BILL NUMBER: AB 2533 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 6, 2014
AMENDED IN ASSEMBLY APRIL 22, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Ammiano
FEBRUARY 21, 2014
An act to add Section 1367.031 to the Health and Safety Code,
and to amend Section 10133.5 of, and to add
Section 10133.51 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 enrollees 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 require penalties assessed against
health insurers to be deposited into the Health Insurance
Administrative Fines and Penalties Account, to be used, upon
appropriation by the Legislature, to support the Department of
Insurance.
This bill would require a health care service plan or health
insurer that contracts for alternative rates of payment to arrange
for, or assist in arranging for, an enrollee or insured who is unable
to obtain a medically necessary covered service to receive the care
or service from a noncontracting provider in an accessible and timely
manner. The bill would prohibit the health care service plan or
health insurer from imposing copayments, coinsurance, or deductibles
on an enrollee or insured that exceed what the enrollee or insured
would pay for services from a contracting provider. The bill would
require a health care service plan or health insurer to report
annually to the respective department on the occurrences of denial of
care and complaints received by the plan or insurer regarding
accessible and timely access to care. The bill would require each
department to review those complaints and any complaints received by
the department regarding accessibility or timeliness of care and
annually prepare and post on its Internet Web site a report of the
information received.
This bill would authorize the Insurance Commissioner to
investigate and take enforcement action against insurers regarding
noncompliance with these provisions and would authorize the
commissioner to assess administrative penalties for violations, as
specified. The bill would require the commissioner, on or before
January 1, 2016, to promulgate related regulations and review the
regulations every 3 years to determine if the regulations should be
updated.
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 an enrollee is unable to obtain a medically
necessary covered service in an accessible and timely manner, as
required under Section 1367.03, from a contracted provider, the
health care service plan shall arrange for, or assist the enrollee in
arranging for, the enrollee to receive the care or service in an
accessible and timely manner from a noncontracting provider, and
shall not impose copayments, coinsurance, or deductibles on the
enrollee that exceed what the enrollee would pay for services from a
contracting provider.
(b) In addition to any reporting requirements in 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
complaints received by the health care service plan regarding
accessible and timely access to care. The department shall review
these complaints and any complaints received by the department
regarding accessibility or timeliness of care and annually prepare
and post on the department's Internet Web site a report on the
information received.
SEC. 2. Section 10133.51 is added to the
Insurance Code , to read:
10133.51. (a) This section shall apply to insurers that contract
for alternative rates of payment pursuant to Section 10133.
(b) If an insured is unable to obtain a medically necessary
covered service in an accessible and timely manner, as required under
Section 10133.5, from a contracted provider, the health insurer
shall arrange for, or assist the insured in arranging for, the
insured to receive the care or service in an accessible and timely
manner from a noncontracting provider, and shall not impose
copayments, coinsurance, or deductibles on the insured that exceed
what an insured would pay for services from a contracting provider.
(c) In addition to the reporting requirements in Section 10133.5,
health insurers shall report annually to the department on any and
all occurrences of denial of care and on complaints received by the
insurer regarding accessible and timely access to care. The
department shall review these complaints and any complaints received
by the department regarding accessibility or timeliness of care and
annually prepare and post on the department's Internet Web site a
report on the information received.
(d) The commissioner shall, on or before January 1, 2016,
promulgate regulations pursuant to this section and Section 10133.5
to ensure that insureds have the opportunity to access medically
necessary health care services in an accessible and timely manner.
Every three years, the commissioner shall review the latest version
of the regulations adopted pursuant to this section and determine if
the regulations should be updated to further the intent of this
section.
(e) The commissioner may investigate and take enforcement action
against insurers regarding noncompliance with the requirements of
this section and Section 10133.5. The commissioner may, by order,
assess administrative penalties for violations of this section and
Section 10133.5, 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 insurer may provide to the commissioner, and the
commissioner may consider, information regarding the insurer's
overall compliance with the requirements of this section. 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.
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.
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.
(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.
(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.
(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.
(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.
(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 10133.5 of the Insurance Code
is amended to read:
10133.5. (a) The commissioner shall, on or before January 1,
2016, promulgate regulations applicable to health insurers 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. 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.
(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.
(5) Adequacy of number of professional providers, and license
classifications of 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.
(6) The policy or contract is not inconsistent with standards of
good health care and clinically appropriate care.
(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.
(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.
(f) In designing the regulations the commissioner shall consider
the regulations in Title 28, of the California Code of Regulations,
commencing with Section 1300.67.2, that are applicable to Knox-Keene
plans, and all other relevant guidelines in an effort to accomplish
maximum 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.
(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.
(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.
(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.
(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.
(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.
(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.
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.