BILL ANALYSIS �
SB 690
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Date of Hearing: June 12, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 690 (Ed Hernandez) - As Amended: January 10, 2012
SENATE VOTE : 31-7
SUBJECT : Health care coverage: discrimination.
SUMMARY : Prohibits, beginning January 1, 2014, a health care
service plan (health plan) or health insurer 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 that provider's license or certification.
Specifically, this bill :
1)Prohibits, beginning January 1, 2014, a health plan or health
insurer 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
that provider's license or certification.
2)Provides that 1) above shall not be construed to require a
health plan or health insurer contract with any health care
provider willing to abide by the terms and conditions for
participation established by the plan, insurer, or issuer.
3)Provides that nothing in this bill shall be construed as
preventing a health plan or health insurer from establishing
varying reimbursement rates based on quality or performance
measures.
4)States that this bill will be implemented only to the extent
required by the provider nondiscrimination provisions
established pursuant to federal law, and any federal rules or
regulations issued, as specified.
EXISTING LAW :
1)Establishes the Department of Managed Health Care (DMHC) to
regulate health plans and the California Department of
Insurance (CDI) to regulate health insurers.
2)Provides that health plans (except specialized health plans)
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and health insurers that negotiate and enter into contracts
with professional providers to provide services at alternative
rates of payment, as specified, shall give reasonable
consideration to timely written proposals for affiliation by
licensed or certified professional providers.
3)Defines "reasonable consideration" for purposes of 2) above as
consideration in good faith of the terms of proposals for
affiliation prior to the time that contracts for alternative
rates of payment are entered into or renewed. Allows health
plans or insurers to specify the terms and conditions of
contracting to assure cost efficiency, qualification of
providers, and appropriate utilization of services,
accessibility, and convenience to persons who would receive
the provider's services, and consistency with basic methods of
operation, but shall not exclude providers because of their
category of license. Defines professional provider for
purposes of 2) above.
4)Establishes the federal Patient Protection and Affordable Care
Act (ACA) (Public Law 111-148) which among other provisions,
prohibits health plans and health issuers offering group or
individual insurance coverage from discriminating with respect
to participation under the plan or coverage against any health
care provider who is acting within the scope of that
provider's license or certification under applicable state
law.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
Fiscal Impact (in thousands)
Major Provisions 2012-13 2013-14 2014-15 Fund
Developing regulations $85 Special *
Help Center staffing Unknown costs, starting in
2014Special *
and enforcement
Increases in utilization Unknown costs, starting in
2014Various **
for various health programs
* Managed Care Fund.
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** Medi-Cal costs shared 50% General Fund (GF) or 50% local
funds, 50% federal funds; The California Public Employees'
Retirement System costs shared 55% GF, 45% special and
other funds; Healthy Families Program costs shared 35% GF,
65%t federal funds.
COMMENTS :
1)PURPOSE OF THIS BILL . The author is the sponsor of this bill.
According to the author, this bill is needed to eliminate the
harmful practice of health plan discrimination against whole
classes of health care providers. Commonly, health plans and
insurance companies limit types of health care providers
allowed to provide services. For example, optometrists who
are permitted to provide routine vision care under a health
plan or insurance contract are often prohibited from treating
medical eye conditions, such as glaucoma, that are within
their scope of practice. Evidence shows optometrists can
reduce costs, improve quality, and increase access to care.
Unfortunately, traditional contracting arrangements prevent
optometrists from being used to their fullest potential. As
growing demands for health care services add stress to an
already overburdened health care system, efficient utilization
of health care professions other than traditional physicians
is essential to ensuring access and reigning in health care
costs.
2)BACKGROUND .
a) Provider Nondiscrimination in the ACA . This bill
codifies a provision in the ACA (U.S.C. Sec. 300gg-5) which
prohibits discrimination with respect to participation
under the plan or coverage against any health care provider
who is acting within the scope of that provider's license
or certification under applicable state law. Specifically,
the ACA provides: "A group health plan and a health
insurance issuer offering group or individual health
insurance coverage shall not discriminate with respect to
participation under the plan or coverage against any health
care provider who is acting within the scope of that
provider's license or certification under applicable State
Law. This section shall not require that a group health
plan or health insurance issuer contract with any health
care provider willing to abide by the terms and conditions
for participation established by the plan or issuer.
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Nothing in this section shall be construed to preventing a
group health plan, a health insurance issuer, or the
Secretary from establishing varying reimbursement rates
based on quality or performance measures."
