BILL ANALYSIS Ó SB 137 Page 1 SENATE THIRD READING SB 137 (Hernandez) As Amended September 4, 2015 Majority vote SENATE VOTE: 35-0 -------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+-----------------------+---------------------| |Health |17-2 |Bonta, Maienschein, |Lackey, Patterson | | | |Bonilla, Burke, | | | | |Chávez, Chiu, Gomez, | | | | |Gonzalez, Roger | | | | |Hernández, Nazarian, | | | | |Ridley-Thomas, | | | | |Rodriguez, Santiago, | | | | |Steinorth, Thurmond, | | | | |Waldron, Wood | | | | | | | |----------------+-----+-----------------------+---------------------| |Appropriations |12-2 |Gomez, Bloom, Bonta, |Bigelow, Jones | | | |Calderon, Nazarian, | | | | |Eggman, | | | | | | | | | | | | | | |Eduardo Garcia, | | SB 137 Page 2 | | |Holden, Quirk, Rendon, | | | | |Weber, Wood | | | | | | | | | | | | -------------------------------------------------------------------- SUMMARY: Requires health care service plans (plans) and health insurers (insurers), collectively referred to as carriers, to publish and maintain printed and online provider directories, and sets requirements carriers must meet to maintain accurate provider directories. Specifically, this bill: 1)Requires carriers, commencing July 1, 2016, to publish and maintain written and online provider directories with information on contracting providers that deliver health care services to enrollees, as specified. 2)Requires carriers to update printed provider directories at least quarterly and online provider directories at least weekly, or more frequently if required by federal law, and specifies when carriers must update provider information and when to delete providers from the directories. 3)Requires provider directories for full-service health plans and policies, mental health, vision, dental, and other specialized plans to include specified information for various provider and facility types, including provider contact information; practice locations; non-English languages spoken by providers or qualified medical interpreters on the provider's staff; and, identification of providers no longer accepting new patient's for a carrier's product. 4)Details policies and procedures carriers must follow to update provider directories, including requirements for affirmative SB 137 Page 3 responses from providers confirming or updating their information in the provider directories within specified timeframes, and a process to allow providers to submit changes or updates. Exempts general acute care hospitals from this requirement. 5)Requires providers, except general acute care hospitals, to verify or submit changes to their information in the provider directories using a process as required by carriers, and within specified timeframes. Authorizes carriers to delay payment, as specified, to providers for up to one month, remove providers from the provider directory, or terminate contracts based on provider nonresponse to carrier requests to verify or update provider directory information, within specified timeframes. Exempts a provider group from the delay in payment if all of the following occur: a) A provider does not respond to the provider group's attempt to verify, as defined, the provider's information; b) The provider group documents the effort to verify the provider's information; and, c) The provider group reports to the carrier that the provider should be deleted from the provider group in the plan directory or directories. 6)Requires carriers to establish a process for an individual to identify and report possible inaccurate, incomplete, or misleading information listed in the provider directory, as specified, and requires carriers to, within specified timeframes, investigate such reports and update the information in the provider directory as applicable. SB 137 Page 4 7)Requires carriers to use a consistent method of network and product naming, numbering, or classification method to ensure proper identification of networks and plan products in which a provider participates; and, requires online provider directories to be accessible through a clearly identifiable link or tab and in a manner that is searchable by specified informational elements including provider name, practice address, language, distance from a specified address, California license number, National Provider Identifier number, and others. 8)Requires, on or before December 31, 2016, the Department of Manages Health Care (DMHC) and the Department of Insurance (CDI) to develop uniform provider directory standards to permit consistency for naming, numbering, the classification methods of, and ability to search a directory, as well as the development of a multi-plan directory by another entity. Exempts no more than two revisions of the standards developed by DMHC and CDI from the Administrative Procedures Act until January 1, 2021. 9)Requires carriers, by July 31, 2017, or 12 months after the date the standards are developed, whichever is later, to comply with the standards in 8) above. 10)Authorizes DMHC and CDI to require a carrier to provide coverage for all health care services provided to an enrollee, and to reimburse an enrollee for any amount beyond what the enrollee would have paid for services provided by a contracting provider, if DMHC or CDI find that the enrollee reasonably relied upon materially inaccurate, incomplete, or misleading information contained in a provider directory and, as a result, obtained services from a non-contracting provider. SB 137 Page 5 11)Requires plans to file an amendment to its plan application with DMHC whenever it determines, as a result of the provisions of this bill, that there has been a 10% change in the network for a product in a region. 