BILL ANALYSIS
AB 591
Page 1
Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 591 (De La Torre) - As Amended: April 15, 2009
SUBJECT : Insurance: referral fees: health plans and
insurance: filings.
SUMMARY : Requires health care service plans and health
insurers to file with their respective regulator a list of plan
contracts/policies offered or issued in California. Increases
the maximum fine from $1,000 to $5,000 to unlawfully solicit,
receive, offer or pay any referral fee for the referral of an
individual for the furnishing of services or goods for which the
person knows or should have known that whole or partial
reimbursement is or may be made by a motor vehicle insurer.
Specifically, this bill :
1)Requires health plans and insurers, by June 30th of each year,
to file with Department of Managed Health Care (DMHC) and the
California Department of Insurance (CDI) a list of plan
contracts offered or issued by the plan or insurer or
outstanding in this state as of the end of the previous
calendar year.
2)Requires the list in 1) above to identify each type of
contract by form number and marketing name, if used.
3)Requires DMHC and CDI to use the form number and marketing
name provided under this bill when tracking the associated
health care service plan contract/health insurance policy or
health care service plan/health insurer under existing law.
4)Increases the maximum penalty, from up to $1,000 to up to
$5,000, to unlawfully solicit, receive, offer or pay a
referral fee for the referral of an individual for the
furnishing of services or goods for which the persons knows or
should have known that whole or partial reimbursement is or
may be made by a motor vehicle insurer.
EXISTING LAW :
1)Regulates health care service plans under the Knox-Keene
Health Care Service Plan Act of 1975 (Knox-Keene) through
AB 591
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DMHC, and regulates health insurers under the Insurance Code
through CDI.
2)Requires health plans and insurers to file with their
respective regulator a list of Medicare supplement contracts
that identify the filing issuer by name and address, and type
of contract it offers by name and form number if one is used.
3)Makes it unlawful for any person to solicit, receive, offer,
or pay any referral fee for the referral of an individual for
the furnishing of services or goods for which the person knows
or should have known that whole or partial reimbursement is or
may be made, directly or indirectly, by a motor vehicle
insurer.
4)Makes a violation of provision 3) above a misdemeanor,
punishable by a fine not to exceed $1,000 for each violation.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . This bill has two parts, the first of
which falls under the jurisdiction of the Assembly Insurance
Committee. First, this bill would increase the maximum fine
from $1,000 to $5,000 to unlawfully solicit, receive, offer,
or pay any referral fee for the referral of an individual for
the furnishing of services or goods for which the person knows
or should have known that whole or partial reimbursement is or
may be made by an insurer. The author argues increasing the
penalty for each violation will deter "bad actors" from paying
or receiving a kickback for a car insurance referral. The
author states too many times individuals are referred
believing that the referral is in the consumers' best
interest, but there are instances where the referrer is
getting compensated or receiving kickbacks. The author argues
increasing the penalty will deter fraud and protect the
consumer's interest.
The second part of this bill falls under the jurisdiction of the
Assembly Health Committee, and would require health care
service plans and health insurers to annually file with the
Director of DMHC or the Commissioner of CDI a list of their
plan contracts or health insurance policies offered, issued,
or outstanding in this state in the previous calendar year,
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including the form number and marketing name for those
contracts or policies. The author states this bill will
ensure that information about health plans and health insurers
is readily accessible by consumers, as consumers are generally
only aware of the marketing names of their health plans and
health insurers. The author states if you currently call CDI
and DMHC, you would have to know the form number of the health
plan contract or health insurance policy to receive additional
information. The author argues requiring that the product's
marketing name be tracked along with the form number will
allow for consumers to more readily access information about
health plans or health insurers. The author states that
health plans and health insurers are already required to
report the form number and marketing name for Medicare
supplemental contracts and insurances, and this bill would
only be expanding this existing reporting requirement to other
plans and policies offered across the state.
2)DOUBLE REFERRAL . This bill was heard by the Assembly
Insurance Committee on April 22, 2009, and was passed on a
10-0 vote.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Scott Bain / HEALTH / (916) 319-2097