BILL ANALYSIS Ó
AB 72
Page 1
Date of Hearing: August 30, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 72
(Bonta) - As Amended August 25, 2016
SUBJECT: Health care coverage: out-of-network coverage
SUMMARY: Establishes a payment rate, which is the greater of
the average of a health care service plan (health plan) or
health insurer's contracted rate, as specified, or 125% of the
amount Medicare reimburses for the same or similar services; and
an independent dispute resolution process (IDRP) for claims and
claim disputes related to covered services provided at a
contracted health facility by a noncontracting individual health
care professional for health plan contracts and health policies
issued, amended, or renewed on or after July 1, 2017. Limits
enrollee and insured cost sharing for these covered services to
no more than the cost sharing required had the services been
provided by a contracting health professional.
The Senate amendments delete the Assembly-approved version of
this bill, and instead:
IDRP
1)Requires the Department of Managed Health Care (DMHC) and
California Department of Insurance (CDI) to establish an IDRP,
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by September 1, 2017, for the purpose of processing and
resolving a claim dispute between a health plan or health
insurer and a noncontracting individual health professional
for covered services from a contracted health facility by a
noncontracting individual health professional, as specified.
2)Requires the noncontracting individual health professional to
complete the health plan or health insurer's internal process
prior to initiating IDRP.
3)Requires DMHC and CDI to establish uniform written procedures
and other guidelines, and reasonable and necessary fees to be
paid by both parties. Permits the bundling of claims
submitted to the same health plan or health insurer or the
same delegated entity for the same or similar services by the
same noncontracting individual health professional. Permits a
physician group, independent practice association (IPA), or
other entity authorized to act on behalf of a professional to
initiate and participate in the IDRP. Requires DMHC and CDI
to contract with one or more independent organization to
conduct the proceedings. Requires DMHC and CDI to establish
conflict-of-interest standards consistent with this bill and
existing law. Permits DMHC and CDI to contract with the same
independent organization.
4)Requires DMHC and CDI to provide, upon request of an
interested person, a copy of all nonproprietary information,
as specified, and permits DMHC or CDI to charge a nominal fee
to cover the costs of providing a copy.
5)Exempts IDRP contracts from the Public Contract Code, as
specified.
6)Requires the IDRP decision to be binding on both parties and
requires the health plan or health insurer to implement the
IDRP determination. Permits a dissatisfied party to pursue
any right, remedy, or penalty established under any other
applicable law.
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7)Exempts Medi-Cal managed care health plans or any entity that
contracts with the Department of Health Care Services (DHCS)
from this bill.
8)Requires delegated entities, including medical groups and
IPAs, as specified, to comply with this bill.
9)Exempts emergency services and care, as defined, from this
bill.
10)Specifies that this bill does not alter the health plan or
health insurer's obligation of timely authorization of
post-stabilization services and time for reimbursement of
claims consistent with existing law.
11)Permits DMHC and CDI to implement and interpret the IDRP
process without taking regulatory action, until regulations
are adopted.
12)Requires DMHC and CDI to report, in a manner and format
specified by the Legislature, data and information provided in
the IDRP to the Governor and Legislature by January 1, 2019.
Reimbursement Rate
13)Requires, effective July 1, 2017, the health plan and health
insurer to reimburse the greater of the average contracted
rate or 125% of the amount Medicare reimburses on a
fee-for-service (FFS) basis for the same or similar services
in the general geographic region in which the services
specified in this bill are provided, unless otherwise agreed
to by the health plan or health insurer and noncontracting
individual health professional. Defines average contracted
rate as the average of the contracted commercial rates paid by
the health plan or health insurer or delegated entity for the
same or similar services in the geographic region.
14)Requires each health plan or health insurer and its delegated
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entities to provide to DMHC or CDI by July 1, 2017, all of the
following:
a) Data listing its average contracted rate for services
most frequently provided in contracted facilities by
noncontracting individual health professionals, as
specified, in each geographic region in which the services
are rendered for the calendar year 2015;
b) Its methodology for determining the average contracted
rate for services provided in contracted facilities by
noncontracting individual health professionals. Requires
the average contracted rate methodology to include the
highest and lowest contracted rates for the calendar year
2015; and,
c) The policies and procedures used to determine the
average contracted rates.
