BILL NUMBER: AB 2533 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 22, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Ammiano
FEBRUARY 21, 2014
An act to add Sections Section
1367.031 and 1374.37 to the Health and Safety
Code, and to amend Section 10133.5 of, and to add
Sections Section 10133.51 and 10169.6
to , the Insurance Code, relating to health care
coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 2533, as amended, Ammiano. Health care coverage: noncontracting
providers.
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 the Department of Managed Care and the
Insurance Commissioner to adopt regulations to ensure that enrollee's
and insureds have access to needed health care services in a timely
manner, as specified. Existing law authorizes the Department of
Managed Care to assess administrative penalties for noncompliance
with the requirements, which are paid into the Managed Care
Administrative Fines and Penalties Fund.
This bill would require the Department of Insurance, in developing
the regulations, to develop indicators of timeliness of access to
care considering specified indicators of timeliness of access to
care, including waiting time for appointments with physicians. The
bill would require contracts between health insurers that contract
with providers for alternative rates and health care providers to
assure compliance with the developed standards. The bill would
authorize the Insurance Commissioner to investigate and take
enforcement action against health insurers regarding noncompliance
with the requirements of these provisions, including assessing
administrative penalties that would be paid to the Health Insurance
Administrative Fines and Penalties Account in the Insurance Fund,
which the bill would establish.
This bill would require a health care service plan or health
insurer to arrange for the provision of a medically necessary service
by a licensed noncontracting provider if the plan or insurer is
unable to meet timely access standards established by the Department
of Managed Care or the Insurance Commissioner. The bill would require
the noncontracting provider to seek reimbursement for the covered
service solely from the health care service plan or health insurer,
except for allowable copayments, coinsurance, and deductibles. The
bill would authorize the Director of Managed Care and the Insurance
Commissioner to assess administrative penalties of a minimum
of $1,000 per violation against a health care service plan or
health insurer that fails to comply with these requirements. The bill
would require that the penalties assessed against health care
service plans be deposited into the Managed Care Administrative Fines
and Penalties Fund. The bill would establish the Health
Insurance Administrative Fines and Penalties Account in the Insurance
Fund and would require penalties assessed against health
insurers to be deposited into that account
the Health Insurance Administrative Fines and Penalties Account,
to be used, upon appropriation by the Legislature, to support
the Department of Insurance.
Existing law establishes independent medical review (IMR) systems
to provide enrollees and insureds with the opportunity to seek an IMR
whenever health care services have been denied, modified, or delayed
by a health care service plan or health insurer, or by one of its
contracting providers, if the decision was based in whole or in part
on a finding that the proposed health care services are not medically
necessary.
This bill would require a health care service plan contract or
health insurance policy issued, amended, renewed, or delivered on or
after January 1, 2015, to provide an enrollee or insured with the
opportunity to seek an IMR to examine the health insurer's coverage
decisions regarding services not offered by the health care service
plan contract or health insurance policy and provided by
noncontracting providers. If a determination is made that the health
care service plan or health insurer shall cover the service rendered
by the noncontracting provider, the bill would require the
noncontracting provider to seek reimbursement for the covered service
solely from the health care service plan or health insurer, except
for allowable copayments, coinsurance, and deductibles.
Because a willful violation of these requirements with respect to
health care service plans would be a crime, the 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.
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 1367.031 is added to the Health and Safety
Code, immediately following Section 1367.03, to read:
1367.031. (a) If a health care service plan is unable to meet
timely access standards established pursuant to Section 1367.03, and
is thereby unable to ensure timely access by an enrollee to a
medically necessary covered service provided by a contracted
provider, the health care service plan shall arrange for the
provision of the service by a licensed noncontracting provider in the
area of practice appropriate to treat the enrollee's condition.
(1) A health care service plan shall not impose copayments,
coinsurance, or deductibles for a noncontracting provider that exceed
those of contracting providers.
(1)
(2) A noncontracting provider providing a service to an
enrollee pursuant to subdivision (a) shall seek reimbursement for a
covered service solely from an enrollee's health care service plan,
and shall not seek payment from the enrollee for the covered service,
except for allowable copayments, coinsurance, and deductibles.
(2)
(3) A health care service plan referring an enrollee to
a noncontracting provider shall ensure that the location of the
facilities of the noncontracting provider is within reasonable
proximity of the business or personal residence of the enrollee, and
that the hours of operation and provision for after-hours care is
reasonable so as not to result in barriers to accessibility.
(3)
(4) The health care service plan shall consider
referral to a specific noncontracting provider preferred by the
enrollee. If the health care service plan does not refer the enrollee
to the enrollee's preferred noncontracting provider, the health care
service plan shall provide the enrollee with a written explanation
outlining the reasons why the enrollee's preferred noncontracting
provider was not selected to provide the covered service.
