BILL ANALYSIS �
AB 2533
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Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 2533 (Ammiano) - As Amended: April 22, 2014
SUBJECT : Health care coverage: noncontracting providers.
SUMMARY : Requires health plans and insurers unable to meet
timely access standards through contracted providers to arrange
for the provision of services by a noncontracting provider, as
specified, and requires the California Department of Insurance
(CDI) to adopt new timely access standards for health insurers
in accordance with statutory criteria similar to those
applicable to health plans under the Department of Managed
Health Care (DMHC). Specifically, this bill :
1)Requires health plans and insurers (if the insurer contracts
with a network of providers) that are unable to meet timely
access standards, and therefore unable to ensure timely access
by an enrollee to a covered service through a contracted
provider, to arrange for the provision of the service by a
noncontracting provider in the area of practice appropriate to
treat the enrollee's condition consistent with the following:
a) Prohibits a health plan from imposing any copayments,
coinsurance, or deductibles for services provided by the
noncontracting provider that exceed the cost sharing for
contracted providers;
b) Prohibits an insurer from imposing any copayments,
coinsurance, or deductibles for services provided by the
noncontracting provider that exceed the cost sharing for
contracted providers, in the event that an insured receives
services from a noncontracting provider because an insurer
was unable to ensure timely access to a medically necessary
covered service by a contracted provider;
c) Prohibits noncontracting providers providing a service
to an enrollee or insured from seeking reimbursement for
the service from the enrollee except for allowable
copayments, coinsurance, and deductibles, and requires the
noncontracting provider to seek reimbursement solely from
the health plan or insurer;
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d) Requires a health plan or insurer to ensure that the
location of the noncontracting provider is within
reasonable proximity of the business or personal residence
of the enrollee and that the hours of operation and
provision for after-hours care is reasonable so as not to
result in barriers to accessibility;
e) Requires a health plan or insurer to consider referring
enrollees to the enrollee's preferred noncontracting
provider and, if not, to provide the enrollee with a
written explanation outlining the reasons why the
enrollee's preferred provider was not selected to provide
the service;
f) Requires a health plan or insurer to accommodate an
enrollee's preference to wait for a contracted provider;
g) Expands existing health plan timely access reporting
requirements and imposes new reporting requirements on
health insurers to report to DMHC and CDI annually on any
and all occurrences of denial of care and on compliance
with the requirements related to referrals to
noncontracting providers and requires the departments to
post the information public on the Internet Websites; and,
h) Authorizes DMHC and CDI to assess an administrative
penalty of, at a minimum, $1,000 per violation of the
timely access referrals required under this bill and states
that the penalties are not exclusive and may be sought and
employed in any combination with civil, criminal, and other
administrative remedies, as determined by CDI and DMHC.
2)Requires CDI to adopt new access standards on or before
January 1, 2016, for insurers that contract with networks of
providers, to ensure that insureds have access to needed
services in a timely manner, and requires CDI to develop the
regulations considering indicators and standards of timeliness
specified in this bill, which are similar to what DMHC was
required to consider in developing timely access regulations
now applicable to health plans.
3)Authorizes CDI to investigate and take action against insurers
subject to the access regulations and authorizes the Insurance
Commissioner to assess administrative penalties, as specified,
to be paid into the newly created Health Insurance
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Administrative Fines and Penalties Account in the Insurance
Fund.
EXISTING LAW :
1)Establishes DMHC to regulate health plans under the Knox-Keene
Health Care Service Plan Act of 1975 (Knox-Keene) and CDI to
regulate health insurers under the Insurance Code.
2)Authorizes health plans and insurers to negotiate and enter
into contracts for alternative rates of payment with
institutional and professional providers and offer the benefit
of these alternative rates to enrollees and insureds who
select those providers, generally referred to as preferred
provider organization (PPO) coverage.