15)Requires the health plan or health insurer and the delegated
entities, to adjust the rate initially submitted in this bill
by the Consumer Price Index (CPI) for Medical Care Services,
as published by the United States Bureau of Labor Statistics,
for each calendar year after the health plan and health
insurer's initial submission and until DMHC and CDI specify an
average contracted methodology.
16)Requires DMHC and CDI to specify an average contracted rate
methodology by January 1, 2019. Requires the methodology to
take into account, at a minimum, information from IDRP, the
individual health professional's specialty, and the geographic
region in which the services are rendered. Requires the
methodology to include the highest and lowest contracted
rates. Requires health plans and health insurers to provide
its policies and procedures to DMHC or CDI.
17)Permits a health plan that does not pay a statistically
significant number or dollar amount of claims for services
covered under this bill, to demonstrate to DMHC that it has
access and will use a statistically credible database
reflecting rates paid to noncontracting individual health
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professionals for services provided in a geographic region.
18)Requires DMHC or CDI to audit the accuracy of the filed
information and to keep the average contracted rate data
confidential and not subject to disclosure under the Public
Records Act.
19)Requires DMHC or CDI to consult with interested parties in
the development of the standardized methodology described in
16) above and to hold its first stakeholder meeting no later
than July 1, 2017.
20)Requires health plans or health insurers, in its network data
reporting submissions, to include the number of payments made
to noncontracting individual health professionals for services
described in this bill, as well as other data sufficient to
determine the proportion of noncontracting individual health
professionals to contracting individual health professionals
at contracting health facilities, as defined. Requires DMHC
and CDI to include a summary of this information and its
findings regarding the impact of this bill on health plan
contracting and network adequacy in its January 1, 2019
report, as described in 12) above.
21)Requires health plans and health insurers to meet existing
network adequacy requirements, including but not limited to,
inpatient hospital and specialist physician services, and
requires DMHC or CDI to adopt additional regulations related
to those services, if necessary. Specifies that this bill
does not limit the director or commissioner's authority.
22)Defines, for purposes of Medicare FFS reimbursement,
geographic regions as those specified for physician
reimbursement for Medicare FFS by the United States Department
of Health and Human Services.
23)Requires a health plan or health insurer to authorize and
permit assignment of the enrollee or insured's right, if any,
to any reimbursement for health care services covered under
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the health plan or health policy to a noncontracting
individual health professional who furnishes the health care
services at a contracted facility.
24)Requires a noncontracting individual health professional,
health plan, or health insurer, or a delegated entity who
disputes the claims reimbursement to utilize IDRP.
25)Provides that the amount paid by the health plan or health
insurer for nonemergency services provided by a noncontracting
individual health professional to enrollees or insureds who
voluntarily choose to use his or her out-of-network benefit
for services covered by a health plan or health policy that
includes out-of-network benefits, be the amount set forth in
the enrollee or insured's evidence of coverage or policy,
unless otherwise agreed to by the health plan or health
insurer and the noncontracting individual health professional,
and prohibits the payment from the IDRP as described in this
bill.
26)Requires the payment made by the health plan or health
insurer to the noncontracting health care professional for
nonemergency services as described in this bill, in addition
to the applicable cost sharing owed by the enrollee or
insured, to be payment in full for nonemergency services
rendered unless either party uses the IDRP or other lawful
means pursuant to this bill.
27)Prohibits the amount paid by the health plan or health
insurer for services pursuant to this bill from constituting
the prevailing or customary charges, the usual fees to the
general public, or other charges for other payers for an
individual health professional.
Patient Obligations and Protections
28)Refers to the in-network cost sharing amount, for health plan
contracts or health policies issued, amended, or renewed on or
after July 1, 2017, as the amount no more than the same cost
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sharing that the enrollee or insured would pay for the same
covered services received from a contracting individual health
professional. Limits enrollee or insured payment to no more
than the in-network cost sharing amount for services pursuant
to this bill. Requires the health plan or health insurer to
inform the noncontracting individual health professional of
the in-network cost sharing owed by the enrollee or insured at
the time of payment by the health plan or health insurer.
