BILL ANALYSIS �
AB 2015
Page 1
Date of Hearing: April 1, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 2015 (Chau) - As Introduced: February 20, 2014
SUBJECT : Health care coverage: discrimination.
SUMMARY : Prohibits, beginning January 1, 2015, a health care
service plan (health plan) or health insurer 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. Specifically, this bill :
1)Prohibits, beginning January 1, 2015, a health plan or insurer
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 under applicable state law.
2)Provides that 1) above shall not be construed to require a
health plan or insurer to contract with any health care
provider willing to abide by the terms and conditions for
participation established by the plan, insurer, or issuer.
3)Provides that nothing in this bill shall be construed as
preventing a health plan or insurer from establishing varying
reimbursement rates based on quality or performance measures.
4)States that this bill will be implemented only to the extent
required by the provider nondiscrimination provisions
established pursuant to federal law, and any federal rules or
regulations issued under that section.
EXISTING LAW :
1)Establishes the Department of Managed Health Care (DMHC) to
regulate health plans and the California Department of
Insurance (CDI) to regulate health insurers.
2)Provides that health plans (except specialized health plans)
and insurers that negotiate and enter into contracts with
professional providers to provide services at alternative
rates of payment, as specified, shall give reasonable
AB 2015
Page 2
consideration to timely written proposals for affiliation by
licensed or certified professional providers. Defines
"reasonable consideration" as consideration in good faith of
the terms of proposals for affiliation prior to the time that
contracts for alternative rates of payment are entered into or
renewed.
3)Allows health plans and insurers to specify the terms and
conditions of contracting to assure cost efficiency,
qualification of providers, and appropriate utilization of
services, accessibility, and convenience to persons who would
receive the provider's services, and consistency with basic
methods of operation, but shall not exclude providers because
of their category of license.
4)Requires issuers providing health coverage in the individual
and small group markets to cover, at a minimum, essential
health benefits (EHBs), including the 10 EHB benefit
categories in the federal Patient Protection and Affordable
Care Act (ACA) (Public Law 111-148), and consistent with
California's EHB benchmark plan, the Kaiser Foundation Health
Plan Small Group HMO 30 plan (Kaiser benchmark), as specified
in state law.
5)Establishes in federal law the ACA which, among other
provisions:
a) Prohibits group health plans and issuers offering group
or individual insurance coverage from discriminating with
respect to participation under the plan or coverage against
any health care provider who is acting within the scope of
that provider's license or certification under applicable
state law.
b) Requires issuers of individual and small group coverage
to, at a minimum, cover EHBs in the following 10
categories: ambulatory patient services; emergency
services; hospitalization; maternity and newborn care;
mental health and substance use disorder services,
including behavioral health treatment; prescription drugs;
rehabilitative and habilitative services and devices;
laboratory services; preventive and wellness services and
chronic disease management; and, pediatric services,
including oral and vision care.
AB 2015
Page 3
c) Requires states to select a "benchmark plan" to serve as
the minimum coverage standard for EHBs, choosing from among
specified employer plans offered in the state.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the purpose of
this bill is to expressly codify in state law the federal ACA
protection that prohibits issuers from discriminating against
any professional category of health provider. The author
argues that health plans in some cases currently exclude
allied health professionals from networks and refuse to allow
them to provide covered services even though providing the
services is within the scope of practice for the provider. In
addition, issuers impose limitations or conditions on payments
or coverage because they are provided by allied health
professionals. The author argues that these practices are
anti-competitive and that patients are best served by having
access to a team of health professionals who can meet their
overall health and wellness needs. Finally, the author points
out that this bill does not require health plans to contract
with any provider or limit the ability of health plans to set
reimbursement rates based on quality or performance measures.
