Amended in Assembly January 16, 2014

Amended in Assembly January 6, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 369

Introduced by Assembly Member Pan

February 14, 2013

An act to amend Section 1373.96 of the Health and Safety Code, and to amend Section 10133.56 of the Insurance Code, relating to health care coverage begin insert , and declaring the urgency thereof, to take effect immediately end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 369, as amended, Pan. Continuity of care.

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 and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan begin delete , with some exceptions, end delete begin insert or a health insurer end insert to provide for the completion of covered services by a terminated provider begin delete or a nonparticipating provider end delete for enrollees begin insert or insureds end insert who were receiving services from the provider for begin delete one of the end delete begin insert a end insert specified begin delete conditions end delete begin insert condition end insert at the time of the contract begin insert or policy end insert termination begin delete or at the time a newly covered enrollee’s coverage became effective. Existing law requires a health insurer, with some exceptions, to provide for the completion of covered services by a terminated provider for insureds who were receiving services from the provider for one of the specified conditions at the time of the policy termination end delete . begin insert end insert begin insert Existing law also requires a health care service plan to provide for the completion of covered services by a nonparticipating provider to a newly covered enrollee who, at the time his or her coverage became effective, was receiving services from that provider for a specified condition. Existing law specifies that this provision does not apply to a newly covered enrollee under an individual subscriber agreement. end insert

begin delete

Under the federal Patient Protection and Affordable Care Act (PPACA), each state is required, by January 1, 2014, to establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange (Exchange) within state government, specifies the powers and duties of the board governing the Exchange, and requires the board to facilitate the purchase of qualified health plans through the Exchange by qualified individuals and small employers by January 1, 2014.

end delete

This bill would require a health begin delete insurer to arrange for the completion of covered services by a nonparticipating provider at the request of a newly covered insured under a group insurance policy. The bill would require a health end delete care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for a newly covered enrollee and a newly covered insured under an individual health care service plan contract or begin insert an individual health end insert insurance policy whose prior coverage was begin delete terminated end delete begin insert withdrawn from the market end insert between begin delete January end delete begin insert December end insert 1, 2013, and March 31, 2014, inclusive begin insert , as specified end insert .

Because a willful violation of these provisions by a health care service plan would, in part, be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1373.96 of the Health and Safety Code
is amended to read:

1373.96.  

(a) A health care service plan shall at the request of
an enrollee, provide the completion of covered services as set forth
in this section by a terminated provider or by a nonparticipating
provider.

(b) (1) The completion of covered services shall be provided
by a terminated provider to an enrollee who at the time of the
contract’s termination, was receiving services from that provider
for one of the conditions described in subdivision (c).

(2) The completion of covered services shall be provided by a
nonparticipating provider to a newly covered enrollee who, at the
time his or her coverage became effective, was receiving services
from that provider for one of the conditions described in
subdivision (c).

(c) The health care service plan shall provide for the completion
of covered services for the following conditions:

(1) An acute condition. An acute condition is a medical
condition that involves a sudden onset of symptoms due to an
illness, injury, or other medical problem that requires prompt
medical attention and that has a limited duration. Completion of
covered services shall be provided for the duration of the acute
condition.

(2) A serious chronic condition. A serious chronic condition is
a medical condition due to a disease, illness, or other medical
problem or medical disorder that is serious in nature and that
persists without full cure or worsens over an extended period of
time or requires ongoing treatment to maintain remission or prevent
deterioration. Completion of covered services shall be provided
for a period of time necessary to complete a course of treatment
and to arrange for a safe transfer to another provider, as determined
by the health care service plan in consultation with the enrollee
and the terminated provider or nonparticipating provider and
consistent with good professional practice. Completion of covered
services under this paragraph shall not exceed 12 months from the
contract termination date or 12 months from the effective date of
coverage for a newly covered enrollee.

(3) A pregnancy. A pregnancy is the three trimesters of
pregnancy and the immediate postpartum period. Completion of
covered services shall be provided for the duration of the
pregnancy.

(4) A terminal illness. A terminal illness is an incurable or
irreversible condition that has a high probability of causing death
within one year or less. Completion of covered services shall be
provided for the duration of a terminal illness, which may exceed
12 months from the contract termination date or 12 months from
the effective date of coverage for a new enrollee.

(5) The care of a newborn child between birth and age 36
months. Completion of covered services under this paragraph shall
not exceed 12 months from the contract termination date or 12
months from the effective date of coverage for a newly covered
enrollee.

(6) Performance of a surgery or other procedure that is
authorized by the plan as part of a documented course of treatment
and has been recommended and documented by the provider to
occur within 180 days of the contract’s termination date or within
180 days of the effective date of coverage for a newly covered
enrollee.

