BILL ANALYSIS
AB 2586
Page 1
Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2586 (Chesbro) - As Amended: April 5, 2010
SUBJECT : Health care coverage: network modification:
contracting providers.
SUMMARY : Revises existing law related to contracting providers
of health care service plans (health plans) regulated by the
Department of Managed Health Care (DMHC) and adds substantially
similar requirements on health insurers regulated by the
California Department of Insurance (CDI). Requires carriers to
obtain regulator approval prior to implementing a network
modification, as defined and as specified. Specifically, this
bill :
Reporting Contracting Provider Information
1)Requires health insurers to 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: primary care providers;
medical groups; independent practice associations; hospitals;
and, 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. (Current
requirement for health plans.)
2)Requires carriers to provide, upon request of an enrollee or
prospective enrollee, a list of hospital-based physicians in
that person's general geographic area. Requires the list to
also include the specialty of each of these physicians, the
name of the hospital where the physician is contracted to
provide services.
3)Requires provider lists to indicate which providers have
closed practices or are otherwise not accepting new patients
at that time.
4)Requires health insurers' provider list to indicate that it
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may be subject to change without notice and to provide a
number that insureds can contact to obtain information
regarding a particular provider. Requires the information to
include whether or not that provider has indicated that he or
she is accepting new patients. (Current requirement for
health plans.)
5)Prohibits the list from including contracted providers who are
deceased, retired, or who are otherwise not actually
practicing in the service area for from including
out-of-network or non-contracted providers. Permits
regulators, for each violation of these provisions, to assess
additional fines and penalties up to, and including,
suspension and revocation of a carrier's license. Makes a
provider entitled to recover, in a civil action, damages
arising from a carrier's violation of these provisions and
permits any other remedies available under current law.
6)Requires health insurers to provide this information in
written form to its insureds or prospective insureds upon
request. Permits insurers, with the permission of the insured
or prospective insured, satisfy these requirements by
directing the insured or prospective insured to the insurer's
provider listings on its Web site. (Current requirement for
health plans.)
7)Requires carriers to ensure that the list required under this
bill, including the information provided on its Web site, is
updated at least quarterly. Permits carriers to satisfy this
update requirement, with respect to written provider lists, by
providing an insert or addendum to the list.
8)Prohibits the update requirement from mandating a complete
republishing of an insurer's provider directory. (Current
requirement for health plans.)
9)Requires health insurers to make information available, upon
request, concerning a contracting provider's professional
degree, board certifications, and any recognized subspeciality
qualifications a specialist may have. (Current requirement
for health plans.)
10)Clarifies that health insurers are permitted to require
contracting providers, contracting provider groups, or
contracting specialized health insurers to satisfy these
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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. (Current requirement for health plans)
11)Requires carriers, if they delegate the responsibility of
providing requested information to enrollees, to reimburse
contracting providers or provider groups for any costs
incurred to do so.
12)Requires health insurers to allow insureds to request this
information through its toll-free number or in writing.
(Current requirement for health plans.)
13)Requires carriers to provide a mechanism enabling enrollees,
insureds, and providers to easily report provider directory
errors to the carrier, such as through the carrier's Web site
or through its toll-free number. Requires all confirmed
errors to be corrected within 30 days.
Network modifications
14)Requires carriers to obtain regulator approval prior to
implementing a network modification, as defined. Defines
"network modification" as a change to a network of contracted
health care providers where the change would affect more than
2,000 enrollees or 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.
15)Requires health plans and health insurers that contract with
providers for alternate rates, in order to obtain regulator
approval, to demonstrate that the modified network would meet
standards set forth in this bill and in existing law.
16)Requires carriers, at least 45 days prior to seeking
approval, to notify affected health care providers of the
plan's intent to undertake a network modification. Requires
carriers, after receiving approval and at least 60 days prior
to implementing the modification, to notify affected enrollees
or insureds in writing of the modification, as specified.
On-site medical surveys
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17)Requires surveys of health plans conducted by DMHC under
existing law to include, but not be limited to, a review of
the plan's compliance with network reporting, geographic
accessibility, and timely access requirements in existing law.
Other provisions
18)Exempts health plans that exclusively contract with a single
medical group in a specific geographic area to provide or
arrange for professional medical services for the enrollees of
the plan from the provisions of this bill.
19)Requires carriers, by January 1, 2012, to make a graphic
interactive map available on their Web sites. Requires the
map to provide current and prospective enrollees with the
means to input a reference address and locate providers within
the plan's provider directory by name, type, specialty, and
distance from the entered address.
