BILL ANALYSIS
AB 2389
Page 1
ASSEMBLY THIRD READING
AB 2389 (Gaines)
As Amended April 8, 2010
Majority vote
HEALTH 17-0
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|Ayes:|Monning, Fletcher, |
| |Ammiano, Carter, Conway, |
| |De La Torre, De Leon, |
| |Emmerson, Eng, Gaines, |
| |Hayashi, Jones, Bonnie |
| |Lowenthal, Nava, |
| |V. Manuel Perez, Salas, |
| |Smyth |
| | |
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SUMMARY : Prohibits a contract between a health facility and a
health care service plan or health insurer (collectively
carriers) from containing a provision that restricts the ability
of the carrier to furnish information on the cost of procedures
or health care quality information to carrier enrollees.
Specifically, this bill :
1)Prohibits a contract, issued, amended, renewed, or delivered
on or after January 1, 2011, between a carrier and a health
facility to provide inpatient hospital services or ambulatory
care services to subscribers and enrollees of the carrier,
from containing a provision that restricts the ability of the
carrier to furnish information to subscribers or enrollees
concerning the cost of procedures at the facility or the
quality of services provided by the facility.
2)Requires any contractual provision inconsistent with 1) above
to be void and unenforceable.
3)Prohibits specified fines and penalties, established in
existing law, from applying to the provisions in this bill.
EXISTING LAW :
1)Establishes the Office of the Patient Advocate (OPA) within
DMHC, and requires the OPA to prepare and make available a
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quality of care report card that includes a rating of health
care service plans.
2)Requires hospitals to make a written or electronic copy of its
charge description master (a list of prices for services)
available, either by posting an electronic copy on the
hospital's Web site, or by making a written or electronic copy
available at the hospital.
3)Requires hospitals to submit their average charges for 25
common outpatient procedures, as specified, annually to Office
of Statewide Health Planning and Development (OSHPD) who is
required to publish this information on its Web site.
Requires OSHPD to publish and update on its Web site, a list
of the 25 inpatient procedures most commonly performed in
California hospitals, along with each hospital's average
charges for those procedures.
4)Requires OSHPD to publish risk-adjusted outcome reports for
medical, surgical, and obstetric conditions or procedures, as
specified.
5)Requires hospitals, upon request, to provide to a person who
has no health coverage, a written estimate of the amount the
hospital will charge for the health care services, procedures,
and supplies that are reasonably expected to be provided to
the person by the hospital, as well as information about its
financial assistance and charity care policies, as specified.
FISCAL EFFECT : None
COMMENTS : According to the author, this bill will ensure
consumers have the quality and cost information that they need
to make purchasing decisions about health products and services.
While the majority of hospitals in this state already allow
this information to be shared, the author argues that some
hospitals are turning to "gag clauses" in contracts with
carriers that preclude carriers from sharing cost and quality
information about hospitals with their enrollees. The author
maintains that consumers are increasingly being required to pay
more attention to the cost of their care when they have a
greater responsibility for paying for it due to deductibles and
other cost sharing arrangements, particularly for a preferred
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provider organization (PPO) product where the consumer pays 20%
or more of their total health care bill. The author asserts
that this bill will ensure that carriers are not restricted in
their ability to provide cost and quality information to their
members.
Government, carriers, and employers have increased their
interest in price transparency in an effort to improve health
care outcomes and slow the growth rate of health care
expenditures. The idea behind price transparency is to make
comparative information on the prices charged by health care
providers for specific services available to consumers. One of
the goals of transparency is to encourage consumers and others
who make decisions on their behalf (employers, carriers, and
referring practitioners) to consider price and quality in
deciding among providers and services. Existing law does not
prohibit or prevent carriers from furnishing information on the
cost of procedures, and at least one carrier provides its
enrollees with information so they can evaluate cost and
quality. However, contractual agreements between carriers and
providers can prevent this information from being released,
particularly when a large provider has market power.
The California Hospital Association is opposed unless amended
and suggests the bill to be amended to: 1) require that
information concerning the cost of procedures be based on
episodes of care, as defined by the National Quality Forum, and
all of the expenses associated with an episode of care be
bundled or combined to prevent the disclosure of any single
expense; 2) require the cost information be consistent with
professionally recognized standards of clinical practice so that
the information provided is based on identical treatment options
among the facilities being compared; 3) require the cost and
quality information to be linked so that the information is
useful and "actionable" for consumers; 4) require the carrier to
provide an opportunity to validate both the cost and quality
information with an appeals process to make corrections and
settle disputes over the data; and, 5) require a provision
prohibiting the disclosure by a carrier of any negotiated
capitation rates or other prepaid arrangements and requests that
the carrier and the health facility agree on the methodology to
allocate capitation payments for an episode of care.
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Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097 FN:
0004205