Prohibits the noncontracting individual health professional
from billing or collecting any amount from the enrollee or
insured for services subject to this bill, except the
in-network cost sharing amount. Requires any communication
from the noncontracting individual health professional to the
enrollee or insured prior to the receipt of information about
the in-network cost sharing include a notice in 12-point bold
type stating that the communication is not a bill and
informing the enrollee or insured that the enrollee or insured
will not pay until the enrollee or insured is informed of any
applicable cost sharing.
29)Requires the noncontracting individual health professional to
refund any overpayment to the enrollee or insured within 30
calendar days of receiving payment from the enrollee,
otherwise interest will accrue at the rate of 15% per annum
beginning with the date payment was received from the
enrollee.
30)Requires cost sharing paid by the enrollee or insured to
count toward the limit on annual out-of-pocket expenses and
any deductible, as specified.
31)Permits a noncontracting individual health professional to
bill or collect from the enrollee or insured with
out-of-network coverage, the out-of-network cost sharing, if
applicable, only when the enrollee or insured consents in
writing and that written consent satisfies all the following
criteria:
a) At least 24 hours in advance of care, the enrollee or
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insured consents in writing to receive services from the
identified noncontracting individual health professional;
b) The consent is obtained by the noncontracting individual
health professional in a document that is separate from the
document used to obtain the consent for any other part of
the care or procedure, and not obtained by the facility or
its representative, at the same time as admission or at any
time when the enrollee or insured is being prepared for
surgery or any other procedure;
c) At the time of consent, a written estimate of the
enrollee or insured's total out-of-pocket cost of care is
provided and based on the noncontracting individual health
professional's billed charges, and prohibits the
noncontracting individual health professional from
attempting to collect more than the estimate amount without
receiving separate written consent from the enrollee or
insured or authorized representative unless circumstances
arise during the delivery of services that was unforeseen
at the time the estimate was given that would require the
provider to change the estimate;
d) The consent must advise the enrollee or insured that he
or she may elect to seek care from a contracted provider or
may contact the health plan or health insurer in order to
arrange to receive the health service from a contracted
provider for lower out-of-pocket costs;
e) The consent and estimate will be provided to the
enrollee or insured in the language spoken by the enrollee
or insured if the language is a Medi-Cal threshold language
as defined in existing law; and,
f) The consent will also advise the enrollee or insured
that any costs incurred as a result of the out-of-network
benefit will be in addition to in-network cost sharing
amount and may not count toward the annual out-of-pocket
maximum on in-network benefits or a deductible, if any, for
in-network benefits.
32)Provides that a professional who fails to comply with 31)
above has not obtained written consent and therefore other
provisions of this bill applies.
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33)Permits the noncontracting individual health professional to
advance to collections only the in-network cost sharing amount
or the out-of-network cost sharing amount described in 31)
above, that the enrollee or insured failed to pay. Prohibits
the noncontracting individual health professional, or any
entity acting on his or her behalf, including any assignee of
debt, from reporting adverse information to a consumer credit
reporting agency or commencing civil action against the
enrollee or insured for 150 days after the initial billing
regarding amounts owed by the enrollee or using wage
garnishments or liens on primary residences as a means of
collecting unpaid bills.
Other Provisions and Definitions
34)Defines a contracting health facility as a health facility
that is contracted with the enrollee or insured's health plan
or health insurer to provide services under the health plan or
health policy. Includes, but is not limited to, the following
providers:
a) A licensed hospital;
b) An ambulatory surgery or other outpatient setting, as
described;
c) A laboratory; or,
d) A radiology or imaging center.
35)Defines cost sharing as any copayment, coinsurance, or
deductible, or any other form of cost sharing paid by the
enrollee or insured other than premium or share of premium.
36)Defines an individual health professional as a physician and
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surgeon or other professional who is California licensed to
deliver or furnish health care services and does not include a
dentist, licensed pursuant to the Dental Practice Act.
Defines noncontracting individual health professional as an
individual health professional not contracted with the
enrollee or insured's health plan or health insurer.
