Amended in Senate June 15, 2016

Amended in Senate September 9, 2015

Amended in Senate September 4, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 72


Introduced by Assemblybegin delete Member Bontaend deletebegin insert Members Bonta, Bonilla, Dahle, Gonzalez, Maienschein, and Woodend insert

begin delete

(Coauthor: Senator Hancock)

end delete

December 18, 2014


An act to addbegin delete and repeal Article 4 (commencing with Section 32250) of Chapter 3 of Division 23 of the Health and Safety Code, relating to health care districts, and declaring the urgency thereof, to take effect immediately.end deletebegin insert Sections 1371.30, 1371.31, and 1371.9 to the Health and Safety Code, and to add Sections 10112.8, 10112.81, and 10112.82 to the Insurance Code, relating to health care coverage.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 72, as amended, Bonta. begin deleteEden Township Healthcare District: special taxes: authorization. end deletebegin insertHealth care coverage: out-of-network coverage.end insert

begin insert

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. A willful violation of the act is a crime. Existing law requires a health care service plan to reimburse providers for emergency services and care provided to its enrollees, until the care results in stabilization of the enrollee. Existing law prohibits a health care service plan from requiring a provider to obtain authorization prior to the provision of emergency services and care necessary to stabilize the enrollee’s emergency medical care, as specified.

end insert
begin insert

Existing law also provides for the regulation of health insurers by the Insurance Commissioner. Existing law requires a health insurance policy issued, amended, or renewed on or after January 1, 2014, that provides or covers benefits with respect to services in an emergency department of a hospital to cover emergency services without the need for prior authorization, regardless of whether the provider is a participating provider, and subject to the same cost sharing required if the services were provided by a participating provider, as specified.

end insert
begin insert

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017, to provide that if an enrollee or insured receives covered services from a contracting health facility, as defined, at which, or as a result of which, the enrollee or insured receives covered services provided by a noncontracting individual health professional, as defined, the enrollee or insured would be required to pay the noncontracting individual health professional only the same cost sharing required if the services were provided by a contracting individual health professional, which would be referred to as the “in-network cost-sharing amount.” The bill would require the in-network cost-sharing amount to be collected by the health care service plan or health insurer, as specified. The bill would prohibit an enrollee or insured from owing the noncontracting individual health professional at the contracting health facility more than the in-network cost-sharing amount if the noncontracting individual health professional receives reimbursement for services provided to the enrollee or insured at a contracting health facility from the health care service plan or health insurer. However, the bill would make an exception from this prohibition if the enrollee or insured provides written consent that satisfies specified criteria. The bill would require a noncontracting individual health professional who collects any amount from the enrollee or insured to refund the amount to the enrollee or insured, as specified, and would provide that interest on any amount not refunded to the enrollee or insured shall accrue at 15% per annum, as specified.

end insert
begin insert

Existing law requires a contract between a health care service plan and a provider, or a contract between an insurer and a provider, to contain provisions requiring a fast, fair, and cost-effective dispute resolution mechanism under which providers may submit disputes to the plan or insurer. Existing law requires that dispute resolution mechanism also be made accessible to a noncontracting provider for the purpose of resolving billing and claims disputes.

end insert
begin insert

This bill would require the department and the commissioner to each establish an independent dispute resolution process that would allow a noncontracting individual health professional who rendered services at a contracting health facility, or a plan or insurer, to appeal a claim payment dispute, as specified. The bill would authorize the department and the commissioner to contract with one or more independent dispute resolution organizations to conduct the independent dispute resolution process, as specified. The bill would provide that the decision of the organization would be binding on the parties. The bill would require a plan or insurer to base reimbursement for covered services on the amount the individual health professional would have been reimbursed by Medicare for the same or similar services in the general geographic area in which the services were rendered. The plan or insurer would be required to provide specified information relating to the determination of the average contracted rate by July 1, 2017, and to adjust the rate each year thereafter, as prescribed. The bill would require the department and the commissioner to report the above information to the Governor and other specified recipients by January 1, 2020. The bill would require a noncontracting individual health professional who disputes that claim reimbursement to utilize the independent dispute resolution process. The bill would provide that these provisions do not apply to emergency services and care, as defined.

end insert
begin insert

Because a willful violation of the bill’s provisions relative to a health care service plan would be a crime, the bill would impose a state-mandated local program.

end insert
begin insert

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.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert
begin delete

Existing law provides for the formation of local health care districts and specifies district powers. The California Constitution prohibits the Legislature from imposing taxes for local purposes, but allows the Legislature to authorize local governments to impose them.

end delete
begin delete

This bill, until January 1, 2026, would authorize the Eden Township Healthcare District to impose special taxes, as provided.

end delete
begin delete

This bill would make legislative findings and declarations as to the necessity of a special statute for the Eden Township Healthcare District.

end delete
begin delete

This bill would declare that it is to take effect immediately as an urgency statute.

end delete

Vote: begin delete23 end deletebegin insertmajorityend insert. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

The people of the State of California do enact as follows:

P4    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 1371.30 is added to the end insertbegin insertHealth and Safety
2Code, immediately following Section 1371.3
end insert
begin insert, to read:end insert

begin insert
3

begin insert1371.30.end insert  

(a) (1) The department shall establish an independent
4dispute resolution process for the purpose of processing and
5resolving a claim dispute between a health care service plan and
6a noncontracting individual health professional for services subject
7to subdivision (a) of Section 1371.9.

