Amended in Assembly April 15, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 533


Introduced by Assembly Member Bonta

February 23, 2015


An act to add Section 1371.9 to the Health and Safety Code, and to add Section 10112.8 to the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 533, as amended, Bonta. Health care coverage: out-of-network coverage.

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 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.

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.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2016, to provide that if an enrolleebegin insert or insuredend insert obtains care from abegin delete participatingend deletebegin insert contracting healthend insert facility, as defined, at which, or as a result of which, the enrolleebegin insert or insuredend insert receives covered services provided by abegin delete nonparticipating provider,end deletebegin insert noncontracting individual health professional,end insert as defined, the enrolleebegin insert or insuredend insert is required to pay thebegin delete nonparticipating providerend deletebegin insert noncontracting individual health professionalend insert only the same cost sharing required if the services were provided by abegin delete participating provider.end deletebegin insert contracting individual health professional. 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 plan or health insurer. The bill would require a noncontracting individual health professional who collects more than the in-network cost sharing amount from the enrollee or insured to refund any overpayment to the enrollee or insured, as specified, and would provide that interest on any amount overpaid by, and not refunded to, the enrollee or insured shall accrue at 15% per annum, as specified.end insert Because a willful violation of the bill’s provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

P2    1

SECTION 1.  

Section 1371.9 is added to the Health and Safety
2Code
, to read:

3

1371.9.  

(a) (1) A health care service plan contract issued,
4amended, or renewed on or after January 1, 2016, shall provide
5that if an enrollee obtains care from abegin delete participatingend deletebegin insert contracting
6healthend insert
facility at which, or as a result of which, the enrollee
P3    1receives services provided by abegin delete nonparticipating provider,end delete
2begin insert noncontracting individual health professional,end insert the enrollee shall
3pay thebegin delete nonparticipating providerend deletebegin insert noncontracting individual health
4professionalend insert
no more than the same cost sharing that the enrollee
5would have paid for the same covered benefits received from a
6begin delete participating provider.end deletebegin insert contracting individual health professional.
7This amount shall be referred to as the “in-network cost sharing.”end insert

begin delete

8(2) Except as provided in subdivision (d), the plan shall not
9reimburse a nonparticipating provider for services provided to the
10enrollee if the nonparticipating provider obtains, or seeks to obtain,
11more than the in-network cost sharing from the enrollee.

end delete
begin insert

12(2) At the time of payment by the plan to the noncontracting
13individual health professional, the plan shall inform the
14noncontracting individual health professional of the in-network
15cost sharing owed by the enrollee. If a noncontracting individual
16health professional receives reimbursement for services provided
17to the enrollee at a contracting health facility from the plan, an
18enrollee shall not owe the noncontracting individual health
19professional at the contracting health facility more than the
20in-network cost sharing.

end insert
begin insert

21(3) Except as provided in subdivision (d), if the noncontracting
22individual health professional collects more than the in-network
23cost sharing from the enrollee, the noncontracting individual health
24professional shall refund any overpayment to the enrollee within
2530 working days of receiving notice from the plan of the in-network
26cost sharing amount owed by the enrollee pursuant to paragraph
27(2). If the noncontracting individual health professional does not
28refund an overpayment within 30 working days after being
29informed of the enrollee’s in-network cost sharing, interest shall
30accrue at the rate of 15 percent per annum beginning with the first
31calendar day after the 30-working day period. A noncontracting
32individual health professional shall automatically include in his
33or her refund of the overpayment all interest that has accrued
34pursuant to this section without requiring the enrollee to submit
35a request for the interest amount.

end insert
begin insert

36(4) If the noncontracting individual health professional has
37advanced to collections any amount owed by the enrollee, the plan
38shall not reimburse the noncontracting individual health
39professional for services provided to the enrollee by the
40noncontracting individual health professional at a contracting
P4    1health facility. In submitting a claim to the plan, the noncontracting
2individual health professional at a contracting health facility shall
3affirm in writing that he or she has not advanced to collections
4any payment owed by the enrollee. A noncontracting individual
5health professional shall not attempt to collect more than the
6in-network cost sharing from the enrollee after receiving payment
7from the plan. Once the noncontracting individual health
8professional receives payment from the plan, the noncontracting
9individual health professional may advance to collections any
10in-network cost sharing owed by the enrollee if the enrollee fails
11to pay the in-network cost sharing after the plan has informed the
12noncontracting individual health professional of the amount owed
13by the enrollee pursuant to paragraph (2).

end insert

14(b) (1) Any cost sharing paid by the enrollee for the services
15provided by abegin delete nonparticipating providerend deletebegin insert noncontracting individual
16health professionalend insert
at thebegin delete participatingend deletebegin insert contracting healthend insert facility
17shall count toward the limit on annual out-of-pocket expenses
18established under Section 1367.006.

