BILL ANALYSIS
AB 2389
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ASSEMBLY THIRD READING
AB 2389 (Gaines)
As Amended May 24, 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 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 range 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 range 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
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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 [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
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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
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.
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Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097 FN:
0004451