BILL NUMBER: AB 2586 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 28, 2010
AMENDED IN ASSEMBLY APRIL 20, 2010
AMENDED IN ASSEMBLY APRIL 5, 2010
INTRODUCED BY Assembly Member Chesbro
FEBRUARY 19, 2010
An act to amend Sections 1367.26 and 1380 of, and to add Section
1373.68 to, the Health and Safety Code, and to add Sections 10133.35
and 10133.4 to, and to repeal Section 10133.1 of, the Insurance Code,
relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 2586, as amended, Chesbro. Health care coverage: network
modification: contracting providers.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires a plan to obtain department approval prior to a
material modification of its plan or operations and requires a plan
to take specified actions prior to terminating a contract with a
provider group or a general acute care hospital. Existing law imposes
specified requirements with respect to the accessibility of services
provided by both plans and insurers.
This bill would require a plan or an insurer that contracts with
providers to obtain approval from its regulating department prior to
implementing a network modification, as defined, and would require
the plan or insurer, in order to obtain approval, to demonstrate that
the modified network would meet certain access requirements. The
bill would require plans and insurers to notify affected providers
and enrollees or insureds of the modification, as specified.
Existing law requires a health care service plan or a health
insurer to include in its disclosure form and evidence of coverage a
statement describing how participation in the plan or policy may
affect the choice of provider, among other things. Existing law
requires a health care service plan to, upon request, provide an
enrollee or prospective enrollee with a list of certain contracting
providers within his or her general geographic area.
This bill would require the list to include additional information
regarding hospital-based physicians. The bill would also
require a plan to reimburse a contracting provider or provider group
to which the plan delegates the responsibilities of complying with
the provider listing requirements.
Existing law requires health insurers that contract with providers
to provide group policyholders with a current roster of contracting
providers and to make this list available for public inspection, as
specified.
This bill would instead require those health insurers to provide a
list of certain contracting providers to insureds and prospective
insureds upon request and would require that the list be updated, as
specified. The bill would also require these health insurers to make
information available, upon request, concerning a contracting
provider's degree, certifications, or subspecialty qualifications.
The bill would prohibit both plans and health insurers that
contract with providers from including out-of-network or
noncontracted noncontracting providers in their
lists and would make a plan or insurer who violates this
prohibition subject to specified disciplinary and civil action
. The bill would require those plans and insurers to
provide a mechanism enabling enrollees, insureds, and providers to
easily report provider directory errors to the plan or insurer and
would require plans and insurers to correct confirmed errors within a
specified period of time.
The bill would enact other related provisions.
Existing law requires the Department of Managed Health Care, as
often as the director of the department deems necessary, but not less
frequently than once every 3 years, to conduct an onsite medical
survey of the health delivery system of each plan to ensure
protection of subscribers and enrollees, as specified. Existing law
requires that the survey include a review of, among other things, the
procedures for obtaining health services, the procedures for
regulating utilization, and the internal procedures for assuring
quality of care.
This bill would require the survey to also include a review of the
plan's compliance with certain accessibility standards and with the
contracting provider listing requirements described above.
Because a willful violation of the bill's requirements by a health
care service plan would be a crime, the bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1367.26 of the Health and Safety Code is
amended to read:
1367.26. (a) A health care service plan shall provide, upon
request, a list of the following contracting providers, within the
enrollee's or prospective enrollee's general geographic area:
(1) Primary care providers.
(2) Medical groups.
(3) Independent practice associations.
(4) Hospitals.
(5) Hospital-based physicians. The list shall also include the
specialty of each of these physicians and the name of the hospital
where the physician is contracted to provide services.
(6) All other available contracting physicians, listed by
specialty or subspecialty, psychologists, acupuncturists,
optometrists, podiatrists, chiropractors, licensed clinical social
workers, marriage and family therapists, and nurse midwives to the
extent their services may be accessed and are covered through the
contract with the plan.
(b) The list shall indicate which contracting providers
have notified the plan that they have closed practices or are
otherwise not accepting new patients at that time.