3)Requires health plans and insurers to meet statutory and
regulatory standards related to arranging for contracted
network provider services and imposes similar but not
identical standards on the adequacy of the networks applicable
to health plans under DMHC and health insurers under CDI
including but not limited to:
a) Health plans under DMHC must ensure that subscribers and
enrollees receive available and accessible services in a
manner providing for continuity of care and ready referrals
to other providers consistent with good professional
practice, offer a complete network of contracting or
employed primary care and specialist physicians each of
whom has staff privileges with at least one contracting
hospital, comply with minimum ratios for number of
physician providers for the number of enrollees in the
health plan (one physician for every 1,200 enrollees and
one primary care physician (PCP) for every 2,000
enrollees), ensure accessibility of providers within
prescribed geographic distances (for PCPs within 30 minutes
or 15 miles of an enrollee's residence or workplace), and
ensure that the contracted networks have adequate capacity
and availability of licensed providers to offer enrollees
appointments in a timely manner in compliance with
specified timeframes and appointment waiting times, and
maintain a system to monitor and report on timely access
compliance and access to care; and,
b) Health insurers offering contracted networks under CDI
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must ensure accessibility of provider services in a timely
manner and ensure that providers are sufficient, in number
and size, to be capable of furnishing the health care
services covered by the insurance contract, taking into
account the characteristics and medical needs of insured
persons, ensure accessibility of providers within
prescribed geographic distances (for PCPs within 30 minutes
or 15 miles of each covered person's residence or
workplace), comply with minimum ratios for number of
physician providers based on the number of covered persons
(one physician for every 1,200 enrollees and one PCP for
every 2,000 enrollees) and monitor waiting times for
appointments as part of the overall system the insurer must
maintain to monitor access.
FISCAL EFFECT : This bill has not been heard by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
aimed at protecting patients from high out-of-pocket costs
when health plans and insurers fail to meet timely access
standards by requiring health plans and insurers to impose
in-network copayments, coinsurance, and deductibles and
prohibit out-of-network providers from balance billing. In
addition, this bill is intended to create parity between DMHC
and CDI with regard to timely access requirements and
enforcement. The goal is to ensure that all patients are
afforded equal timely access protections regardless of whether
they have coverage overseen by DMHC or CDI.
2)BACKGROUND . AB 2179 (Cohn), Chapter 797, Statutes of 2002,
directed DMHC and CDI to adopt regulations to ensure enrollee
access to necessary health care services in a timely manner.
CDI adopted provider network access regulations to implement
AB 2179 which for the first time imposed on health insurers
offering PPO networks specific geographic time and distance
standards for contracted providers, full-time hours and
availability of providers and minimum provider-to-insured
ratios. Previous CDI access regulations applied only to
exclusive provider organizations (EPOs). CDI is in the
process of reviewing and potentially revising the network
adequacy and access regulations applicable to health insurers
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consistent with the requirement that DMHC and CDI review the
regulations every three years.
AB 2179 more specifically instructed DMHC (but not CDI) to
consider the following in developing the implementing
regulations: a) waiting times for appointments with
physicians; b) timeliness of care in an episode of illness,
including timeliness of referrals and obtaining other
services; and, c) waiting time to speak to a physician,
registered nurse, or other qualified health care professional
acting within the scope of his or her practice who is trained
to screen or triage an enrollee who may need care. AB 2179
also directed DMHC to consider the clinical appropriateness,
the nature of the specialty, the urgency of the care needed,
and other legal requirements in developing the standards.
This bill would require CDI to adopt new access regulations
and to consider these same indicators that DMHC was required
to consider.
The DMHC Timely Access to Non-Emergency Health Care Services
regulation became effective January 17, 2010 and DMHC licensed
health plans had until January 17, 2011 to fully implement the
policies, procedures and systems necessary to comply with the
timely access regulations. By October 2010 health plans were
required to submit a filing to DMHC demonstrating how they
would comply with the regulations. Each health plan must show
that its provider network is large and varied enough to offer
enrollees appointments that meet the following standards:
a) The clinical appropriateness standard requires that
enrollees be offered appointments for covered health care
services within a time period appropriate for their
condition; and,
b) Quality assurance standards requiring that enrollees be
offered appointments within the following time-elapsed
standards:
i) Within 48 hours of a request for an urgent care
appointment for services that do not require prior
authorization;
ii) Within 96 hours of a request for an urgent
appointment for services that do require prior
authorization;
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iii) Within ten (10) business days of a request for
non-urgent primary care appointments;
iv) Within fifteen (15) business days of a request for
an appointment with a specialist;
v) Within ten (10) business days of a request for an
appointment with non-physician mental health care
providers; and,
vi) Within fifteen (15) business days of a request for a
non-urgent appointment for ancillary services for the
diagnosis or treatment of injury, illness, or other
health condition.