20)Permits regulators to request from carriers any information
deemed necessary to ascertain compliance with this bill, and
requires the information to be in a regulator-approved uniform
format.
21)Expands certain reporting provisions in current law
regulating health plans to apply to prospective enrollees, in
addition to existing enrollees.
22)Makes other technical and conforming changes to existing law.
EXISTING LAW :
1)Provides for the licensure and regulation of health plans by
DMHC under the Knox-Keene Health Care Service Plan Act of
1975, and provides for the regulation of health insurers by
CDI. Requires health plans to obtain DMHC approval prior to a
material modification of its plan or operations and requires
health plans to take specified actions prior to terminating a
contract with a provider group or a general acute care
hospital. Imposes specified requirements with respect to the
accessibility of services provided by both plans and insurers.
2)Requires carriers to include in disclosure forms and evidence
of coverage a statement describing how participation in the
plan or policy may affect the choice of provider, among other
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things. Requires a health plan to, upon request, provide an
enrollee or prospective enrollee with a list of certain
contracting providers within his or her general geographic
area.
3)Requires specified health insurers to provide group
policyholders with a current roster of contracting providers
and to make this list available for public inspection, as
specified.
4)Requires DMHC, as often as deemed necessary, but not less
frequently than once every three years, to conduct an onsite
medical survey of the health delivery system of each plan to
assure protection of subscribers and enrollees, as specified.
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.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, provider
directories are notoriously inaccurate, listing physicians or
other providers who are not available. This bill provides
some accountability and transparency for carriers that publish
these directories. The author states that this bill will help
protect and maintain access to health care by making sure
patients have full and complete information about their health
care provider network and will help ensure that consumers and
employers are being offered real value in exchange for their
health care premiums. The author states that it will also
help the state crack down on health plans and insurers that
promise consumers a fully staffed physician network but,
instead, give them a phantom network with insufficient
providers and misleading provider directories. Finally, this
bill closes a gap in the law and makes it easier for
regulators to monitor this process and ensure that adequate
networks are in place before implementation of a network
modification that will restrict access.
2)BLUE CROSS HEALTHY FAMILY PROGRAM RE-CONTRACTING . According
to Blue Cross, it is the largest Healthy Families Program
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(HFP) health plan, serving 214,000 members in 47 California
counties. According to the California Medical Association
(CMA), prior to July 2009 Blue Cross HFP enrollees accessed
physician services throughout California through the Prudent
Buyer network. In March 2009, Blue Cross sent a notice to
physicians informing them that as of July 1, 2009 they would
no longer be able to see HFP patients through their Prudent
Buyer contract. Instead, physicians were offered a new
separate contract for health care services to HFP and Access
for Infants and Mothers (AIM) patients.
According to Blue Cross, the company was severely impacted by
three separate rate reductions implemented in 2009, and were
requested by the state to operate in 2010 and most of 2011
with no rate increases. Blue Cross states that this situation
necessitated provider contracting changes. The CMA states that
the new rates that were offered were significantly reduced.
Historically, Blue Cross had provided commercial rates of
reimbursement for its California HFP and AIM state-sponsored
programs. Blue Cross states that these public programs are
not comparable to commercial products; the rates plans receive
to manage these programs are very similar to Medi-Cal rates
and that commercial rates could no longer be supported. The
contracts were reviewed by DMHC and CMA prior to being
finalized, and that changes were made as a result of CMA
input.
According to CMA, physicians reported that their HFP patients
hadn't been notified that they may be required to choose a new
physician. After raising the issue with DMHC, Blue Cross
implemented a continuity of care plan, which remains in
effect, to allow out-of-network physicians to continue to see
patients, but at a reduced rate of "usual and customary" on
file with DMHC (which is about 125% of Medi-Cal rates). Blue
Cross terminated the contracts, physicians who did not sign
the new agreements can choose to continue to see HFP patients
under the continuity of care plan and accept the reduced
rates, but are under no contractual obligation to do so.
3)NOTICE TO PROVIDERS AND MEMBERS . While CMA states that
adequate notice of the re-contracting was not provided to
either providers or enrollees, Blue Cross states that they
initiated a large outreach campaign. Blue Cross states that
its communications included letters sent via certified mail on
March 27, 2009; June 1, 2009; June 5, 2009; and, December 22,
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2009 and fax blasts on September 3, 2009; November 3, 2009;
and, December 17, 2009. Additionally, they developed a
Provider Contracting Toolkit, which was mailed to providers.
Blue Cross initiated both a toll-free number and a shared
mail-box dedicated to provider questions and concerns. Blue
Cross also reached out to providers via both phone and
face-to-face visits. Blue Cross states that from the beginning
of the re-contracting effort they communicated openly with
DMHC and have the full and complete support of the Managed
Risk Medical Insurance Board.
