BILL NUMBER: SB 1373 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 10, 2012
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 amended, 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
under a specified type of contract or policy that
covers services rendered by noncontracting providers seeks covered
services from a an individual
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 at the provider's office or the
office of the provider's provider group, or at a health facility fo
r an elective or scheduled procedure, the individual
provider or the facility would be required to provide the enrollee or
insured a notice containing certain information, as specified. The
bill would require the plan or insurer to reimburse a
the individual 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 at a rate other than
the rate usually paid to a noncontracting provider , 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
provide that the enrollee or insured reasonably should have known
that the provider was a noncontracting provider if the provider or
the facility provided the notice described above. The bill
would also prohibit a health facility or a provider group from
holding itself out as being within a plan or provider
network unless all of the individual providers providing services at
the facility or with the provider group are within the plan or
provider 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
1371.6. (a) In enacting this section, it is the
intent of the Legislature to ensure that consumers have an adequate
opportunity to obtain medically necessary care within their plan
network.
(b) When an enrollee of a preferred
provider organization plan contract or a point-of-service plan
contract receives services for covered benefits from an individual
noncontracting provider at the provider's office or the office of the
provider's provider group, or at a health facility during
an elective or scheduled procedure, including a planned labor and
delivery, 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 from the individual
noncontracting provider at a rate other than the rate usually paid to
an individual noncontracting provider who renders similar
services on a noncapitated basis and who are
is 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 as described in
subdivision (c) . 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.
(c) For purposes of subdivision (b), the following provisions
shall apply:
(1) If an enrollee receives services from an individual
noncontracting provider at the provider's office or the office of the
provider's provider group, the enrollee reasonably should have known
that the provider was a noncontracting provider if the provider
documents to the plan that he or she provided the notice as required
under subdivision (d).
(2) If an enrollee receives services from an individual
noncontracting provider at a health facility during an elective or
scheduled procedure, including a planned labor and delivery, the
enrollee reasonably should have known that the provider was a
noncontracting provider if the facility documents to the plan that it
provided the notice as required under subdivision (e).
(d) When an enrollee of a preferred provider organization plan
contract or a point-of-service plan contract seeks services for
covered benefits from an individual noncontracting provider at the
provider's office or the office of the provider's provider group, the
provider shall, at the point of entry, provide a written notice to
the enrollee in English, Spanish, Vietnamese, Chinese, Korean,
Tagalog, Russian, Armenian, Khmer, Arabic, or Hmong, as applicable,
that includes all of the following information:
(1) A statement that the provider is not in the enrollee's plan
network.
(2) A statement that services rendered by the provider may not be
covered by the enrollee's plan contract.
(3) A statement referring the enrollee to his or her health care
service plan in order to obtain services from an in-network provider
or a provider otherwise authorized by the plan.
(4) A written estimate of the cost to the enrollee for the
services to be rendered by the provider. This estimate shall be based
on the provider's usual and customary charges for the care to be
provided.
(5) The toll-free telephone number of the department.
(e) When an enrollee of a preferred provider organization plan
contract or a point-of-service plan contract seeks covered services
for an elective or scheduled procedure, including a planned labor and
delivery, from a health facility in which individual providers
providing services within the facility are not known to the facility
to be contracting providers, the facility shall, at the earliest
possible time after the procedure is scheduled, provide a notice to
the enrollee in English, Spanish, Vietnamese, Chinese, Korean,
Tagalog, Russian, Armenian, Khmer, Arabic, or Hmong, as applicable,
that includes all of the following information:
(1) A statement that specific categories of providers providing
services within the facility may not be in the enrollee's plan
network.
(2) A statement that services rendered by individual
noncontracting providers within the facility may not be covered by
the enrollee's plan contract.
(3) A statement that refers the enrollee to his or her health
care service plan in order to obtain services from an in-network
provider or a provider otherwise authorized by the plan.
(4) A written estimate of the cost to the enrollee for the
services rendered by the categories of providers described in
paragraph (1). The estimate shall be based on the providers' usual
and customary charges.
(5) The toll-free telephone number of the department.
