BILL NUMBER: AB 2152 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 17, 2012
INTRODUCED BY Assembly Member Eng
FEBRUARY 23, 2012
An act to amend Sections 10123.12, 10601, and 10604 of, and to add
Section 10133.57 to, the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2152, as amended, Eng. Disability insurance.
Existing law provides for the regulation of health insurers by the
Department of Insurance. Under existing law, a health insurer may
contract with providers for alternative rates of payment. Existing
law requires those insurers to file a policy with the department
describing how the insurer facilitates the continuity of care for new
insureds under group policies receiving services for an acute
condition from a noncontracting provider. Existing law also requires
those health insurers to, at the request of an insured, arrange for
the completion of covered services by a terminated provider if the
insured is undergoing treatment for certain conditions, as specified.
This bill would require a health insurer to submit a
transition plan to notify the department at
least 75 days prior to terminating a contract with a provider
group or hospital to provide services at alternative rates of
payment and would require the insurer to send a written notice within
a specified time period to all insureds who have obtained services
from that provider within the last six 6
months if the termination results in a material change to
the insurer's provider network , as specified.
Existing law requires disability insurance policies to include a
disclosure form that contains specified information, including the
principal benefits and coverage of the policy, the exceptions,
reductions, and limitations that apply to the policy, and a
statement, with respect to health insurance policies, describing how
participation in the policy may affect the choice of physician,
hospital, or health care providers, and describing the extent of
financial liability that may be incurred if care is furnished by a
nonparticipating provider.
With respect to health insurance policies, this bill would require
the disclosure form to include additional information, including
conditions and procedures for disenrollment
cancellation, rescission, or nonrenewal , a description of the
limitations on the insured's choice of provider, and ,
with respect to insurers that contract for alternate rates of
payment, a statement describing the basic method of
reimbursement made to its participating providers, as specified. The
bill would also require the front first
page of the disclosure form for health insurance policies to include
other specified information. The bill would require a
health insurer, medical group, independent practice
association, or participating provider that uses or
receives financial bonuses or other incentives to provide a written
summary of specified information to any requesting person.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10123.12 of the Insurance Code is amended to
read:
10123.12. (a) Every health insurer, including those insurers that
contract for alternative rates of payment pursuant to Section 10133,
and every self-insured employee welfare benefit plan that will
affect the choice of physician, hospital, or other health care
providers shall include within its disclosure form and within its
evidence or certificate of coverage a statement clearly describing
how participation in the policy or plan may affect the choice of
physician, hospital, or other health care providers, and describing
the nature and extent of the financial liability that is, or that may
be, incurred by the insured, enrollee, or covered dependents if care
is furnished by a provider that does not have a contract with the
insurer or plan to provide service at alternative rates of payment
pursuant to Section 10133. The form shall clearly inform prospective
insureds or plan enrollees that participation in the policy or plan
will affect the person's choice in this regard by placing the
following statement in a conspicuous place on all material required
to be given to prospective insureds or plan enrollees including
promotional and descriptive material, disclosure forms, and
certificates and evidences of coverage:
PLEASE READ THE FOLLOWING INFORMATION SO YOU WILL KNOW FROM
WHOM OR WHAT GROUP OF PROVIDERS HEALTH CARE MAY BE OBTAINED
It is not the intent of this section to require that the names of
individual health care providers be enumerated to prospective
insureds or enrollees.
If a health insurer providing coverage for hospital, medical, or
surgical expenses provides a list of providers or facilities to
patients or contracting providers, the insurer shall include within
the listing a notification that insureds or enrollees may contact the
insurer in order to obtain a list of the facilities with which the
health insurer is contracting for subacute care and/or transitional
inpatient care.
(b) Every health insurer , including those insurers
that contract contracts for
alternative rates of payment pursuant to Section 10133, shall include
within its disclosure form a statement clearly describing the basic
method of reimbursement, including the scope and general methods of
payment, made to its contracting providers of health care services,
and whether financial bonuses or any other incentives are used. The
disclosure form shall indicate that if an insured wishes to know more
about these issues, the insured may request additional information
from the insurer, the insured's provider, or the provider's medical
group or independent practice association
regarding the information required pursuant to subdivision (c).
(c) If a health insurer, medical group, independent
practice association, or participating health care provider
uses or receives financial bonuses or any other incentives, the
insurer, medical group, independent practice association,
or health care provider shall provide a written summary to
any person who requests it that includes both of the following:
(1) A general description of the bonus and any other incentive
arrangements used in its compensation agreements. Nothing in this
paragraph shall be construed to require disclosure of trade secrets
or commercial or financial information that is privileged or
confidential, such as payment rates, as determined by the
commissioner, pursuant to state law.