Under DMHC regulations, the applicable waiting time for an
appointment may be shortened or extended as clinically
appropriate in the opinion of a qualified health care
professional acting within the scope of his or her practice
consistent with professionally recognized standards of
practice notes in the relevant record that a longer waiting
time will not have a detrimental impact on the health of the
enrollee. Health plans must contract with adequate numbers of
doctors and other health care providers in each geographic
area to meet the clinical and time-elapsed standards for
appointment waiting times. In areas with provider shortages,
plans are not excused from their obligation to arrange for
enrollees to receive timely care as necessary for their health
condition. If timely appointments are not available in a
particular area, a plan must refer enrollees to, or, in the
case of a PPO network, assist enrollees in locating, available
and accessible contracted providers in neighboring service
areas consistent with patterns of practice for obtaining
health care services in a timely manner appropriate for the
enrollee's needs. In areas where there are provider
shortages, health plans must arrange for specialty services
from specialists outside of the contracted network if a
specialist is not available in the network, but enrollees must
not be subject to any more cost sharing than would apply for
an in-network specialist.
3)SUPPORT . The California Nurses Association (CNA), sponsor of
this bill, states that it is intended to protect patients from
high out-of-pocket costs by expanding balance billing
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protections to patients receiving service from an
out-of-network provider because the patient is unable to
obtain the service from an in-network provider in a timely
manner. CNA argues that as the ACA reaches full
implementation, the tension between efforts to control costs
and preserve access is reaching new heights. Health plans are
narrowing provider networks to achieve cost savings goals and
thereby limiting access to care. CNA points out that having
an insurance card means nothing if you are unable to find a
provider to get care when you need it. According to CNA,
California law currently protects patients receiving emergency
care from out-of-network providers from out-of-network charges
but there is no similar protection for those who seek care
from out-of-network providers for non-emergency care. CNA
states that this bill builds on the existing timely access
regulations by ensuring that patients can go out-of-network
but pay the same price as they would pay if the service was
provided by a network provider. The Asian Pacific
Environmental Health Network (APEN) supports this bill as a
part of a new "Patients' Bill of Rights." APEN argues that
despite more Californians having insurance under the ACA,
low-income, immigrant, and refugee communities continue to
experience insecurity about access to health care because of
narrow networks, high out-of-pocket costs especially for
out-of-network care, and more services being done in
less-regulated outpatient settings and increase insurance
rates for large group employers.
4)AMENDMENTS. Health Access California writes on a prior
version of this bill in support of the intent to assure timely
access to necessary care without balance billing by
out-of-network providers. However, Health Access believes
that this bill would be improved if the regulators monitored
instances where enrollees went out-of-network to obtain timely
care because that would indicate an inadequate network of
providers and the need for regulatory review and enforcement.
5)OPPOSITION . Health insurers write in opposition that this
bill threatens the ability of health plans and insurers to
offer affordable coverage, control costs and protect consumers
and will unravel plan networks. America's Health Insurance
Plans (AHIP) argues that one way insurers control costs is by
contracting with providers who meet credentialing requirements
and this bill would prevent health plans from implementing
safety and quality standards through selective contracting.
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According to AHIP, requiring coverage of noncontracted
providers also acts as a disincentive to providers to sign up
for contracted networks. California Chamber of Commerce
opposes this bill because it would undo the managed care model
by requiring health plans to pay for noncontracted providers
and will unnecessarily drive up the cost of care and
potentially reduce the quality.
