BILL NUMBER: AB 2400	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 22, 2014

INTRODUCED BY   Assembly Member Ridley-Thomas

                        FEBRUARY 21, 2014

   An act to  amend Section 1375.7 of, and to  add Section
1375.65 to  ,  the Health and Safety Code, and to add
Section 10133.651 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2400, as amended, Ridley-Thomas. Health care coverage: 
physician   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 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  , known as the Health Care Providers' Bill of
Rights,  prescribes restrictions on the types of contractual
provisions that may be included in agreements between health care
service plans  or health insurers  and health care
providers.  Under existing law, if a change is made by amending a
  manual, policy, or procedure document referenced in the
contract between a plan and a provider, the plan is required to
provide at least 45 business days' notice to the provider, as
specified.  
   Existing law establishes the California Health Benefit 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. Existing law provides for the
Medi-Cal program, which is administered by the State Department of
Health Care Services, under which qualified low-income individuals
receive health care services. 
   This bill would  prohibit a contract between a physician
or physician group with a health care service plan or health insurer,
that is issued, amended, delivered, or renewed in this state on or
after January 1, 2015,   require a health care service
plan to provide at least 90 business days' notice to a contracting
provider if a change is made by amending a manual, policy, or
procedure document referenced in the contract. The bill would also
prohibit a contract between a plan and a provider that is issued,
amended, or renewed on or after January 1, 2015, from including any
provision that would require a provider to accept or participate in
any additional products or product networks, except as specified, or
that would terminate the health care provider's contract, or the
provider's eligibility to participate in other product networks, when
the provider exercises the right to negotiate, accept, or refuse a
material change to the contract. With respect to a physician or
physician group that maintains, pursuant to a contract with a health
care service plan or health insurer, an unspecified percentage of
subscribers in either the Exchange or the Medi-Cal program, the bill
would prohibit the contract between the   physician or
physician group and the plan or insurer  from including any
provision that requires  a   the  physician
 or physician group  , as a condition of entering into the
contract, to participate in any product that provides different
rates, methods of payment, or lines of business unless that
participation is negotiated and agreed to between the health care
service plan or health insurer and the physician  or physician
group  . The bill would require  any   a
 contract that contains a provision attempting to obligate the
physician  or physician group  to participate in any product
that provides different rates, methods of payment, or lines of
business to contain a provision for each product permitting the
physician  or physician group  to affirmatively agree to
participate in each product.  The bill would state findings
and declarations of the Legislature with respect to these provisions.

