BILL ANALYSIS
AB 2389
Page 1
ASSEMBLY THIRD READING
AB 2389 (Gaines)
As Amended May 20, 2010
Majority vote
HEALTH 17-0
-----------------------------------------------------------------
|Ayes:|Monning, Fletcher, | | |
| |Ammiano, Carter, Conway, | | |
| |De La Torre, De Leon, | | |
| |Emmerson, Eng, Gaines, | | |
| |Hayashi, Jones, Bonnie | | |
| |Lowenthal, Nava, | | |
| |V. Manuel Perez, Salas, | | |
| |Smyth | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
-----------------------------------------------------------------
SUMMARY : Prohibits a contract by or on behalf of a licensed hospital
or health care 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 to
carrier enrollees on the cost of procedures or quality of services
performed by the hospital or facility. Specifically, this bill :
1)Prohibits a contract, issued, amended, renewed, or delivered on or
after January 1, 2011, by or on behalf of a carrier and a licensed
hospital or any other licensed health care facility owned by a
licensed hospital 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 hospital or the licensed
health care facility or the quality of services performed by the
hospital or facility.
2)Requires any contractual provision inconsistent with 1) above to be
void and unenforceable.
3)Defines "licensed hospital," consistent with existing law, as an
institution, place, building, or agency that maintains and operates
organized facilities for one or more persons for the diagnosis,
care, and treatment of human illnesses to which persons may be
admitted for overnight stay, and include any institution classified
under regulations issued by the State Department of Health Services
AB 2389
Page 2
[now Department of Public Health (DPH)] as a general or specialized
hospital, as a maternity hospital, or as a tuberculosis hospital,
but does not include a sanitarium, rest home, a nursing or
convalescent home, a maternity home, or an institution for treating
alcoholics.
4)Defines "licensed health care facility" as any institution or
health facility, other than long-term health care facility as
defined in existing law, licensed by DPH to deliver or furnish
health care services.
5)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 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.
AB 2389
Page 3
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 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.
The California Hospital Association is opposed unless amended and
suggests the bill 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.
Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097
FN:
0004427