BILL ANALYSIS Ó AB 533 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 533 (Bonta) As Amended September 4, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |74-1 |(June 2, 2015) |SENATE: | |(September 10, | | | | | |25-10 |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: HEALTH SUMMARY: Establishes requirements for the payment of non-contracting individual health professionals when a health care service plan enrollee obtains services from the non-contracting individual health professional in a contracting health facility, as specified. The Senate amendments: 1)Require the Department of Managed Health Care (DMHC) and the Commissioner of the Department of Insurance (DOI) (Commissioner) to establish a mandatory and binding independent dispute resolution process (IDRP) to review and resolve claim disputes between a health care service plan or insurer and a noncontracting individual health professional. AB 533 Page 2 2)Require DMHC and the Commissioner to jointly establish uniform criteria for the IDRP, including conflict-of-interest standards that an organization are required to meet in order to participate in the IDRP. 3)Authorize DMHC and the Commissioner to contract with one or more independent organizations that specialize in dispute resolution to conduct the IDRP. 4)Exclude Medi-Cal managed health care service plans, Medicare, and emergency services and care from the requirements of this bill. 5)Require medical groups, independent practice associations, and other entities delegated payment functions by a health care service plan or insurer, to comply with the provisions of this bill. 6)Require a health care service plan or insurer, unless otherwise provided in this bill or agreed to by the noncontracting individual health professional and the plan, to base reimbursement of noncontracted claims for services rendered 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. If an enrollee voluntarily chooses to use his or her out-of-network benefits, requires the amount paid by the health care service plan to be the amount set forth in the enrollee's evidence of coverage, unless otherwise agreed to by the plan and the noncontracting individual health professional. Requires a noncontracting individual health professional who disputes the claim to use the IDRP established under this bill. 7)Require the payment made by the health care service plan or insurer to the noncontracting health care professional for nonemergency services, in addition to the applicable cost AB 533 Page 3 sharing owed by the enrollee or insured, to constitute payment in full for nonemergency services rendered. 8)Delay implementation of the prohibition on balance billing by six months, to July 1, 2016. 9)Require the health care service plan and 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 plan to the noncontracting individual health professional. 10) Prohibit a noncontracting individual health professional from billing or collecting any amount from the enrollee or insured except the in-network cost-sharing amount, and prohibit him or her from billing until he or she is informed of the in-network cost-sharing amount. Also require the noncontracting individual health professional to affirm that he or she has not attempted to collect any payment other than the in-network cost-sharing owed by the enrollee or insured in writing. 11)Allow a noncontracting individual health professional to bill or collect from an enrollee or insured the out-of-network cost sharing, if applicable, or more than the in-network cost-sharing for nonemergency health services provided in a contracting health facility only when the enrollee consents in writing at least three business days prior to receipt of care. 12)Require medical groups, independent practice associations and other contracted entities of health care service plans to comply with this bill. 13)Exempt Medi-Cal managed health care service plans from this bill. AB 533 Page 4 14)Make technical changes. 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 the DMHC (Managed Care Fund). 2)Annual costs of $1.5 million to $3 million per year for the independent dispute resolution process that the DMHC convenes to settle a dispute between a provider and a health plan (Managed Care Fund). 3)One-time costs of about $550,000 for the development of regulations and review of plan filings by the Department of Insurance (DOI) (Insurance Fund). 4)Annual costs of $900,000 per year for the independent dispute resolution process that the Department of Insurance convenes to settle a dispute between a provider and a health plan (Insurance Fund). 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 AB 533 Page 5 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, the Association of California Life and Health Insurance Companies and other health plans support this bill, stating that out-of-network physicians who charge exorbitant prices, sometimes nearly 100 times more than Medicare pays, drive up consumer costs of coverage and leave patients with unexpected and sometimes significant medical bills despite their best efforts to receive care within the confines of their respective network. The California Chamber of Commerce supports this bill stating that it furthers the goals of employers to provide high-value health care coverage and minimize out-of-pocket costs for their employees by protecting employee-patients who purposefully seek care at in-network facilities and allowing them to count any out-of-pocket costs they do pay to out-of-network providers towards their annual out-of-pocket limit for health care expenses. 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 AB 533 Page 6 argues this bill provides health plans and insurers more opportunities to collect premiums from patients, not provide the care they have agreed give. The California Medical Association and California Society of Anesthesiologists oppose this bill, stating that it creates government rate setting for physician services in commercial plans and establishes a payment standard that is below existing contract rates and will result in health plans dropping contracts or reducing contract rates. Analysis Prepared by: An-Chi Tsou / HEALTH / (916) 319-2097 FN: 0002401