BILL ANALYSIS Ó
AB 41
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
AB 41
(Chau) - As Introduced December 1, 2014
SUBJECT: Health care coverage: discrimination.
SUMMARY: Prohibits a health care service plan (plan) or health
insurer (insurer) from discriminating against any health care
provider who is acting within the scope of that provider's
license or certification. Specifically, this bill:
1)Prohibits, beginning January 1, 2016, a plan or insurer from
discriminating with respect to provider participation or
coverage under the plan against any health care provider who
is acting within the scope of that provider's license or
certification.
2)Clarifies that the prohibition on discrimination is not to be
construed to require that a plan or insurer contract with any
health care provider willing to abide by the terms and
conditions for participation established by the plan or
issuer.
3)Clarifies that its provisions are not to be construed as
preventing a plan or insurer from establishing varying
reimbursement rates based on quality or performance measures.
4)Makes implementation of this bill conditional upon
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requirements of federal law, as specified.
EXISTING LAW:
1)Establishes, under federal law, the Patient Protection and
Affordable Care Act (ACA) which, among other provisions,
prohibits plans and insurers offering group or individual
insurance coverage from discriminating with respect to
participation under the plan or policy against any health care
provider who is acting within the scope of the provider's
license or certification under applicable state law.
2)Establishes the Knox-Keene Health Care Service Plan Act of
1975, the body of law governing plans in the state, and
provides for the licensure and regulation of plans by the
Department of Managed Health Care.
3)Provides for the regulation of health insurers by the
California Department of Insurance (CDI).
4)Provides that plans and insurers that negotiate and enter into
contracts with professional providers to provide services at
alternative rates of payment, as specified, must give
reasonable consideration to timely written proposals for
affiliation by licensed or certified professionals providers.
Defines "reasonable consideration" as consideration in good
faith of the terms of proposals for affiliations prior to the
time that contracts for alternative rates of payment are
entered into or renewed.
5)Authorizes health plans and insurers to specify the terms and
conditions of contracting to assure cost-efficiency,
qualification of providers, and appropriate utilization of
services, accessibility, and convenience to persons who would
receive the provider's services, and consistency with basis
methods of operation, but not exclude providers because of
their category of license.
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FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, with the
passage of the ACA, an influx of newly insured people will
engage with an overburdened health care system that faces
severe shortages of health care practitioners. The author
states that we must utilize our health care practitioners
whose scope of practice and training will allow them to
perform more vital functions. The author states that while
federal law bans discrimination against whole classes of
health care providers, plans and insurers commonly limit the
types of health care providers allowed to provide services.
The author cites an example of optometrists who are permitted
to provide routine vision care under a health plan or
insurance contract are often prohibited from treating other
conditions that are within their scope of practice. The
author asserts that provider discrimination is wrong in
principle, anti-competitive, limits or denies patient choice
and access to a range of beneficial providers, and results in
a less than optimal health care delivery system. The author
concludes by stating that this bill will help eliminate
provider discrimination which will lead to lower health care
costs, improve quality, increase access, and mitigate provider
shortages.
2)BACKGROUND.
a) Provider nondiscrimination under the ACA. This bill
codifies a provision of the ACA, which prohibits
discrimination with respect to participation under a plan
or coverage against any health care provider who is acting
within the scope of that provider's license or
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certification applicable under state law. The specific
section for this provision of the ACA is Section 2706(a) of
the Public Health Services Act (PHSA) 42 U.S. Code Section
300gg-5 (PHSA Section 2706(a)), and it contains language
nearly identical to that in this bill.
b) Federal regulations. On April 29, 2013, the federal
Departments of Labor, Health and Human Services, and
Treasury (collectively the departments), issued Frequently
Asked Questions (FAQ) stating that the departments did not
intend to issue regulations to implement PHSA Section
2706(a), and that ACA provider non-discrimination language
as self-implementing and stated that the departments did
not intend to issue regulations. The April 2013 FAQ also
stated that plans and insurers are expected to implement
the non-discrimination requirements of PHSA Section 2706(a)
using a good faith and reasonable interpretation of the
law; and, that the provisions of the law do not require
plans or issues to accept all types of providers into a
network or govern provider reimbursement rates which may be
subject to quality, performance, or market standards and
considerations.