19(2) Cost sharingbegin insert arising from services received by a
20noncontracting individual health professionalend insert
begin insert at a contracting
21health facilityend insert
shall be counted toward any deductible in the same
22manner as cost sharing would be attributed to abegin delete participating
23provider.end delete
begin insert contracting individual health professional.end insert

24(c) For purposes of this section, the following definitions shall
25apply:

26(1) “Cost sharing” includes any copayment, coinsurance, or
27deductible, or any other form of cost sharing paid by the enrollee
28other than premium or share of premium.

begin delete

29(2) “Nonparticipating provider” means a provider who is not
30contracted with the enrollee’s health care service plan to provide
31services under the enrollee’s plan contract.

32(3) “Participating

end delete

33begin insert(2)end insertbegin insertend insertbegin insert“Healthend insert facility” means a health facility provider who is
34begin delete contracted with the enrollee’s health care service plan to provide
35services under the enrollee’s plan contract.end delete
begin insert licensed by this state
36to deliver or furnish health care services.end insert
Abegin insert healthend insert facility shall
37include the following providers:

38(A) Licensed hospital.

39(B) Skilled nursing facility.

40(C) Ambulatory surgery.

P5    1(D) Laboratory.

2(E) Radiology or imaging.

3(F) Facilities providing mental health or substance abuse
4treatment.

5(G) Any other provider as the department may by regulation
6define as a facility for purposes of this section.

begin delete

7(4) “Provider” means a health facility or any person who is
8licensed by the state to deliver or furnish health care services.

end delete
begin insert

9(3) “Individual Health Professional” means a physician or
10surgeon or other professional who is licensed by this state to
11deliver or furnish health care services.

end insert

12(d) An enrollee may voluntarily consent to the use of a begin delete13 nonparticipating provider.end delete begin insert noncontracting individual health
14professional.end insert
For purposes of this section, consent shall be
15voluntary if at least 24 hours in advance of the receipt of services,
16the enrollee is provided a written estimate of the cost of care by
17thebegin delete nonparticipating providerend deletebegin insert noncontracting individual health
18professionalend insert
and the enrollee consents in writing to both the use
19of abegin delete nonparticipating providerend deletebegin insert noncontracting individual health
20professionalend insert
and the estimated additional cost for the services to
21be provided by thebegin delete nonparticipating provider.end deletebegin insert noncontracting
22individual health professional.end insert
The consent shall inform the
23enrollee that the cost of the services of thebegin delete nonparticipating
24providerend delete
begin insert noncontracting individual health professionalend insert will not
25accrue to the limit on annual out-of-pocketbegin delete expenses.end deletebegin insert expenses or
26the enrollee’s deductible, if any.end insert

27(e) This section shall not be construed to require a plan to cover
28services or provide benefits that are not otherwise covered under
29the terms and conditions of the plan contract.

begin insert

30(f) This section shall not be construed to exempt a plan from
31the requirements under Section 1373.96 or Section 1371.4, nor
32abrogate the holding in Prospect Medical Group v. Northridge
33Emergency Medical Group et al., (2009) 45 Cal.4th 497, that an
34emergency room physician is prohibited from billing an enrollee
35of a health care service plan directly for sums that the health care
36service plan has failed to pay for the enrollee’s emergency room
37treatment.

end insert
38

SEC. 2.  

Section 10112.8 is added to the Insurance Code, to
39read:

P6    1

10112.8.  

(a) (1) A health insurance policy issued, amended,
2or renewed on or after January 1, 2016, shall provide that if an
3insured obtains care from abegin delete participatingend deletebegin insert contracting healthend insert facility
4at which, or as a result of which, the insured receives services
5provided by abegin delete nonparticipating provider,end deletebegin insert noncontracting individual
6health professional,end insert
the insured shall pay thebegin delete nonparticipating
7providerend delete
begin insert noncontracting individual health professionalend insert no more
8than the same cost sharing that the insured would have paid for
9the same covered benefits received from abegin delete participating provider.end delete
10begin insert contracting individual health professional. This amount shall be
11referred to as the “in-network cost sharing.”end insert

begin delete

12(2) Except as provided in subdivision (d), the insurer shall not
13reimburse a nonparticipating provider for services provided to the
14insured if the nonparticipating provider obtains, or seeks to obtain,
15more than the in-network cost sharing from the insured.

end delete
begin insert

16(2) At the time of payment by the health insurer to the
17noncontracting individual health professional, the health insurer
18shall inform the noncontracting individual health professional of
19the in-network cost sharing owed by the insured. If a
20noncontracting individual health professional receives
21reimbursement for services provided to the insured at a contracting
22health facility from the health insurer, an insured shall not owe
23the noncontracting individual health professional at the contracting
24health facility more than the in-network cost sharing.

end insert
begin insert

25(3) Except as provided in subdivision (d), if the noncontracting
26individual health professional collects more than the in-network
27cost sharing from the insured, the noncontracting individual health
28professional shall refund any overpayment to the insured within
2930 working days of receiving notice from the health insurer of the
30in-network cost sharing amount owed by the insured pursuant to
31paragraph (2). If the noncontracting individual health professional
32does not refund an overpayment within 30 working days after being
33informed of the insured’s in-network cost sharing, interest shall
34accrue at the rate of 15 percent per annum beginning with the first
35calendar day after the 30-working day period. A noncontracting
36individual health professional shall automatically include in his
37or her refund of the overpayment all interest that has accrued
38pursuant to this section without requiring the insured to submit a
39request for the interest amount.