According to background information provided by the author,
the ACA provisions were referred to as the Harkin
Amendment (sponsored by Senator Tom Harkin (D-Iowa) of the
Senate Health, Education, Labor and Pensions Committee),
and established the first-ever federal standard for
provider nondiscrimination. These provisions are expected
to go into effect in 2014. Federal guidance on the
interpretation of these provisions for purposes of
implementation is currently not available.
b) Healing Arts Practitioners in California . Existing
state law provides for the licensure and certification of
various healing arts licensees, including, physicians and
surgeons, dentists, podiatrists, naturopathic doctors,
registered nurses, physician assistants, radiologic
technologists, social workers, acupuncturists, and massage
therapists. Generally, the practice or title acts of these
healing arts practitioners include a scope of practice
provisions which defines the procedures, actions or
processes that are permitted for the licensed or certified
individual. Additionally, there are healing arts
practitioners whose scope of practice is defined in the
initiative act, specifically, chiropractors and osteopathic
physicians. The scope of practice of some practitioners
overlap. For example, physicians and surgeons may perform
acupuncture without obtaining an acupuncture license.
Ophthalmologists and optometrists (certified pursuant to
specified regulations) can treat glaucoma.
c) Violations of Knox-Keene and Insurance Code . Existing
law allows DMHC to take administrative actions (suspension
or revocation of license or assessment of administrative
penalties) for any acts or omissions constituting grounds
for discipline, including violation of any provision of
Knox-Keene. There are also additional enforcement
procedures and penalties, such as cease-and-desist orders
or civil actions to obtain injunctions for any violation of
Knox-Keene. Similarly, the Insurance Code provides CDI,
through the Insurance Commissioner, various enforcement
tools, including the ability to suspend an insurer's
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certificate of authority for not carrying out contracts in
good faith. If this measure is enacted, DMHC or CDI may
use any administrative actions or enforcement tools that
are deemed appropriate to enforce this bill's provisions.
3)SUPPORT . Supporters such as the California Academy of
Audiology, California Speech-Language Hearing Association,
California Society of Health-System Pharmacists, and the
California Association of Marriage and Family Therapists state
that patients are best served if they have access to a team of
health care professionals who work together to ensure overall
health and wellness and allow patients to obtain the right
care at the right time, resulting in greater accessibility and
affordability.
4)SUPPORT IF AMENDED . The California Chiropractic Association
has taken a support if amended position and indicates that it
would support provider nondiscrimination language that
includes the full spectrum of different health plans and
health insurers that the public has to choose from to ensure
sufficient access to health care providers. It is also
unclear what the impact of this bill is to healing arts
providers, access to care, or cost.
5)OPPOSITION . The California Medical Association (CMA) opposes
this measure and indicates CMA had opposed the ACA provider
nondiscrimination clause. CMA believes that this bill and the
ACA provisions 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. It could
also create patient confusion over greatly differing levels of
education, skills, and training among different types of
health care professionals. CMA also points out that although
the overall intent of this bill is to address disparate
contracting policies for different licensed providers, it has
not been provided with information demonstrating a problem
that need be legislated, particularly since current law
already requires reasonable consideration of allied health
care providers when health plans and health insurers are
contracting for services.
6)POLICY COMMENT . As indicated above, federal guidance on the
meaning of ACA's provider nondiscrimination provisions
currently does not exist. It is unclear how these provisions
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will be implemented, how many health care providers will be
impacted, the cost of implementation, and whether these
provisions will have an actual impact on actual health plan
coverage or reimbursements.
7)SUGGESTED TECHNICAL AMENDMENTS . The ACA provisions state that
the provider nondiscrimination provisions will apply where a
health care provider is acting within the scope of that
provider's license or certification under applicable state
law. In California, the scope of practice of healing arts
practitioners is codified in state law and the initiative act
(osteopaths and chiropractors). As such, the author may wish
to amend this bill as follows:
"(a) Beginning January 1, 2014, no health insurer shall
discriminate with respect to provider
participation or coverage under the policy against any health
care provider who is acting within the scope of that
provider's license or certification under applicable state law
or initiative act ."
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
American Massage Therapy Association
Associated Body Work & Massage Professionals
California Academy of Audiology
California Association of Marriage and Family Therapists
California Black Health Network
California Naturopathic Doctors Association
California Nurse-Midwives Association
California Optometric Association
California Pharmacists Association
California Psychological Association
California Society of Health-System Pharmacists
California Speech-Language Hearing Association
Coalition for Patients' Rights/California
Council of Acupuncture and Oriental Medicine Associations
National Community Pharmacists Association
Opposition
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California Medical Association
Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916)
319-2097