8
(2) Prior to initiating the independent dispute resolution process,
9the parties shall exhaust the plan’s internal process.

10
(3) If either the noncontracting individual health professional
11or the plan appeals a claim to the department’s independent dispute
12resolution process, the other party shall participate in the appeal
13process as described in this section.

14
(b) (1) The department shall establish uniform written
15procedures for the submission, receipt, processing, and resolution
16of claim payment disputes pursuant to this section and any other
17guidelines for implementing this section.

18
(2) The department shall establish reasonable and necessary
19fees for the purpose of administering this section, to be paid by
20both parties.

21
(3) In establishing the independent dispute resolution process,
22the department may permit the bundling of claims submitted to the
23same plan or the same delegated entity for the same or similar
24services by the same noncontracting individual health professional.

25
(4) The department shall permit a physician group, independent
26practice association, or other entity authorized to act on behalf of
27a noncontracting individual health professional to participate in
28the independent dispute resolution process.

29
(c) (1) The department may contract with one or more
30independent organizations to conduct the proceedings. The
P5    1independent organization handling a dispute shall be independent
2of either party to the dispute.

3
(2) The department shall establish conflict-of-interest standards,
4consistent with the purposes of this section, that an organization
5shall meet in order to qualify to administer the independent dispute
6resolution program. The conflict-of-interest standards shall be
7consistent with the standards pursuant to subdivisions (c) and (d)
8of Section 1374.32.

9
(3) The department may contract with the same independent
10organization or organizations as the Department of Insurance.

11
(4) The department shall provide, upon the request of an
12interested person, a copy of all nonproprietary information, as
13determined by the director, filed with the department by an
14independent organization seeking to contract with the department
15to administer the independent dispute resolution process pursuant
16to this section. The department may charge a nominal fee to cover
17the costs of providing a copy of the information pursuant to this
18paragraph.

19
(d) (1) The determination obtained through the department’s
20independent dispute resolution process shall be binding on both
21parties.

22
(2) Notwithstanding paragraph (1), this section does not
23preclude a dissatisfied party from pursuing any right, remedy, or
24penalty established under any other applicable law.

25
(e) This section shall not apply to a Medi-Cal managed health
26care service plan or any entity that enters into a contract with the
27State Department of Health Care Services pursuant to Chapter 7
28(commencing with Section 14000), Chapter 8 (commencing with
29Section 14200), and Chapter 8.75 (commencing with Section
3014591) of Part 3 of Division 9 of the Welfare and Institutions Code.

31
(f) If a health care service plan delegates payment functions to
32a contracted entity, including, but not limited to, a medical group
33or independent practice association, then the delegated entity shall
34comply with this section.

35
(g) This section shall not apply to emergency services and care,
36as defined in Section 1317.1.

37
(h) The definitions in subdivision (f) of Section 1371.9 shall
38 apply for purposes of this section.

end insert
39begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 1371.31 is added to the end insertbegin insertHealth and Safety
40Code
end insert
begin insert, to read:end insert

begin insert
P6    1

begin insert1371.31.end insert  

(a) (1) For services rendered subject to Section
21371.9, unless otherwise agreed to by the noncontracting individual
3health professional and the plan, the plan shall reimburse the
4greater of the average contracted rate or 125 percent of the amount
5Medicare reimburses on a fee-for-service basis for the same or
6similar services in the general geographic region in which the
7services were rendered. For the purposes of this section, “average
8contracted rate” means the average of the contracted rates paid
9by the health plan or delegated entity for the same or similar
10services in the geographic region. This subdivision does not apply
11to subdivision (c) of Section 1371.9 or subdivision (b) of this
12section.

13
(2) (A) In a manner and format specified by the department,
14by July 1, 2017, each health care service plan shall provide to the
15department both of the following:

16
(i) Data listing its average contracted rates for services most
17frequently subject to Section 1371.9 in each geographic region in
18which the services are rendered, including the average contracted
19rates paid by the plan’s delegated entities.

20
(ii) Its methodology for determining the average contracted rate
21for services subject to Section 1371.9. The methodology to
22determine an average contracted rate shall assure that the plan
23includes the highest and lowest contracted rates.

24
(B) Each health care service plan’s delegated entities shall
25provide to the department data listing its average contracted rates
26for services most frequently subject to Section 1371.9 in each
27geographic region in which the services are rendered.