(d) (1) The plan may require the terminated provider whose
services are continued beyond the contract termination date
pursuant to this section to agree in writing to be subject to the same
contractual terms and conditions that were imposed upon the
provider prior to termination, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review,
and quality assurance requirements. If the terminated provider
does not agree to comply or does not comply with these contractual
terms and conditions, the plan is not required to continue the
provider’s services beyond the contract termination date.

(2) Unless otherwise agreed by the terminated provider and the
plan or by the individual provider and the provider group, the
services rendered pursuant to this section shall be compensated at
rates and methods of payment similar to those used by the plan or
the provider group for currently contracting providers providing
similar services who are not capitated and who are practicing in
the same or a similar geographic area as the terminated provider.
Neither the plan nor the provider group is required to continue the
services of a terminated provider if the provider does not accept
the payment rates provided for in this paragraph.

(e) (1) The plan may require a nonparticipating provider whose
services are continued pursuant to this section for a newly covered
enrollee to agree in writing to be subject to the same contractual
terms and conditions that are imposed upon currently contracting
providers providing similar services who are not capitated and
who are practicing in the same or a similar geographic area as the
nonparticipating provider, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review,
and quality assurance requirements. If the nonparticipating provider
does not agree to comply or does not comply with these contractual
terms and conditions, the plan is not required to continue the
provider’s services.

(2) Unless otherwise agreed upon by the nonparticipating
provider and the plan or by the nonparticipating provider and the
provider group, the services rendered pursuant to this section shall
be compensated at rates and methods of payment similar to those
used by the plan or the provider group for currently contracting
providers providing similar services who are not capitated and
who are practicing in the same or a similar geographic area as the
nonparticipating provider. Neither the plan nor the provider group
is required to continue the services of a nonparticipating provider
if the provider does not accept the payment rates provided for in
this paragraph.

(f) The amount of, and the requirement for payment of,
copayments, deductibles, or other cost sharing components during
the period of completion of covered services with a terminated
provider or a nonparticipating provider are the same as would be
paid by the enrollee if receiving care from a provider currently
contracting with or employed by the plan.

(g) If a plan delegates the responsibility of complying with this
section to a provider group, the plan shall ensure that the
requirements of this section are met.

(h) This section shall not require a plan to provide for
completion of covered services by a provider whose contract with
the plan or provider group has been terminated or not renewed for
reasons relating to a medical disciplinary cause or reason, as
defined in paragraph (6) of subdivision (a) of Section 805 of the
Business and Profession Code, or fraud or other criminal activity.

(i) This section shall not require a plan to cover services or
provide benefits that are not otherwise covered under the terms
and conditions of the plan contract. Except as provided in
subdivision begin delete (k) end delete begin insert (l) end insert , this section shall not apply to a newly covered
enrollee covered under an individual subscriber agreement who is
undergoing a course of treatment on the effective date of his or
her coverage for a condition described in subdivision (c).

begin insert

(j) Subdivision (b) does not apply to a newly covered enrollee
who is offered an out-of-network option or to a newly covered
enrollee who had the option to continue with his or her previous
health plan or provider and instead voluntarily chose to change
health plans.

end insert begin delete

(j)

end delete

begin insert (k) end insert  The provisions contained in this section are in addition to
any other responsibilities of a health care service plan to provide
continuity of care pursuant to this chapter. Nothing in this section
shall preclude a plan from providing continuity of care beyond the
requirements of this section.

begin delete

(k)

end delete

begin insert (l) end insert  (1) A health care service plan shall, at the request of a newly
covered enrollee under an individual health care service plan
contract, arrange for the completion of covered services by a
nonparticipating provider for one of the conditions described in
subdivision (c) if the newly covered enrollee meets both of the
following:

(A) The newly covered enrollee’s prior coverage was terminated
begin insert under paragraph (5) or (6) of subdivision (a) of Section 1365 end insert
between begin delete January end delete begin insert December end insert 1, 2013, and March 31, 2014, inclusive.

(B) At the time his or her coverage became effective, the newly
covered enrollee was receiving services from that provider for one
of the conditions described in subdivision (c).

begin insert

(2) The completion of covered services required to be provided
under this subdivision apply to services rendered to the newly
covered enrollee on and after the effective date of his or her new
coverage.

end insert begin delete

(2)

end delete

begin insert (3) end insert  A violation of this subdivision does not constitute a crime
under Section 1390.

begin delete

(l)

end delete

begin insert (m) end insert  The following definitions apply for the purposes of this
section:

(1) “Individual provider” means a person who is a licentiate, as
defined in Section 805 of the Business and Professions Code, or
a person licensed under Chapter 2 (commencing with Section
1000) of Division 2 of the Business and Professions Code.