   By expanding the scope of a crime  with respect to health care
service plans  , this bill would create 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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1375.65 is added to the Health and Safety Code,
to read: 
   1375.65.  (a) The Legislature finds and declares that prohibiting
health care service plans from executing agreements with physicians
that contain provisions requiring physicians to participate in all
networks or products that are currently offered or that may be
offered by the health plan without allowing physicians to
affirmatively agree and opt-in to participate in each network or
product will assist in maintaining patient access to adequate
physician networks. The Legislature further finds and declares that
the ability of physicians to exercise this choice will further
protect patients as physicians will be able to decide on the merits
of the product being offered and whether participation, in their
reasonable professional judgment, would further patients' access to
continuous quality of medical care.
   (b) 
   1375.65.    (a)  A contract between a physician
or physician group and a health care service plan that is issued,
amended, delivered, or renewed in this state on or after January 1,
2015, shall not include any provision that requires  a
  the  physician  or physician group  , as
a condition of entering into the contract, to participate in any
product that provides different rates, methods of payment, or lines
of business unless that participation is negotiated and agreed to
between the health care service plan and the physician  or
physician group . Any contract that contains a provision
attempting to obligate the physician  or physician group  to
participate in any product that provides different rates, methods of
payment, or lines of business shall contain a provision for each
product permitting the physician  or physician group  to
affirmatively agree to participate in each product. The status of a
physician  or physician group as a member of, or as being
eligible for, other existing or new provider panels shall not be
adversely affected by the physician's  or physician group's 
exercise of his or her  or its  right to not participate
pursuant to this section. 
   (b) This section applies only to a physician or physician group
that maintains, for the duration of the agreement, ____ percent of
subscribers through either the Exchange or Medi-Cal.  
   (c) This section shall not apply to employee welfare benefit plans
established pursuant to Section 302(c)(5) of the Taft-Hartley Act
(29 U.S.C. Sec. 186(c)(5)).  
   (d) For purposes of this section, "Exchange" means the California
Health Benefit Exchange established pursuant to Section 100500 of the
Government Code. 
   SEC. 2.    Section 1375.7 of the   Health
and Safety Code   is amended to read: 
   1375.7.  (a) This section shall be known and may be cited as the
Health Care Providers' Bill of Rights.
   (b)  No   A  contract issued, amended,
or renewed on or after January 1,  2003   2015
 , between a plan and a health care provider for the provision
of health care services to a plan enrollee or subscriber shall 
not  contain any of the following terms:
   (1) (A) 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 the change is necessary to comply
with state or federal law or regulations or any accreditation
requirements of a private sector accreditation organization. If a
change is made by amending a manual, policy, or procedure document
referenced in the contract, the plan shall provide  45
  90  business days' notice to the provider, and
the provider has the right to negotiate and agree to the change. If
the plan and the provider cannot agree to the change to a manual,
policy, or procedure document, the provider has the right to
terminate the contract prior to the implementation of the change. In
any event, the plan shall provide at least  45  
90  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 of a private sector accreditation
organization requires a shorter timeframe for compliance. However, if
the parties mutually agree, the  45-business  
90-business  day notice requirement may be waived. Nothing in
this subparagraph limits the ability of the parties to mutually agree
to the proposed change at any time after the provider has received
notice of the proposed change. 
   (B) If a contract between a provider and a plan provides benefits
to enrollees or subscribers through a preferred provider arrangement,
the contract may 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.  
   (C) 
    (B)  If a contract between a noninstitutional provider
and a plan provides benefits to enrollees or subscribers covered
under the Medi-Cal or Healthy Families Program and compensates the
provider on a fee-for-service basis, the contract may contain
provisions permitting a material change to the contract by the plan,
if the following requirements are met:
   (i) The plan gives the provider a minimum of 90 business days'
notice of its intent to change a material term of the contract.
   (ii) The plan clearly gives the provider the right to exercise his
or her intent to negotiate and agree to the change within 30
business days of the provider's receipt of the notice described in
clause (i).
   (iii) The plan clearly gives the provider the right to terminate
the contract within 90 business days from the date of the provider's
receipt of the notice described in clause (i) if the provider does
not exercise the right to negotiate the change or no agreement is
reached, as described in clause (ii).
   (iv) The material change becomes effective 90 business days from
the date of the notice described in clause (i) if the provider does
not exercise his or her right to negotiate the change, as described
in clause (ii), or to terminate the contract, as described in clause
(iii).
   (2) A provision that requires a health care provider to accept
additional patients  or product networks beyond the
contracted number or in the absence of a number if, in the reasonable
professional judgment of the provider, accepting additional patients
 or product networks  would endanger patients' access to,
or continuity of, care.
   (3) A requirement to comply with quality improvement or
utilization management programs or procedures of a plan, unless the
requirement is fully disclosed to the health care provider at least
15 business days prior to the provider executing the contract.
However, the plan may make a change to the quality improvement or
utilization management programs or procedures at any time if the
change is necessary to comply with state or federal law or
regulations or any accreditation requirements of a private sector
accreditation organization. A change to the quality improvement or
utilization management programs or procedures shall be made pursuant
to paragraph (1).
   (4) A provision that waives or conflicts with any provision of
this chapter. A provision in the contract that allows the plan to
provide professional liability or other coverage or to assume the
cost of defending the provider in an action relating to professional
liability or other action is not in conflict with, or in violation
of, this chapter.
   (5) A requirement to permit access to patient information in
violation of federal or state laws concerning the confidentiality of
patient information. 
   (6) A requirement or provision that terminates the health care
provider's contract or participation status in the contract, or the
provider's eligibility to participate in other product networks, when
the provider exercises the right to negotiate, accept, or refuse a
material change to the contract pursuant to this section.  
   (7) A requirement that a health care provider agree to accept or
participate in other products or product networks, including future
products that have not yet been developed or adopted by the plan,
without disclosing the reimbursement rate, method of payment, and any
other materially different contract terms for those products from
the underlying agreement and giving the provider the right to
negotiate, accept, or refuse participation in each product or product
network. 
   (c) With respect to a health care service plan contract covering
dental services or a specialized health care service plan contract
covering dental services, all of the following shall apply:
   (1) If a material change is made to the health care service plan's
rules, guidelines, policies, or procedures concerning dental
provider contracting or coverage of or payment for dental services,
the plan shall provide at least 45 business days' written notice to
the dentists contracting with the health care service plan to provide
services under the plan's individual or group plan contracts,
including specialized health care service plan contracts, unless a
change in state or federal law or regulations or any accreditation
requirements of a private sector accreditation organization requires
a shorter timeframe for compliance. For purposes of this paragraph,
written notice shall include notice by electronic mail or facsimile
transmission. This paragraph shall apply in addition to the other
applicable requirements imposed under this section, except that it
shall not apply where notice of the proposed change is required to be
provided pursuant to subparagraph (C) of paragraph (1) of
subdivision (b).
   (2) For purposes of paragraph (1), a material change made to a
health care service plan's rules, guidelines, policies, or procedures
concerning dental provider contracting or coverage of or payment for
dental services is a change to the system by which the plan
adjudicates and pays claims for treatment that would reasonably be
expected to cause delays or disruptions in processing claims or
making eligibility determinations, or a change to the general
coverage or general policies of the plan that affect rates and fees
paid to providers.
   (3) A plan that automatically renews a contract with a dental
provider shall annually make available to the provider, within 60
days following a request by the provider, either online, via email,
or in paper form, a copy of its current contract and a summary of the
changes described in paragraph (1) of subdivision (b) that have been
made since the contract was issued or last renewed.
   (4) This subdivision shall not apply to a health care service plan
that exclusively contracts with no more than two medical groups in
the state to provide or arrange for the provision of professional
medical services to the enrollees of the plan.
   (d) (1) When a contracting agent sells, leases, or transfers a
health provider's contract to a payor, the rights and obligations of
the provider shall be governed by the underlying contract between the
health care provider and the contracting agent.
   (2) For purposes of this subdivision, the following terms shall
have the following meanings:
   (A) "Contracting agent" has the meaning set forth in paragraph (2)
of subdivision (d) of Section 1395.6.
   (B) "Payor" has the meaning set forth in paragraph (3) of
subdivision (d) of Section 1395.6.
   (e) Any contract provision that violates subdivision (b), (c), or
(d) shall be void, unlawful, and unenforceable.
   (f) The department shall compile the information submitted by
plans pursuant to subdivision (h) of Section 1367 into a report and
submit the report to the Governor and the Legislature by March 15 of
each calendar year.
   (g) Nothing in this section shall be construed or applied as
setting the rate of payment to be included in contracts between plans
and health care providers. 
   (h) The changes made to this section by the act adding this
subdivision shall not apply to employee welfare benefit plans
established pursuant to Section 302(c)(5) of the Taft-Hartley Act (29
U.S.C. Sec. 186(c)(5)).  
   (h) 
    (i)  For purposes of this section the following
definitions apply:
   (1) "Health care provider" means any professional person, medical
group, independent practice association, organization, health care
facility, or other person or institution licensed or authorized by
the state to deliver or furnish health services.
   (2) "Material" means a provision in a contract to which a
reasonable person would attach importance in determining the action
to be taken upon the provision.
   SEC. 2.   SEC. 3.   Section 10133.651 is
added to the Insurance Code, to read: 
   10133.651.  (a) The Legislature finds and declares that
prohibiting health insurers from executing agreements with physicians
or physician groups that contain provisions requiring physicians to
participate in all networks or products that are currently offered or
that may be offered by the health insurer without allowing
physicians to affirmatively agree and opt-in to participate in each
network or product will assist in maintaining patient access to
adequate physician networks. The Legislature further finds and
declares that the ability of physicians to exercise this choice will
further protect patients as physicians will be able to decide on the
merits of the product being offered and whether participation, in
their reasonable professional judgment, would further patients'
access to continuous quality of medical care.