28
(C) For each year thereafter, the health care service plan and
29the plan's delegated entities shall adjust the rate initially
30established pursuant to this subdivision by the Consumer Price
31Index for Medical Care Services, as published by the United States
32Bureau of Labor Statistics.

33
(D) The department shall audit the accuracy of the information
34required under subparagraphs (A) and (B).

35
(E) By January 1, 2020, the department shall provide a report
36to the Governor, the President pro Tempore of the Senate, the
37Speaker of the Assembly, and the Senate and Assembly Committees
38on Health of the data provided in subparagraphs (A) and (B) in a
39manner and format specified by the Legislature.

P7    1
(3) For purposes of this section for Medicare fee for service
2reimbursement, geographic regions shall be the geographic regions
3specified for physician reimbursement for Medicare fee for service
4by the United States Department of Health and Human Services.

5
(4) A health care service plan shall authorize and permit
6assignment of the enrollee’s right, if any, to any reimbursement
7for health care services covered under the plan contract to a
8noncontracting individual health professional who furnishes the
9health care services rendered subject to Section 1371.9. The plan
10shall provide a form approved by the department for this purpose.

11
(5) A noncontracting individual health professional who disputes
12the claim reimbursement under this section shall utilize the
13independent dispute resolution process described in Section
141371.30.

15
(b) If nonemergency services are provided by a noncontracting
16individual health professional consistent with subdivision (c) of
17Section 1371.9, to an enrollee who has voluntarily chosen to use
18his or her out-of-network benefit for services covered by a
19preferred provider organization or a point-of-service plan, unless
20otherwise agreed to by the plan and the noncontracting individual
21health professional, the amount paid shall be the amount set forth
22in the enrollee’s evidence of coverage. This payment is not subject
23to the independent dispute resolution process described in Section
241371.30.

25
(c) If a health care service plan delegates the responsibility for
26payment of claims to a contracted entity, including, but not limited
27to, a medical group or independent practice association, then the
28entity to which that responsibility is delegated shall comply with
29the requirements of this section.

30
(d) (1) A payment made by the health care service plan to the
31noncontracting health care professional for nonemergency services
32as required by Section 1371.9 and this section, in addition to the
33applicable cost sharing owed by the enrollee, shall constitute
34payment in full for nonemergency services rendered.

35
(2) Notwithstanding any other law, the amounts paid by a plan
36for services under this section shall not constitute the prevailing
37or customary charges, the usual fees to the general public, or other
38charges for other payers for an individual health professional.

39
(3) This subdivision shall not preclude the use of the independent
40dispute resolution process pursuant to Section 1371.30.

P8    1
(e) This section shall not apply to a Medi-Cal managed health
2care service plan or any other entity that enters into a contract
3with the State Department of Health Care Services pursuant to
4Chapter 7 (commencing with Section 14000), Chapter 8
5(commencing with Section 14200), and Chapter 8.75 (commencing
6with Section 14591) of Part 3 of Division 9 of the Welfare and
7Institutions Code.

8
(f) This section shall not apply to emergency services and care,
9as defined in Section 1317.1.

10
(g) The definitions in subdivision (f) of Section 1371.9 shall
11apply for purposes of this section.

end insert
12begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 1371.9 is added to the end insertbegin insertHealth and Safety Codeend insertbegin insert,
13to read:end insert

begin insert
14

begin insert1371.9.end insert  

(a) (1) Except as provided in subdivision (c), a health
15care service plan contract issued, amended, or renewed on or after
16July 1, 2017, shall provide that if an enrollee receives covered
17services from a contracting health facility at which, or as a result
18of which, the enrollee receives services provided by a
19noncontracting individual health professional, the enrollee shall
20pay no more than the same cost sharing that the enrollee would
21pay for the same covered services received from a contracting
22individual health professional. This amount shall be referred to
23as the “in-network cost-sharing amount.”

24
(2) An enrollee shall not owe more than the in-network
25cost-sharing amount for services subject to this section. The health
26care service plan shall collect the in-network cost-sharing amount
27from the enrollee.

28
(3) A noncontracting individual health professional shall not
29bill or collect any amount from the enrollee for services subject
30to this section. Any communication from the noncontracting
31individual health professional to the enrollee shall include a notice
32in 12-point bold type stating that the communication is not a bill.

33
(4) In submitting a claim to the plan, the noncontracting
34individual health professional shall affirm in writing to the plan
35that he or she has not attempted to collect any payment from the
36enrollee.

37
(5) (A) If the noncontracting individual health professional has
38received any amount from the enrollee for services subject to this
39section, the noncontracting individual health professional shall
P9    1refund the amount to the enrollee after receiving payment from
2the plan.

3
(B) If the noncontracting individual health professional does
4not refund the amount collected from the enrollee after receiving
5payment from the plan, interest shall accrue at the rate of 15
6percent per annum beginning with the date payment was received
7from the enrollee.