(c) The list shall indicate that it may be subject to change
without notice and shall provide a telephone number that enrollees
can contact to obtain information regarding a particular provider.
This information shall include whether or not that provider has
indicated that he or she is accepting new patients.
(d) The list shall not include contracted
contracting providers who are deceased, retired, or who are
otherwise not actually practicing in the service area.
(e) The list shall not include out-of-network or
noncontracted providers. For each violation of this subdivision the
department may assess additional fines and penalties up to, and
including, suspension and revocation of the health care service plan'
s license. A provider shall be entitled to recover, in a civil
action, damages arising from a health care service plan's violation
of this subdivision and may exercise any other remedies available
under law. noncontracting providers.
(f) A health care service plan shall provide this information in
written form to its enrollees or prospective enrollees upon request.
A plan may, with the permission of the enrollee or prospective
enrollee, satisfy the requirements of this section by directing the
enrollee or prospective enrollee to the plan's provider listings on
its Internet Web site.
(g) A plan shall ensure that the list required under this section,
including the information provided on the plan's Internet Web site
pursuant to subdivision (f), is updated at least quarterly. With
respect to written provider lists, a plan may satisfy this update
requirement by providing an insert or addendum to the list. This
update requirement shall not mandate a complete republishing of a
plan's provider directory.
(h) Each plan shall make information available, upon request,
concerning a contracting provider's professional degree, board
certifications, and any recognized subspeciality qualifications a
specialist may have.
(i) Nothing in this section shall prohibit a plan from requiring
its contracting providers, contracting provider groups, or
contracting specialized health care service plans to satisfy these
requirements. If a plan delegates the responsibility of complying
with this section to its contracting providers, contracting provider
groups, or contracting specialized health care service plans, the
plan shall ensure that the requirements of this section are met
and shall reimburse the contracting provider or contracting
provider group for any costs incurred to comply with this section.
.
(j) A health care service plan shall allow enrollees to request
the information required by this section through its toll-free
telephone number or in writing.
(k) A health care service plan shall provide a mechanism enabling
enrollees and providers to easily report provider directory errors to
the plan, such as through the plan's Internet Web site or through
its toll-free telephone number. All errors reported and subsequently
confirmed by the plan shall be corrected within 30 days.
(l) Information requested of health care service plans by the
department to ascertain compliance with this section shall be
provided in a uniform format approved by the department.
SEC. 2. Section 1373.68 is added to the Health and Safety Code, to
read:
1373.68. (a) A health care service plan shall obtain approval
from the department prior to implementing a network modification, as
defined in subdivision (e). In order to obtain approval from the
department, a health care service plan shall demonstrate to the
department that the modified network would meet the network adequacy,
geographic access, and timely access standards set forth in this
chapter and in Title 28 of the California Code of Regulations.
(b) At least 45 days prior to seeking approval of a network
modification pursuant to subdivision (a), a plan shall notify
affected health care providers of the plan's intent to undertake a
network modification.
(c) After a network modification has been approved by the
department pursuant to subdivision (a), a plan shall, at least 60
days prior to implementing the modification, notify affected
enrollees in writing of the modification. The notice shall include
the statement identified in subdivision (f) of Section 1373.65 in no
less than 8-point type and shall be provided in a manner consistent
with Section 1373.65, if applicable.
(d) The department may request from a health care service plan any
information it deems necessary to review a proposed network
modification under subdivision (a) and to ascertain whether a plan
has complied with this section. This information shall be in a
uniform format approved by the department.
(e) For purposes of this section, "network modification" means a
change to a network of contracted health care providers where the
change would affect more than 2,000 enrollees by reducing the number
of contracted physicians in a service area, or by terminating,
renegotiating, or otherwise impacting a provider contract in the
network.
(f) This section shall not apply to a health care service plan
that exclusively contracts with a single medical group in a specific
geographic area to provide or arrange for professional medical
services for the enrollees of the plan.