2)BACKGROUND .
a) Provider Nondiscrimination in the ACA. This bill
codifies a provision of the ACA, Section 2706 of the Public
Health Service Act ((PHSA) 42 U.S. Code Section 300gg-5),
which prohibits discrimination with respect to
participation under the plan or coverage against any health
care provider who is acting within the scope of that
provider's license or certification under applicable state
law. Specifically, Section 2706 provides: "A group health
plan and a health insurance issuer offering group or
individual health insurance coverage shall not discriminate
with respect to participation under the plan or coverage
against any health care provider who is acting within the
scope of that provider's license or certification under
applicable State Law. This section shall not require that
a group health plan or health insurance issuer contract
AB 2015
Page 4
with any health care provider willing to abide by the terms
and conditions for participation established by the plan or
issuer. Nothing in this section shall be construed to
preventing a group health plan, a health insurance issuer,
or the Secretary from establishing varying reimbursement
rates based on quality or performance measures."
Section 2706 took effect January 1, 2014, and is referred to
as the Harkin Amendment (sponsored by Senator Tom Harkin
(D-Iowa) of the Senate Health, Education, Labor and
Pensions Committee), and established the first-ever federal
standard for provider nondiscrimination.
b) Federal agency guidance. As of this writing, federal
agencies have not adopted specific federal rules or
guidance implementing PHSA Section 2706. On April 29,
2013, the federal Departments of Labor, Health and Human
Services and Treasury (collectively the departments) issued
ACA Implementation Frequently Asked Questions - Part XV
(April 2013 FAQ) which described the ACA provider
nondiscrimination language as self-implementing and stated
that the departments did not intend to issue regulations.
The April 2013 FAQ did include the following comment:
"Until any further guidance is issued, group health plans
and health insurance issuers offering group or individual
coverage are expected to implement the requirements of
PHS Act section 2706(a) using a good faith, reasonable
interpretation of the law. For this purpose, to the
extent an item or service is a covered benefit under the
plan or coverage, and consistent with reasonable medical
management techniques specified under the plan with
respect to the frequency, method, treatment or setting
for an item or service, a plan or issuer shall not
discriminate based on a provider's license or
certification, to the extent the provider is acting
within the scope of the provider's license or
certification under applicable state law. This provision
does not require plans or issuers to accept all types of
providers into a network. This provision also does not
govern provider reimbursement rates, which may be subject
to quality, performance, or market standards and
considerations."
c) U.S. Senate report and federal request for information.
AB 2015
Page 5
On July 11, 2013, the U.S. Senate Appropriations Committee
issued a report (Senate report) relating to Section 2706
which stated in part:
"The goal of this provision is to ensure that patients
have the right to access covered health services from the
full range of providers licensed and certified in the
state. The Committee is therefore concerned that the FAQ
document?advises insurers that this provision allows them
to exclude whole categories of providers?.In addition,
the FAQ advises that section 2706 allows discrimination
in the reimbursement rates based on 'broad market
considerations' rather than the more limited exception
cited in the law related to performance and quality
measures. Section 2706 was intended to prohibit exactly
these types of discrimination. The Committee directs
[the departments] to correct the FAQ to reflect the law
and congressional intent?"
In response to the Senate report, on March 12, 2014, the
departments issued a joint Request for Information on all
aspects of PHSA Section 2706. Comments are due to the
departments no later than June 10, 2014.
d) Colorado Division of Insurance. For illustration
purposes only, Colorado's experience offers one potential
interpretation of the impact of enacting the provider
nondiscrimination provision in state law. In 2013,
Colorado adopted state legislation (HB 13-1266) similar to
this bill codifying PHSA Section 2706 as enacted in the
ACA. On May 29, 2013, the Colorado Department of
Regulatory Agencies, Division of Insurance (Division)
issued Bulletin B-4.60 to provide guidance concerning the
provider non-discrimination provision in state and federal
law. The Division found that the Colorado EHB benchmark,
also a Kaiser plan, contained language excluding "services
provided by a chiropractor." The Division interpreted PHSA
Section 2706 and the state law as no longer allowing such
exclusions because they discriminate against a provider
acting within the scope of his or her license and stated
that insurers could not define the scope of coverage with
reference to a specific provider type. The Division
affirmed that carriers need not include all types of
providers in their networks and could include any type of
provider in the network to provide EHBs or other benefits.
