Amended in Assembly April 23, 2015

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 enrollee or insured obtains care 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 is 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. 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. 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 a contracting health facility
6at which, or as a result of which, the enrollee receives services
P3    1provided by a noncontracting individual health professional, the
2enrollee shall pay the noncontracting individual health professional
3no more than the same cost sharing that the enrollee would have
4paid for the same covered benefits received from a contracting
5individual health professional. This amount shall be referred to as
6the “in-network cost sharing.”

7(2) At the time of payment by the plan to the noncontracting
8individual health professional, the plan shall inform the
9noncontracting individual health professional of the in-network
10cost sharing owed by the enrollee. If a noncontracting individual
11health professional receives reimbursement for services provided
12to the enrollee at a contracting health facility from the plan, an
13enrollee shall not owe the noncontracting individual health
14professional at the contracting health facility more than the
15in-network cost sharing.

16(3) Except as provided in subdivision (d), if the noncontracting
17individual health professional collects more than the in-network
18cost sharing from the enrollee, the noncontracting individual health
19professional shall refund any overpayment to the enrollee within
2030 working days of receiving notice from the plan of the in-network
21cost sharing amount owed by the enrollee pursuant to paragraph
22(2). If the noncontracting individual health professional does not
23refundbegin delete anend deletebegin insert anyend insert overpayment within 30 working days after being
24informed of the enrollee’s in-network cost sharing, interest shall
25accrue at the rate of 15 percent per annum beginning with the first
26calendar day after the 30-working day period. A noncontracting
27individual health professional shall automatically include in his
28or her refund of the overpayment all interest that has accrued
29pursuant to this section without requiring the enrollee to submit a
30request for the interest amount.

31(4) If the noncontracting individual health professional has
32advanced to collections any amount owed by the enrollee, the plan
33shall not reimburse the noncontracting individual health
34professional for services provided to the enrollee by the
35noncontracting individual health professional at a contracting
36health facility. In submitting a claim to the plan, the noncontracting
37individual health professional at a contracting health facility shall
38affirm in writing that he or she has not advanced to collections any
39payment owed by the enrollee. A noncontracting individual health
40professional shall not attempt to collect more than the in-network
P4    1cost sharing from the enrollee after receiving payment from the
2plan. Once the noncontracting individual health professional
3receives payment from the plan, the noncontracting individual
4health professional may advance to collections any in-network
5cost sharing owed by the enrollee if the enrollee fails to pay the
6in-network cost sharing after the plan has informed the
7noncontracting individual health professional of the amount owed
8by the enrollee pursuant to paragraph (2).

9(b) (1) Any cost sharing paid by the enrollee for the services
10provided by a noncontracting individual health professional at the
11contracting health facility shall count toward the limit on annual
12out-of-pocket expenses established under Section 1367.006.

13(2) Cost sharing arising from services received by a
14noncontracting individual health professional at a contracting
15health facility shall be counted toward any deductible in the same
16manner as cost sharing would be attributed to a contracting
17individual health professional.

18(c) For purposes of this section, the following definitions shall
19apply:

20(1) “Cost sharing” includes any copayment, coinsurance, or
21deductible, or any other form of cost sharing paid by the enrollee
22other than premium or share of premium.

23(2) “Health facility” means a health facility provider who is
24licensed by this state to deliver or furnish health care services. A
25health facility shall include the following providers:

26(A) Licensed hospital.

27(B) Skilled nursing facility.

28(C) Ambulatory surgery.

29(D) Laboratory.

30(E) Radiology or imaging.

31(F) Facilities providing mental health or substance abuse
32treatment.

33(G) Any other provider as the department may by regulation
34define as abegin insert healthend insert facility for purposes of this section.

35(3)  begin delete“Individual Health Professional” end delete begin insert“Individual health
36professional” end insert
means a physician or surgeon or other professional
37who is licensed by this state to deliver or furnish health care
38services.

39(d) An enrollee may voluntarily consent to the use of a
40noncontracting individual health professional. For purposes of this
P5    1section, consent shall be voluntary if at least 24 hours in advance
2of the receipt of services, the enrollee is provided a written estimate
3of the cost of care by the noncontracting individual health
4professional and the enrollee consents in writing to both the use
5of a noncontracting individual health professional andbegin insert payment ofend insert
6 the estimated additional cost for the services to be provided by the
7noncontracting individual health professional. The consent shall
8inform the enrollee that the cost of the services of the
9noncontracting individual health professional will not accrue to
10the limit on annual out-of-pocket expenses or the enrollee’s
11deductible, if any.

12(e) This section shall not be construed to require a plan to cover
13services or provide benefits that are not otherwise covered under
14the terms and conditions of the plan contract.

15(f) This section shall not be construed to exempt a plan from
16the requirements under Section 1373.96 or Section 1371.4, nor
17abrogate the holding in Prospect Medical Group v. Northridge
18Emergency Medical Group et al., (2009) 45 Cal.4th 497, that an
19emergency room physician is prohibited from billing an enrollee
20of a health care service plan directly for sums that the health care
21service plan has failed to pay for the enrollee’s emergency room
22treatment.

23

SEC. 2.  

Section 10112.8 is added to the Insurance Code, to
24read:

25

10112.8.  