(f) A provider group shall not hold itself out as being within a
plan's network unless all of the individual providers providing
services with the provider group are within the plan network.
(g) A health facility shall not hold itself out as being within a
plan's network unless all of the individual providers providing
services within the facility are within the plan network.
(d)
(h) 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. Consistent with Section 1371.4, this
section shall apply to services and care provided after an enrollee
is stabilized following an emergency.
(e)
(i) For purposes of this section, the following
definitions shall apply:
(1) "Health facility" has the same meaning as that term is defined
in Section 1250.
(1)
(2) "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)
(3) "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
10133.68. (a) When an
insured receives services for covered benefits from an individual
noncontracting provider at the provider's office or the office of the
provider's provider group, or at a health facility during an
elective or scheduled procedure, including a planned labor and
delivery, an insurer that contracts with institutional and
professional providers for alternative rates pursuant to Section
10133 and does not limit payments to those providers as
described in subdivision (c) of 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
from the individual noncontracting provider at a rate
other than the rate usually paid to an indi vidual
noncontracting provider who renders similar services and
who are is 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 as described in subdivision (b) . 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.
(b) For purposes of subdivision (a), the following provisions
shall apply:
(1) If an insured receives services from an individual
noncontracting provider at the provider's office or the office of the
provider's provider group, the insured reasonably should have known
that the provider was a noncontracting provider if the provider
documents to the insurer that he or she provided the notice as
required under subdivision (c).
(2) If an insured receives services from an individual
noncontracting provider at a health facility during an elective or
scheduled procedure, including a planned labor and delivery, the
insured reasonably should have known that the provider was a
noncontracting provider if the facility documents to the insurer that
it provided the notice as required under subdivision (d).
(c) When an insured of a preferred provider organization health
insurance policy seeks services for covered benefits from an
individual noncontracting provider at the provider's office or the
office of the provider's provider group, the provider shall, at the
point of entry, provide a written notice to the insured in English,
Spanish, Vietnamese, Chinese, Korean, Tagalog, Russian, Armenian,
Khmer, Arabic, or Hmong, as applicable, that includes all of the
following information:
(1) A statement that the provider is not in the insured's
provider network.
(2) A statement that services rendered by the provider may not be
covered by the insured's policy.
(3) A statement referring the insured to his or her health
insurer in order to obtain services from an in-network provider or a
provider otherwise authorized by the insurer.
(4) A written estimate of the cost to the insured for the
services to be rendered by the provider. This estimate shall be based
on the provider's usual and customary charges for the care to be
provided.
(5) The toll-free telephone number of the department.
(d) When an insured of a preferred provider organization health
insurance policy seeks covered services for an elective or scheduled
procedure, including a planned labor and delivery, from a health
facility in which individual providers providing services within the
facility are not known to the facility to be contracting providers,
the facility shall, at the earliest possible time after the procedure
is scheduled, provide a notice to the insured in English, Spanish,
Vietnamese, Chinese, Korean, Tagalog, Russian, Armenian, Khmer,
Arabic, or Hmong, as applicable, that includes all of the following
information:
(1) A statement that specific categories of providers providing
services within the facility may not be in the insured's provider
network.
(2) A statement that services rendered by individual
noncontracting providers within the facility may not be covered by
the insured's policy.
(3) A statement that refers the insured to his or her health
insurer in order to obtain services from an in-network provider or a
provider otherwise authorized by the insurer.
(4) A written estimate of the cost to the insured for the
services rendered by the categories of providers described in
paragraph (1). The estimate shall be based on the providers' usual
and customary charges.
(5) The toll-free telephone number of the department.
(e) A provider group shall not hold itself out as being within a
provider network unless all of the individual providers providing
services with the provider group are within the provider network.
(f) A health facility shall not hold itself out as being within a
provider network unless all of the individual providers providing
services within the facility are within the provider network.
(d)
(g) 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 . This section shall apply
to care provided after an insured is stabilized following an
emergency.
(e)
(h) For purposes of this section, the following
definitions shall apply:
(1) "Health facility" has the same meaning as that term is defined
in Section 1250 of the Health and Safety Code.
(1)
(2) "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)
(3) "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.