(2) A description regarding whether, and in what manner, the
bonuses and any other incentives are related to a provider's use of
referral services.
(d) The statements and written information provided pursuant to
subdivisions (b) and (c) shall be communicated in clear and simple
language that enables consumers to evaluate and compare health
insurance policies.
SEC. 2. Section 10133.57 is added to the Insurance Code, to read:
10133.57. (a) At least 75 days prior to the termination date of
its contract with a professional or institutional
provider group or a general acute care hospital to provide
services at alternative rates of payment pursuant to Section 10133,
a health insurer shall submit a transition plan to
notify the department that includes the
of the termination and include the written
notice the insurer proposes to send to affected insureds if the
termination of the contract results in a material change to the
insurer's provider network, as defined by the department by
regulation. The insurer shall not send this notice to insureds until
the department has reviewed and approved its content. If the
department does not respond within seven days of the date of its
receipt of the filing, the notice shall be deemed approved. For
purposes of this section, "material change" shall be defined as a
termination affecting 800 or more covered lives unless the department
establishes a higher threshold by regulation.
(b) At least 60 days prior to the termination date of a contract
between a professional or institutional provider
group or a general acute care hospital to provide services
at alternative rates of payment pursuant to Section 10133, the
health insurer shall send the written notice described in subdivision
(a) by United States mail to all insureds who have obtained services
from the professional or institutional provider within the preceding
six months if the termination of the contract results in a material
change to the insurer's provider network, as defined by the
department by regulation. A health insurer that is unable to comply
with the timeframe because of exigent circumstances shall apply to
the department for a waiver. The health insurer is excused from
complying with this requirement only if its waiver application is
granted by the department or the department does not respond within
seven days of the date of its receipt of the waiver application. If
the terminated provider is a hospital, the health insurer shall send
the written notice to all insureds who reside within a 15-mile radius
of the terminated hospital.
(c) The health insurer shall send the written notice regarding
termination of a provider contract with a hospital required by
subdivision (b) only if the terminated provider is a general acute
care hospital.
(d)
(c) If an individual provider terminates his or her
contract or employment with a provider group that contracts with a
health insurer, the insurer may require that the provider group send
the notice required by subdivision (b).
(e)
(d) If, after sending the notice required by
subdivision (b), a health insurer reaches an agreement with a
terminated provider to renew or enter into a new contract or to not
terminate their contract, the insurer shall offer each affected
insured the option to return to that provider.
(f)
(e) A health insurer and a provider shall include in
all written, printed, or electronic communications sent to an insured
that concern the contract termination or transition plan, the
following statement in not less than 8-point
eight-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, and if you have further questions, you are
encouraged to contact the Department of Insurance, which protects
insurance consumers, by telephone at its toll-free number,
800-927-HELP (4357), or at a TDD number for the hearing impaired at
800-482-4833, or online at www.insurance.ca.gov."
(g)
(f) For purposes of this section, "provider group"
means a medical group , independent practice association,
or any other similar organization.
(h)
(g) The commissioner may adopt regulations in
accordance with the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code) that are necessary to implement the provisions
of this section.
SEC. 3. Section 10601 of the Insurance Code is amended to read:
10601. As used in this chapter:
(a) "Benefits and coverage" means the accident, sickness or
disability indemnity available under a policy of disability
insurance.
(b) "Exception" means any provision in a policy whereby coverage
for a specified hazard or condition is entirely eliminated.
(c) "Reduction" means any provision in a policy which reduces the
amount of a policy benefit to some amount or period less than would
be otherwise payable for medically authorized expenses or services
had such a reduction not been used.
(d) "Limitation" means any provision other than an exception or a
reduction which restricts coverage under the policy.
(e) "Presenting for examination or sale" means either (1)
publication and dissemination of any brochure, mailer, advertisement,
or form which constitutes a presentation of the provisions of the
policy and which provides a policy enrollment or application form, or
(2) consultations or discussions between prospective beneficiaries
or their contract agents and employees or agents of disability
insurers, when such consultations or discussions include presentation
of formal, organized information about the policy which is intended
to influence or inform the prospective insured or beneficiary, such
as brochures, summaries, charts, slides, or other modes of
information in lieu of or in addition to the policy itself.
(f) "Disability insurance" means every policy of disability
insurance , and self-insured employee
welfare benefit plan , and nonprofit hospital service plan
issued, delivered, or entered into pursuant to or described
in Chapter 1 (commencing with Section 10110) ,
or Chapter 4 (commencing with Section 10270) , or
Chapter 11A (commencing with Section 11491) of this part.
