BILL NUMBER: SB 751 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 15, 2011
PASSED THE ASSEMBLY JULY 11, 2011
AMENDED IN ASSEMBLY JULY 7, 2011
AMENDED IN ASSEMBLY JUNE 20, 2011
AMENDED IN SENATE MAY 11, 2011
INTRODUCED BY Senators Gaines and Hernandez
FEBRUARY 18, 2011
An act to add Section 1367.49 to the Health and Safety Code, and
to add Section 10133.64 to the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 751, Gaines. Health care coverage: provider contracts.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Existing law prohibits a contract between a plan or
insurer and a health care provider from containing certain terms.
This bill would prohibit a contract by or on behalf of a plan or
insurer and a licensed hospital, as defined, or any other licensed
health care facility owned by a licensed hospital to provide
inpatient hospital services or ambulatory care services to
subscribers and enrollees of the plan or policyholders and insureds
of the insurer from containing a provision that restricts the ability
of the plan or insurer to furnish information to subscribers or
enrollees of the plan or policyholders or insureds of the insurer
concerning the cost range of procedures at the hospital or facility
or the quality of services performed by the hospital or facility. The
bill would make a contractual provision inconsistent with this
requirement void and unenforceable. The bill would require a plan or
insurer to provide a hospital or facility the opportunity to review
the methodology and data used before cost or quality information is
provided to subscribers or enrollees of the plan or to policyholders
or insureds of the insurer, as specified. The bill would also
establish requirements applicable to information displayed on an
Internet Web site pursuant to these provisions by, or on behalf of, a
plan or insurer.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature to ensure that
subscribers and enrollees of a health care service plan, and
policyholders and insureds of a health insurer, can make informed
decisions about their health care choices. To fulfill this goal, any
information furnished pursuant to this act to subscribers or
enrollees of a health care service plan, or to policyholders or
insureds of a health insurer, concerning the cost range of procedures
or quality of services should use state or nationally recognized
quality measures where available, connect cost range of procedures to
relevant quality data, and inform subscribers and enrollees and
policyholders and insureds of their range of potential cost-sharing
liabilities when feasible.
SEC. 2. Section 1367.49 is added to the Health and Safety Code, to
read:
1367.49. (a) A contract issued, amended, renewed, or delivered on
or after January 1, 2012, by or on behalf of a health care service
plan and a licensed hospital or any other licensed health care
facility owned by a licensed hospital to provide inpatient hospital
services or ambulatory care services to subscribers and enrollees of
the plan shall not contain any provision that restricts the ability
of the health care service plan to furnish information to subscribers
or enrollees of the plan concerning the cost range of procedures at
the hospital or facility or the quality of services performed by the
hospital or facility.
(b) Any contractual provision inconsistent with this section shall
be void and unenforceable.
(c) A health care service plan shall provide the hospital or
facility an advance opportunity of at least 20 days to review the
methodology and data developed and compiled by the health care
service plan, and used pursuant to subdivision (a), before cost or
quality information is provided to subscribers or enrollees,
including material revisions or the addition of new information. At
the time the health care service plan provides a hospital or facility
with the opportunity to review the methodology and data, it shall
also notify the hospital or facility in writing of their opportunity
to provide an Internet Web site link pursuant to subdivision (f).
(d) If the information proposed to be furnished to enrollees and
subscribers on the quality of services performed by a hospital or
facility is data that the plan has developed and compiled, the plan
shall utilize appropriate risk adjustment factors to account for
different characteristics of the population, such as case mix,
severity of patient's condition, comorbidities, outlier episodes, and
other factors to account for differences in the use of health care
resources among hospitals and facilities.
(e) Any Internet Web site owned or controlled by a health care
service plan, or operated by another person or entity under contract
with or on behalf of a health care service plan, that displays the
information developed and compiled by the health care service plan as
referenced by this section shall prominently post the following
statement:
"Individual hospitals may disagree with the methodology used to
define the cost ranges, the cost data, or quality measures. Many
factors may influence cost or quality, including, but not limited to,
the cost of uninsured and charity care, the type and severity of
procedures, the case mix of a hospital, special services such as
trauma centers, burn units, medical and other educational programs,
research, transplant services, technology, payer mix, and other
factors affecting individual hospitals."