37)Defines in-network cost sharing amount as an amount no more
than the same cost sharing the enrollee or insured would pay
for the same covered service received from a contracting
health professional. Specifies the in-network cost sharing
amount for enrollee's or insured's with coinsurance to be the
amount paid by the health plan or health insurer pursuant to
13) above.
38)Provides that this bill shall not be construed to exempt a
health plan or health insurer or provider from the
requirements under existing law, nor abrogate the holding in
Prospect Medical Group, Inc. v. Northridge Emergency Medical
Group (2009) 45 Cal.4th 497.
EXISTING LAW:
1)Provides for the regulation of health plans by DMHC under the
Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene
Act) and for health insurers by CDI under the Insurance Code.
2)Requires contracts between providers and health plans to be in
writing and prohibits, except for applicable copayments and
deductibles, a contracted provider from invoicing or balance
billing a health plan's enrollee for the difference between
the provider's billed charges and the reimbursement paid by
the health plan or the health plan's capitated provider for
any covered benefit.
3)Prohibits a provider, in the event that a contract has not
been reduced to writing, or does not contain the prohibition
above, from collecting or attempting to collect from the
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subscriber or enrollee sums owed by the health plan.
Prohibits a contracting provider, agent, trustee or assignee
from taking action at law against a subscriber or enrollee to
collect sums owed by the health plan.
4)Establishes, pursuant to regulations, requirements that health
plans must implement in their claims settlement practice,
including the meaning of "reimbursement of a claim," such that
providers with a contract receive the contract rate. Claims
for contracted providers without a written contract and
non-contracted providers require payment of the reasonable and
customary value for the health care services rendered based
upon "statistically credible information" that is updated at
least annually and takes into consideration the following:
a)The provider's training, qualifications, and length of time in
practice;
b)The nature of the services provided;
c)The fees usually charged by the provider;
d) Prevailing provider rates charged in the general
geographic area in which the services were rendered;
e) Other aspects of the economics of the medical provider's
practice that are relevant; and,
f)Any unusual circumstances in the case.
5)Allows a noncontracted provider to dispute the appropriateness
of a health plan's computation of the reasonable and customary
value and requires the health plan to respond to the dispute
through the health plan's mandated provider dispute resolution
process.
6)Requires health plans to pay for medically necessary services
provided in a licensed acute care hospital, if the services
were related to authorized services and provided after the
health plan's normal business hours, unless the health plan
has a system whereby it can respond to authorization requests
within 30 minutes.
7)Prohibits a health plan from engaging in an unfair payment
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pattern, defined as, engaging in a demonstrable and unjust
pattern, of reviewing or processing complete and accurate
claims that results in payment delays; engaging in a
demonstrable and unjust pattern of reducing the amount of
payment or denying complete and accurate claims; failing on a
repeated basis to pay the uncontested portions of a claim
within specified timeframes; and, failing on a repeated basis
to automatically include the interest due on claims, as
specified.
8)Prohibits a hospital which contracts with an insurer,
nonprofit hospital service plan, or health plan from
determining or conditioning medical staff membership or
clinical privileges upon the basis of a physician and
surgeon's or podiatrist's participation or non-participation
in a contract with that insurer, hospital service plan, or
health plan.
9)Defines emergency services and care as medical screening,
examination, and evaluation by a physician and surgeon, or, to
the extent permitted by applicable law, by other appropriate
licensed persons under the supervision of a physician and
surgeon, to determine if an emergency medical condition or
active labor exists and, if it does, the care, treatment, and
surgery, if within the scope of that person's license,
necessary to relieve or eliminate the emergency medical
condition, within the capability of the facility; and to
determine if a psychiatric emergency medical condition exists,
and the care and treatment necessary to relieve or eliminate
the psychiatric emergency medical condition, within the
capability of the facility.
10)Requires a health plan, or its contracting medical providers,
to provide 24-hour access for enrollees and providers,
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including, but not limited to, non-contracting hospitals, to
obtain timely authorization for medically necessary care, for
circumstances where the enrollee has received emergency
services, and is stabilized, but the treating provider
believes that the enrollee may not be discharged safely.
Establishes additional requirements associated with treatment
or transfer post stabilization.
