BILL ANALYSIS Ó
AB 533
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CONCURRENCE IN SENATE AMENDMENTS
AB
533 (Bonta)
As Amended September 4, 2015
Majority vote
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|ASSEMBLY: |74-1 |(June 2, 2015) |SENATE: | |(September 10, |
| | | | |25-10 |2015) |
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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.
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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
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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.
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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
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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
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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