BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 690 S
AUTHOR: Hernandez B
AMENDED: As Introduced
HEARING DATE: May 4, 2011 6
CONSULTANT: 9
Chan-Sawin 0
SUBJECT
Health care coverage: discrimination
SUMMARY
Prohibits health care service plan (health plan) contracts and
insurance policies issued, amended, renewed, or delivered on or
after January 1, 2014, from discriminating, with respect to
provider participation or coverage, against any health care
provider who is acting within the scope of his or her licensure
or certification, as specified. Specifies that the provisions
of the bill may not be construed as an "any willing provider"
provision or from preventing a plan or insurer from establishing
varying reimbursement rates, as specified.
CHANGES TO EXISTING LAW
Existing federal law:
Prohibits, under the federal Patient Protection and Affordable
Care Act (the federal health reform act), (Public Law 111-148),
among other things, health plans and insurers offering group or
individual health insurance coverage from discriminating, with
respect to participation, against any health provider acting
within the scope of that provider's license or certification
under applicable state law.
Specifies that these provisions shall not be construed to:
Require a health plan or insurer to contract with any
provider willing to abide by the terms and conditions for
participation established by the plan or insurer, or
Prevent a health plan, insurer, or the federal Secretary
Continued---
STAFF ANALYSIS OF SENATE BILL 690 (Hernandez) Page 2
of Health and Human Services from establishing varying
reimbursement rates based on quality or performance
measures.
Applies this nondiscrimination provision to new plans, but
exempts grandfathered plans, retiree-only plans, and specialized
plans. A "grandfathered plan" is any group or individual health
insurance product that was in effect on March 23, 2010.
Existing state law:
Provides for the regulation of health plans by the Department of
Managed Health Care (DMHC), and for the regulation of health
insurers by the California Department of Insurance (CDI).
Requires health plans, except for specialized plans, and
disability insurers who negotiate and enter into contracts with
professional providers to provide services at alternative rates
of payment, as specified, to give reasonable consideration to
timely written proposals for contracting by licensed or
certified professional providers.
Defines "reasonable consideration" as a consideration in good
faith of the terms of proposals for contracting prior to the
time that contracts for alternative rates for payment are
entered into or renewed. Allows a plan or insurer to specify
the terms and conditions of contracting to assure cost
efficiency, qualification of providers, appropriate utilization
of services, accessibility, convenience to persons who would
receive the provider's services, and consistency with its basic
method of operation, but prohibits a plan or insurer from
excluding providers because of their category of license.
Prohibits plans or insurers, as specified, from refusing to give
reasonable consideration to affiliation with podiatrists for the
provision of services solely on the basis that they are
podiatrists.
Specifies legislative intent that all persons licensed in the
state to practice dentistry be accorded equal professional
status and privileges, without regard to the degree earned.
Prohibits nonprofit hospital service plans or self-insured
employee welfare benefit plans from discriminating, as
specified, with respect to employment, against a licensed
dentist solely on the basis of the educational degree held by
the dentist.
Prohibits a health plan which offers or provides chiropractic
STAFF ANALYSIS OF SENATE BILL 690 (Hernandez) Page 3
services, as specified, from refusing to give reasonable
consideration to affiliation with chiropractors for provision of
services solely on the basis that they are chiropractors.
Specifies that health insurers are not required to contract with
or reimburse additional medical providers if the geographic area
is adequately served by those with which it already contracts.
This bill:
Prohibits health plan contracts and insurance policies issued,
amended, renewed, or delivered on or after January 1, 2014, from
discriminating, with respect to provider participation or
coverage under the plan or policy, against any health care
provider who is acting within the scope of his or her licensure
or certification.
Specifies that this bill shall not be construed to:
Require a health plan contract or insurance policy to
contract with any provider willing to abide by the terms
and conditions for participation established by the plan or
insurer, or
Prevent a health plan or insurer from establishing
varying reimbursement rates based on quality or performance
measures.
FISCAL IMPACT
This bill has not been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
According to the author, health plans and insurers currently
have latitude to determine the quantity, type and geographic
location of health care professionals they need to ensure
availability of health care benefits to their enrollees. Health
plans and insurers, including a number of large self-funded
employer-sponsored coverage programs authorized under the
federal Employee Retirement Income Security Act (ERISA), have
policies that require certain services be provided by certain
types of providers, even though another type of provider may be
authorized to perform that service based on their scope of
practice. For example, certain plans or insurers prohibit
STAFF ANALYSIS OF SENATE BILL 690 (Hernandez) Page 4
reimbursement for anesthesia and pain management services
provided by certified registered nurse anesthetists and require
such services to be provided by anesthesiologists.
The author asserts that such discrimination by plans and
insurers against whole classes of qualified licensed health care
professionals impairs patient access to care, limits consumer
choice, and may result in increased health care costs due to
lack of competition. SB 690, which is sponsored by the author,
simply enacts federal health reform law by prohibiting health
plans and insurers from engaging in blanket exclusions of a
class of provider based solely on licensure or certification,
and does not impose "any willing provider" requirements on plans
or insurers, or prevent plans and insurers from establishing
varying reimbursement rates based on performance and quality
measures. The author believes that SB 690 promotes access to
care, maintains consumer choice of health care professionals,
and reduces health care costs through increased competition,
while still maintaining the state's ability to establish scope
of practice laws.
The Harkin Amendment
Section 2706 (a) of PPACA, referred to as the Harkin Amendment -
sponsored by Senator Tom Harkin (D-Iowa) of the Senate Health,
Education, Labor and Pensions Committee -establishes the
first-ever federal standard for provider nondiscrimination.