8
(C) A noncontracting individual health professional shall
9automatically include in his or her refund to the enrollee all
10interest that has accrued pursuant to this section without requiring
11the enrollee to submit a request for the interest amount.

12
(b) Except for services subject to subdivision (c), the following
13shall apply:

14
(1) Any cost sharing paid by the enrollee for the services
15provided by a noncontracting individual health professional at
16the contracting health facility shall count toward the limit on
17annual out-of-pocket expenses established under Section 1367.006.

18
(2) Cost sharing arising from services received by a
19noncontracting individual health professional at a contracting
20health facility shall be counted toward any deductible in the same
21manner as cost sharing would be attributed to a contracting
22individual health professional.

23
(3) The cost sharing paid by the enrollee pursuant to this section
24shall satisfy the enrollee’s obligation to pay cost sharing for the
25health service and shall constitute “applicable cost sharing owed
26by the enrollee” for the purpose of subdivision (e) of Section
271371.31.

28
(c) For services subject to this section, if an enrollee has a
29health care service plan that includes coverage for out-of-network
30benefits, a noncontracting individual health professional may bill
31or collect from the enrollee the out-of-network cost sharing, if
32applicable, only when the enrollee consents in writing and that
33written consent satisfies all the following criteria:

34
(1) At least 24 hours in advance of care, the enrollee shall
35consent in writing to receive services from the identified
36noncontracting individual health professional.

37
(2) The consent shall be obtained by the noncontracting
38individual health professional separately from the consent for any
39other part of the care or procedure. The consent shall not be
40obtained by the facility or any representative of the facility. The
P10   1consent shall not be obtained at the time of admission or at any
2time when the enrollee is being prepared for surgery or any other
3procedure.

4
(3) At the time consent is provided, the noncontracting individual
5health professional shall give the enrollee a written estimate of
6the enrollee’s total out-of-pocket cost of care. The written estimate
7shall be based on the professional’s billed charges for the service
8to be provided. The noncontracting individual health professional
9shall not attempt to collect more than the estimated amount without
10receiving separate written consent from the enrollee or the
11enrollee’s authorized representative.

12
(4) The consent shall advise the enrollee that he or she may
13elect to seek care from a contracted provider or may contact the
14enrollee’s health care service plan in order to arrange to receive
15the health service from a contracted provider for
16lower-out-of-pocket costs.

17
(5) The consent and estimate shall be provided to the enrollee
18in the language spoken by the enrollee.

19
(6) The consent shall also advise the enrollee that any costs
20incurred as a result of the enrollee’s use of the out-of-network
21benefit shall be in addition to in-network cost-sharing amounts
22and may not count toward the annual out-of-pocket maximum on
23in-network benefits or a deductible, if any, for in-network benefits.

24
(d) A noncontracting individual health professional who fails
25to comply with the requirements of subdivision (c) has not obtained
26written consent for purposes of this section. Under those
27circumstances, subdivisions (a) and (b) shall apply and subdivision
28(c) shall not apply.

29
(e) (1) A noncontracting individual health professional may
30advance to collections only the in-network cost-sharing amount,
31as determined by the plan pursuant to subdivision (a) or the
32out-of-network cost-sharing amount owed pursuant to subdivision
33(c), that the enrollee has failed to pay.

34
(2) The noncontracting individual health professional, or any
35entity acting on his or her behalf, including any assignee of the
36debt, shall not report adverse information to a consumer credit
37reporting agency or commence civil action against the enrollee
38for 150 days after the initial billing regarding amounts owed by
39the enrollee under subdivision (a) or (c).

P11   1
(3) With respect to an enrollee, the noncontracting individual
2health professional, or any entity acting on his or her behalf,
3including any assignee of the debt, shall not use wage garnishments
4or liens on primary residences as a means of collecting unpaid
5bills under this section.

6
(f) For purposes of this section and Sections 1371.30 and
71371.31, the following definitions shall apply:

8
(1) “Contracting health facility” means a health facility that is
9contracted with the enrollee’s health care service plan to provide
10services under the enrollee’s plan contract. A contracting health
11care facility includes, but is not limited to, the following providers:

12
(A) A licensed hospital.

13
(B) An ambulatory surgery or other outpatient setting, as
14described in subdivision (a), (d), (e), (g), or (h) of Section 1248.1.

15
(C) A laboratory.

16
(D) A radiology or imaging center.

17
(E) Any other similar provider as the department may define,
18by regulation, as a health facility for purposes of this section.

19
(2) “Cost sharing” includes any copayment, coinsurance, or
20deductible, or any other form of cost sharing paid by the enrollee
21other than premium or share of premium.

22
(3) “Individual health professional” means a physician and
23surgeon or other professional who is licensed by this state to
24deliver or furnish health care services. For this purpose, an
25“individual health professional” shall not include a dentist,
26licensed pursuant to the Dental Practice Act (Chapter 4
27(commencing with Section 1600) of Division 2 of the Business and
28Professions Code).

