BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 2152 (Eng) - Health care coverage.
Amended: June 21, 2012 Policy Vote: Health 5-2
Urgency: No Mandate: Yes
Hearing Date: August 16, 2012
Consultant: Brendan McCarthy
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: AB 2152 would require reporting by health plans
and health insurers that function as preferred provider
organizations.
Fiscal Impact:
One-time costs up to $150,000 to adopt regulations for
reporting of data (Managed Care Fund).
Minor ongoing costs to review data (Managed Care Fund and
Insurance Fund).
Background: Under current state law, health plans are regulated
by the Department of Managed Health Care while health insurers
are regulated by the Department of Insurance. Certain forms of
health care coverage commonly referred to as "preferred provider
organizations" may be regulated by either the Department of
Managed Health Care (referred to as a preferred provider
arrangement) or the Department of Insurance (referred to as an
alternative rates of payment). Under a preferred provider
organization, the health plan or health insurer contracts with
hospitals and provider groups to provide services to enrollees
at reduced costs to both the enrollee and the health plan or
health insurer. If an enrollee elects to receive services from a
hospital or provider group that is not in the preferred provider
network, the enrollee is usually liable for increased cost
sharing.
Current law required health plans to notify the Department of
Managed Health Care and enrollees when a contract between the
health plan and a health care provider has been terminated,
subject to specific conditions.
AB 2152 (Eng)
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Proposed Law: AB 2152 would require reporting by health plans
and health insurers that function as preferred provider
organizations.
With respect to preferred provider organizations regulated by
the Department of Managed Health Care, the bill would:
Require a health plan to notify the Department of the
termination of a contract with a hospital or provider group
at least 30 days prior to the termination.
If the termination would impact 2,000 or more enrollees who
have obtained services from the hospital or provider group
within the last six months, the health plan would be
required to notify those enrollees at least 10 days prior to
the termination, including specified information.
With respect to preferred provider organizations regulated by
the Department of Insurance, the bill would:
Require a health insurer to disclose certain information to
insureds regarding methods of payment to contracting
providers, including information on any financial incentives
used.
Require a health insurer to notify the Department of the
termination of a contract with a hospital or provider group
at least 30 days prior to the termination.
If the termination would impact 2,000 or more enrollees who
have obtained services from the hospital or provider group
within the last six months, the health plan would be
required to notify those enrollees at least 10 days prior to
the termination, including specified information.
Related Legislation: AB 2350 (Monning) would require health
plans and health insurers to provide specified information on
policies, enrollment, and financial issues annually to the
Department of Managed Health Care or the Department of
Insurance, respectively. That bill will be heard in this
committee.
Staff Comments: No reimbursement is required under the bill,
because the only mandated activities on local governments relate
to criminal penalties.
Author's amendments: The proposed author's amendments would
delay implementation until July 1, 2013.
AB 2152 (Eng)
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