BILL NUMBER: SB 751	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 11, 2011

INTRODUCED BY    Senator   Gaines 
 Senators   Gaines   and Hernandez 

                        FEBRUARY 18, 2011

   An act to add Section 1367.49 to the Health and Safety Code, and
to add Section 10133.64 to the Insurance Code, relating to health
care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 751, as amended, Gaines. Health care coverage: provider
contracts.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Existing law prohibits a contract between a plan or
insurer and a health care provider from containing certain terms.
   This bill would prohibit a contract by or on behalf of a plan or
insurer and a licensed hospital, as defined, or any other licensed
health care facility  , as defined,  owned by a
licensed hospital to provide inpatient hospital services or
ambulatory care services to subscribers and enrollees of the plan or
policyholders and insureds of the insurer from containing a provision
that restricts the ability of the plan or insurer to furnish
information to subscribers or enrollees of the plan or policyholders
or insureds of the insurer concerning the cost range of procedures at
the hospital or  licensed health care  facility or
the quality of services performed by the hospital or facility. The
bill would make a  contractural   contractual
 provision inconsistent with this requirement void and
unenforceable.  The bill would require a plan or insurer to
annually provide a hospital or facility the opportunity to review and
validate data provided to subscribers or enrollees of the plan or to
policyholders or insureds of the insurer, as specified. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1367.49 is added to the Health and Safety Code,
to read:
   1367.49.  (a) A contract issued, amended, renewed, or delivered on
or after January 1, 2012, by or on behalf of a health care service
plan and a licensed hospital or any other licensed health care
facility owned by a licensed hospital to provide inpatient hospital
services or ambulatory care services to subscribers and enrollees of
the plan shall not contain any provision that restricts the ability
of the health care service plan to furnish information to subscribers
or enrollees of the plan concerning the cost range of procedures at
the hospital or  the licensed health care  facility
or the quality of services performed by the hospital or facility.
   (b) Any  contractural   contractual 
provision inconsistent with this section shall be void and
unenforceable. 
   (c) For purposes of this section, the following definitions apply:
 
   (1) "Licensed hospital" has the same meaning as set forth in
Section 4028 of the Business and Professions Code.  

   (2) "Licensed health care facility" means any institution or
health facility, other than a long-term health care facility as
defined pursuant to Section 1418, licensed by the State Department of
Public Health to deliver or furnish health care services. 

   (c) A health care service plan shall, at a minimum, on an annual
basis, provide the hospital or facility a reasonable opportunity to
review and validate data provided to subscribers or enrollees
pursuant to subdivision (a).  
   (d) If the information proposed to be furnished to enrollees and
subscribers on the quality of services performed by a hospital or
facility is data that the plan has developed and compiled, the plan
shall utilize appropriate risk adjustment factors to account for
different characteristics of the population, such as case mix,
severity of patient's condition, comorbidities, outlier episodes, and
other factors to account for differences in the use of health care
resources among hospitals and facilities.  
   (e) As it applies to this section, the cost range of a procedure
shall not include procedures for enrollees covered by capitated
payments in a contract between a health plan and a licensed hospital
or a licensed health care facility owned by a licensed hospital.
 
   (f) For the purposes of this section, "licensed hospital" means
those hospitals as defined in subdivisions (a), (b), and (f) of
Section 1250.  
   (d) 
    (g)  Section 1390 shall not apply for purposes of this
section.
  SEC. 2.  Section 10133.64 is added to the Insurance Code, to read:
   10133.64.  (a) A contract issued, amended, renewed, or delivered
on or after January 1, 2012, by or on behalf of a health insurer and
a licensed hospital or any other licensed health care facility owned
by a licensed hospital to provide inpatient hospital services or
ambulatory care services to policyholders and insureds of the insurer
shall not contain any provision that restricts the ability of the
health insurer to furnish information to policyholders or insureds
concerning the cost range of procedures at the hospital or 
the licensed health care  facility or the quality of
services provided by the hospital or facility.
   (b) Any  contractural   contractual 
provision inconsistent with this section shall be void and
unenforceable. 
   (c) For purposes of this section, the following definitions apply:
 
   (1) "Licensed hospital" has the same meaning as set forth in
Section 4028 of the Business and Professions Code.  

   (2) "Licensed health care facility" means any institution or
health facility, other than a long-term health care facility as
defined pursuant to Section 1418 of the Health and Safety Code,
licensed by the State Department of Public Health to deliver or
furnish health care services.  
   (c) A health insurer shall, at a minimum, on an annual basis,
provide the hospital or facility a reasonable opportunity to review
and validate data provided to policyholders and insureds pursuant to
subdivision (a).  
   (d) If the information proposed to be furnished to policyholders
and insureds on the quality of services performed by a hospital or
facility is data that the insurer has developed and compiled, the
insurer shall utilize appropriate risk adjustment factors to account
for different characteristics of the population, such as case mix,
severity of patient's condition, comorbidities, outlier episodes, and
other factors to account for differences in the use of health care
resources among hospitals and facilities.  
   (e) For the purposes of this section, "licensed hospital" means
those hospitals as defined in subdivisions (a), (b), and (f) of
Section 1250 of the Health and Safety Code. 
                                          ____ CORRECTIONS
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