29
(4) “In-network cost-sharing amount” means an amount no
30more than the same cost sharing the enrollee would pay for the
31same covered service received from a contracting health
32professional. The in-network cost-sharing amount with respect to
33an enrollee with coinsurance shall be based on the amount paid
34by the plan pursuant to paragraph (1) of subdivision (a) of Section
351371.31.

36
(5) “Noncontracting individual health professional” means a
37physician and surgeon or other professional who is licensed by
38the state to deliver or furnish health care services and who is not
39contracted with the enrollee’s health care service plan. For this
40purpose, a “noncontracting individual health professional” shall
P12   1not include a dentist, licensed pursuant to the Dental Practice Act
2(Chapter 4 (commencing with Section 1600) of Division 2 of the
3Business and Professions Code).

4
(g) This section shall not be construed to require a health care
5service plan to cover services not required by law or by the terms
6and conditions of the health care service plan contract.

7
(h) This section shall not be construed to exempt a plan or
8provider from the requirements under Section 1371.4 or 1373.96,
9nor abrogate the holding in Prospect Medical Group, Inc. v.
10Northridge Emergency Medical Group (2009) 45 Cal.4th 497, that
11an emergency room physician is prohibited from billing an enrollee
12of a health care service plan directly for sums that the health care
13service plan has failed to pay for the enrollee’s emergency room
14treatment.

15
(i) If a health care service plan delegates payment functions to
16a contracted entity, including, but not limited to, a medical group
17or independent practice association, the delegated entity shall
18comply with this section.

19
(j) This section shall not apply to a Medi-Cal managed health
20care service plan or any other entity that enters into a contract
21with the State Department of Health Care Services pursuant to
22Chapter 7 (commencing with Section 14000), Chapter 8
23(commencing with Section 14200), and Chapter 8.75 (commencing
24with Section 14591) of Part 3 of Division 9 of the Welfare and
25Institutions Code.

26
(k) This section shall not apply to emergency services and care,
27as defined in Section 1317.1.

end insert
28begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 10112.8 is added to the end insertbegin insertInsurance Codeend insertbegin insert, to
29read:end insert

begin insert
30

begin insert10112.8.end insert  

(a) (1) Except as provided in subdivision (c), a health
31insurance policy issued, amended, or renewed on or after July 1,
322017, shall provide that if an insured receives covered services
33from a contracting health facility at which, or as a result of which,
34the insured receives services provided by a noncontracting
35individual health professional, the insured shall pay no more than
36the same cost sharing that the insured would pay for the same
37covered services received from a contracting individual health
38professional. This amount shall be referred to as the “in-network
39cost-sharing amount.”

P13   1
(2) Except as provided in subdivision (c), an insured shall not
2owe more than the in-network cost-sharing amount for services
3subject to this section. The insurer shall collect the in-network
4cost-sharing amount from the insured.

5
(3) A noncontracting individual health professional shall not
6bill or collect any amount from the insured for services subject to
7this section. Any communication from the noncontracting individual
8health professional to the insured shall include a notice in 12-point
9bold type stating that the communication is not a bill.

10
(4) In submitting a claim to the insurer, the noncontracting
11individual health professional shall affirm in writing to the insurer
12that he or she has not attempted to collect any payment from the
13insured.

14
(5) (A) If the noncontracting individual health professional has
15received any amount from the insured for services subject to this
16section, the noncontracting individual health professional shall
17refund the amount to the insured after receiving payment from the
18insurer.

19
(B) If the noncontracting individual health professional does
20not refund the amount collected from the insured after receiving
21payment from the insurer, interest shall accrue at the rate of 15
22percent per annum beginning with the date payment was received
23from the insured.

24
(C) A noncontracting individual health professional shall
25automatically include in his or her refund to the insured all interest
26that has accrued pursuant to this section without requiring the
27insured to submit a request for the interest amount.

28
(b) Except for services subject to subdivision (c), the following
29shall apply:

30
(1) Any cost sharing paid by the insured for the services
31provided by a noncontracting individual health professional at
32the contracting health facility shall count toward the limit on
33annual out-of-pocket expenses established under Section 10112.28.

34
(2) Cost sharing arising from services received by a
35noncontracting individual health professional at a contracting
36health facility shall be counted toward any deductible in the same
37manner as cost sharing would be attributed to a contracting
38individual health professional.

39
(3) The cost sharing paid by the insured pursuant to this section
40shall satisfy the insured’s obligation to pay cost sharing for the
P14   1health service and shall constitute “applicable cost sharing owed
2by the insured” for the purpose of subdivision (e) of Section
310112.82.

4
(c) For services subject to this section, if an insured has an
5insurance contract that includes coverage for out-of-network
6benefits, a noncontracting individual health professional may bill
7or collect from the insured the out-of-network cost sharing, if
8applicable, only when the insured consents in writing and that
9written consent satisfies all the following criteria:

10
(1) At least 24 hours in advance of care, the insured shall
11consent in writing to receive services from the identified
12noncontracting individual health professional.