   (b) 
    10133.651.    (a)    A contract
between a physician or physician group and a health insurer that is
issued, amended, delivered, or renewed in this state on or after
January 1, 2015, shall not include any provision that requires
 a   the  physician  or physician group
 , as a condition of entering into the contract, to participate
in any product that provides different rates, methods of payment, or
lines of business unless that participation is negotiated and agreed
to between the health insurer and the physician  or physician
group  . Any contract that contains a provision attempting to
obligate the physician  or physician group  to participate
in any product that provides different rates, methods of payment, or
lines of business shall contain a provision for each product
permitting the physician  or physician group  to
affirmatively agree to participate in each product. The status of a
physician  or physician group  as a member of, or as being
eligible for, other existing or new provider panels shall not be
adversely affected by the physician's  or physician group's 
exercise of his or her  or its  right to not participate
pursuant to this section. 
   (b) This section applies only to a physician or physician group
that maintains, for the duration of the agreement, ____ percent of
subscribers through either the Exchange or Medi-Cal.  
   (c) This section shall not apply to employee welfare benefit plans
established pursuant to Section 302(c)(5) of the Taft-Hartley Act
(29 U.S.C. Sec. 186(c)(5)).  
   (d) For purposes of this section, "Exchange" means the California
Health Benefit Exchange established pursuant to Section 100500 of the
Government Code. 
   SEC. 3.   SEC. 4.   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.