(2) “Nonparticipating provider” means a provider who is not
contracted with a health care service plan. begin delete A nonparticipating
provider does not include a terminated provider. end delete

(3) “Provider” shall have the same meaning as set forth in
subdivision (i) of Section 1345.

(4) “Provider group” means a medical group, independent
practice association, or any other similar organization.

begin delete

(5) “Terminated provider” means a provider whose contract to
provide services to enrollees is terminated or not renewed by the
plan or one of the plan’s contracting provider groups.

end delete

SEC. 2.  

Section 10133.56 of the Insurance Code is amended
to read:

10133.56.  

(a)  begin insert (1) end insert begin insert   end insert A health insurer that enters into a contract
with a professional or institutional provider to provide services at
alternative rates of payment pursuant to Section 10133 shall, at
the request of an insured, arrange for the completion of covered
services by a terminated provider, if the insured is undergoing a
course of treatment for any of the following conditions:

begin delete

(1)

end delete

begin insert (A) end insert  An acute condition. An acute condition is a medical
condition that involves a sudden onset of symptoms due to an
illness, injury, or other medical problem that requires prompt
medical attention and that has a limited duration. Completion of
covered services shall be provided for the duration of the acute
condition.

begin delete

(2)

end delete

begin insert (B) end insert  A serious chronic condition. A serious chronic condition is
a medical condition due to a disease, illness, or other medical
problem or medical disorder that is serious in nature and that
persists without full cure or worsens over an extended period of
time or requires ongoing treatment to maintain remission or prevent
deterioration. Completion of covered services shall be provided
for a period of time necessary to complete a course of treatment
and to arrange for a safe transfer to another provider, as determined
by the health insurer in consultation with the insured and the
terminated provider and consistent with good professional practice.
Completion of covered services under this paragraph shall not
exceed 12 months from the contract termination date.

begin delete

(3)

end delete

begin insert (C) end insert  A pregnancy. A pregnancy is the three trimesters of
pregnancy and the immediate postpartum period. Completion of
covered services shall be provided for the duration of the
pregnancy.

begin delete

(4)

end delete

begin insert (D) end insert  A terminal illness. A terminal illness is an incurable or
irreversible condition that has a high probability of causing death
within one year or less. Completion of covered services shall be
provided for the duration of a terminal illness, which may exceed
12 months from the contract termination date.

begin delete

(5)

end delete

begin insert (E) end insert  The care of a newborn child between birth and age 36
months. Completion of covered services under this paragraph shall
not exceed 12 months from the contract termination date.

begin delete

(6)

end delete

begin insert (F) end insert  Performance of a surgery or other procedure that has been
recommended and documented by the provider to occur within
180 days of the contract’s termination date.

begin delete

(b)

end delete

begin insert (2) end insert  The insurer may require the terminated provider whose
services are continued beyond the contract termination date
pursuant to this begin delete section end delete begin insert subdivision end insert , to agree in writing to be subject
to the same contractual terms and conditions that were imposed
upon the provider prior to termination, including, but not limited
to, credentialing, hospital privileging, utilization review, peer
review, and quality assurance requirements. If the terminated
provider does not agree to comply or does not comply with these
contractual terms and conditions, the insurer is not required to
continue the provider’s services beyond the contract termination
date.

begin delete

(c)

end delete

begin insert (3) end insert  Unless otherwise agreed upon between the terminated
provider and the insurer or between the terminated provider and
the provider group, the agreement shall be construed to require a
rate and method of payment to the terminated provider, for the
services rendered pursuant to this begin delete section end delete begin insert subdivision end insert , that are the
same as the rate and method of payment for the same services
while under contract with the insurer and at the time of termination.
The provider shall accept the reimbursement as payment in full
and shall not bill the insured for any amount in excess of the
reimbursement rate, with the exception of copayments and
deductibles pursuant to subdivision begin delete (e) end delete begin insert (c) end insert .

begin delete

(d)

end delete

begin insert (b) end insert  Notice as to the process by which an insured may request
completion of covered services pursuant to this section shall be
provided in any insurer evidence of coverage and disclosure form
issued after March 31, 2004. An insurer shall provide a written
copy of this information to its contracting providers and provider
groups. An insurer shall also provide a copy to its insureds upon
request.

begin delete

(e)

end delete

begin insert (c) end insert  The payment of copayments, deductibles, or other
cost-sharing components by the insured during the period of
completion of covered services with a terminated provider begin insert pursuant
to subdivision (a) or a nonparticipating provider pursuant to
subdivision (i) end insert shall be the same copayments, deductibles, or other
cost-sharing components that would be paid by the insured when
receiving care from a provider currently contracting with the
insurer.

begin delete

(f)

end delete

begin insert (d) end insert  If an insurer delegates the responsibility of complying with
this section to its contracting entities, the insurer shall ensure that
the requirements of this section are met.

begin delete

(g)

end delete

begin insert (e) end insert  For the purposes of this section, the following terms have
the following meanings:

(1) “Provider” means a person who is a licentiate as defined in
Section 805 of the Business and Professions Code or a person
licensed under Chapter 2 (commencing with Section 1000) of
Division 2 of the Business and Professions Code.