(4)
(5) If an enrollee prefers to wait for a contracted
provider to provide the covered service, the health care service plan
shall accommodate the enrollee's preference.
(b) Pursuant to subdivision (f) of Section 1367.03, a health care
service plan shall report annually to the department on any and all
occurrences of denial of care and on compliance with the requirements
of this section. The department shall make this information public
on the department's Internet Web site.
(b)
(c) (1) Pursuant to subdivision
(g) of Section 1367.03, the department may assess an administrative
penalty of a minimum of one thousand dollars ($1,000) per
violation against any health care service plan that fails to comply
with this section.
(2) The administrative penalties available to the department
pursuant to this section are not exclusive, and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies as determined by the director for purposes of
enforcing this chapter.
SEC. 2. Section 1374.37 is added to the Health
and Safety Code, immediately following Section 1374.36, to read:
1374.37. (a) Every health care service plan contract that is
issued, amended, renewed, or delivered on or after January 1, 2015,
shall provide an enrollee with an opportunity to seek an independent
medical review under the process established pursuant to this article
to examine the plan's coverage decisions regarding services not
covered by the health care service plan contract and provided by
noncontracting providers.
(b) If a health care service plan modifies, delays, or denies a
claim for a service rendered by a noncontracting provider because the
provision of the service is excluded as a covered benefit, the
enrollee may appeal the modification, delay, or denial by submitting
a written statement from the enrollee's attending physician, who
shall be a licensed, board-certified, or board-eligible physician
qualified to practice in the area of practice appropriate to treat
the enrollee for the health care service sought, certifying that the
service provided by the noncontracting provider is medically
necessary.
(c) Claims for services rendered by a noncontracting provider that
are modified, delayed, or denied because the service is excluded as
a covered benefit shall qualify for the independent medical review
process established pursuant to this article if the enrollee's
physician, as specified in subdivision (b), certifies the service is
medically necessary.
(d) If a health care service plan modifies, delays, or denies a
claim for a service rendered by a noncontracting provider because the
health care service plan offers an alternative service that is
included as a covered benefit and provided by a contracting provider,
the enrollee of the health care service plan may appeal the
modification, delay, or denial of the claim by submitting both of the
following:
(1) A written statement from the enrollee's attending physician,
who shall be a licensed, board-certified, or board-eligible physician
qualified to practice in the specialty area of practice appropriate
to treat the enrollee for the health service sought, that the service
provided by the noncontracting provider is materially different from
a health care service the health care service plan approved to treat
the enrollee.
(2) Two documents from the available medical and scientific
evidence that the service provided by the noncontracting provider is
likely to be more beneficial to the enrollee than the alternate
service recommended by the health care service plan.
(e) An external appeal agent shall review the health care service
plan's coverage decision to modify, delay, or deny claims for
services described in subdivision (a), and shall make a determination
within seven days of receipt of the appeal as to whether the claim
for the service rendered by a noncontracting provider shall be
covered by the plan. The external appeal agent shall make a
determination within 48 hours in cases where an enrollee has an
imminent need for the services in question.
(f) If a determination is made by the external appeal agent that
the service rendered by the noncontracting provider is materially
different from, and more beneficial than, the alternate service
recommended by the plan, the health care service plan shall cover the
service rendered by the noncontracting provider.
(g) The noncontracting provider providing a service to an enrollee
that is required to be covered by the health care service plan as a
result of an independent medical review pursuant to this section
shall seek reimbursement for the service solely from the enrollee's
health care service plan, and shall not seek payment from the
enrollee for the covered service, except for allowable copayments,
coinsurance, and deductibles.
SEC. 2. Section 10133.5 of the
Insurance Code is amended to read:
10133.5. (a) The commissioner shall, on or before January 1,
2004, 2016, promulgate regulations
applicable to health insurers which that
contract with providers for alternative rates pursuant to
Section 10133 to ensure that insureds have the opportunity to access
needed health care services in a timely manner.
(b) These regulations shall be designed to assure accessibility of
provider services in a timely manner to individuals comprising the
insured or contracted group, pursuant to benefits covered under the
policy or contract. The regulations shall insure:
In developing these regulations, the department shall
develop indicators of timeliness of access to care and, in so doing,
shall consider the following as indicators of timeliness of access
to care:
(1) Waiting times for appointments with physicians, including
primary care and specialty physicians.
(2) Timeliness of care in an episode of illness, including the
timeliness of referrals and obtaining other services, if needed.
(3) Waiting time to speak to a physician, registered nurse, or
other qualified health professional acting within his or her scope of
practice who is trained to screen or triage an enrollee who may need
care.
1.