12)Provides that carriers are not prohibited from requiring provider groups or contracting specialized health care plans to provide information required by the carrier for each of the providers that contract with the group or specialized plan, as specified. Requires, under this arrangement, the carrier to retain the responsibility for ensuring that the provisions of this bill are satisfied. Allows a provider group to terminate a contract with a provider for a pattern or repeated failure to update the information required by the carrier. 13)Specifies that the provider directory standards apply to Medi-Cal managed care (MCMC) plans to the extent consistent with federal law and guidance issued after January 1, 2016, and provides that a MCMC plan that complies with this bill is not required to distribute a printed provider directory unless one is requested. FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill would result in: 1)One-time costs to DMHC in the hundreds of thousands (Managed Care Fund), and in the range of $100,000 for CDI (Insurance Fund) for development of complex regulations related to standard provider directories. 2)Enforcement costs are unknown but likely significant for both DMHC and CDI. Most costs would fall on DMHC, as they now regulate the vast majority of the marketplace. Enforcement SB 137 Page 6 and complaint resolution costs would depend on compliance and level of consumer complaints. 3)Although not a direct state cost, health plans indicate the complex and prescriptive nature of the requirements translate into several million dollars of one-time infrastructure costs per plan, and significant costs ongoing. Increased administrative costs can be passed on to consumers and purchasers, including the state, as higher premiums and cost-sharing and lower benefits. COMMENTS: According to the author, the reliability of provider directories has recently become a source of policy concern, particularly following the implementation of the Patient Protection and Affordable Care Act (ACA) which establishes an individual mandate to maintain coverage, and which expands Medicaid (Medi-Cal in California) to newly eligible populations. Provider directories serve as a resource for consumers to evaluate coverage options; determine whether a provider, including primary a care physician, specialist, or hospital they would like to see are contracted in a carrier's network; and, to identify and locate providers and services when seeking care. Californians shopping for health insurance must have confidence in the provider directory information upon which they are basing their decisions, especially when health insurance coverage is required by government for most of the population. The author states that this bill would establish provider directory standards and routine updates of provider directories. Over the last two years, the public, advocates, regulators, and oversight agencies have expressed concerns about patient access to providers and the accuracy of provider directories. Covered California is California's state health benefit exchange. In the fall of 2013, Covered California established an online aggregated provider directory which would allow consumers to see which providers belonged to which qualified health plan SB 137 Page 7 networks. However, due to inaccurate information regarding the providers, the Web site was discontinued in February 2014. According to Covered California, while the combined provider directory was a useful service for consumers, some enrollees who located physicians thought to be in their plan, subsequently discovered they were not. In November 2014, DMHC audits of two large health plans found significant inaccuracies in provider directories. With regard to provider directories of MCMC plans, a June 2015 California State Auditor report concluded that the Department of Health Care Services (DHCS) did not verify provider network data it received from MCMC plans were accurate, and that flaws in DHCS' process for reviewing provider directories have resulted in DHCS approving provider directories with inaccurate information. Regulatory actions at the federal and state levels aim to improve the accuracy of provider directories. Under federal regulations, carriers participating in health benefit exchanges established under the ACA are required to publish up-to-date, accurate, and easily accessible provider directories. Proposed federal MCMC regulations require MCMC plans to update paper provider directories at least monthly and electronic provider directories within three days of learning of changes from providers. In January 2015, CDI issued emergency regulations requiring provider directories to include specified elements, and to demonstrate the accuracy of its directories as required. Health Access California, Consumers Union, and the California Pan-Ethnic Health Network are cosponsors of this bill and argue that it provides critical improvements to provider directories, which are a crucial tool for consumers choosing and using a health plan. Supporters state that consumers must have accurate information about the doctors, hospitals, and other providers covered by each product's network, and with this information, they can make informed choices about which plans and policies are best for them and avoid exposure to unexpected medical bills by inadvertently obtaining care from out-of-network providers. SB 137 Page 8 The California Hospital Association, California Association of Health Plans, Delta Dental, and America's Health Insurance Plans have all officially removed their opposition. Analysis Prepared by: Patty Rodgers and Kelly Green / HEALTH / (916) 319-2097 FN: 0002175