11)Requires a health plan to annually report network adequacy
data, as specified, to DMHC as a part of its annual timely
access compliance report, and requires DMHC to review the
network adequacy data for compliance with existing
requirements.
12)Requires DMHC to annually review health plan compliance with
timely access standards and to post its final findings from
the review, and any waivers or alternative standards approved
by DMHC, on its Website.
13)Authorizes DMHC to develop, and requires health plans to use,
standardized methodologies for timely access reporting.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)One-time costs of about $500,000 for the development of
regulations and review of plan filings by DMHC (Managed Care
Fund).
2)Annual costs of $1.5 million to $3 million per year for IDRP
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that DMHC would convene to settle a dispute between a provider
and a health plan (Managed Care Fund).
3)One-time costs of about $600,000 for the development of
regulations and review of plan filings by the CDI (Insurance
Fund).
4)Ongoing costs of $1 million per year for the IDRP that CDI
would convene to settle a dispute between a provider and a
health insurer (Insurance Fund).
COMMENTS:
1)PURPOSE OF THIS BILL. According to the authors, this bill
protects patients from surprise medical bills when they follow
the rules of their health plan by going to an in-network
hospital, lab, imaging center, or other health care facility.
Patients would only be responsible for their in-network cost
sharing and would be prohibited from getting outrageous
out-of-network bills from doctors they did not choose.
Surprise medical bills wreak havoc on people's finances and
their ability to pay for basic necessities.
This bill also provides certainty for doctors and insurers and
keeps our health care costs under control. Insurers must
reimburse doctors a fair rate for their services, and doctors
are assured a minimum payment in statute. The Patient
Protection and Affordable Care Act requires all consumers to
have health coverage, and it is the state's responsibility to
ensure patients are safeguarded from hidden costs unfairly
imposed upon them when they have followed their insurers'
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rules.
2)BACKGROUND. A March 2016 Kaiser Family Foundation Issue Brief
(Brief) defined "surprise medical bill" as a term commonly
used to describe charges arising when an insured individual
inadvertently receives care from an out-of-network provider.
This situation could arise in an emergency when the patient
has no ability to select the emergency room, treating
physicians, or ambulance providers. Surprise medical bills
might also arise when a patient receives planned care from an
in-network provider (often, a hospital or ambulatory care
facility), but other treating providers brought in to
participate in the patient's care are not in the same network.
These can include anesthesiologists, radiologists,
pathologists, surgical assistants, and others. In some cases,
entire departments within an in-network facility may be
operated by subcontractors who don't participate in the same
network. In these non-emergency situations, too, the
in-network provider or facility generally arranges for the
other treating providers, not the patient. The Brief reported
that a Kaiser Family Foundation survey found that among
insured, non-elderly adults struggling with medical bill
problems, charges from out-of-network providers were a
contributing factor about one-third of the time. Further,
nearly seven in 10 of individuals with unaffordable
out-of-network medical bills did not know the health care
provider was not in their health plan's network at the time
they received care.
In 2011, the New York Department of Financial Services studied
more than 2,000 complaints involving surprise medical bills,
and found the average out-of-network emergency bill was
$7,006. Insurers paid an average of $3,228 leaving consumers,
on average, "to pay $3,778 for an emergency in which they had
no choice." The same New York study found that 90% of
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surprise medical bills were not for emergency services, but
for other in-hospital care. The specialty areas of physicians
most often submitting such bills were anesthesiology, lab
services, surgery, and radiology. Out-of-network assistant
surgeons, who often were called in without the patient's
knowledge, on average billed $13,914, while insurers paid
$1,794 on average. Surprise bills by out-of-network
radiologists averaged $5,406, of which insurers paid $2,497 on
average.
According to the National Academy for State Health Policy, 49
states have enacted some consumer protections against balance
billing for managed care enrollees. Of these, 27 states apply
protections against out-of-network providers in PPO plans and
13 apply them for HMO plans. Usually protections relate to
care delivered in emergency settings. Other state legislation
is aimed at enabling independent legal resolution between
providers and providers without involving the consumer, as in
Illinois, and laws that empower consumers to dispute billing
issues, like in Texas. New York's law, enacted in April 2015,
includes some of the most comprehensive protections to date.