In July 2013, the U.S. Senate Appropriations (USSA) Committee
issued a report, within which it expressed concerns regarding
the FAQ. The USSA Committee stated that the goal of PHSA
Section 2706(a) is to ensure patients have the right access to
covered health services from the full range of providers
licensed and certified in the state. The USSA Committee also
expressed concerns that the FAQ advised insurers that PHSA
Section 2706(a) allows them to exclude whole categories of
providers, and allows discrimination in reimbursement rates
based on market considerations rather than the law's more
limited exceptions based on performance and quality measures.
Following this report, the departments issued a Request for
Information on all aspects of PHSA Section 2706, with public
comments due by June 10, 2014. The USSA Committee issued
another report in June 2014, directing the departments to
correct its FAQ by November 3, 2014.
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As of the writing of this analysis, the original FAQ document is
still posted on the departments' Websites, and federal agencies
have not adopted specific federal rules to implement PHSA
Section 2706(a). It is unclear if additional rules will be
forthcoming.
Additionally, existing federal law and regulations governing
Medicare Advantage (MA) plans implement similar requirements as
those enacted under the ACA and proposed under this bill.
Specifically, the regulations provide that MA plans may select
the practitioners that participate in its plan networks, but may
not discriminate in terms of participation, reimbursement or
indemnification against any health professional who is acting
within the scope of his or her license or certification under
state law. These regulations have been in effect since 2000.
c) Healing arts practitioners in California. Existing
state law provides for the licensure and certification of
various healing arts licensees, including physicians and
surgeons, dentists, podiatrists, naturopathic doctors,
registered nurses, physician assistants, radiologic
technologists, social workers, acupuncturists, and massage
therapists. Generally, the practice or title acts of the
practitioners define the procedures, actions, or processes
that are permitted for the individual that is licensed or
certified. Additionally, there are healing arts
practitioners whose scope of practice is defined in an
initiative act, specifically chiropractors and osteopathic
physicians. The scope of practice of practitioners can
sometimes overlap. For example, physicians and surgeons
may perform acupuncture without obtaining an acupuncture
license. Ophthalmologists and optometrists (certified
pursuant to specified regulations) can both treat glaucoma.
3)SUPPORT. The California Chiropractic Association (CCA), the
bill's sponsor, states that plans and insurers routinely
discriminate against whole classes of providers based solely
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on licensure and certification. CCA state that bill codifies
federal ACA requirements to prohibit this discrimination, thus
ensuring that patients have access to health care providers of
their choice and broadening the range of providers available
in our health care delivery system. CCA adds that neither
federal law, nor this bill, prevents a plan or insurer from
varying reimbursement rates based on quality or performance
measures. Other supporters state that this bill will reduce
costs, improve quality, increase efficient utilization, and
increase access to care.
4)OPPOSITION. CSAC Excess Insurance Authority (EIA) states that
the rising cost of health care is due in part to the rising
cost of provider expense, and that this bill opens the field
for any non-physician provider type to be reimbursed based on
the sole discretion of the non-physician provider and not
based on the guidelines of the contractual agreement or taking
into consideration of physician specialty. CSAC EIA states
that the bill is not based on prudent health care
considerations and works to undermine health plan and insurer
administrative initiatives to monitor care and control costs.
5)PREVIOUS LEGISLATION. AB 2015 (Chau) from 2014, and SB 690
(Ed Hernandez) from 2012, were identical to this bill. Both
bills were held on the Suspense file by the Assembly
Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
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California Chiropractic Association (sponsor)
California Academy of Audiology
California Immigrant Policy Center
California Optometric Association
California Naturopathic Doctors Association
California Nurse-Midwives Association
California Pharmacists Association
California Psychological Association
Occupational Therapy Association of California
Opposition
CSAC Excess Insurance Authority
Analysis Prepared by:Kelly Green / HEALTH / (916) 319-2097
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