13
(2) The consent shall be obtained by the noncontracting
14individual health professional separately from the consent for any
15other part of the care or procedure. The consent shall not be
16obtained by the facility or any representative of the facility. The
17consent shall not be obtained at the time of admission or at any
18time when the enrollee is being prepared for surgery or any other
19procedure.

20
(3) At the time consent is provided the noncontracting individual
21health professional shall give the insured a written estimate of the
22insured’s total out-of-pocket cost of care. The written estimate
23shall be based on the professional’s billed charges for the service
24to be provided. The noncontracting individual health professional
25shall not attempt to collect more than the estimated amount without
26receiving separate written consent from the insured or the insured’s
27authorized representative.

28
(4) The consent shall advise the insured that he or she may elect
29to seek care from a contracted provider or may contact the
30insured’s health care service plan in order to arrange to receive
31the health service from a contracted provider for
32lower-out-of-pocket costs.

33
(5) The consent and estimate shall be provided to the insured
34in the language spoken by the insured.

35
(6) The consent shall also advise the insured that any costs
36incurred as a result of the insured’s use of the out-of-network
37benefit shall be in addition to in-network cost-sharing amounts
38and may not count toward the annual out-of-pocket maximum on
39in-network benefits or a deductible, if any, for in-network benefits.

P15   1
(d) A noncontracting individual health professional who fails
2to comply with provisions of this subdivision has not obtained
3written consent for purposes of this section. Under those
4circumstances, subdivisions (a) and (b) shall apply and subdivision
5(c) shall not apply.

6
(e) (1) A noncontracting individual health professional may
7advance to collections only the in-network cost-sharing amount,
8as determined by the insurer pursuant to subdivision (a) or the
9out-of-network cost-sharing amount owed pursuant to subdivision
10(c), that the insured has failed to pay.

11
(2) The noncontracting individual health professional, or any
12entity acting on his or her behalf, including any assignee of the
13debt, shall not report adverse information to a consumer credit
14reporting agency or commence civil action against the insured for
15150 days after the initial billing regarding amounts owed by the
16insured under subdivision (a) or (c).

17
(3) With respect to an insured, a noncontracting individual
18health professional, or any entity acting on his or her behalf,
19including any assignee of the debt, shall not use wage garnishments
20or liens on primary residences as a means of collecting unpaid
21bills under this section.

22
(f) For purposes of this section and Sections 10112.81 and
2310112.82, the following definitions shall apply:

24
(1) “Contracting health facility” means a health facility that is
25contracted with the insured’s health care service plan to provide
26services under the insured’s policy. A contracting health care
27facility includes, but is not limited to, the following providers:

28
(A) A licensed hospital.

29
(B) An ambulatory surgery or other outpatient setting, as
30described in subdivision (a), (d), (e), (g), or (h) of Section 1248.1
31of the Health and Safety Code.

32
(C) A laboratory.

33
(D) A radiology or imaging center.

34
(E) Any other provider as the department may define, by
35regulation, as a health facility for purposes of this section.

36
(2) “Cost sharing” includes any copayment, coinsurance, or
37deductible, or any other form of cost sharing paid by the insured
38other than premium or share of premium.

39
(3) “Individual health professional” means a physician and
40surgeon or other professional who is licensed by the state to deliver
P16   1or furnish health care services. For this purpose, an “individual
2health professional” shall not include a dentist, licensed pursuant
3to the Dental Practice Act (Chapter 4 (commencing with Section
41600) of Division 2 of the Business and Professions Code).

5
(4) “In-network cost-sharing amount” means an amount no
6more than the same cost sharing the insured would pay for the
7same covered service received from a contracting health
8professional. The in-network cost-sharing amount with respect to
9an insured with coinsurance shall be based on the amount paid
10by the insurer pursuant to paragraph (1) of subdivision (a) of
11Section 10112.82.

12
(5) “Noncontracting individual health professional” means a
13physician and surgeon or other professional who is licensed by
14the state to deliver or furnish health care services and who is not
15contracted with the insured’s health insurer. For this purpose, a
16“noncontracting individual health professional” shall not include
17a dentist, licensed pursuant to the Dental Practice Act (Chapter
184 (commencing with Section 1600) of Division 2 of the Business
19and Professions Code).

20
(g) This section shall not be construed to require an insurer to
21cover services not required by law or by the terms and conditions
22of the health insurance policy.

23
(h) If a health insurer delegates payment functions to a
24contracted entity, including, but not limited to, a medical group
25or independent practice association, the delegated entity shall
26comply with this section.

