Amended in Assembly April 23, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1086

Introduced by Assembly Member Dababneh

begin insert

(Coauthor: Senator Pan)

end insert

February 27, 2015

An act to add Section 1371.34 to the Health and Safety Code, and to add Section 10133.75 to the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 1086, as amended, Dababneh. Assignment of reimbursement rights.

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 and makes a willful violation of that act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance.

Existing law requires, on and after January 1, 1994, every group health care service plan, that provides hospital, medical, or surgical expense benefits for plan members and their dependents to authorize and permit assignment of the enrollee’s or subscriber’s right to any reimbursement for health care services covered under the plan contract to the State Department of Health Care Services when health care services, excepting specified contracted services, are provided to a Medi-Cal beneficiary.

This bill would begin delete prohibit certain health care service plans and disability insurers from prohibiting an enrollee, subscriber, or insured from making an assignment of his or her reimbursement rights for covered health care services to the physician and surgeon who furnished those services. The bill would require a physician and surgeon seeking payment from a health care service plan or disability insurer under the provisions of the bill to provide the plan or insurer with specified documentation and information, including an itemized bill for service. This bill would require the physician and surgeon to provide a written agreement authorizing the assignment of the enrollee’s, subscriber’s, or insured’s reimbursement rights, and would specify the form and content of that agreement. end delete begin insert require certain health care service plans, on and after January 1, 2016, to authorize and permit an enrollee or subscriber to assign the enrollee or subscriber’s right to reimbursement for health care services covered under the plan contract by a noncontracting physician and surgeon who furnished the services, as specified. The bill would require certain disability insurers to pay group insurance benefits to a physician and surgeon rendering health care services to an insured upon obtaining written consent of the insured. The bill would require a noncontracting physician and surgeon who renders services to an enrollee or an insured to give the enrollee or the insured a written estimate of the cost of care and a notice regarding, among other things, the estimated cost of care and the enrollee’s or subscriber’s, and the plan’s or the insurer’s responsibility for payment of the cost of care, as specified. The bill would prohibit a noncontracting physician and surgeon who accepts an assignment of benefits from collecting more than the estimated cost of care from the enrollee or insured. The bill would prohibit a noncontracting physician and surgeon from accepting an assignment of benefits from a patient with whom the physician and surgeon or an employee of the physician and surgeon communicates in a language other than English or one of specified languages, unless the notice described above is given in that language. end insert

Because a willful violation of the bill’s requirements relative to health care service plans 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:

SECTION 1.  

Section 1371.34 is added to the Health and Safety
Code, to read:

begin delete

1371.34.  

(a) A health care service plan that provides medical
or surgical expense benefits for plan members and their dependents
shall not prohibit an enrollee or subscriber from making an
assignment of the enrollee’s or subscriber’s right to any
reimbursement for health care services covered under the plan
contract to the physician and surgeon who furnished the health
care services.

end delete

begin insert

begin insert 1371.34. end insert   

end insert begin insert

(a) On or after January 1, 2016, a health care service
plan that provides out-of-network services as a covered benefit
for plan members and their dependents shall authorize and permit
assignment of the enrollee’s or subscriber’s right to any
reimbursement for health care services covered under the plan
contract to a noncontracting physician and surgeon who furnishes
the health care services. This section shall not apply to emergency
services covered under Section 1371.4, poststabilization services
as defined in Section 1371.4, or urgent care as defined in
paragraph (2) of subdivision (h) of Section 1367.01.

end insert

(b) When seeking payment from a health care service plan
pursuant to subdivision (a), a begin insert noncontracting end insert physician and surgeon
shall provide the plan with the begin insert noncontracting end insert physician and
surgeon’s itemized bill for service, the name and address of the
person to be reimbursed, and the name and contract number of the
enrollee. begin insert The noncontracting physician and surgeon shall also
retain on file, and provide upon request to the health care service
plan, documentation showing the notice required in paragraph
(2) of subdivision (c) was provided in a timely manner, as required
by paragraph (1) of subdivision (c). end insert

begin delete

(c) The written agreement authorizing assignment of the
enrollee’s or subscriber’s right to any reimbursement for health
care services covered under subdivision (a) shall do all of the
following:

(1) Be written in plain language.

(2) Be made available by the physician and surgeon in the
primary languages of the two largest groups seen by the physician
and surgeon who either do not speak English or who are unable
to effectively communicate in English because it is not their native
language, and who comprise 5 percent or more of the patients
served by the physician.

(3) Be printed in at least 12-point font. The agreement shall
disclose in boldface type or a font a minimum of two points larger
than the rest of the agreement, exclusive of the heading, all of the
following information:

(A) “The enrollee or subscriber remains responsible for costs,
including any provider fees, copayments, and coinsurance
exceeding the amount of the benefit covered by the policy and
paid by the health plan.”

