BILL NUMBER: SB 1373 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Lieu
FEBRUARY 24, 2012
An act to add Section 1371.6 to the Health and Safety Code, and to
add Section 10133.68 to the Insurance Code, relating to health care
coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 1373, as introduced, Lieu. Health care coverage: out-of-network
coverage.
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 and makes a willful
violation of that act a crime. Existing law requires plans to
reimburse noncontracting providers for emergency services and care
rendered to enrollees of the plan, as specified. Existing law
requires plans to, upon request, provide a list of specified
contracting providers within the enrollee's or prospective enrollee's
general geographic area. Existing law provides for the regulation of
health insurers by the Department of Insurance and authorizes health
insurers to contract for alternative rates of payment with
providers. Existing law requires insurers to provide group
policyholders with a current roster of institutional and professional
providers under contract to provide services at alternative rates
under their group policy and to make that list available for
inspection during regular business hours at the insurer's principal
office.
Under this bill, when an enrollee or insured seeks care from a
noncontracting provider, the provider would be required to provide a
specified written notice to the enrollee or insured informing the
enrollee or insured that the provider is not in the enrollee's or
insured's plan or provider network, as specified. The bill would
require a plan or insurer to reimburse a noncontracting provider for
covered services rendered by the provider to an enrollee of the plan
or insured of the insurer using the rate and method of payment
applied to contracting providers, unless the plan or insurer
determines that the enrollee or insured reasonably should have known
that the provider was a noncontracting provider, except as specified.
The bill would also prohibit a health facility or a provider group
from holding itself out as being within a plan network unless all of
the individual providers providing services at the facility or with
the provider group are within the plan network.
Because a violation of these requirements with respect to a health
care service plan would be a crime, this bill would impose a
state-mandated local program by creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1371.6 is added to the Health and Safety Code,
to read:
1371.6. (a) When an enrollee seeks health care services from a
noncontracting provider, the provider shall, prior to providing care
to the enrollee, provide a written notice to the enrollee informing
him or her that the provider is not in the enrollee's plan network
and that services rendered by that provider may not be covered by the
enrollee's plan contract. The notice shall also include a written
estimate of the cost for the enrollee to obtain those services from
the provider and direct the enrollee to contact his or her plan for
information regarding contracting providers with similar clinical
expertise who offer the same services.
(b) A health facility or provider group shall not hold itself out
as being within a plan's network unless all of the individual
providers providing services at the facility or with the provider
group are within the plan network.
(c) A plan shall pay claims for covered services rendered by a
noncontracting provider to an enrollee of the plan using the same
rate and method of payment used by the plan for contracting providers
rendering similar services on a noncapitated basis and who are
practicing in the same or similar geographic region as the
noncontracting provider unless the plan determines that the enrollee
reasonably should have known that the provider was a noncontracting
provider. This subdivision shall not apply where the plan is
otherwise required, by this chapter or by the enrollee's plan
contract, to provide coverage for the service rendered by the
noncontracting provider. This subdivision shall apply only to health
care service plan contracts issued, amended, or renewed on or after
January 1, 2013.
(d) This section shall not apply when an enrollee seeks emergency
services and care required to be reimbursed by a plan pursuant to
Section 1371.4.
(e) For purposes of this section, the following definitions shall
apply:
(1) "Noncontracting provider" means a provider who is not employed
by, under contract with, or otherwise affiliated with a health care
service plan to provide services to the enrollee.
(2) "Provider group" means a medical group, independent practice
association, or any other similar organization.
SEC. 2. Section 10133.68 is added to the Insurance Code, to read:
10133.68. (a) When an insured seeks health care services from a
noncontracting provider, the provider shall, prior to providing care
to the insured, provide a written notice to the insured informing him
or her that the provider is not in the insured's provider network
and that services rendered by that provider may not be covered by the
insured's policy. The notice shall also include a written estimate
of the cost for the insured to obtain those services from the
provider and direct the insured to contact his or her insurer for
information regarding contracting providers with similar clinical
expertise who offer the same services.
(b) A health facility or provider group shall not hold itself out
as being within an insurer's provider network unless all of the
individual providers providing services at the facility or with the
provider group are within the provider network.
(c) An insurer that contracts with institutional and professional
providers for alternative rates pursuant to Section 10133 shall pay
claims for covered services rendered by a noncontracting provider to
an insured of the insurer, using the same rate and method of payment
used by the insurer for contracting providers rendering similar
services who are practicing in the same or similar geographic region
as the noncontracting provider, unless the insurer determines that
the insured reasonably should have known that the provider was a
noncontracting provider. This subdivision shall not apply where the
insurer is otherwise required, by this part or by the insured's
policy, to provide coverage for the service rendered by the
noncontracting provider. This subdivision shall apply only to health
insurance policies issued, amended, or renewed on or after January 1,
2013.
(d) This section shall not apply when an insured seeks emergency
services and care or when an insured is covered by an insurer that
does not contract for alternative rates of payment pursuant to
Section 10133.
(e) For purposes of this section, the following definitions shall
apply:
(1) "Noncontracting provider" means a provider who has not entered
into a contract with an insurer for alternative rates of payment
pursuant to Section 10133.
(2) "Provider group" means a medical group, independent practice
association, or any other similar organization.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.