(a) (1) A health insurance policy issued, amended,
26or renewed on or after January 1, 2016, shall provide that if an
27insured obtains care from a contracting health facility at which, or
28as a result of which, the insured receives services provided by a
29noncontracting individual health professional, the insured shall
30pay the noncontracting individual health professional no more than
31the same cost sharing that the insured would have paid for the
32same covered benefits received from a contracting individual health
33professional. This amount shall be referred to as the “in-network
34cost sharing.”

35(2) At the time of payment by the health insurer to the
36noncontracting individual health professional, the health insurer
37shall inform the noncontracting individual health professional of
38the in-network cost sharing owed by the insured. If a
39noncontracting individual health professional receives
40reimbursement for services provided to the insured at a contracting
P6    1health facility from the health insurer, an insured shall not owe the
2noncontracting individual health professional at the contracting
3health facility more than the in-network cost sharing.

4(3) Except as provided in subdivision (d), if the noncontracting
5individual health professional collects more than the in-network
6cost sharing from the insured, the noncontracting individual health
7professional shall refund any overpayment to the insured within
830 working days of receiving notice from the health insurer of the
9in-network cost sharing amount owed by the insured pursuant to
10paragraph (2). If the noncontracting individual health professional
11does not refundbegin delete anend deletebegin insert anyend insert overpayment within 30 working days after
12being informed of the insured’s in-network cost sharing, interest
13shall accrue at the rate of 15 percent per annum beginning with
14the first calendar day after the 30-working day period. A
15noncontracting individual health professional shall automatically
16include in his or her refund of the overpayment all interest that has
17accrued pursuant to this section without requiring the insured to
18submit a request for the interest amount.

19(4) If the noncontracting individual health professional has
20advanced to collections any amount owed by the insured, the health
21insurer shall not reimburse the noncontracting individual health
22professional for services provided to the insured by the
23noncontracting individual health professional at a contracting
24health facility. In submitting a claim to the health insurer, the
25noncontracting individual health professional at a contracting
26health facility shall affirm in writing that he or she has not
27advanced to collections any payment owed by the insured. A
28noncontracting individual health professional shall not attempt to
29collect more than the in-network cost sharing from the insured
30after receiving payment from the health insurer. Once the
31noncontracting individual health professional receives payment
32from the health insurer, the noncontracting individual health
33professional may advance to collections any in-network cost
34sharing owed by the insured if the insured fails to pay the
35in-network cost sharing after the health insurer has informed the
36noncontracting individual health professional of the amount owed
37by the insured pursuant to paragraph (2).

38(5) This section shall only apply to a health insurer that enters
39into a contract with a professional or institutional provider to
P7    1provide services at alternative rates of payment pursuant to Section
210133.

3(b) (1) Any cost sharing paid by the insured for the services
4provided by a noncontracting individual health professional at the
5contracting health facility shall count toward the limit on annual
6out-of-pocket expenses established under Section 10112.28.

7(2) Cost sharing arising from services received by a
8noncontracting individual health professional at a contracting
9health facility shall be counted toward any deductible in the same
10manner as cost sharing would be attributed to a contracting
11individual health professional.

12(c) For purposes of this section, the following definitions shall
13apply:

14(1) “Cost sharing” includes any copayment, coinsurance, or
15deductible, or any other form of cost sharing paid by the insured
16other than premium or share of premium.

17 (2) “Health facility” means a health facility provider who is
18 licensed by this state to deliver or furnish health care services. A
19begin insert healthend insert facility shall include the following providers:

20(A) Licensed hospital.

21(B) Skilled nursing facility.

22(C) Ambulatory surgery.

23(D) Laboratory.

24(E) Radiology or imaging.

25(F) Facilities providing mental health or substance abuse
26treatment.

27(G) Any other provider as the commissioner may by regulation
28define as abegin insert healthend insert facility for purposes of this section.

29(3) “Individual health professional” means a physician or
30surgeon or other professional who is licensed by this state to deliver
31or furnish health care services.

32(d) An insured may voluntarily consent to the use of a
33 noncontracting individual health professional. For purposes of this
34section, consent shall be voluntary if at least 24 hours in advance
35of the receipt of services, the insured is provided a written estimate
36of the cost of care by the noncontracting individual health
37professional and the insured consents in writing to both the use of
38a noncontracting individual health professional andbegin insert payment ofend insert
39 the estimated additional cost for the services to be provided by the
40noncontracting individual health professional. The consent shall
P8    1inform the insured that the cost of the services of the
2noncontracting individual health professional will not accrue to
3the limit on annual out-of-pocket expenses or the insured’s
4deductible, if any.

5(e) This section shall not be construed to require an insurer to
6cover services or provide benefits that are not otherwise covered
7under the terms and conditions of the policy.

8(f) This section shall not be construed to exempt a health insurer
9from the requirements under Section 10112.7 or Section 10133.56.

10

SEC. 3.  

No reimbursement is required by this act pursuant to
11Section 6 of Article XIII B of the California Constitution because
12the only costs that may be incurred by a local agency or school
13district will be incurred because this act creates a new crime or
14infraction, eliminates a crime or infraction, or changes the penalty
15for a crime or infraction, within the meaning of Section 17556 of
16the Government Code, or changes the definition of a crime within
17the meaning of Section 6 of Article XIII B of the California
18Constitution.



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