4)LETTER TO BLUE CROSS . There were 3,000 Blue Cross HFP
enrollees in Humboldt County as of March 2010. In a letter
dated November 19, 2009, Assemblymember Chesbro urged Blue
Cross to take immediate action to investigate the situation in
Humboldt County and ensure that patients have access to
medical care. He also requested an updated and accurate list
of currently practicing physicians who have current contracts
to provide care to HFP enrollees in the county, information
about the continuity of care plan that Blue Cross had recently
launched, and information about how Blue Cross intends to
rectify the situation if the network was lacking in adequate
providers. Blue Cross states that they are in the process of
responding to a similar request from DMHC, and intends to
provide that information to the Legislature when that is
complete.
5)SUPPORT . CMA, the sponsor of this bill, provided information
that indicated that this bill was introduced as a direct
result of the Humboldt HFP situation. CMA, the California
Hospital Association, and Children Now write that inadequate
provider networks deprive consumers of the benefit of the
money they have paid for health care coverage, and undermine
the public health and welfare by forcing consumers to reduce
utilization of appropriate preventive services and forgo
necessary medical care. Supporters further state that this
bill will provide state regulators with better network
adequacy enforcement tools to improve access and continuity of
care and will help the state crack down on carriers that
promise consumers a fully staffed physician network but,
instead, give them a phantom network with insufficient
providers and misleading provider directories. The California
Chiropractic Association asserts that most provider network
lists are woefully out of date, and that it's not uncommon for
the network lists to include provides who are deceased,
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retired, have moved out of state, or whose practices are
closed to new patients. The California Psychological
Association states that it has long looked at the issue of
adequate provider networks impeding access to critical
psychological services and that this bill will provide better,
more accurate information on provider networks. The
California Dental Association (CDA) writes that negative
changes in plans' contracts with its providers may, ultimately
jeopardize enrollees' access to care should providers refuse
onerous contract changes and leave the network. CDA states
that this bill will enable both departments to better monitor
and take action against unilateral and onerous plan changes
where it appears that such changes will undermine the
integrity of the network and access to care.
6)OPPOSITION . America's Health Insurance Plans (AHIP) states
that this bill does not enhance transparency, threatens high
quality provider networks, establishes unnecessary
administrative process, and further strains the affordability
of coverage. AHIP further states that under existing law,
plans and insurers must already provider information to
enrollees and applicants in a variety of ways, and this bill
only duplicates administrative procedures already in place.
Local Health Plans of California states that it is
unreasonable and unrealistic to require plans to list all
closed practices, regardless of whether providers have
notified the plan and the requirement to list subspecialties
will be very onerous. Health Net states that the practical
effect of the network modification provisions of this bill is
to grant providers greater negotiating leverage over plans and
insurers that will increase contract rates and inevitably the
premiums paid by employers. Health Net also objects to the
provision in this bill that allows a provider to bring a civil
action against a plan or insurer for inadvertently listing a
non-contracted or out-of-network provider on their provider
list and states that this new sanction is an addition o the
creation of an addition regulatory fine for the same
infraction. Blue Cross states that they fail to see how this
bill would improve access to care and asserts that it will
only further increase costs to the system without providing
any benefit to their members. Blue Cross further states that,
at the very minimum, providers should be required to go
through the same processes being proposed if they would like
to leave our network for any reason.
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7)TECHNICAL AMENDMENTS .
a) On page 3, line 20, after "providers" insert "have
notified the plan that they"
b) On page 5, delete lines 24-27 and on page 12 delete
lines 32-35 and insert (on both pages):
(n) Information requested of the health plans by the
department to ascertain compliance with this section shall
be in a uniform format approved by the department.
c) On page 10, delete lines 27 and 29
d) On page 12, delete lines 36 and 37
8)AUTHORS AMENDMENTS . The author is proposing to take
amendments in Committee to delete the interactive Web site
requirements in this bill.
REGISTERED SUPPORT / OPPOSITION :
Support
California Medical Association (sponsor)
California Association of Marriage and Family Therapists
California Dental Association
California Chiropractic Association
California Hospital Association
California Psychological Association
Children Now
Opposition
America's Health Insurance Plans
Association of California Life and Health Insurance Companies
Blue Cross of California
Blue Shield of California
California Association of Health Plans
Health Net
Kaiser Permanente
Local Health Plans of California
Molina Healthcare
Analysis Prepared by : Melanie Moreno / HEALTH / (916)
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