BILL ANALYSIS �
AB 2152
Page 1
GOVERNOR'S VETO
AB 2152 (Eng)
As Amended August 24, 2012
2/3 vote
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|ASSEMBLY: |46-25|(May 3, 2012) |SENATE: |21-14|(August 29, |
| | | | | |2012) |
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|ASSEMBLY: |41-33|(August 30, | | | |
| | |2012) | | | |
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Original Committee Reference: HEALTH
SUMMARY : Establishes notification requirements on preferred
provider organizations 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.
1)Requires 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)Requires 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
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the provider group that has a contract with the health plan.
3)Requires health insurers to notify CDI 30 days prior to the
termination of a contract between a preferred provider
organization and a health insurer if the termination would
affect 800 or more covered lives who have obtained services
within the preceding six months.
4)Requires health insurers where the termination described in 3)
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.
5)Establishes a specific written notice requirement for health
insurers or provider groups in 12-point type to send pursuant
to 4) above.
6)Sunsets existing disclosure requirements on disability
insurance policies and establishes new and revised disclosure
requirements, as specified.
7)Makes additional technical and clarifying changes.
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
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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.
GOVERNOR'S VETO MESSAGE :
I agree with the need to provide adequate notice to
consumers about relevant changes to their health
coverage - in this case, the availability of
contracted providers. However, this bill is
technically flawed. It provides for stronger
notification procedures at the Department of
Insurance, but weakens the notification procedures
under existing law at the Department of Managed Health
Care.
I will direct the Department of Managed Health Care to
work with the Insurance Commissioner, the Legislature
and interested parties to correct these defects and
develop a workable solution next year.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0005981