(B) “The enrollee or subscriber is entitled to a summary of
benefits and coverage from the health care service plan pursuant
to Section 300gg-15 of Title 42 of the United States Code to help
in better understanding benefit design, level of financial protection,
and costs related to out-of-network services.”

(C) “The enrollee or subscriber is entitled to information from
the health care service plan that explains how the health plan
determines the amount it pays for out-of-network services. Your
actual out-of-pocket costs may vary based on factors specific to
your health plan. Some plans base their reimbursement rates on a
percentage of “usual, customary, and reasonable” charges, which
is referred to as “UCR.” Others use a formula based on the
Medicare fee schedule that is published by the United States
Department of Health and Human Services. To learn how your
health plan determines out-of-network reimbursement rates and
covered services, call the number listed on the back of your
insurance card. Then, to estimate your out-of-pocket costs, visit
the following Internet Web site http://fairhealthconsumer.org,
which will, using the method that your plan uses to calculate
reimbursement, allow you to estimate your out-of- pocket costs.”

(4) Be signed and dated by the enrollee or subscriber.

(d) This section applies only to a preferred provider organization,
point of service plan, or any other plan contract that provides for
out-of-network coverage and services. This section does not apply
to a plan providing benefits pursuant to a specialized health care
service plan contract, as defined in subdivision (o) of Section 1345.

end delete begin insert

(c) (1) A noncontracting physician and surgeon accepting an
assignment of benefits shall give the enrollee the notice described
in paragraph (2) and obtain a signature from the enrollee. The
notice shall be in 12-point type, on a single page, without any
additional information other than that specified in the statutory
notice.

end insert begin insert

(A) The notice shall be provided to the enrollee at least 24 hours
prior to providing care.

end insert begin insert

(B) For health care services offered to the enrollee within the
same business day from the time an appointment is requested by
the enrollee, the notice shall be provided to the enrollee prior to
providing care.

end insert begin insert

(2) The notice provided pursuant to paragraph (1) shall be in
the following form:

end insert

 

begin insert

begin insert [Noncontracting physician and surgeon may add office logo and office contact information here.] end insert
begin insert ASSIGNMENT OF BENEFITS end insert
begin insert I, [patient name] agree to receive medical services from [physician and surgeon’s name] at [business name and location]. My signature below means I have read and understand the following: end insert
begin insert  •  end insert	begin insert The physician and surgeon listed above is not part of my health plan’s network. end insert
begin insert  •  end insert	begin insert My health plan may pay some of the cost, or none at all. I will be responsible for most of the cost. end insert
begin insert  •  end insert	begin insert My health plan must help me get care from an in-network physician and surgeon if I call the health plan at the telephone number on my membership card. I am likely to pay less if I use a physician and surgeon that is in my health plan’s network. end insert
begin insert  •  end insert	begin insert My health plan may not cover the costs of other care ordered by this physician and surgeon. Examples of care that the physician and surgeon might order include lab tests, imaging, and referrals to other providers. end insert
begin insert  •  end insert	begin insert State law does not require any payments I make to this physician and surgeon to count toward my annual out-of-pocket maximum. I can call my health plan at the telephone number on my membership card to find out the remaining costs before I reach my out-of-pocket maximum. My costs will also be in addition to my share of premium for this year. end insert
begin insert  •  end insert	begin insert I have received this notice and a written estimate of the cost for care from [physician and surgeon’s name]. end insert
begin insert  •  end insert	begin insert The estimate cost of treatment may be up to [amount], and the estimate is attached to this notice. I will receive another notice if the cost is more than $100 higher, or more than 10 % higher, than the original estimate, whichever is the larger change. end insert
begin insert  •  end insert	begin insert The estimate is limited to services provided by [physician and surgeon’s name] and may not include services from other providers, such as facility charges. end insert
begin insert  •  end insert	begin insert I have the right to confirm health plan benefit information from my health plan before beginning treatment. end insert
begin insert     DateSignature end insert
begin insert     TimePrint name end insert

end insert

 

begin insert

(d) (1) The noncontracting physician and surgeon shall provide
the enrollee a written estimate of the cost of care at the time of
providing the notice required by paragraph (2) of subdivision (c).
The estimate shall include each anticipated service to be provided
and the estimated cost of each service. The noncontracting
physician and surgeon shall attach the written estimate, along
with any explanation of the cost estimate, to the notice.

end insert begin insert

(2) If, upon further examination, the care costs more than the
greater of one hundred dollars ($100) more than, or more than
10 percent higher than, the physician and surgeon’s initial estimate
of the cost of care, the physician and surgeon shall provide a
revised estimate of the cost of care in writing as soon as
practicable.

