BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2252|
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THIRD READING
Bill No: AB 2252
Author: Gordon (D)
Amended: 8/6/12 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 6/27/12
AYES: Hernandez, Harman, Alquist, Anderson, Blakeslee, De
León, DeSaulnier, Rubio, Wolk
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/6/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
ASSEMBLY FLOOR : 77-0, 5/30/12 - See last page for vote
SUBJECT : Dental coverage: provider notice of changes
SOURCE : California Dental Association
DIGEST : This bill requires additional notification to
dental providers when a health plan or insurer covering
dental services makes material changes to rules,
guidelines, coverage, or payments.
ANALYSIS : 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
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the regulation of health plans by the Department of
Managed Health Care (DMHC) pursuant to Knox-Keene.
Establishes the Department of Insurance (DOI) which
establishes licensing standards for health insurers,
including specialized health insurance policies for
dental care, and provides for the regulation of health
insurers by DOI 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 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.
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This bill 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 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
Background
Regulation and oversight of health insurance in California
is split between two state departments, DMHC and DOI.
While DOI 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 DOI. DMHC
regulates approximately 21.5 million lives of which
approximately 82 percent are members of Delta Dental. DOI
regulates approximately 4.1 million enrollees as of 2010
but DOI does not have data by plan enrollment.
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 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
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According to the Senate Appropriations Committee:
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.
SUPPORT : (Verified 6/27/12) (per Senate Health Committee
analysis prior version of the bill - unable to verify at
time of writing)
California Dental Association (source)
ARGUMENTS IN SUPPORT : The California Dental Association
states 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.
ASSEMBLY FLOOR : 77-0, 5/30/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Eng, Feuer, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Wagner,
Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Donnelly, Fletcher, Valadao
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CTW:n 8/8/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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