BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                       AB 533

                                                                      Page  1


          533 (Bonta)

          As Amended  April 23, 2015

          Majority vote

          |Committee       |Votes |Ayes                |Noes                |
          |                |      |                    |                    |
          |                |      |                    |                    |
          |Health          |17-0  |Bonta, Maienschein, |                    |
          |                |      |Bonilla, Burke,     |                    |
          |                |      |Chávez, Chiu,       |                    |
          |                |      |Gomez, Gonzalez,    |                    |
          |                |      |                    |                    |
          |                |      |                    |                    |
          |                |      |Roger Hernández,    |                    |
          |                |      |Lackey, Nazarian,   |                    |
          |                |      |Rodriguez,          |                    |
          |                |      |Santiago,           |                    |
          |                |      |Steinorth,          |                    |
          |                |      |Thurmond, Waldron,  |                    |
          |                |      |Wood                |                    |
          |                |      |                    |                    |
          |Appropriations  |17-0  |Gomez, Bigelow,     |                    |
          |                |      |Bonta, Calderon,    |                    |
          |                |      |Chang, Daly,        |                    |
          |                |      |Eggman, Gallagher,  |                    |
          |                |      |                    |                    |
          |                |      |                    |                    |


                                                                       AB 533

                                                                      Page  2

          |                |      |Eduardo Garcia,     |                    |
          |                |      |Gordon, Holden,     |                    |
          |                |      |Jones, Quirk,       |                    |
          |                |      |Rendon, Wagner,     |                    |
          |                |      |Weber, Wood         |                    |
          |                |      |                    |                    |
          |                |      |                    |                    |

          SUMMARY:  This bill establishes requirements for the payment of  
          non-contracting individual health professionals when a health care  
          service plan enrollee obtains services from the non-contracting  
          professional in a contracting health facility, as specified.   
          Specifically, this bill:  

          1)Prohibits, when an enrollee or insured individual in a health  
            care service plan or health insurance policy, who receives care  
            at a contracting health facility from a non-contracting  
            individual health professional, to pay more than the in-network  
            cost sharing.

          2)Requires a health plan or insurer to inform the non-contracting  
            individual health professional of the in-network cost sharing of  
            the enrollee or insured upon time of payment.

          3)Requires a non-contracting individual health professional to  
            refund any amount collected from the enrollee or insured that is  
            greater that the in-network cost sharing; and, requires the  
            refundable amount to accrue interest, as specified, if it is not  
            returned to the enrollee or insured within prescribed time  

          4)Prohibits a health plan or insurer from paying a non-contracting  
            individual health professional if the professional has advanced  


                                                                       AB 533

                                                                      Page  3

            the amount owed by the enrollee or insured to collections, prior  
            to payment by the plan, as specified.

          5)Provides that any cost sharing paid by the enrollee or insured  
            provided by the non-contracting individual health professional  
            shall count towards the annual out-of-pocket expenses limit and  
            the enrollee's deductible.

          6)Allows an enrollee or insured to voluntarily consent to the use  
            of a non-contracting individual health professional contingent  
            on specified consent and cost estimate requirements.


          FISCAL EFFECT:  According to the Assembly Appropriations  

          1)One-time costs, in the range of $300,000 (Managed Care Fund), to  
            the Department of Managed Health Care (DMHC) for plan review,  
            legal services, technical assistance, and regulations. 

          2)Ongoing annual costs potentially in the hundreds of thousands of  
            dollars (Managed Care Fund), to the DMHC Help Center to assist  
            consumers, and investigate and resolve complaints and disputes. 

          3)One-time costs of $300,000 (Insurance Fund), to the California  
            Department of Insurance (CDI) for policy review and regulations.  

          4)Ongoing annual costs, in the range of $50,000 (Insurance Fund),  
            to CDI to assist consumers, and investigate and resolve  


                                                                       AB 533

                                                                      Page  4

            complaints and disputes. 

          COMMENTS:  The author states that this bill will protect patients  
          who do the right thing by seeking care in an in-network facility,  
          only to later receive a surprise bill from an out-of-network  
          provider that had been called in to provide service.  The author  
          states that surprise bills cost consumers substantial sums of  
          money, placing an undeserved and unreasonable financial burden  
          upon them.  The author asserts that consumers should not be placed  
          in the middle of billing conflicts and disputes between  
          out-of-network providers and plans or insurers, particularly when  
          they sought in-network care but were seen by an out-of-network  
          provider through no fault of their own.  The author contends that  
          while California has been at the forefront of the federal Patient  
          Protection and Affordable Care Act implementation, we need to  
          catch up to other states which have taken the lead in fully  
          protecting consumers from surprise bills.  The author concludes  
          that it is the state's responsibility to ensure full consumer  
          protection for all of our patients, and this bill ensures patients  
          are safeguarded from hidden costs unfairly imposed upon them when  
          they have followed the rules. 

          Health Access California, the sponsor of this bill, and other  
          supporters state that surprise billing practices are a result of  
          both inadequate provider networks and a lack of disclosure  
          regarding provider status and billing to consumers prior to  
          procedures taking place, and asserts that health plans and  
          providers should not involve consumers in business disputes.   
          Supporters state that consumers who follow their plan's rules and  
          use in-network facilities should not be surprised by  
          out-of-network charges from providers who grant care at in-network  
          facilities.  The California Association of Health Plans, and some  
          health plans have a support if amended position based on an older  
          version of the bill, and state that the easiest solution for  
          balance billing is for doctors to contract with health plans and  


                                                                       AB 533

                                                                      Page  5

          The California American College of Emergency Physicians and some  
          specialty provider groups are opposed to this bill, stating that  
          patients and providers should be protected from health plans and  
          insurers who do not have adequate networks, by imposing a payment  
          standard on health plans and insurers set by an independent,  
          unbiased, non-profit entity.  The opposition argues this bill  
          provides health plans and insurers more opportunities to collect  
          premiums from patients, not provide the care they have agreed  
          give, and pay physicians arbitrary amounts.  The California  
          Medical Association and California Society of Anesthesiologists  
          have an opposed unless amended position based on a previous  
          version of the bill, and state an efficient, equitable dispute  
          resolution mechanism will guide parties towards a reasonable rate  
          of services.

          Analysis Prepared by:                     An-Chi Tsou / HEALTH /  
          (916) 319-2097                                      FN: 0000726