SEC. 3. Section 1380 of the Health and Safety Code is amended to
read:
1380. (a) The department shall conduct periodically an onsite
medical survey of the health delivery system of each plan. The survey
shall include a review of the procedures for obtaining health
services, the procedures for regulating utilization, peer review
mechanisms, internal procedures for ensuring quality of care, and the
overall performance of the plan in providing health care benefits
and meeting the health needs of the subscribers and enrollees. In
order to ensure enrollee access to health care services, the survey
shall also include, but not be limited to, a review of the plan's
compliance with Section 1367.26, with Item H of Section 1300.51 of
Title 28 of the California Code of Regulations, and with Sections
1300.67.2 and 1300.67.2.1 of Title 28 of the California Code of
Regulations.
(b) The survey shall be conducted by a panel of qualified health
professionals experienced in evaluating the delivery of prepaid
health care. The department shall be authorized to contract with
professional organizations or outside personnel to conduct medical
surveys and these contracts shall be on a noncompetitive bid basis
and shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code. These
organizations or personnel shall have demonstrated the ability to
objectively evaluate the delivery of health care by plans or health
maintenance organizations.
(c) Surveys performed pursuant to this section shall be conducted
as often as deemed necessary by the director to ensure the protection
of subscribers and enrollees, but not less frequently than once
every three years. Nothing in this section shall be construed to
require the survey team to visit each clinic, hospital office, or
facility of the plan. To avoid duplication, the director shall
employ, but is not bound by, the following:
(1) For hospital-based health care service plans, to the extent
necessary to satisfy the requirements of this section, the findings
of inspections conducted pursuant to Section 1279.
(2) For health care service plans contracting with the State
Department of Health Care Services pursuant to the Waxman-Duffy
Prepaid Health Plan Act, the findings of reviews conducted pursuant
to Section 14456 of the Welfare and Institutions Code.
(3) To the extent feasible, reviews of providers conducted by
professional standards review organizations, and surveys and audits
conducted by other governmental entities.
(d) Nothing in this section shall be construed to require the
medical survey team to review peer review proceedings and records
conducted and compiled under Section 1370 or medical records.
However, the director shall be authorized to require onsite review of
these peer review proceedings and records or medical records where
necessary to determine that quality health care is being delivered to
subscribers and enrollees. Where medical record review is
authorized, the survey team shall ensure that the confidentiality of
physician-patient relationship is safeguarded in accordance with
existing law and neither the survey team nor the director or the
director's staff may be compelled to disclose this information except
in accordance with the physician-patient relationship. The director
shall ensure that the confidentiality of the peer review proceedings
and records is maintained. The disclosure of the peer review
proceedings and records to the director or the medical survey team
shall not alter the status of the proceedings or records as
privileged and confidential communications pursuant to Sections 1370
and 1370.1.
(e) The procedures and standards utilized by the survey team shall
be made available to the plans prior to the conducting of medical
surveys.
(f) During the survey the members of the survey team shall examine
the complaint files kept by the plan pursuant to Section 1368. The
survey report issued pursuant to subdivision (h) shall include a
discussion of the plan's record for handling complaints.
(g) During the survey the members of the survey team shall offer
such advice and assistance to the plan as deemed appropriate.
(h) (1) Survey results shall be publicly reported by the director
as quickly as possible but no later than 180 days following the
completion of the survey unless the director determines, in his or
her discretion, that additional time is reasonably necessary to fully
and fairly report the survey results. The director shall provide the
plan with an overview of survey findings and notify the plan of
deficiencies found by the survey team at least 90 days prior to the
release of the public report.
(2) Reports on all surveys, deficiencies, and correction plans
shall be open to public inspection, except that no surveys,
deficiencies, or correction plans shall be made public unless the
plan has had an opportunity to review the report and file a response
within 45 days of the date that the department provided the report to
the plan. After reviewing the plan's response, the director shall
issue a final report that excludes any survey information and legal
findings and conclusions determined by the director to be in error,
describes compliance efforts, identifies deficiencies that have been
corrected by the plan by the time of the director's receipt of the
plan's 45-day response, and describes remedial actions for
deficiencies requiring longer periods to the remedy required by the
director or proposed by the plan.
