BILL ANALYSIS �
AB 2152
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CONCURRENCE IN SENATE AMENDMENTS
AB 2152 (Eng)
As Amended August 24, 2012
Majority vote
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|ASSEMBLY: |46-25|(May 3, 2012) |SENATE: |21-14|(August 29, |
| | | | | |2012) |
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Original Committee Reference: HEALTH
SUMMARY : Establishes notification requirements on preferred
provider organizations (PPO) licensed at the Department of
Managed Health Care (DMHC) and the California Department of
Insurance (CDI) when a provider contract is terminated that
affects 800 or more covered lives. Requires specified patient
disclosure if the termination affects 2,000 or more covered
lives. Establishes and revises other consumer notification and
disclosure requirements on health insurers.
The Senate amendments :
1)Require at least 30 days prior to the termination date of a
contract between a health plan and a provider group or a
general acute care hospital, the health plan to submit a
written notice notifying DMHC of the termination if the
termination would affect 800 or more covered lives who have
obtained services within the preceding six months.
2)Require the health plan where the termination described in 1)
above affects 2,000 or more covered lives, unless a higher
threshold is established by regulation, to send a written
notice, as specified, to those affected at least 10 days prior
to the termination date. Authorizes a plan to require a
provider group to comply with this requirement if an
individual provider terminates a contract or employment with
the provider group that has a contract with the health plan.
3)Revise disclosure requirements on CDI licensed Medicare
supplement policies and certificates.
4)Revise the CDI requirements on health insurers from 75 days to
30 days in terms of the period of time prior to the
termination of a contract between a preferred provider
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organization and a health insurer if the termination would
affect 800 or more covered lives who have obtained services
within the preceding six months.
5)Require the health insurer where the termination described in
4) above affects 2,000 or more covered lives, unless a higher
threshold is established by regulation, to send a written
notice, as specified, to those affected at least 10 days prior
to the termination date. Authorizes an insurer to require a
provider group to comply with this notification requirement if
an individual provider terminates a contract or employment
with the provider group that has a contract with the health
insurer.
6)Establish a specific written notice requirement for health
insurers or provider groups in 12-point type to send pursuant
to 5) above.
7)Sunset existing disclosure requirements on disability
insurance policies and establish new and revised disclosure
requirements, as specified.
8)Make additional technical and clarifying changes.
AS PASSED BY THE ASSEMBLY , this bill required health insurers to
notify the CDI, if a termination of a contract results in a
material change to the network, (affecting 800 or more covered
lives unless a higher threshold is determined by CDI by
regulation). Required health insurers to disclose specified
information related to methods of payment and bonuses and other
disclosures required of the DMHC licensees. Specifically, this
bill :
1)Required every health insurer, including those insurers that
contract for alternative rates of payment, as specified, to
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.
2)Required health insurers, at least 75 days prior to the
termination date of its contract with a provider group or
general acute care hospital to provide services at alternative
rates of payment, as specified, to notify CDI and submit for
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approval 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.
3)Required a health insurer and a provider to 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 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
telecommunications device for the deaf (or TDD) number for the
hearing impaired at 800-482-4833, or online at
www.insurance.ca.gov."
4)Required specified disclosures for a health insurance policy
relating to the terms and conditions of the policy.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)One-time costs up to $300,000 to adopt regulations for
reporting of data (Managed Care Fund and Insurance Fund).
2)Minor ongoing costs to review data (Managed Care Fund and
Insurance Fund).
COMMENTS : According to the author, in June 2011, the California
HealthCare Foundation issued a report which focused on the
policies and structures possibly needed to implement the
Affordable Care Act (ACA). The report identified considerations
and options for updating and strengthening California's
regulatory context in light of ACA requirements. One of the
recommendations was to align statutes and regulations between
CDI and DMHC. The author states that the report found a number
of instances in California law where DMHC statutory requirements
were potentially more protective or beneficial to consumers than
those authorized for CDI under the Insurance Code.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
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