AB 2015
Page 6
Finally, the Division stated that if consumers chose to
receive treatment by an out-of-network (noncontracted)
provider, those services would only be eligible for
reimbursement at the out-of-network rate and only if the
specific health benefit plan contains out-of-network
benefits (such as in a PPO coverage plan). California's
EHB Kaiser Benchmark contains a similar exclusion for
chiropractic services and the services of a chiropractor.
e) Healing Arts Practitioners in California. Existing
state law provides for the licensure and certification of
various healing arts licensees, including, physicians and
surgeons, dentists, podiatrists, naturopathic doctors
(NDs), registered nurses, physician assistants, radiologic
technologists, social workers, acupuncturists, and massage
therapists. Generally, the practice or title acts of these
healing arts practitioners include scope of practice
provisions which defines the procedures, actions, or
processes that are permitted for the licensed or certified
individual. Additionally, there are healing arts
practitioners whose scope of practice is defined in an
initiative act, specifically, chiropractors and osteopathic
physicians. The scope of practice of some practitioners
overlap. For example, physicians and surgeons may perform
acupuncture without obtaining an acupuncture license.
Ophthalmologists and optometrists (certified pursuant to
specified regulations) can both treat glaucoma.
f) Violations of the Knox-Keene Health Care Service Plan
Act (Knox-Keene) and Insurance Code. Existing law allows
DMHC to take administrative actions (suspension or
revocation of license or assessment of administrative
penalties) for any acts or omissions constituting grounds
for discipline, including violation of any provision of
Knox-Keene. There are also additional enforcement
procedures and penalties, such as cease-and-desist orders
or civil actions to obtain injunctions for any violation of
Knox-Keene. Similarly, the Insurance Code provides CDI,
through the Insurance Commissioner, various enforcement
tools, including the ability to suspend an insurer's
certificate of authority for not carrying out contracts in
good faith. If this measure is enacted, DMHC or CDI may
use any administrative actions or enforcement tools that
are deemed appropriate to enforce this bill's provisions.
AB 2015
Page 7
3)PREVIOUS LEGISLATION. This bill is identical to SB 690 (Ed
Hernandez) of 2011, as it passed the Assembly Health Committee
on June 12, 2012 by a vote of 17-0. SB 690 was held on the
Assembly Appropriations Committee suspense file.
4)SUPPORT . The California Chiropractic Association (CCA),
sponsor of this bill, states that codifying the ACA provisions
in this bill will help guarantee that patients have access to
the health care providers of their choice, including doctors
of chiropractic, non-MD/OD physicians, nurses, and other
health professionals that millions of patients depend on for
quality and effective health care services. CCA points out
that since 1992 chiropractors have been educated and licensed
by the state to serve as portal of entry/primary care
providers and are required by law to refer patients to another
health care provider if a condition is detected that is not a
part of the chiropractic scope of practice. The California
Naturopathic Doctors Association (CNDA) writes in support that
NDs are primary care doctors that practice integrative
medicine and are trained in the same medical sciences as
medical doctors, including the latest advances in medicine,
with a focus on prevention and through lifestyle modification
and natural treatments. CNDA argues that efficient
utilization of all health care professions and a focus on
prevention and wellness are necessary to ensure access and
reduce health care costs. The California Academy of Audiology
states that a full range of providers is crucial for patients
to receive the right care at the right time to improve
accessibility and affordability. The California Association
of Psychologists states this bill will reduce costs, improve
quality, and increase access to care.
5)POLICY COMMENT . Given the pending federal request for
information, as well as the inconsistency between the April
FAQ issued by federal agencies and the U.S. Senate's report on
the congressional intent of Section 2706, enacting this
provision in California law may be premature.
REGISTERED SUPPORT / OPPOSITION :
Support
California Chiropractic Association (sponsor)
California Academy of Audiology
California Naturopathic Doctors Association
AB 2015
Page 8
California Optometric Association
California Psychological Association
Opposition
None on file.
Analysis Prepared by : Deborah Kelch / HEALTH / (916) 319-2097