(4) Adequacy of number and locations of
institutional facilities , including hospitals,
and professional providers, and consultants in relationship to the
size and location of the insured group and that the services offered
are available at reasonable times. The department shall consider
the nature of physician practices, including individual and group
practices, and the nature of the provider network. The department
shall also consider various circumstances affecting the
delivery of care, including urgent care, care provided on the same
day, and requests for specific providers.
2.
(5) Adequacy of number of professional
providers, and license classifications of such
the providers, in relationship to the projected demands for
services covered under the group policy or plan. The department shall
consider the nature of the specialty in determining the adequacy of
professional providers. The department shall consider the
availability of primary care physicians, specialty physicians,
hospital care, and other health care.
3.
(6) The policy or contract is not
inconsistent with standards of good health care and clinically
appropriate care.
4.
(7) All contracts including contracts with providers,
and other persons furnishing services, or facilities shall be fair
and reasonable.
(c) In developing these standards for timeliness of access, the
department shall consider all of the following:
(1) Clinical appropriateness.
(2) The nature of the specialty.
(3) The urgency of care.
(d) The department may adopt standards other than the time elapsed
between an enrollee seeking health care and obtaining care. If the
department adopts an alternative standard, it shall demonstrate why
that standard is more appropriate. In developing standards pursuant
to this subdivision, the department shall consider the nature of the
provider network.
(c)
(e) In developing standards under subdivision (a), the
department shall also consider requirements under federal law;
requirements under other state programs and law, including
utilization review; and standards adopted by other states, national
accrediting organizations and professional associations. The
department shall further consider the accessability to provider
services in rural areas , specifically those areas in
which health facilities are more than 30 miles apart .
(d)
(f) In designing the regulations the commissioner shall
consider the regulations in Title 28, of the California
Administrative Code of Regulations, commencing with Section
1300.67.2, which that are applicable
to Knox-Keene plans, and all other relevant guidelines in an effort
to accomplish maximum accessibility within a cost efficient
system of indemnification accessibility . The
department shall consult with the Department of Managed Health Care
concerning regulations developed by that department pursuant to
Section 1367.03 of the Health and Safety Code and shall seek public
input from a wide range of interested parties.
(g) (1) Contracts between health insurers that contract with
providers for alternative rates and health care providers shall
assure compliance with the standards developed under this section.
These contracts shall require reporting by health care providers to
health insurers that contract with providers for alternative rates
and by health insurers that contract with providers for alternative
rates to the department to ensure compliance with the standards.
(e)
(2) Health insurers that contract for alternative rates
of payment with providers shall report annually on
the number of occurrences of denial of care and on complaints
received by the insurer regarding timely access to care. The
department shall review these complaints and any complaints received
by the department regarding timeliness of care and shall make public
this information on the department's Internet Web site .
(f) The department shall report to the Assembly Committee on
Health and the Senate Committee on Insurance of the Legislature on
March 1, 2003, and on March 1, 2004, regarding the progress towards
the implementation of this section.
(g)
(h) Every three years, the commissioner shall review
the latest version of the regulations adopted pursuant to subdivision
(a) and shall determine if the regulations should be updated to
further the intent of this section.
(i) (1) The commissioner may investigate and take enforcement
action against plans regarding noncompliance with the requirements of
this section. When substantial harm to an insured has occurred as a
result of plan noncompliance, the commissioner may, by order, assess
administrative penalties subject to appropriate notice of, and the
opportunity for, a hearing in accordance with Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code. The health insurer may provide to the commissioner,
and the commissioner may consider, information regarding the health
insurer's overall compliance with the requirements of this section.
(2) The administrative penalties available to the commissioner
pursuant to this section are not exclusive, and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies as determined by the commissioner for
purposes of enforcing this chapter.
(3) The administrative penalties shall be paid to the Health
Insurance Administrative Fines and Penalties Account in the Insurance
Fund.
(j) There is hereby created the Health Insurance Administrative
Fines and Penalties Account in the Insurance Fund established
pursuant to Section 12975.7. All moneys in the account shall be
subject to annual appropriation each fiscal year for the support of
the Department of Insurance.
SEC. 3. Section 10133.51 is added to the Insurance Code,
immediately following Section 10133.5, to read:
10133.51. (a) If a health insurer that contracts with providers
for alternative rates pursuant to Section 10133 is unable to meet
timely access standards established pursuant to Section 10133.5, and
is thereby unable to ensure timely access by an insured to a
medically necessary covered service provided by a contracted
provider, the health insurer shall arrange for the provision of the
service by a licensed noncontracting provider in the area of practice
appropriate to treat the insured's condition.
(1) A health insurer shall not impose copayments, coinsurance, or
deductibles for a noncontracting provider that exceed those of
contracting providers in the event that an insured receives services
from a noncontracting provider because a health insurer was unable to
ensure timely access to a medically necessary, covered service by a
contracted provider.
