BILL NUMBER: AB 2400 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 6, 2014
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 amend Section 10133.65 of
the Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 2400, as amended, Ridley-Thomas. 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 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 and
authorizes health insurers to contract with providers for
alternative rates of payment . 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 health care service plan and a
provider, the plan is required to provide at least 45 business days'
notice to the provider and the provider has the right to
negotiate and agree to the change and terminate the contract prior to
the change , as specified , except that if the contract
between the plan and the provider provides benefits through a
preferred provider arrangement, the provider only has the right to
terminate the contr act prior to the change .
Existing law authorizes the contract between a health
insurer and a provider to contain provisions permitting a material
change to the contract by the insurer if the insurer provides at
least 45 business days' notice to the provider .
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 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 and would require that the provider
under a preferred provider arrangement have the right to negotiate
and agree to the change. The bill would authorize a
contract between a provider and a health insurer for alternative
rates of payment to contain provisions permitting a material change
to the contract by the insurer if the insurer provides at least 90
business days' notice to the provider . The bill would also
prohibit a contract between a plan or insurer
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 without
making specified disclosures , 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 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 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.
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) 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 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 1. 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) A contract issued, amended, or renewed on or after January 1,
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 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 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 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 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. agreement.
(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) (B)
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)).
(i)
(h) 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. 3. Section 10133.651 is added to the
Insurance Code, to read:
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 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. 2. Section 10133.65 of the
Insurance Code is amended to read:
10133.65. (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 health insurer and a health care provider for the
provision of covered benefits at alternative rates of payment to an
insured shall not contain any of the following terms:
(1) A provision that requires a health care provider to accept
additional patients beyond the contracted number or in the absence of
a number if, in the reasonable professional judgment of the
provider, accepting additional patients would endanger patients'
access to, or continuity of, care.
(2) A requirement to comply with quality improvement or
utilization management programs or procedures of a health insurer,
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 health insurer 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 subdivision (c).
(3) A provision that waives or conflicts with any provision of the
Insurance Code.
(4) A requirement to permit access to patient information in
violation of federal or state laws concerning the confidentiality of
patient information.
(5) 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.
(6) 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.
(c) If a contract is with a health insurer that negotiates and
arranges for alternative rates of payment with the provider to
provide benefits to insureds, the contract may contain provisions
permitting a material change to the contract by the health insurer if
the health insurer provides at least 45 90
business days' notice to the provider of the change, and the
provider has the right to terminate the contract prior to
implementation of the change.
(d) With respect to a health insurance policy covering dental
services or a specialized health insurance policy covering dental
services, all of the following shall apply:
(1) If a material change is made to the health insurer's rules,
guidelines, policies, or procedures concerning dental provider
contracting or coverage of or payment for dental services, the
insurer shall provide at least 45 business days' written notice to
the dentists contracting with the health insurer to provide services
under the insurer's individual or group health insurance policies,
including specialized health insurance policies. 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.
(2) For purposes of paragraph (1), a material change made to a
health insurer'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 insurer
adjudicates and pays claims for treatment that may cause delays or
disruptions in processing claims or making eligibility
determinations, or a change to the general coverage or general
policies of the insurer that affect rates and fees paid to providers.
(3) An insurer 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 subdivision (c) that have been made since the
contract was issued or last renewed.
(e) Any contract provision that violates subdivision (b), (c), or
(d) shall be void, unlawful, and unenforceable.
(f) The Department of Insurance shall annually compile all
provider complaints that it receives under this section, and shall
report to the Legislature and the Governor the number and nature of
those complaints 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
health insurers and health care providers.
(h) For purposes of this section, the following definitions apply:
(1) "Health care provider" means any professional person, medical
group, independent practice association, organization, health
facility, or other person or institution licensed or authorized by
the state to deliver or furnish health care services.
(2) "Health insurer" means any admitted insurer writing health
insurance, as defined in Section 106, that enters into a contract
with a provider to provide covered benefits at alternative rates of
payment.
(3) "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. 4. SEC. 3. 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.