end insert begin insert

(e) A noncontracting physician and surgeon shall not accept
an assignment of benefits from a patient with whom the
noncontracting physician and surgeon, or an employee or agent
of that physician and surgeon, communicates primarily in a
language other than English, or in a Medi-Cal threshold language,
as defined by the regulations adopted pursuant to Section 14680
of the Welfare and Institutions Code, unless the written notice
required by paragraph (2) of subdivision (c) is also provided in
that language.

end insert begin insert

(f) (1) A noncontracting physician and surgeon who accepts
an assignment of benefits from an enrollee may collect no more
than the estimated cost of care from the enrollee.

end insert begin insert

(2) After receiving the direct payment from the enrollee’s plan,
a noncontracting physician and surgeon shall refund any
overpayment to the enrollee within 30 business days if the payment
from the plan is more than the estimated payment.

end insert begin insert

(g) This section shall only apply to health care service plans
that offer out-of-network covered benefits. Nothing in this section
shall be construed to require a health care service plan to cover
out-of-network benefits not otherwise required by this article. This
section does not apply to a plan providing benefits pursuant to a
specialized health care service plan contract, as defined in
subdivision (o) of Section 1345.

end insert begin insert

(h) Nothing in this section shall be construed to exempt a health
care service plan from the requirements of paragraph (2) of
subdivision (h) of Section 1367, or Section 1371.4, or 1371.37, or
to exempt a health care provider from the requirements of Section
1317, 1371.39, or 1379.

end insert

SEC. 2.  

Section 10133.75 is added to the Insurance Code, to
read:

10133.75.  

(a)  begin delete On end delete begin insert Notwithstanding Section 10133, on end insert and after
January 1, begin delete 2013, a disability insurer shall pay individual insurance
benefits contingent upon, or for expenses incurred on account of,
medical or surgical aid to the physician and surgeon having
provided the medical or surgical aid where that physician and
surgeon has qualified for reimbursement by submitting the items
and information specified in subdivision (b). end delete begin insert 2016, upon written
consent of the insured first obtained with respect to a particular
claim, a disability insurer shall pay group benefits contingent
upon, or for expenses incurred on account of, hospitalization or
medical or surgical aid to a physician and surgeon furnishing the
hospitalization or medical or surgical aid, but the amount of that
payment shall not exceed the amount of benefit provided by the
policy with respect to the service or billing of the physician and
surgeon, and the amount of the payments pursuant to one or more
assignments shall not exceed the amount of expenses incurred on
account of the hospitalization or medical or surgical aid. Payments
so made shall discharge the insurer’s obligation with respect to
the amount so paid. end insert

(b) When seeking payment from a disability insurer pursuant
to subdivision (a), begin delete a person end delete begin insert a noncontracting physician and surgeon end insert
shall provide the insurer with the begin delete provider’s end delete begin insert physician and
surgeon’s end insert itemized bill for service, the name and address of the
person to be reimbursed, and the name and policy number of the
insured. begin insert The noncontracting physician and surgeon shall also
retain on file, and provide upon request to the insurer,
documentation showing the notice required in paragraph (2) of
subdivision (c) was provided in a timely manner, as required by
paragraph (1) of subdivision (c). end insert

begin delete

(c) The written agreement authorizing assignment of the
insured’s right to any reimbursement for health care services
covered under subdivision (a) shall do all of the following:

(1) Be written in plain language.

(2) Be made available by the physician and surgeon in the
primary languages of the two largest groups seen by the physician
and surgeon who either do not speak English or who are unable
to effectively communicate in English because it is not their native
language, and who comprise 5 percent or more of the patients
served by the physician and surgeon.

(3) Be printed in at least 12-point font. The agreement shall
disclose in boldface type or a font a minimum of two points larger
than the rest of the agreement, exclusive of the heading, the
following information:

(A) “The insured remains responsible for costs, including any
provider fees, copayments, and coinsurance exceeding the amount
of the benefit covered by the policy and paid by the insurer.”

(B) “The insured is entitled to a summary of benefits and
coverage from the insurer pursuant to Section 300gg-15 of Title
42 of the United States Code to help in better understanding benefit
design, level of financial protection, and costs related to
out-of-network services.”

(C) “The insured is entitled to information from the insurer that
explains how the insurer determines the amount it pays for
out-of-network services. Your actual out-of-pocket costs may vary
based on factors specific to your health plan. Some plans base their
reimbursement rates on a percentage of “usual, customary, and
reasonable” charges, which is referred to as “UCR.” Others use a
formula based on the Medicare fee schedule that is published by
the United States Department of Health and Human Services. To
learn how your health plan determines out­ of-network
reimbursement rates and covered services, call the number listed
on the back of your insurance card. Then, to estimate your
out-of-pocket costs, visit the following Internet Web site
http://fairhealthconsumer.org, which will, using the method that
your plan uses to calculate reimbursement, allow you to estimate
your out-of-pocket costs.”

(4) Be signed and dated by the insured.