(g) "Insurer" means every insurer transacting disability insurance
, and every self-insured employee
welfare plan , and every nonprofit hospital service plan
specified in subdivision (e) (f)
.
(h) "Disclosure form" means the standard supplemental disclosure
form required pursuant to Section 10603.
(i) "Small group health insurance policy" means a group health
insurance policy issued to a small employer, as defined in Section
10700.
SEC. 4. Section 10604 of the Insurance Code is amended to read:
10604. The disclosure form shall include at least the following
information, in concise and specific terms, relative to the
disability insurance policy, together with additional information as
the commissioner may require in connection with the policy:
(a) The applicable category or categories of coverage provided by
the policy, from among the following:
(1) Basic hospital expense coverage.
(2) Basic medical-surgical expense coverage.
(3) Hospital confinement indemnity coverage.
(4) Major medical expense coverage.
(5) Disability income protection coverage.
(6) Accident only coverage.
(7) Specified disease or specified accident coverage.
(8) Such other categories as the commissioner may prescribe.
(b) The principal benefits and coverage of the disability
insurance policy, including coverage for acute care and subacute care
if the policy is a health insurance policy, as defined in Section
106.
(c) The exceptions, reductions, and limitations that apply to the
policy.
(d) A summary, including a citation of the relevant contractual
provisions, of the process used to authorize, modify, delay, or deny
payments for services under the coverage provided by the policy
including coverage for subacute care, transitional inpatient care, or
care provided in skilled nursing facilities. This subdivision shall
only apply to health insurance policies, as defined in Section 106.
(e) The full premium cost of the policy.
(f) Any copayment, coinsurance, or deductible requirements that
may be incurred by the insured or his or her family in
obtaining coverage under the policy.
(g) The terms under which the policy may be renewed by the
insured, including any reservation by the insurer of any right to
change premiums.
(h) A statement that the disclosure form is a summary only, and
that the policy itself should be consulted to determine governing
contractual provisions.
(i) For a health insurance policy, as defined in Section 106, all
of the following:
(1) A notice on the first page of the disclosure form that
conforms with all of the following conditions:
(A) (i) States that the form discloses the terms and conditions of
coverage.
(ii) States, with respect to individual health insurance policies,
small group health insurance policies, and any group health
insurance policies for which health care services are not
negotiated , that the applicant has a right to view the
disclosure form and policy prior to beginning coverage under the
policy, and, if the policy does not accompany the disclosure form,
the notice shall specify where the policy can be obtained prior to
beginning coverage.
(B) Includes a statement that the disclosure and the policy should
be read completely and carefully and that individuals with special
health care needs should read carefully those sections that apply to
them.
(C) Includes the insurer's telephone number or numbers that may be
used by an applicant to receive additional information about the
benefits of the policy, or states where those telephone number or
numbers are located in the disclosure form.
(D) For individual health insurance policies, and small group
health insurance policies, states where a health policy benefits and
coverage matrix is located.
(E) Is printed in type no smaller than that used for the remainder
of the disclosure form and is displayed prominently on the page.
(2) A statement as to when benefits shall cease in the event of
nonpayment of the prepaid or periodic charge
premium and the effect of nonpayment upon an insured who is
hospitalized or undergoing treatment for an ongoing condition.
(3) To the extent that the policy or insurer permits a free choice
of provider to its insureds, the statement shall disclose,
consistent with Section 10123.12, the nature and extent of choice
permitted and the financial liability that is, or may be, incurred by
the insured, covered dependents, or a third party by reason of the
exercise of that choice.
(4) For group health insurance policies, including small group
health insurance policies, a summary of the terms and conditions
under which insureds may remain in the policy in the event the group
ceases to exist, the group policy is terminated, or an individual
insured leaves the group, or the insureds' eligibility status
changes.
(5) If the policy utilizes arbitration to settle disputes, a
statement of that fact. If the policy requires binding arbitration, a
disclosure pursuant to Section 10123.19.
(6) A description of any limitations on the insured's choice of
primary care physician, specialty care physician, or nonphysician
health care practitioner, based on service area and limitations on
the insured's choice of acute care hospital care, subacute or
transitional inpatient care, or skilled nursing facility.
(7) General authorization requirements for referral by a primary
care physician to a specialty care physician or a nonphysician health
care practitioner.
(8)
(7) Conditions and procedures for
disenrollment cancellation, rescission, or nonrenewal
.
(9)
(8) A description as to how an insured may request
continuity of care as required by Sections 10133.55 and 10133.56, and
request a second opinion pursuant to Section 10123.68.
(10)
(9) Information concerning the right of an insured to
request an independent medical review in
accordance with Article 3.5 (commencing with Section 10169) of
Chapter 1.
(11)
(10) A notice as required by Section 791.04.