BILL ANALYSIS �
AB 2015
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Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2015 (Chau) - As Introduced: February 20, 2014
Policy Committee: HealthVote:18-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill codifies a federal law requirement that prohibits
health plans and insurers 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. Additionally, this
bill:
1)Specifies plans and insurers are not required to contract with
"any willing provider" (any provider willing to abide by the
terms and conditions for participation established by the plan
or insurer).
2)Specifies it shall not be construed as preventing a health
care service plan from establishing varying reimbursement
rates based on quality or performance measures.
3)Requires implementation only to the extent required by the
provider nondiscrimination provisions established in Section
2706 of the federal Public Health Service Act (42 U.S.C. Sec.
300gg-5), and any federal rules or regulations issued under
that section.
FISCAL EFFECT
1)One-time special fund costs to the Department of Managed
Health Care (DMHC) in the range of $70,000 to verify that plan
filings reflect the provider nondiscrimination requirements
enacted by this bill, to the extent required by federal law.
The cost for the California Department of Insurance (CDI) to
similarly review policies under their jurisdiction is expected
to be minor and absorbable.
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Although the provisions of the bill do not exceed what is
required by federal law, in absence of this bill there would
be no specific state requirement for DMHC and CDI to verify
compliance with the provider nondiscrimination provision of
federal law.
2)Both DMHC and CDI may also need to promulgate regulations to
clarify implementation, depending if and when federal guidance
is released on the similar provision in the federal Patient
Protection and Affordable Care Act (ACA). Potential one-time
special fund workload costs associated with regulations could
range from $50,000 to $100,000 for DMHC, depending on the
complexity of the regulations.
Similar costs would accrue to CDI if they were granted
authority to issue regulations in order to clarify this bill's
provisions. CDI does not have blanket rulemaking authority,
and this bill does not explicitly grant CDI such authority.
3)Enforcement costs would likely be minor and absorbable for CDI
and DMHC. However, given the uncertainty surrounding federal
interpretation of the provider nondiscrimination provision of
the ACA and how it may interact with this bill, it is
difficult to project the necessity, type, and extent of any
enforcement actions.
COMMENTS
1)Rationale . According to the author, this bill is needed to
eliminate the harmful practice of health plan discrimination
against whole classes of healthcare providers. The author
believes that licensed health care providers who have
contracted with plans and insurers should be reimbursed for
covered services they are qualified to perform, as long as
they are working within their scopes of practice. This bill
is sponsored by the California Chiropractic Association which
states that codifying the ACA provisions in this bill will
help guarantee that patients have access to the health care
providers of their choice. The bill is supported by numerous
nonphysician health care provider groups.
2)Background . Though the extent to which health plans and
insurers include so-called "discriminatory" provisions in
their contracts is unclear, commonly cited cases include, for
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example, optometrists who contract with plans and insurers but
are not eligible to be reimbursed for delivering certain
covered services that are within their scope of practice.
The federal government is currently considering further action
on this front. The federal ACA includes a provider
nondiscrimination provision similar to the one enacted by this
bill. No formal federal guidance has been released on this
provision. However, in an April 2013 "Frequently Asked
Questions"(FAQ) document, relevant federal agencies described
the provider nondiscrimination language as self-implementing,
stating that the departments did not intend to issue
regulations, but allowing for discrimination in reimbursement
rates based on "broad market considerations." Subsequently,
the US Senate issued a report that directed the departments to
correct the FAQ to hew more closely to the law and to reflect
congressional intent that any allowable discrimination in
reimbursement rates be more narrowly defined. As a result of
this report, the departments issued a Request for Information
on the provider nondiscrimination issue and are considering
comments submitted until June 10, 2014. Thus, it is
reasonable to expect the departments may issue further
guidance this year or next with respect to interpretation of
the federal provider nondiscrimination provision.
3)Previous Legislation . This bill is identical to SB 690 (Ed
Hernandez) of 2011, which was held on the Suspense File of
this committee.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081