BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 369 (Pan) - Continuity of Care.
          
          Amended: February 18, 2014      Policy Vote: Health 7-0
          Urgency: Yes                    Mandate: Yes
          Hearing Date: February 24, 2014                         
          Consultant: Brendan McCarthy    
          
          This bill does not meet the criteria for referral to the  
          Suspense File.
          
          
          Bill Summary: AB 369, an urgency measure, would allow new  
          enrollees in a health plan or health insurance policy to  
          continue to receive treatment from their existing provider, if  
          the enrollee's prior health care coverage was cancelled between  
          December 1, 2013 and March 31, 2014.

          Fiscal Impact: 
              One-time costs of about $120,000 in 2013-14 and $110,000 in  
              2014-15 to the Department of Insurance for enforcement and  
              consumer assistance (Insurance Fund).

              One-time costs of about $15,000 in 2013-14 and $80,000 in  
              2014-15 to the Department of Managed Health Care for  
              enforcement and consumer assistance (Managed Care Fund).

              No anticipated impact on the Medi-Cal program. Under  
              current law and practice, Medi-Cal managed care plans are  
              already required to provide continuity of care for new  
              enrollees as would be required under this bill.

          Background: Under current law, health insurers are regulated by  
          the Department of Insurance and health plans are regulated by  
          the Department of Managed Health Care. Current law generally  
          requires health insurers and managed care plans to provide  
          "continuity of care" for enrollees who have certain medical  
          conditions. Under this requirement, if an insurance policy or  
          health plan terminates a contract with a medical provider, the  
          insurer or health plan must continue to provide coverage for  
          services provided by the terminated provider for specified time  
          periods. Current law does not extend continuity of care  
          requirements to newly covered enrollees who have an individual  








          AB 369 (Pan)
          Page 1


          subscriber agreement (i.e. a consumer who has bought a health  
          plan in the individual market) or to enrollees in a health  
          insurance plan.

          Proposed Law: AB 369 would allow new enrollees in a health plan  
          or health insurance policy to continue to receive treatment from  
          their existing provider, if the enrollee's prior health care  
          coverage was cancelled between December 1, 2013 and March 31,  
          2014.

          Under the bill, insurers and health plans would be authorized to  
          pay non-participating providers at the same rates and terms as a  
          imposed on participating providers. If the provider does not  
          wish to provide services under those terms and cannot agree to  
          other terms with the insurer or health plan, the provider would  
          not be obligated to continue to provide services under the bill.
          
          In cases where a new enrollee has a health insurance policy and  
          the existing provider agrees to continue to provide care under  
          the bill, the provider would have to accept payment from the  
          insurer as payment in full for services. The provider would be  
          prohibited from billing the patient for any amount in excess of  
          the insurer's reimbursement rate, except for copayments and/or  
          deductibles allowed under the insurance policy.
          
          This bill is an urgency measure.

          Related Legislation: AB 1507 (Logue) would allow an individual  
          or small group health plan in effect on October 1, 2013 to be  
          renewed until October 1, 2014 and remain in effect until  
          December 31, 2014. That bill is in the Assembly.

          Staff Comments: The only costs that may be incurred by a local  
          agency relate to crimes and infractions. Under the California  
          Constitution, such costs are not reimbursable by the state.