This provision in the federal health reform law, which goes into
effect in 2014, bars plans and insurers from discriminating in
plan coverage and participation based on provider types. The
U.S. Department of Health and Human Services (HHS) is expected
to issue guidance on the implementation of this section of PPACA
in 2012.
This provision in federal law was supported by a wide range of
providers including audiologists, nurse practitioners, nurse
anesthetists, chiropractors, nurse-midwives, occupational
therapists, optometrists, physical therapists, podiatrists,
psychologists, speech-language-hearing therapists, complementary
and alternative medicine providers, naturopathic physicians,
acupuncturists, massage therapists, and social workers.
Arguments in support
The Coalition for Patients' Rights/California, which includes
the American Nurses Association, California, the California
Association of Nurse Anesthetists Inc., the California Physical
Therapy Association, the Occupational Therapy Association of
STAFF ANALYSIS OF SENATE BILL 690 (Hernandez) Page 5
California, and the California Optometric Association, states
that many non-MD providers can reduce costs, improve quality and
increase access to care. The coalition states that traditional
contracting arrangements exclude these providers from being used
to their fullest potential, and such provider discrimination is
anti-competitive. As growing demands for health care services
add stress to an already overburdened system, efficient
utilization of health care professions other than traditional
physicians is essential to ensuring access and reigning in
costs.
The California Nurse-Midwives Association (CNMA) argues that
provider discrimination is wrong, and that it limits or denies
patient choice, and can have a negative impact on access to and
cost-effectiveness of care. CNMA further points out that, as
advanced practice nurses, nurse-midwives work in collaboration
with physicians to provide quality health care for women
throughout California, it is vital to ensure that Californians
have access to the care and expertise that California's
nurse-midwives offer.
Arguments in opposition
The California Medical Association (CMA) oppose this bill,
stating their strong opposition to the federal health reform
provision enacting the health care provider nondiscrimination
clause that this bill codifies in state law. CMA points to
existing state law that requires plans and insurers to provide
reasonable consideration of allied providers when contracting
for services. CMA believes it would require insurers to expand
coverage for alternative therapies, which is inconsistent with
the President's goals to reduce health care costs for medical
treatments that are not proven effective. CMA believes SB 690
could potentially open the door for practitioners with less
training and expertise, and force unfettered access to unproven
therapies, which could increase costs, reduce quality and
endanger patient safety.
The California Association of Health Plans (CAHP) states that
while they appreciate the desire to ensure that plans do not
discriminate against classes of providers, any state legislation
must carefully and precisely conform to federal law or the state
risks regulatory confusion. Although potential amendments may
more closely align this bill to the specific requirements of the
federal law, CAHP states that the current version of the bill
does not achieve this level of conformity.
STAFF ANALYSIS OF SENATE BILL 690 (Hernandez) Page 6
COMMENTS
1.Potential impact on classes of providers. It is unclear how
many and which provider classes will be affected by SB 690, but
it is anticipated that a wide range of non-MD/DO professions,
such as audiologists, nurse practitioners, nurse anesthetists,
chiropractors, nurse-midwives, occupational therapists,
optometrists, physical therapists, podiatrists, psychologists,
speech-language-hearing therapists, complementary and
alternative medicine providers, naturopathic physicians,
acupuncturists, massage therapists, clinical social workers, and
other groups of licensed health practitioners, could potentially
be affected.
2.Potential impact on access and cost. To the extent that
additional classes of providers, who were previously barred from
providing a specific service due to their licensure or
certification, would be able to provide that service, this bill
would increase the supply of providers providing said service.
However, it is unclear how many provider classes would be
impacted, and how many types of services would fall within the
overlap in the scope of practice between two or more classes of
providers. The increased competition due to more providers
providing the service could potentially lower cost.
3.Definition of "discriminate" is unclear. The standard
definition of "discriminate" in state law is based on
established classifications such as race, color, national
origin, ancestry, religion, sex, marital status, sexual
orientation, age, etc. It is undefined in the Harkin Amendment.
The author may wish to provide an alternative definition
applicable to the provisions of this bill that defines
"discriminate" as discrimination against classifications of
medical providers, or provide a cross-reference to federal law
and subsequent rules and regulations issued.
4.PPACA exemptions. Federal law provides an exemption to these
provisions for grandfathered plans, specialized plans and
retiree-only plans. As drafted, the bill does not provide such
exemptions. The author may wish to consider providing a similar
exemption in order to parallel federal law either explicitly or
through a cross-reference.
5.Future changes in federal law. Federal guidance on the
implementation of this section of PPACA is expected in 2012. It
STAFF ANALYSIS OF SENATE BILL 690 (Hernandez) Page 7
is unclear what that guidance will entail. The author may wish
to consider an amendment that cross-references the bill to the
appropriate section in federal law and subsequent federal
guidance issued in relation to that section, or provides the
departments with regulatory authority to address such changes to
ensure conformity with federal law.
6.Suggested technical amendments:
a) On page 2, strike out lines 3-4 and insert:
"1373.15. (a) Beginning January 1, 2014, no health care
service plan shall"
b) On page 2, strike out lines 17-18 and insert:
"10177.15. (a) Beginning January 1, 2014, no health
insurer shall"
POSITIONS
Support: American Nurses Association, California
California Association of Marriage and Family
Therapists
California Association of Nurse Anesthetists Inc.
California Chiropractic Association
California Nurse-Midwives Association
California Optometric Association
California Physical Therapy Association
Coalition for Patients' Rights/California
Occupational Therapy Association of California
Oppose: California Association of Health Plans
California Medical Association
-- END --