(3) The final report shall not include a description of
"acceptable" or of "compliance" for any uncorrected deficiency.
(4) Upon making the final report available to the public, a single
copy of a summary of the final report's findings shall be made
available free of charge by the department to members of the public,
upon request. Additional copies of the summary may be provided at the
department's cost. The summary shall include a discussion of
compliance efforts, corrected deficiencies, and proposed remedial
actions.
(5) If requested by the plan, the director shall append the plan's
response to the final report issued pursuant to paragraph (2), and
shall append to the summary issued pursuant to paragraph (4) a brief
statement provided by the plan summarizing its response to the
report. The plan may modify its response or statement at any time and
provide modified copies to the department for public distribution no
later than 10 days from the date of notification from the department
that the final report will be made available to the public. The plan
may file an addendum to its response or statement at any time after
the final report has been made available to the public. The addendum
to the response or statement shall also be made available to the
public.
(6) Any information determined by the director to be confidential
pursuant to statutes relating to the disclosure of records, including
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code), shall
not be made public.
(i) (1) The director shall give the plan a reasonable time to
correct deficiencies. Failure on the part of the plan to comply to
the director's satisfaction shall constitute cause for disciplinary
action against the plan.
(2) No later than 18 months following release of the final report
required by subdivision (h), the department shall conduct a followup
review to determine and report on the status of the plan's efforts to
correct deficiencies. The department's followup report shall
identify any deficiencies reported pursuant to subdivision (h) that
have not been corrected to the satisfaction of the director.
(3) If requested by the plan, the director shall append the plan's
response to the followup report issued pursuant to paragraph (2).
The plan may modify its response at any time and provide modified
copies to the department for public distribution no later than 10
days from the date of notification from the department that the
followup report will be made available to the public. The plan may
file an addendum to its response at any time after the followup
report has been made available to the public. The addendum to the
response or statement shall also be made available to the public.
(j) The director shall provide to the plan and to the executive
officer of the Dental Board of California a copy of information
relating to the quality of care of any licensed dental provider
contained in any report described in subdivisions (h) and (i) that,
in the judgment of the director, indicates clearly excessive
treatment, incompetent treatment, grossly negligent treatment,
repeated negligent acts, or unnecessary treatment. Any confidential
information provided by the director shall not be made public
pursuant to this subdivision. Notwithstanding any other provision of
law, the disclosure of this information to the plan and to the
executive officer shall not operate as a waiver of confidentiality.
There shall be no liability on the part of, and no cause of action of
any nature shall arise against, the State of California, the
Department of Managed Health Care, the Director of the Department of
Managed Health Care, the Dental Board of California, or any officer,
agent, employee, consultant, or contractor of the state or the
department or the board for the release of any false or unauthorized
information pursuant to this section, unless the release of that
information is made with knowledge and malice.
(k) Nothing in this section shall be construed as affecting the
director's authority pursuant to Article 7 (commencing with Section
1386) or Article 8 (commencing with Section 1390) of this chapter.
SEC. 4. Section 10133.1 of the Insurance Code is repealed.
SEC. 5. Section 10133.35 is added to the Insurance Code, to read:
10133.35. (a) For purposes of this section, "health insurer"
means a health insurer that contracts with providers for alternate
rates pursuant to Section 10133.
(b) A health insurer shall provide to an insured or prospective
insured, upon request, a list of the following contracting providers,
within the insured's or prospective insured's general geographic
area:
(1) Primary care providers.
(2) Medical groups.
(3) Independent practice associations.
(4) Hospitals.
(5) Hospital-based physicians. The list shall also include the
specialty of each of these physicians and the name of the hospital
where the physician is contracted to provide services.
(6) All other available contracting physicians, listed by
specialty or subspecialty, psychologists, acupuncturists,
optometrists, podiatrists, chiropractors, licensed clinical social
workers, marriage and family therapists, and nurse midwives to the
extent their services may be accessed and are covered through the
policy with the insurer.