Physician organizations, California Medical Association and
California Chapter of the American College of Emergency
Physicians (CalACEP), write in opposition arguing that this
bill eviscerates current law which requires insurers to
provide adequate networks and turns the law on its head by
absolving insurers of their responsibility to offer sufficient
provider networks. Physician groups state that this bill puts
noncontracted providers in the position of having to accept
whatever payment the health plan deems appropriate or turning
the patient away without care. CalACEP contends that this
bill gives insurers a free pass to collect premiums from
patients but not provide the contracted networks necessary to
deliver care.
6)PREVIOUS LEGISLATION . AB 2179 directed DMHC and CDI to adopt
regulations to ensure enrollee access to necessary health care
services in a timely manner.
7)POLICY COMMENTS .
a) Proposed timely access referrals. The notion that
health plans and insurers have an obligation to ensure
timely access to care for consumers, even if it means
allowing consumers to receive services from noncontracting
providers with no increase in the enrollee's cost sharing
when timely care is not available from contracted
providers, is embedded in the statutory framework of
Knox-Keene. Still, there may be value and impact to being
more specific in statute regarding how and under what
circumstances consumers are entitled to that option and
ensuring that the same protections apply to consumers
covered in health insurance under CDI.
However, this bill as currently drafted includes some
conflicts, primarily with DMHC timely access regulations,
which need to be resolved. For example, existing DMHC
regulations require health plans, in certain circumstances,
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to arrange for specialty care if unavailable in the
network, holding consumers harmless to in-network cost
sharing. However, under the existing regulations, health
plans can either refer the enrollee, or for PPO plans,
assist enrollees to find the provider outside of the
contracted network, when medically necessary for the
enrollee's condition. This bill mandates a referral
(prohibiting PPO-style assistance) and does not include any
requirement that the referral be medically necessary. This
bill would also require referral to a noncontracting
provider if any one network provider does not meet the
timely access standard, whether or not another contracted
provider is available to provide the service to the
enrollee in a timely manner.
b) Inconsistent application of timely access statute to
health insurers. This bill imposes on CDI health insurers
additional requirements related to timely access,
requirements that are imposed on DMHC health plans through
a combination of statute and implementing regulations. The
existing Knox-Keene and Insurance Code provisions relating
to access and network adequacy, and the implementing
regulations adopted by DMHC and CDI, are different.
However, this bill applies the Knox-Keene provisions
inconsistently in the Insurance Code, carrying over some
statutory provisions, but not all, and also adds some
phrasing not in Knox-Keene. If the intent is to impose the
same requirements as apply to DMHC health plans on CDI
insurers, this bill should mirror the DMHC timely access
statute, rather than creating additional conflicts and
inconsistencies between the two regulatory frameworks. If
the author intends to continue with different statutory
requirements, it is important, in order for the Legislature
to evaluate that approach, to identify the differences and
fully articulate the purpose and impact of the changes (as
well as the omissions) being proposed.
c) Balance billing. Under Knox-Keene and related case law,
noncontracting emergency providers are prohibited from
balance billing patients. This bill is drafted so that it
extends the prohibition on balance billing to all
noncontracting providers under Knox-Keene and to the
Insurance Code. At the same time, this bill is internally
inconsistent on balance billing. For example, the proposed
Insurance Code language includes both a total ban on
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balance billing by any noncontracted provider seeing
patients for any reason, as well as the conditional
consumer protection of paying no more than in-network rates
if care is received by a noncontracting provider because
the health insurer failed to provide timely care. By
contrast, the proposed Knox-Keene language in this bill
includes both a total ban on balance billing and the
requirement that health plans limit consumer cost sharing
to in-network charges, but without the condition that care
is being received by a noncontracting provider because the
health insurer failed to provide timely care. This bill,
as drafted, provides consumers with access to noncontracted
providers at in-network cost sharing regardless of the
terms of the coverage contract they selected (HMO, PPO,
EPO, etc.).
REGISTERED SUPPORT / OPPOSITION :
Support
California Nurses Association (sponsor)
Asian Pacific Environmental Network
San Francisco Labor Council
Opposition
America's Health Insurance Plans
Association of California Life and Health Insurance Companies
California Association of Health Plans
California Chamber of Commerce
California Chapter of the American College of Emergency
Physicians
California Medical Association
Analysis Prepared by : Deborah Kelch / HEALTH / (916) 319-2097