The New York law protects consumers from owing more than their
in-network copayment, coinsurance, or deductible when
receiving emergency care even from out-of-network providers.
It also enables consumers to sign an "assignment of benefits
form" that allows providers to pursue payment directly from
insurers in the case of a dispute.
Several states are considering actions to address surprise
billing. Proposals range from improving the processes by
which patients are notified about the receipt of
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out-of-network services to setting cost limits on charges
assessed for out-of-network care. Florida recently passed
legislation that will exempt patients from having to pay
balance bills from out-of-network providers in certain
situations. The Florida legislation will apply to patients
who go to a healthcare facility in their health plan network
and inadvertently receive services from a noncontracted
provider. Patients would only be responsible for paying their
usual in-network cost-sharing. Plans and noncontracted
providers would have to work out payment for those services
through a state-arranged, voluntary dispute resolution
process, with a penalty assessed to the party that refused to
accept an offer that was close to the final arbitration order.
The negotiation would be based on the usual and customary
rate for the particular geographic area. Disputes could be
taken to court. Florida's law would only apply to PPO-type
plans, since it already bars balance-billing patients in HMOs.
3)DMHC LETTER. In a letter dated August 25, 2016, the DMHC
provided its understanding with respect to the CPI and network
adequacy provisions in this bill and how these provisions
would impact the Director's authority under the Knox-Keene
Act. DMHC states the following:
Proposed Health & Safety Code section 1371.31(a)(2)(B)
provides the following:
For each calendar year after the plan's initial
submission of the average contracted rate as specified in
subparagraph (A) and until the standardized methodology
under paragraph (3) is specified, a health care service
plan and the plan's delegated entities shall adjust the
rate initially established pursuant to this subdivision
by the Consumer Price Index for Medical Care Services, as
published by the United States Bureau of Labor
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Statistics.
DMHC interprets this proposed language to require health
plans and their delegated entities, for the calendar year
after the initial submission, to adjust their 2015 average
contracted rates for the services subject to this bill, by
the CPI for Medical Care Services, as published by the United
States Bureau of Labor Statistics for the 2017 calendar year.
Proposed Health & Safety Code section 1371.31(a)(5)
provides the following:
A health care service plan that provides services subject
to Section 1371.9 shall meet the network adequacy
requirements set forth in this chapter, including, but
not limited to, in subdivisions (d) and (e) of Section
1367 of this code and in Exhibits (H) and (I) of
subdivision (d) of Section 1300.51 of, and Section
1300.67.2 and 1300.67.2.1 of, Title 28 of the California
Code of Regulations, including, but not limited to,
inpatient hospital services and specialist physician
services, and if necessary, the department may adopt
additional regulations related to those services. This
section shall not be construed to limit the director's
authority under this chapter.
DMHC interprets this proposed language to reaffirm the DMHC's
existing authority to require health plans to have an adequate
provider network, including adequate geographic access and
timely acess, and clarify that this bill neither relieves
health plans of their existing obligations under the
Knox-Keene Act to maintain an adequate provider network nor in
any way constrains DMHC's existing authority with respect to
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any other provision of the Knox-Keene Act and its implementing
regulations.
4)RELATED LEGISLATION.
a) AB 533 (Bonta) of 2015 would have required DMHC and CDI
to establish a binding IDRP for claims for non-emergency
covered services provided at contracted health facilities
by a noncontracting health care professional. AB 533 would
have limited enrollee and insured cost sharing for these
covered services to no more than the cost sharing required
had the services been provided by a contracting health
professional; and, required the 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
geographic area in which the services were rendered. AB
533 failed passage on the Assembly Floor.
b) SB 1252 (Stone) of 2016 would have required the general
acute care hospital, surgical clinic, and the attending
physician, as applicable, to notify the patient, in
writing, of the net costs to the patient for the medical
procedure being done, as provided, when a medical procedure
is scheduled to be performed on a patient; and, would have
required disclosure, in writing, if any of the physicians
providing medical services to the patient are not
contracted with the patient's health plan or health insurer
and the costs for which the patient would be responsible as
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a result. SB 1252 was set for hearing in the Senate Health
Committee, but not heard per the request of the author.
