider notice of changes.
SUMMARY : Requires, if a material change is made to the rules,
guidelines, policies, or procedures governing contracting,
coverage, or payment for a health plan contract, a specialized
health plan, a health insurance policy or a specialized health
insurance policy covering dental services, the plan or insurer
to provide a written notice to the contracting dentist at least
45 business days prior to the change.
Existing law:
1.Establishes the Knox-Keene Health Care Service Plan Act of
1975 (Knox-Keene) which establishes licensing standards for
health plans, including for specialized health plan contracts
for dental care, and provides for the regulation of health
plans by the Department of Managed Health Care (DMHC) pursuant
to Knox-Keene. Establishes the California Department of
Insurance (CDI) which establishes licensing standards for
health insurers, including specialized health insurance
policies for dental care, and provides for the regulation of
health insurers by CDI under the Insurance Code.
2.Establishes the Health Care Provider's Bill of Rights, which
prohibits contracts between a plan or health insurer 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.
3.Requires under the Health Care Provider's Bill of Rights, 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 and provider cannot agree to
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AB 2252 | Page 2
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.
4.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.
5.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.
This bill:
1.Requires, if a material change is made to the rules,
guidelines, policies, or procedures governing contracting,
coverage, or payment for a health plan contract, a specialized
health plan, a health insurance policy or a specialized health
insurance policy covering dental services, the plan or insurer
to provide at least 45 business days' written notice to the
contracting dentist.
2.Defines written notice to include notice by electronic mail or
facsimile transmission.
3.Defines a material change to include a change to the system by
which the plan adjudicates and pays claims for treatment that
would be reasonably expected to cause delays or disruptions to
processing claims or making eligibility determinations, or a
change to the general coverage or general policies of the plan
that affect rates and fees paid to providers.
4.Requires a plan or insurer that automatically renews a
contract with a dental provider to, upon renewal or an annual
basis no later than July 1 of each year, upon request by the
provider, make available to the provider a copy of its current
contract and a summary of any changes. Allows this information
to be provided either online, via email, or in paper form.
AB 2252 | Page
3
5.Exempts from this bill a health 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.
FISCAL EFFECT : According to the Assembly Appropriations
analysis, this bill has minor one-time costs, in the range of
$50,000, to DMHC and CDI, combined, to ensure plans are
compliant with the bill's requirements during the licensure
review process.
PRIOR VOTES :
Assembly Health: 18- 0
Assembly Appropriations:16- 0
Assembly Floor: 77- 0
COMMENTS :
1.Author's statement. Dental practices are small businesses and
to succeed they need both a pool of patients and the ability
to rely on contracts and agreements with dental plans.
Changes by dental plans can impact practice staffing, cost of
care, and patient access to services, as well as lead to
confusion for both the small dental practice trying to stay on
top of approvals and billings, and for patients seeking care.
AB 2252 seeks to ensure that dentists are alerted to changes
made by dental plans concerning dental provider contracting,
coverage, or payment for services.
2.Background. Regulation and oversight of health insurance in
California is split between two state departments, DMHC and
CDI. While CDI regulates most of the PPO plans, DMHC also
regulates some PPO plans. According to the California
Association of Dental Plans website, there are 24 dental plan
options in California regulated by DMHC or CDI. DMHC regulates
approximately 21.5 million lives of which approximately 82
percent are members of Delta Dental. CDI regulates
approximately 4.1 million enrollees as of 2010 but CDI does
not have data by plan enrollment.
3.Prior legislation. 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.
AB 2252 | Page 4
AB 2907 (Cohn), Chapter 925, Statutes of 2002, establishes a
"Health Care Providers Bill of Rights," which prohibits
certain provisions in contracts between a health plan or a
health insurer and a health care provider.
4.Support. The sponsors of the bill, California Dental
Association, write that this bill seeks to strengthen the
partnership that already exists between providers and plans by
ensuring that adequate notification of significant changes in
plan policies are communicated in a transparent and timely
manner.
SUPPORT AND OPPOSITION :
Support: California Dental Association (sponsor)
Oppose: None received.
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