BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2152|
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THIRD READING
Bill No: AB 2152
Author: Eng (D)
Amended: 8/21/12 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 5-2, 6/13/12
AYES: Hernandez, Alquist, DeSaulnier, Rubio, Wolk
NOES: Harman, Anderson
NO VOTE RECORDED: Blakeslee, De Le�n
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : Not relevant
SUBJECT : Health care coverage
SOURCE : Department of Insurance
DIGEST : This bill requires reporting by health plans and
health insurers that function as preferred provider
organizations, as specified. Implementation of this bill
will begin on July 1, 2013.
ANALYSIS : 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 (DMHC) and makes a willful violation
of the act a crime. Existing law requires a health care
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AB 2152
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service plan to submit a block transfer filing to the DMHC
at least 75 days prior to the termination of its contract
with a provider group or a general acute care hospital and
to provide 60 days' notice of the contract's termination to
enrollees assigned to the terminated provider. Existing
law specifies that a health care service plan is not
required to send this notice to enrollees of a preferred
provider organization unless the terminated provider is a
general acute care hospital.
This bill, commencing July 1, 2013, makes these provisions
inapplicable with respect to a contract between a plan and
a provider that provides benefits to enrollees and
subscribers through a preferred provider arrangement. This
bill instead requires the plan under those contracts to
notify the DMHC at least 30 days prior to terminating a
contract with a provider group or general acute care
hospital, and where the termination would affect 2,000 or
more covered lives who have obtained services from the
provider group or hospital within the preceding six months,
would require the plan to send a written notice at least 10
days prior to the termination date to all of those covered
lives, as specified.
Existing law provides for the regulation of health insurers
by the Department of Insurance (DOI). 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 DOI 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, commencing July 1, 2013, requires a health
insurer to notify the DOI at least 30 days prior to
terminating a contract with a provider group or general
acute care hospital to provide services at alternative
rates of payment. Where that termination would affect
2,000 or more covered lives who have obtained services from
the provider group or hospital within the preceding six
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months, this bill, commencing July 1, 2013, requires the
insurer to send a written notice to all of those covered
lives at least 10 days prior to the termination date, 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
requires the disclosure form to include additional
information, including conditions and procedures for
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. This bill also requires the first page of the
disclosure form for health insurance policies to include
other specified information. This bill requires a health
insurer, medical group, or participating provider that uses
or receives financial bonuses or other incentives to
provide a written summary of specified information to any
requesting person. This bill makes these provisions
operative on July 1, 2013.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
Senate Appropriations Committee indicates there would be:
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).
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SUPPORT : (Verified 4/17/12)(per Senate Health Committee
analysis - unable to reverify at time of writing)
Department of Insurance (source)
CTW/DLW:k 8/21/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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