(1)
(2) A noncontracting provider providing a service to an
insured pursuant to subdivision (a) shall seek reimbursement for the
covered service solely from the insured's health insurer, and shall
not seek payment from the insured for the covered service, except for
allowable copayments, coinsurance, and deductibles.
(2)
(3) A health insurer referring an insured to a
noncontracting provider shall ensure that the location of the
facilities of the noncontracting provider is within reasonable
proximity of the business or personal residence of the insured, and
that the hours of operation and provision for after-hours care is
reasonable so as not to result in barriers to accessibility.
(3)
(4) The health insurer shall consider referral to a
specific noncontracting provider preferred by the insured. If the
health insurer does not refer the insured to the insured's preferred
noncontracting provider, the health insurer shall provide the insured
with a written explanation outlining the reasons why the insured's
preferred noncontracting provider was not selected to provide the
covered service.
(4)
(5) If an insured prefers to wait for a contracted
provider to provide the covered service, the health insurer shall
accommodate the insured's preference.
(b) (1) The commissioner may investigate and take enforcement
action against health insurers regarding noncompliance with the
requirements of this section.
(2) The commissioner may, by order, assess an administrative
penalty of a minimum of one thousand dollars ($1,000) per
violation against a health insurer that fails to comply with this
section, subject to appropriate notice and the opportunity for a
hearing in accordance with Chapter 5 (commencing with Section 11500)
of Part 1 of Division 3 of Title 2 of the Government Code. The health
insurer may provide to the commissioner, and the commissioner may
consider, information regarding the health insurer's overall
compliance with the requirements of this section. The administrative
penalties shall not be deemed an exclusive remedy available to the
commissioner.
(3) There is hereby created the Health Insurance Administrative
Fines and Penalties Account in the Insurance Fund established
pursuant to Section 12975.7. All moneys in the account shall be
subject to annual appropriation each fiscal year for the support of
the Department of Insurance.
SEC. 4. Section 10169.6 is added to the
Insurance Code, immediately following Section 10169.5, to read:
10169.6. (a) Every health insurance policy that is issued,
amended, renewed, or delivered on or after January 1, 2015, shall
provide an insured with an opportunity to seek an independent medical
review under the process established pursuant to this article to
examine the health insurer's coverage decisions regarding services
not covered by the health insurance policy and provided by
noncontracting providers.
(b) If a health insurer modifies, delays, or denies a claim for a
service rendered by a noncontracting provider because the provision
of the service is excluded as a covered benefit, the insured may
appeal the modification, delay, or denial by submitting a written
statement from the insured's attending physician, who shall be a
licensed, board-certified, or board-eligible physician qualified to
practice in the area of practice appropriate to treat the insured for
the health care service sought, certifying that the service provided
by the noncontracting provider is medically necessary.
(c) Claims for services rendered by a noncontracting provider that
are modified, delayed, or denied because the service is excluded as
a covered benefit shall qualify for the independent medical review
process established pursuant to this article if the insured's
physician, as specified in subdivision (b), certifies the service is
medically necessary.
(d) If a health insurer modifies, delays, or denies a claim for a
service rendered by a noncontracting provider because the health
insurer offers an alternative service that is included as a covered
benefit and provided by a contracting provider, the insured of the
health insurance policy may appeal by the modification, delay, or
denial of the claim by submitting both of the following:
(1) A written statement from the insured's attending physician,
who shall be a licensed, board-certified, or board-eligible physician
qualified to practice in the specialty area of practice appropriate
to treat the insured for the health service sought, that the service
provided by the noncontracting provider is materially different from
a health care service the health insurer approved to treat the
insured.
(2) Two documents from the available medical and scientific
evidence that the service provided by the noncontracting provider is
likely to be more beneficial to the insured than the alternate
service recommended by the health insurer.
(e) An external appeal agent shall review the health insurer's
coverage decision to modify, delay, or deny claims for services
described in subdivision (a), and shall make a determination within
seven days of receipt of the appeal as to whether the claim for the
service rendered by a noncontracting provider shall be covered by the
health insurer. The external appeal agent shall make a determination
within 48 hours in cases where an insured has an imminent need for
the services in question.
(f) If a determination is made by the external appeal agent that
the service rendered by the noncontracting provider is materially
different from, and more beneficial than, the alternate service
recommended by the health insurer, the health insurer shall cover the
service rendered by the noncontracting provider.
(g) The noncontracting provider providing a service to an insured
that is required to be covered by the health insurer as a result of
an independent medical review pursuant to this section shall seek
reimbursement for the service solely from the insured's health care
service plan, and shall not seek payment from the insured for the
covered service, except for allowable copayments, coinsurance, and
deductibles.
SEC. 5. 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 are the result of a program for
which legislative authority was requested by that local agency or
school district, within the meaning of Section 17556 of the
Government Code and Section 6 of Article XIII B of the California
Constitution.