BILL ANALYSIS �
SB 690
Page 1
Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 690 (Hern�ndez) - As Amended: June 18, 2012
Policy Committee: HealthVote:17-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill enacts into state law, beginning January 1, 2014, a
federal requirement that prohibits health plans and insurers
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. Additionally, this bill:
1)Specifies plans and insurers are not required to contract with
"any willing provider" (any provider willing to abide by the
terms and conditions for participation established by the plan
or insurer).
2)Specifies it shall not be construed as preventing a health
care service plan from establishing varying reimbursement
rates based on quality or performance measures.
3)Requires implementation only to the extent required by the
provider nondiscrimination provisions established in Section
2706 of the federal Public Health Service Act (42 U.S.C. Sec.
300gg-5), and any federal rules or regulations issued under
that section.
FISCAL EFFECT
1)One-time special fund costs to the Department of Managed
Health Care (DMHC) in the range of $70,000 to verify that plan
filings reflect the provider nondiscrimination requirements
enacted by this bill, to the extent required by federal law.
The cost for the California Department of Insurance (CDI) to
similarly review policies under their jurisdiction is expected
to be minor and absorbable.
SB 690
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Although the provisions of the bill do not exceed what is
required by federal law, in absence of this bill there would
be no specific state requirement for DMHC and CDI to verify
compliance with the provider nondiscrimination provision of
federal law.
2)Both DMHC and CDI may also need to promulgate regulations to
clarify implementation, depending if and when federal guidance
is released on the similar provision in the federal Patient
Protection and Affordable Care Act (ACA). Potential one-time
special fund workload costs associated with regulations could
range from $50,000 to $100,000 for DMHC, depending on the
complexity of the regulations.
Similar costs would accrue to CDI if they were granted
authority to issue regulations in order to clarify this bill's
provisions. CDI does not have blanket rulemaking authority,
and this bill does not explicitly grant CDI such authority.
3)Enforcement costs would likely be minor and absorbable for CDI
and DMHC. However, given the uncertainty surrounding federal
implementation and interpretation of the provider
nondiscrimination provision of the ACA, it is difficult to
project the necessity, type, and extent of any enforcement
actions.
COMMENTS
1)Rationale . According to the author, this bill is needed to
eliminate the harmful practice of health plan discrimination
against whole classes of healthcare providers. The author
believes that licensed health care providers who have
contracted with plans and insurers should be reimbursed for
covered services they are qualified to perform, as long as
they are working within their scopes of practice.
Though the extent to which health plans and insurers include
so-called "discriminatory" provisions in their contracts is
unclear, commonly cited cases include, for example,
optometrists and nurse anesthetists who contract with plans
and insurers, but are nonetheless not eligible to be
reimbursed for delivering certain covered services that are
within their respective scopes of practice.
SB 690
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The federal ACA includes a similar provider nondiscrimination
provision to the one enacted by this bill. No further federal
guidance has been released on this provision.
2)Opposition . The federal provider nondiscrimination provision
in ACA was opposed by the American Medical Association, who
subsequently adopted a resolution calling for repeal of the
provision.
This bill is opposed by the California Medical Association
because they believe it expands coverage for alternative
therapies of questionable effectiveness.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081