A health care service plan and a hospital shall not be precluded
from mutually agreeing in writing to an alternative method of
conveying this statement.
(f) If a hospital or facility chooses to provide an Internet Web
site link where a response to the health care service plan's posting
may be found, it shall do so in a timely manner in order to satisfy
the requirements of this section. If a hospital or facility chooses
to provide a response, a plan shall post, in an easily identified
manner, a prominent link to the hospital's or facility's Internet Web
site where a response to the plan's posting may be found. A health
care service plan and a hospital shall not be precluded from mutually
agreeing in writing to an alternative method to convey a hospital's
response.
(g) For the purposes of this section, "licensed hospital" means
those hospitals as defined in subdivisions (a), (b), and (f) of
Section 1250.
(h) Section 1390 shall not apply for purposes of this section.
SEC. 3. Section 10133.64 is added to the Insurance Code, to read:
10133.64. (a) A contract issued, amended, renewed, or delivered
on or after January 1, 2012, by or on behalf of a health insurer and
a licensed hospital or any other licensed health care facility owned
by a licensed hospital to provide inpatient hospital services or
ambulatory care services to policyholders and insureds of the insurer
shall not contain any provision that restricts the ability of the
health insurer to furnish information to policyholders or insureds
concerning the cost range of procedures at the hospital or facility
or the quality of services provided by the hospital or facility.
(b) Any contractual provision inconsistent with this section shall
be void and unenforceable.
(c) A health insurer shall provide the hospital or facility an
advance opportunity of at least 20 days to review the methodology and
data developed and compiled by the health insurer, and used pursuant
to subdivision (a), before cost or quality information is provided
to policyholders or insureds, including material revisions or the
addition of new information. At the time the health insurer provides
a hospital or facility with the opportunity to review the methodology
and data, it shall also notify the hospital or facility in writing
of their opportunity to provide an Internet Web site link pursuant to
subdivision (f).
(d) If the information proposed to be furnished to policyholders
and insureds on the quality of services performed by a hospital or
facility is data that the insurer has developed and compiled, the
insurer shall utilize appropriate risk adjustment factors to account
for different characteristics of the population, such as case mix,
severity of patient's condition, comorbidities, outlier episodes, and
other factors to account for differences in the use of health care
resources among hospitals and facilities.
(e) Any Internet Web site owned or controlled by a health insurer,
or operated by another person or entity under contract with or on
behalf of a health insurer, that displays the information developed
and compiled by the health insurer as referenced by this section
shall prominently post the following statement:
"Individual hospitals may disagree with the methodology used to
define the cost ranges, the cost data, or quality measures. Many
factors may influence cost or quality, including, but not limited to,
the cost of uninsured and charity care, the type and severity of
procedures, the case mix of a hospital, special services such as
trauma centers, burn units, medical and other educational programs,
research, transplant services, technology, payer mix, and other
factors affecting individual hospitals."
A health insurer and a hospital shall not be precluded from
mutually agreeing in writing to an alternative method of conveying
this statement.
(f) If a hospital or facility chooses to provide an Internet Web
site link where a response to the health insurer's posting may be
found, it shall do so in a timely manner in order to satisfy the
requirements of this section. If a hospital or facility chooses to
provide a response, an insurer shall post, in an easily identified
manner, a prominent link to the hospital's or facility's Internet Web
site where a response to the health insurer's posting may be found.
A health insurer and a hospital shall not be precluded from mutually
agreeing in writing to an alternative method to convey a hospital's
response.
(g) For the purposes of this section, "licensed hospital" means
those hospitals as defined in subdivisions (a), (b), and (f) of
Section 1250 of the Health and Safety Code.