(c) The list shall indicate which contracting providers
have notified the insurer that they have closed practices or are
otherwise not accepting new patients at that time.
(d) The list shall indicate that it may be subject to change
without notice and shall provide a telephone number that insureds can
contact to obtain information regarding a particular provider. This
information shall include whether or not that provider has indicated
that he or she is accepting new patients.
(e) The list shall not include contracted
contracting providers who are deceased, retired, or who are
otherwise not actually practicing in the service area.
(f) The list shall not include out-of-network or
noncontracted noncontracting providers.
For each violation of this subdivision the department may assess
additional fines and penalties up to, and including, suspension and
revocation of the health insurer's certificate of authority. A
provider shall be entitled to recover, in a civil action, damages
arising from a health insurer's violation of this subdivision and may
exercise any other remedies available under the law.
(g) A health insurer shall provide this information in written
form to its insureds or prospective insureds upon request. An insurer
may, with the permission of the insured or prospective insured,
satisfy the requirements of this section by directing the insured or
prospective insured to the insurer's provider listings on its
Internet Web site.
(h) A health insurer shall ensure that the list required under
this section, including the information provided on its Internet Web
site pursuant to subdivision (g), is updated at least quarterly. With
respect to written provider lists, an insurer may satisfy this
update requirement by providing an insert or addendum to the list.
This update requirement shall not mandate a complete republishing of
an insurer's provider directory.
(i) Each health insurer shall make information available, upon
request, concerning a contracting provider's professional degree,
board certifications, and any recognized subspeciality qualifications
a specialist may have.
(j) Nothing in this section shall prohibit an insurer from
requiring its contracting providers, contracting provider groups, or
contracting specialized health insurers to satisfy these
requirements. If an insurer delegates the responsibility of complying
with this section to its contracting providers, contracting provider
groups, or contracting specialized health insurers, the insurer
shall ensure that the requirements of this section are met
and shall reimburse the contracting provider or contracting provider
group for any costs incurred to comply with this section.
.
(k) A health insurer shall allow insureds to request the
information required by this section through its toll-free telephone
number or in writing.
(l) A health insurer shall provide a mechanism enabling insureds
and providers to easily report provider directory errors to the
insurer, such as through the insurer's Internet Web site or through
its toll-free telephone number. All errors reported and subsequently
confirmed by the insurer shall be corrected within 30 days.
(m) Information requested of health insurers by the department to
ascertain compliance with this section shall be provided in a uniform
format approved by the department.
SEC. 6. Section 10133.4 is added to the Insurance Code, to read:
10133.4. (a) A health insurer that contracts with providers for
alternate rates pursuant to Section 10133 shall obtain approval from
the department prior to implementing a network modification, as
defined in subdivision (e). In order to obtain approval from the
department, a health insurer shall demonstrate to the department that
the modified network would meet the network access standards set
forth in Article 6 (commencing with Section 2240) of Subchapter 2 of
Chapter 5 of Title 10 of the California Code of Regulations.
(b) At least 45 days prior to seeking approval of a network
modification pursuant to subdivision (a), an insurer shall notify
affected health care providers of its intent to undertake a network
modification.
(c) After a network modification has been approved by the
department pursuant to subdivision (a), an insurer shall, at least 60
days prior to implementing the modification, notify affected
insureds of the modification in writing. The notice shall include the
following statement in at least 8-point type:
"If you have been receiving care from a health care provider, you
may have a right to keep your provider for a designated time period.
Please contact your insurer's customer service department."
(d) The department may request from a health insurer any
information it deems necessary to review a proposed network
modification under subdivision (a) and to ascertain whether an
insurer has complied with this section. This information shall be in
a uniform format approved by the department.
(e) For purposes of this section, "network modification" means a
change to a network of contracted health care providers where the
change would affect more than 2,000 insureds by reducing the number
of contracted physicians in a service area, or by terminating,
renegotiating, or otherwise impacting a provider contract in the
network.
SEC. 7. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.