BILL ANALYSIS Ó
SB 1340
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SENATE THIRD READING
SB 1340 (Ed Hernandez)
As Amended March 24, 2014
Majority vote
SENATE VOTE :33-0
HEALTH 17-0
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|Ayes:|Pan, Maienschein, | | |
| |Bonilla, Bonta, Chávez, | | |
| |Chesbro, Gomez, Gonzalez, | | |
| |Roger Hernández, | | |
| |Lowenthal, Mansoor, | | |
| |Nazarian, Nestande, | | |
| |Patterson, Rodriguez, | | |
| |Wagner, Wieckowski | | |
| | | | |
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SUMMARY : Expands provisions related to gag clauses in contracts
between health plans or insurers and providers. Specifically,
this bill :
1)Expands the prohibition on any provision that restricts the
ability of a health plan or insurer to furnish cost and
quality information to enrollees or insureds, which currently
applies to hospitals and certain facilities owned by
hospitals, to include any provider or supplier, and to allow
sharing with beneficiaries of a self-funded plan or other
persons entitled to access services through a network
established by the plan or insurer.
2)Clarifies that such gag clauses are prohibited on the cost of
a procedure or a full course of treatment, including facility,
professional, and diagnostic services, prescription drugs,
durable medical equipment, and other items and services
related to the treatment.
3)Increases from 20 to 30 days the amount of time a health plan
or insurer must give a provider or supplier to review data to
be shared by a health plan or insurer.
FISCAL EFFECT : None
SB 1340
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COMMENTS : According to the author of this bill, health care
costs continue to outpace inflation and more costs are being
shifted to consumers. The author writes that recent
legislation, SB 751 (Gaines), Chapter 244, Statutes of 2011,
prohibits clauses in a contract between a health plan and
hospital that bar the plan from sharing cost and quality
information regarding the hospital with that plan's members,
with a process for hospitals to review the information for
accuracy. According to the author, virtually all large health
plans now provide hospital cost and quality information to their
members. However, several problems with the current
transparency requirements have emerged:
1)SB 751 only applies to a health plan's own members, not to
members of a self-funded plan administered by the health plan.
As a result, members of self-funded plans do not have access
to the same cost and quality information that health plan
members do.
2)SB 751 applies only to hospitals, excluding other types of
providers. As a result, plans are unable to share cost and
quality information regarding some providers and it is unclear
whether SB 751 protects their ability to provide to consumers
the complete costs for a given procedure, including both
facility and provider costs.
3)SB 751 did not set a maximum on the period of time plans are
required to allow for provider review of data before it is
disclosed to consumers. As a result, some providers have
insisted on significantly longer than 20 days, and this makes
it more difficult for plans to make timely information
available to consumers.
SEIU California, in support, writes that its members are
impacted and actively involved in shaping policy as it relates
to health care transparency: as purchasers of health care, in
health benefits bargaining for represented workers, as
California Public Employees' Retirement System members, as
Medi-Cal beneficiaries, as state and county workers
administering public health coverage programs, as part of the
health care delivery system workforce, and as advocates for
patients. CALPIRG, also in support, argues that consumers
increasingly have insurance plans with deductible and
SB 1340
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coinsurance that encourage them to shop around; this bill will
help provide consumers with meaningful information to inform
their shopping. The California Association of Health Plans, in
support, states that this bill will provide pricing transparency
without significantly increasing any administrative burden on
health plans.
This bill has no opposition.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0004028