5)SUPPORT. Health Access California writes that patients know
they have to follow their health plan or health insurer's
rules and go to in-network providers and facilities to keep
their out-of-pocket costs low. Unfortunately, many patients
end up getting a surprise medical bill for hundreds or
thousands of dollars from an anesthesiologist, radiologist,
pathologist or other specialist who turns out to be
out-of-network. The California Labor Federation indicates
patients may not even be able to rely on their hospitals to
tell them if they will be treated by an out-of-network doctor,
since doctors are not direct employees of most hospitals, they
are independent contractors and not all necessarily in the
same network as the hospital. Surprise bills threaten to undo
that work by subjecting patients to astronomically high bills
they were not expecting. Consumers Union writes health
insurance coverage should provide protection against
overwhelming medical bills and debt. Consumers should not pay
the price for the complicated relationships between doctors,
facilities and health plans. Anthem Blue Cross (Anthem)
writes that while there are provisions of this bill that are
still of concern, Anthem supports this bill as it protects
consumers from balance billing by noncontracting providers.
Anthem states that balance billing is the largest grievance
Anthem receives from its enrollees.
6)NEUTRAL. The California Medical Association's position on
this bill is neutral and states that it still has serious
concerns about how this legislation will affect access to
specialty care and incentivize health plans to carry narrow
provider networks.
7)CONCERNS. The America's Health Insurance Plans, Association
of California Life and Health Insurance Companies, and
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California Association of Health Plans, write that while they
laud the authors' efforts to protect consumers from balance
billing, they believe some provisions of this bill may
increase costs for families and employers through higher
premiums and cost-sharing. Specifically, they state that
adjusting the annual contracted rate formula using the CPI no
longer reflects average contracted rates and distorts real
market prices. Additionally, they state that current
provisions, including the IDRP language, may increase
litigation between providers and health plans and health
insurers, and drive up costs in the system.
8)OPPOSITION. The California Chapter of the American College of
Cardiology (CA-ACC) states that while they agree with this
bill's intent to protect patients from surprise balance
billing, the average contracted rate methodology is largely
undefined and empowers the health plans and health insurers to
ratchet down existing contract rates with physicians. CA-ACC
is concerned that health plans and health insurers will offer
low ball contract rates and that physician networks will
continue to narrow making it more difficult for patients to
find in-network physicians to obtain quality care. The
American College of Surgeons writes that mandating payment
incentivizes health insurers to drive down contracting rates,
making it less likely that physicians will contract with them
to be participating providers in the network.
This bill was substantially amended in the Senate and the
Assembly-approved version of this bill was deleted. This bill,
as amended in the Senate, is inconsistent with Assembly actions
and the provisions of this bill, as amended by the Senate, have
not been heard in an Assembly policy committee.
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REGISTERED SUPPORT / OPPOSITION:
Support
California Labor Federation (co-sponsor)
Health Access California (co-sponsor)
American Cancer Society - Cancer Action Network
Americans for Democratic Action, Southern California
Anthem Blue Cross
Blue Shield of California
California Alliance for Retired Americans
California Association of Health Underwriters
California Black Health Network
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California Coverage & Health Initiatives
California Pan-Ethnic Health Network
California Professional Firefighters
CALPIRG
Children's Partnership
Congress of California Seniors
Consumers Union
National Health Law Program
National MS Society CA Action Network
SEIU California
Western Center on Law & Poverty
Opposition
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American College of Cardiology - California Chapter
American College of Surgeons
American College of Physicians - California Chapters
American Congress of Obstetricians and Gynecologists, District
IX
American Society of Plastic Surgeons
California Academy of Eye Physicians and Surgeons
California Association of Neurological Surgeons
California Chapter of the American College of Cardiology
California Neurology Society
California Orthopaedic Association
California Otolaryngology Society
California Society of Facial Plastic Surgery
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California Society of Physical Medicine & Rehabilitation
California Society of Plastic Surgeons
California Thoracic Society
California Urological Association
Medical Oncology Association of Southern California
The Plastic Surgery Foundation
Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097