BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          AB 2252 (Gordon) - Dental coverage: provider notice of changes.
          
          Amended: August 6, 2012         Policy Vote: Health 9-0
          Urgency: No                     Mandate: Yes
          Hearing Date: August 6, 2012                           
          Consultant: Brendan McCarthy    
          
          This bill does not meet the criteria for referral to the 
          Suspense File.
          
          
          Bill Summary: AB 2252 would require additional notification to 
          dental providers when a health plan or insurer covering dental 
          services makes material changes to rules, guidelines, coverage, 
          or payments.

          Fiscal Impact: 
              The Department of Managed Health Care may incur one-time 
              costs up to $70,000 (Managed Care Fund) to review health 
              plan documents. Costs to the Department of Insurance are 
              likely to be minor.

              No increase in costs to the state as a provider of dental 
              benefits is likely to occur, as the changes in the bill are 
              not anticipated to significantly increase the costs of 
              providing dental coverage.

          Background: Under current state law, health plans are regulated 
          by the Department of Managed Health Care while health insurers 
          are regulated by the Department of Insurance. Current law 
          requires health plans and insurers to provide notification to 
          providers within certain time periods if material changes have 
          been made to a manual, policy, or procedure document, unless the 
          change has already first been negotiated with the provider.

          Proposed Law: AB 2252 requires health plans and insurers that 
          cover dental services to provide 45 days' notice of any material 
          change to rules, guidelines, policies or procedures of the plan 
          or policy. Notification can be made electronically or by 
          facsimile.

          For health plans and insurers that automatically renew contracts 








          AB 2252 (Gordon)
          Page 1


          annually, the bill requires the health plan or insurer to make 
          available to the provider, upon request and within 60 days, a 
          copy of the contract and  a summary of the changes.

          The provisions of the bill do not apply to health plans or 
          insurers that contract with two or fewer medical groups

          Staff Comments: Because the only costs that may be incurred by a 
          local government agency relate to crimes or infractions, the 
          bill does not create a reimbursable state mandate.

          The recently adopted Author Amendments: narrow the notification 
          requirements and delete any change to the existing statutory 
          definition of "material" as it relates to changes to a provider 
          contract.