end insert
begin insert

P7    1(4) If the noncontracting individual health professional has
2advanced to collections any amount owed by the insured, the health
3insurer shall not reimburse the noncontracting individual health
4professional for services provided to the insured by the
5noncontracting individual health professional at a contracting
6health facility. In submitting a claim to the health insurer, the
7noncontracting individual health professional at a contracting
8health facility shall affirm in writing that he or she has not
9advanced to collections any payment owed by the insured. A
10noncontracting individual health professional shall not attempt to
11collect more than the in-network cost sharing from the insured
12after receiving payment from the health insurer. Once the
13noncontracting individual health professional receives payment
14from the health insurer, the noncontracting individual health
15professional may advance to collections any in-network cost
16sharing owed by the insured if the insured fails to pay the
17in-network cost sharing after the health insurer has informed the
18noncontracting individual health professional of the amount owed
19by the insured pursuant to paragraph (2).

end insert
begin delete

20(3)

end delete

21begin insert(end insertbegin insert5)end insert This section shall only apply to a health insurer that enters
22into a contract with a professional or institutional provider to
23provide services at alternative rates of payment pursuant to Section
2410133.

25(b) (1) Any cost sharing paid by the insured for the services
26provided by abegin delete nonparticipating providerend deletebegin insert noncontracting end insertbegin insertindividual
27health professionalend insert
at thebegin delete participatingend deletebegin insert contracting healthend insert facility
28shall count toward the limit on annual out-of-pocket expenses
29established under Section 10112.28.

30(2) Cost sharingbegin insert arising from services received by a
31noncontracting individual health professionalend insert
begin insert at a contracting
32health facilityend insert
shall be counted toward any deductible in the same
33manner as cost sharing would be attributed to abegin delete participating
34provider.end delete
begin insert contracting individual health professional.end insert

35(c) For purposes of this section, the following definitions shall
36apply:

37(1) “Cost sharing” includes any copayment, coinsurance, or
38deductible, or any other form of cost sharing paid by the insured
39other than premium or share of premium.

begin delete

P8    1(2) “Nonparticipating provider” means a provider who is not
2contracted with the insured’s health insurer to provide services
3under the insured’s policy.

end delete
begin delete

4(3) “Participating

end delete

5begin insert (2)end insertbegin insertend insertbegin insert“Healthend insert facility” means a health facility provider who is
6begin delete contracted with the insured’s health insurer to provide services
7under the insured’s policy.end delete
begin insert licensed by this state to deliver or
8furnish health care services.end insert
A facility shall include the following
9providers:

10(A) Licensed hospital.

11(B) Skilled nursing facility.

12(C) Ambulatory surgery.

13(D) Laboratory.

14(E) Radiology or imaging.

15(F) Facilities providing mental health or substance abuse
16treatment.

17(G) Any other provider as thebegin delete departmentend deletebegin insert commissionerend insert may
18by regulation define as a facility for purposes of this section.

begin delete

19(4) “Provider” means a health facility or any person who is
20licensed by the state to deliver or furnish health care services.

end delete
begin insert

21(3) “Individual health professional” means a physician or
22surgeon or other professional who is licensed by this state to
23deliver or furnish health care services.

end insert

24(d) An insured may voluntarily consent to the use of a
25begin delete nonparticipating provider.end deletebegin insert noncontracting individual health
26professional.end insert
For purposes of this section, consent shall be
27voluntary if at least 24 hours in advance of the receipt of services,
28the insured is provided a written estimate of the cost of care by
29thebegin delete nonparticipating providerend deletebegin insert noncontracting individual health
30professionalend insert
and the insured consents in writing to both the use of
31a begin delete nonparticipating providerend delete begin insert noncontracting individual health
32professionalend insert
and the estimated additional cost for the services to
33be provided by thebegin delete nonparticipating provider.end deletebegin insert noncontracting
34individual health professional.end insert
The consent shall inform the insured
35that the cost of the services of thebegin delete nonparticipating providerend delete
36begin insert noncontracting individual health professionalend insert will not accrue to
37the limit on annual out-of-pocketbegin delete expenses.end deletebegin insert expenses or the
38insured’s deductible, if any.end insert

P9    1(e) This section shall not be construed to require an insurer to
2cover services or provide benefits that are not otherwise covered
3under the terms and conditions of the policy.

begin insert

4(f) This section shall not be construed to exempt a health insurer
5from the requirements under Section 10112.7 or Section 10133.56.

end insert
6

SEC. 3.  

No reimbursement is required by this act pursuant to
7Section 6 of Article XIII B of the California Constitution because
8the only costs that may be incurred by a local agency or school
9district will be incurred because this act creates a new crime or
10infraction, eliminates a crime or infraction, or changes the penalty
11for a crime or infraction, within the meaning of Section 17556 of
12the Government Code, or changes the definition of a crime within
13the meaning of Section 6 of Article XIII B of the California
14Constitution.



O

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