BILL NUMBER: SB 1373 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 18, 2012
AMENDED IN SENATE APRIL 10, 2012
INTRODUCED BY Senator Lieu
FEBRUARY 24, 2012
An act to add Section Sections 1339.586
and 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 provides for the licensure and regulation of health
facilities, including hospitals, by the State Department of Public
Health and makes a violation of those provisions a misdemeanor.
Existing law, the Payers' Bill of Rights, requires a hospital that
uses a charge description master to make a written or electronic copy
available in accordance with specified provisions and requires the
hospital to post a notice that informs patients that the charge
description master is available pursuant to specified provisions.
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 a patient seeks services at a hospital for
an elective or scheduled procedure and the patient is covered by a
specified type of health care service plan contract or health
insurance policy that provides out-of-network coverage, the hospital
would be required to provide the patient with a notice stating, among
other things, that certain hospital-based providers may not be
within the network of the patient's plan or insurer. The bill would
require that the hospital receive the signature of the patient, or
his or her legal representative, on this notice prior to rendering
services to the patient. The bill would also require that a health
care service plan or health insurer that receives a request from a
subscriber, enrollee, policyholder, or insured for a referral to a
noncontracting provider based on this hospital notice either
authorize the enrollee or subscriber or policyholder or insured to
obtain covered services from the noncontracting provider or refer the
enrollee to a contracting provider with similar clinical expertise
providing similar services in the same geographic region.
Under this bill, when an enrollee or insured under a specified
type of contract or policy that covers services rendered by
noncontracting providers seeks covered services from an individual
noncontracting provider at the provider's office or the office of the
provider's provider group, or at a health facility for 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 the individual noncontracting provider 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. 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
The bill would also prohibit a health facility
hospital 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
hospital or with the provider group are within
the plan or provider network or the hospital or provider group
acknowledges that individual providers within the hospital or
provider group may be outside the plan or provider network .
Because a violation of these certain of
the bill's 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 1339.586 is added to the
Health and Safety Code , to read:
1339.586. (a) When a patient seeks services at a hospital for an
elective or scheduled procedure, including a planned labor and
delivery, and the patient is covered by a point-of-service health
care service plan contract, or a health care service plan contract or
health insurance policy that provides coverage through a preferred
provider organization, the hospital shall provide a written notice to
the patient at the earliest possible time after the procedure is
scheduled. The notice shall be separate from any other document,
shall be in English, Spanish, Vietnamese, Chinese, Korean, Tagalog,
Russian, Armenian, Khmer, Arabic, or Hmong, as applicable, and shall
include all of the following information:
(1) A statement that hospital-based providers, such as
radiologists, anesthesiologists, and pathologists, providing services
within the hospital, may not be in the network of the patient's
health care service plan or health insurer.
(2) A statement that services rendered by the hospital-based
providers described in paragraph (1) may not be covered by the
patient's health care service plan contract or health insurance
policy.
(3) A statement that recommends that the patient contact his or
her health care service plan or health insurer in order to obtain a
referral for services from an in-network provider or a provider
otherwise authorized by the plan or insurer.
(4) A written estimate of the cost to the patient for the
services rendered by the hospital-based providers described in
paragraph (1). The estimate shall be based on the providers' usual
and customary charges.
(5) The toll-free telephone numbers of the Department of Managed
Health Care and the Department of Insurance.
(b) Prior to rendering the services sought pursuant to subdivision
(a), a hospital shall require that the patient, or the legal
representative thereof, sign the notice provided pursuant to
subdivision (a), acknowledging that he or she is aware that specified
providers may be outside the network of his or her health care
service plan or health insurer.
(c) For purposes of this section, the following definitions shall
apply:
(1) "Health care service plan" has the same meaning as that term
is defined in Section 1345.
(2) "Health care service plan contract" has the same meaning as
that term is defined in Section 1345.
(3) "Health insurance policy" means a policy of health insurance,
as defined in Section 106 of the Insurance Code.
(4) "Health insurer" means an insurer that issues policies of
health insurance, as defined in Section 106 of the Insurance Code.
(5) "Hospital" means a hospital as defined in subdivision (a),
(b), or (f) of Section 1250.
(6) "Point-of-service health care service plan contract" means a
"point-of-service plan contract" as defined in Section 1374.60.
SECTION 1. SEC. 2. Section 1371.6 is
added to the Health and Safety Code, to read:
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 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 is
practicing in the same or similar geographic region, 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 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.
(b) If a plan receives a request from an enrollee or subscriber
for a referral to receive covered services from an individual
noncontracting provider based on the notice provided pursuant to
Section 1339.586, the plan shall either refer the enrollee or
subscriber to a contracting provider with similar clinical expertise
providing similar services in the same geographic region or authorize
the enrollee or subscriber to obtain the covered services from the
noncontracting provider. Appointments shall be arranged consistent
with Section 1367.03 and the regulations adopted thereunder.
(f)
(c) A provider group shall not hold itself out as being
within a plan's network unless all one of
the following applies:
(1) All of the individual
providers providing services with the provider group are within the
plan network.
(2) The provider group acknowledges that individual providers
within the provider group may be outside the enrollee's plan network.
(g)
(d) A health facility hospital
shall not hold itself out as being within a plan's network
unless all one of the following applies:
(1) All of the individual
providers providing services within the facility
hospital are within the plan network.
(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.
(2) The hospital acknowledges that individual providers providing
services within the hospital may be outside the enrollee's plan
network.
(i)
(e) For purposes of this section, the following
definitions shall apply:
(1) "Health facility" has the same meaning as that term
is "Hospital" means a hospital as defined in
subdivision (a), (d), or (f) of Section 1250.
(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.
(3) "Provider group" means a medical group, independent practice
association, or any other similar organization.
SEC. 2. SEC. 3. Section 10133.68 is
added to the Insurance Code, to read:
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 from the individual noncontracting provider at a rate other
than the rate usually paid to an individual noncontracting provider
who renders similar services and who is practicing in the same or
similar geographic region, 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 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.
10133.68. (a) If a health insurer receives a
request from a policyholder or insured for a referral to receive
covered services from an individual noncontracting provider based on
the notice provided pursuant to Section 1339.586 of the Health and
Safety Code, the insurer shall either refer the policyholder or
insured to a contracting provider with similar clinical expertise
providing similar services in the same geographic region or authorize
the policyholder or insured to obtain the covered services from the
noncontracting provider. Appointments shall be arranged consistent
with Section 10133.5 and the regulations adopted thereunder.
(e)
(b) A provider group shall not hold itself out as being
within a provider network unless all one of
the following applies:
(1) All of the individual
providers providing services with the provider group are within the
provider network.
(2) The provider group acknowledges that individual providers
within the provider group may be outside the insured's provider
network.
(f)
(c) A health facility hospital
shall not hold itself out as being within a provider network
unless all one of the following applies:
(1) All of the individual
providers providing services within the facility
hospital are within the provider network.
(2) The hospital acknowledges that individual providers providing
services within the hospital may be outside the enrollee's plan
network.
(g) This section shall not apply when an insured seeks emergency
services and care. This section shall apply to care provided after an
insured is stabilized following an emergency.
(h)
(d) For purposes of this section, the following
definitions shall apply:
(1) "Health facility" has the same meaning as that term
is "Hospital" means a hospital defined in
subdivision (a), (d), or (f) of Section 1250 of the Health and
Safety Code.
(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.
(3) "Provider group" means a medical group, independent practice
association, or any other similar organization.
SEC. 3. SEC. 4. 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.