(d) This section shall not apply to an insurer providing benefits
pursuant to a specialized health insurance policy, as defined in
subdivision (c) of Section 106.

end delete begin insert

(c) (1) A noncontracting physician and surgeon accepting an
assignment of benefits shall give the insured with the notice
described in paragraph (2) and obtain a signature from the
insured. The notice shall be in 12-point type, on a single page,
without any additional information other than that specified in the
statutory notice.

end insert begin insert

(A) The notice shall be provided to the insured at least 24 hours
prior to providing care.

end insert begin insert

(B) For health care services offered to the insured within the
same business day from the time an appointment is requested by
the insured, the notice shall be provided to the insured prior to
providing care.

end insert begin insert

(2) The notice provided pursuant to paragraph (1) shall be in
the following form:

end insert

 

begin insert

begin insert [Noncontracting physician and surgeon may add office logo and office contact information here.] end insert
begin insert ASSIGNMENT OF BENEFITS end insert
begin insert I, [patient name] agree to receive medical services from [physician and surgeon’s name] at [business name and location]. My signature below means I have read and understand the following: end insert
begin insert  •  end insert	begin insert The physician and surgeon listed above is not part of my health plan’s network. end insert
begin insert  •  end insert	begin insert My health plan may pay some of the cost, or none at all. I will be responsible for most of the cost. end insert
begin insert  •  end insert	begin insert My health plan must help me get care from an in-network physician and surgeon if I call the health plan at the telephone number on my membership card. I am likely to pay less if I use a physician and surgeon that is in my health plan’s network. end insert
begin insert  •  end insert	begin insert My health plan may not cover the costs of other care ordered by this physician and surgeon. Examples of care that the physician and surgeon might order include lab tests, imaging, and referrals to other providers. end insert
begin insert  •  end insert	begin insert State law does not require any payments I make to this physician and surgeon to count toward my annual out-of-pocket maximum. I can call my health plan at the telephone number on my membership card to find out the remaining costs before I reach my out-of-pocket maximum. My costs will also be in addition to my share of premium for this year. end insert
begin insert  •  end insert	begin insert I have received this notice and a written estimate of the cost for care from [physician and surgeon’s name]. end insert
begin insert  •  end insert	begin insert The estimate cost of treatment may be up to [amount], and the estimate is attached to this notice. I will receive another notice if the cost is more than $100 higher, or more than 10 % higher, than the original estimate, whichever is the larger change. end insert
begin insert  •  end insert	begin insert The estimate is limited to services provided by [physician and surgeon’s name] and may not include services from other providers, such as facility charges. end insert
begin insert  •  end insert	begin insert I have the right to confirm health plan benefit information from my health plan before beginning treatment. end insert
begin insert     DateSignature end insert
begin insert     TimePrint name end insert

end insert

 

begin insert

(d) (1) The noncontracting physician and surgeon shall provide
the insured a written estimate of the cost of care at the time of
providing the notice required by paragraph (2) of subdivision (c).
The estimate shall include each anticipated service to be provided
and the estimated cost of each service. The noncontracting
physician and surgeon shall attach the written estimate, along
with any explanation of the cost estimate, to the notice.

end insert begin insert

(2) If, upon further examination, the care costs more than the
greater of one hundred dollars ($100) more than, or more than
10 percent higher than, the physician and surgeon’s initial estimate
of the cost of care, the physician and surgeon shall provide a
revised estimate of the cost of care in writing as soon as
practicable.

end insert begin insert

(e) A noncontracting physician and surgeon shall not accept
an assignment of benefits from a patient with whom the
noncontracting physician and surgeon, or an employee or agent
of that physician and surgeon, communicates primarily in a
language other than English, or in a Medi-Cal threshold language,
as defined by the regulations adopted pursuant to Section 14680
of the Welfare and Institutions Code, unless the written notice
required by paragraph (2) of subdivision (c) is also provided in
that language.

end insert begin insert

(f) (1) A noncontracting physician and surgeon who accepts
an assignment of benefits from an insured may collect no more
than the estimated cost of care from the insured.

end insert begin insert

(2) After receiving the direct payment from the insured’s insurer,
a noncontracting physician and surgeon shall refund any
overpayment to the insured within 30 business days if the payment
from the insurer is more than the estimated payment.

end insert begin insert

(g) This section shall only apply to an insurer that offers
out-of-network covered benefits. Nothing in this section shall be
construed to require an insurer to cover out-of-network benefits
not otherwise required by this article. This section does not apply
to an insurer providing benefits pursuant to a specialized health
insurance policy, as defined in subdivision (c) of Section 106.

end insert begin insert

(h) Nothing in this section shall be construed to exempt an
insurer from the requirements of subdivision (b) of Section
10123.137, or Section 10123.147.

end insert

SEC. 3.  

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