27
(i) This section shall not apply to emergency services and care,
28as defined in Section 1317.1 of the Health and Safety Code.

end insert
29begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 10112.81 is added to the end insertbegin insertInsurance Codeend insertbegin insert, to
30read:end insert

begin insert
31

begin insert10112.81.end insert  

(a) (1) The commissioner shall establish an
32independent dispute resolution process for the purpose of
33processing and resolving a claim dispute between a health insurer
34and a noncontracting individual health professional for services
35subject to subdivision (a) of Section 10112.8.

36
(2) Prior to initiating the independent dispute resolution process,
37the parties shall exhaust the insurer’s internal process.

38
(3) If either the noncontracting individual health professional
39or the insurer appeals a claim to the department’s independent
P17   1dispute resolution process, the other party shall participate in the
2appeal process as described in this section.

3
(b) (1) The commissioner shall establish uniform written
4procedures for the submission, receipt, processing, and resolution
5of claim payment disputes pursuant to this section and any other
6guidelines for implementing this section.

7
(2) The commissioner shall establish reasonable and necessary
8fees for the purpose of administering this section, to be paid by
9both parties.

10
(3) In establishing the independent dispute resolution process,
11the commissioner may permit the bundling of claims submitted to
12the same insurer or the same delegated entity for the same or
13similar services by the same noncontracting individual health
14professional.

15
(4) The commissioner shall permit a physician group,
16independent practice association, or other entity authorized to act
17on behalf of a noncontracting individual health professional to
18participate in the independent dispute resolution process.

19
(c) (1) The commissioner may contract with one or more
20independent organizations to conduct the proceedings. The
21independent organization handling a dispute shall be independent
22of either party to the dispute.

23
(2) The commissioner shall establish conflict-of-interest
24standards, consistent with the purposes of this section, that an
25organization shall meet in order to qualify to administer the
26independent dispute resolution program. The conflict-of-interest
27standards shall be consistent with the standards pursuant to
28subdivisions (c) and (d) of Section 10169.2.

29
(3) The commissioner may contract with the same independent
30organization or organizations as the State Department of Managed
31Health Care.

32
(4) The commissioner shall provide, upon the request of an
33interested person, a copy of all nonproprietary information, as
34determined by the commissioner, filed with the department by an
35independent organization seeking to contract with the department
36to administer the independent dispute resolution process pursuant
37to this section. The department may charge a nominal fee to cover
38the costs of providing a copy of the information pursuant to this
39paragraph.

P18   1
(d) (1) The determination obtained through the commissioner’s
2independent dispute resolution process shall be binding on both
3parties.

4
(2) Notwithstanding paragraph (1), this section does not
5preclude a dissatisfied party from pursuing any right, remedy, or
6penalty established under any other applicable law.

7
(e) If a health insurer delegates payment functions to a
8contracted entity, including, but not limited to, a medical group
9or independent practice association, then the delegated entity shall
10comply with this section.

11
(f) This section shall not apply to emergency services and care,
12as defined in Section 1317.1 of the Health and Safety Code.

13
(g) The definitions in subdivision (f) of Section 10112.8 shall
14apply for purposes of this section.

end insert
15begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 10112.82 is added to the end insertbegin insertInsurance Codeend insertbegin insert, to
16read:end insert

begin insert
17

begin insert10112.82.end insert  

(a) (1) For services rendered subject to Section
1810112.8, unless otherwise agreed to by the noncontracting
19individual health professional and the insurer, the insurer shall
20reimburse the greater of the average contracted rate or 125 percent
21of the amount Medicare reimburses on a fee-for-service basis for
22the same or similar services in the general geographic region in
23which the services were rendered. For the purposes of this section,
24“average contracted rate” means the average of the contracted
25rates paid by the health insurer or delegated entity for the same
26or similar services in the geographic region. This subdivision does
27not apply to subdivision (c) of Section 10112.8 or subdivision (b)
28of this section.

29
(2) (A) In a manner and format specified by the commissioner,
30by July 1, 2017, each health insurer shall provide to the department
31both of the following:

32
(i) Data listing its average contracted rates for services most
33frequently subject to Section 10112.8 in each geographic region
34in which the services are rendered, including the average
35contracted rates paid by the insurer’s delegated entities.

36
(ii) Its methodology for determining the average contracted rate
37for services subject to Section 10112.8. The methodology to
38determine an average contracted rate shall assure that the insurer
39includes the highest and lowest contracted rates.

P19   1
(B) Each health insurer’s delegated entities shall provide to the
2department data listing its average contracted rates for services
3most frequently subject to Section 10112.8 in each geographic
4region in which the services are rendered.

5
(C) For each year thereafter, the health insurer and its delegated
6entities shall adjust the rate initially established pursuant to this
7subdivision by the Consumer Price Index for Medical Care
8Services, as published by the United States Bureau of Labor
9Statistics.

10
(D) The commissioner shall audit the accuracy of this
11information.