(2) “Provider group” includes a medical group, independent
practice association, or any other similar organization.

(3) “Nonparticipating provider” means a provider who does not
have a contract with an insurer to provide services to insureds. begin delete A
nonparticipating provider does not include a terminated provider. end delete

(4) “Terminated provider” means a provider whose contract to
provide services to insureds is terminated or not renewed by the
insurer or one of the insurer’s contracting provider groups. begin insert A
terminated provider is not a provider who voluntarily leaves the
insurer or contracting provider group. end insert

begin delete

(h)

end delete

begin insert (f) end insert  This section shall not require an insurer or provider group
to provide for the completion of covered services by a provider
whose contract with the insurer or provider group has been
terminated or not renewed for reasons relating to medical
disciplinary cause or reason, as defined in paragraph (6) of
subdivision (a) of Section 805 of the Business and Professions
Code, or fraud or other criminal activity.

begin delete

(i)

end delete

begin insert (g) end insert  This section shall not require an insurer to cover services or
provide benefits that are not otherwise covered under the terms
and conditions of the insurer contract.

begin delete

(j)

end delete

begin insert (h) end insert  The provisions contained in this section are in addition to
any other responsibilities of insurers to provide continuity of care
pursuant to this chapter. Nothing in this section shall preclude an
insurer from providing continuity of care beyond the requirements
of this section.

begin delete

(k) (1) A health insurer shall, at the request of a newly covered
insured under a group insurance policy, arrange for the completion
of covered services by a nonparticipating provider for one of the
conditions described in subdivision (a).

end delete begin delete

(2)

end delete

begin insert (i) end insert begin insert   end insert begin insert (1) end insert  A health insurer shall, at the request of a newly covered
insured under an individual insurance policy, arrange for the
completion of covered services by a nonparticipating provider for
one of the conditions described in subdivision (a) if the newly
covered insured meets both of the following:

(A) The newly covered insured’s prior coverage was terminated
begin insert under subdivision (d) or (e) of Section 10273.6 end insert between begin delete January end delete
begin insert December end insert 1, 2013, and March 31, 2014 begin insert , inclusive end insert .

(B) At the time his or her coverage became effective, the newly
covered insured was receiving services from that provider for one
of the conditions described in subdivision (a).

begin insert

(2) The completion of covered services required to be provided
under this subdivision shall apply to services rendered to the newly
covered insured on and after the effective date of his or her new
coverage.

end insert

(3) (A)    The insurer may require a nonparticipating provider
whose services are continued pursuant to this begin delete section end delete begin insert subdivision end insert
for a newly covered insured to agree in writing to be subject to the
same contractual terms and conditions that are imposed upon
currently participating providers providing similar services who
are practicing in the same or a similar geographic area as the
nonparticipating provider, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review,
and quality assurance requirements. If the nonparticipating provider
does not agree to comply or does not comply with these contractual
terms and conditions, the insurer is not required to continue the
provider’s services.

(B) Unless otherwise agreed upon by the nonparticipating
provider and the insurer begin delete or by the nonparticipating provider and
the provider group end delete , the services rendered pursuant to this begin delete section end delete
begin insert subdivision end insert shall be compensated at rates and methods of payment
similar to those used by the insurer begin delete or the provider group end delete for
currently participating providers providing similar services who
are practicing in the same or a similar geographic area as the
nonparticipating provider. Neither the insurer nor the provider
group is required to continue the services of a nonparticipating
provider if the provider does not accept the payment rates provided
for in this paragraph. begin delete The provider shall accept the reimbursement
as payment in full and shall not bill the insured for any amount in
excess of the reimbursement rate, with the exception of copayments
and deductibles pursuant to subdivision (e). end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert It is the intent of the Legislature that a nonparticipating
provider whose services are continued pursuant to Section
10133.56 of the Insurance Code accept the reimbursement provided
under that section as payment in full and not bill the insured for
any amount in excess of the reimbursement rate, with the exception
of copayments and deductibles pursuant to subdivision (c) of
Section 10133.56. end insert

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

begin insert

begin insert SEC. end insert begin insert 5. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

Many health care service plans and health insurers terminated
health plans between December 1, 2013, and March 31, 2014, in
anticipation of compliance with the federal Patient Protection and
Affordable Care Act. In order to allow an individual enrolled in
such a plan who was receiving covered treatment under the plan
from a provider for a certain condition to continue to receive
services from that provider for the condition, it is necessary that
this act take effect immediately.

end insert