12
(E) By January 1, 2020, the department shall provide a report
13to the Governor, the President pro Tempore of the Senate, the
14Speaker of the Assembly, and the Senate and Assembly Committees
15on Health of the data provided in subparagraphs (A) and (B) in a
16manner and format specified by the Legislature.

17
(3) For the purposes of this section, for average contracted
18rates for individual and small group coverage, geographic region
19shall be the geographic regions listed in subparagraph (A) of
20paragraph (2) of subdivision (a) of Section 1357.512 of the Health
21and Safety Code. For purposes of this section for Medicare
22fee-for-service reimbursement, geographic regions shall be the
23geographic regions specified for physician reimbursement for
24Medicare fee for service by the United States Department of Health
25and Human Services.

26
(4) A health insurer shall authorize and permit assignment of
27the insured’s right, if any, to any reimbursement for health care
28services covered under the health insurance policy to a
29noncontracting individual health professional who furnishes the
30health care services rendered subject to Section 10112.8. The
31insurer shall provide a form approved by the commissioner for
32this purpose.

33
(5) A noncontracting individual health professional who disputes
34the claim reimbursement under this section shall utilize the
35independent dispute resolution process described in Section
3610112.81.

37
(b) If nonemergency services are provided by a noncontracting
38individual health professional consistent with subdivision (c) of
39Section 10112.8 to an insured who has voluntarily chosen to use
40his or her out-of-network benefit for services covered by a
P20   1preferred provider organization or a point-of-service plan, unless
2otherwise agreed to by the insurer and the noncontracting
3individual health professional, the amount paid shall be the amount
4set forth in the insured’s evidence of coverage. This payment is
5not subject to the independent dispute resolution process described
6in Section 10112.81.

7
(c) If a health insurer delegates the responsibility for payment
8of claims to a contracted entity, including, but not limited to, a
9medical group or independent practice association, then the entity
10to which that responsibility is delegated shall comply with the
11requirements of this section.

12
(d) (1) A payment made by the health insurer to the
13noncontracting health care professional for nonemergency services
14as required by Section 10112.8 and this section, in addition to the
15applicable cost sharing owed by the insured, shall constitute
16payment in full for nonemergency services rendered.

17
(2) Notwithstanding any other law, the amounts paid by an
18insurer for services under this section shall not constitute the
19prevailing or customary charges, the usual fees to the general
20public, or other charges for other payers for an individual health
21professional.

22
(3) This subdivision shall not preclude the use of the independent
23dispute resolution process pursuant to Section 10112.81.

24
(e) This section shall not apply to emergency services and care,
25as defined in Section 1317.1 of the Health and Safety Code.

26
(f) The definitions in subdivision (f) of Section 10112.8 shall
27apply for purposes of this section.

end insert
28begin insert

begin insertSEC. 7.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
29Section 6 of Article XIII B of the California Constitution because
30the only costs that may be incurred by a local agency or school
31district will be incurred because this act creates a new crime or
32infraction, eliminates a crime or infraction, or changes the penalty
33for a crime or infraction, within the meaning of Section 17556 of
34the Government Code, or changes the definition of a crime within
35the meaning of Section 6 of Article XIII B of the California
36Constitution.

end insert
begin delete
37

SECTION 1.  

Article 4 (commencing with Section 32250) is
38added to Chapter 3 of Division 23 of the Health and Safety Code,
39to read:

 

P21   1Article 4.  Special Taxes
2

 

3

32250.  

(a) Subject to Section 4 of Article XIII A and Article
4XIII C of the California Constitution, the Eden Township
5Healthcare District may impose special taxes within the district
6pursuant to the procedures established in Article 3.5 (commencing
7with Section 50075) of Chapter 1 of Part 1 of Division 1 of Title
85 of the Government Code and any other applicable procedures
9provided by law. The board of directors shall determine the basis
10and nature of a special tax and its manner of collection.

11(b) For purposes of this section, “special taxes” means special
12taxes that apply uniformly to all taxpayers or all real property
13within the district.

14(c) It is the intent of the legislature that funds from a tax enacted
15pursuant to this section be used to support the purposes of the
16district, including support of nonprofit and public hospitals and
17other health care providers in the communities served by the
18district.

19

32251.  

This article shall remain in effect only until January 1,
202026, and as of that date is repealed, unless a later enacted statute,
21that is enacted before January 1, 2026, deletes or extends that date.

22

SEC. 2.  

The Legislature finds and declares that a special law
23is necessary and that a general law cannot be made applicable
24within the meaning of Section 16 of Article IV of the California
25Constitution because of the unique circumstances of the Eden
26Township Healthcare District.

27

SEC. 3.  

This act is an urgency statute necessary for the
28immediate preservation of the public peace, health, or safety within
29the meaning of Article IV of the Constitution and shall go into
30immediate effect. The facts constituting the necessity are:

31In order to ensure that the residents of the Eden Township
32Healthcare District have continued access to critical health care
33services, it is necessary that this measure take effect immediately.

end delete


O

    96