BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2533
AUTHOR: Ammiano
AMENDED: May 6, 2014
HEARING DATE: June 25, 2014
CONSULTANT: Boughton
SUBJECT : Health care coverage: noncontracting providers
SUMMARY : Requires a health plan or health insurer to arrange
for, or assist an enrollee or insured in arranging for, the
enrollee or insured to receive the care or service in an
accessible and timely manner from a noncontracting provider, and
prohibits a health plan or insurer from imposing copayments,
coinsurance, or deductibles on the enrollee or insured that
exceed what the enrollee or insured would pay for services from
a contracting provider.
Existing law:
1.Establishes the Department of Managed Health Care (DMHC) to
regulate health plans under the Knox-Keene Health Care Service
Plan Act of 1975 (Knox-Keene Act), and the California
Department of Insurance (CDI) to regulate health insurers
under the Insurance Code.
2.Requires DMHC to develop and adopt regulations to ensure
that health plan enrollees have access to health care
services in a timely manner, and requires DMHC to develop
indicators of timeliness and consider the following:
a. Waiting times for appointments with
physicians and specialists;
b. Timeliness of care in an episode of illness,
including timeliness to referrals; and,
c. Waiting time to speak to a physician,
registered nurse or other qualified health
professional.
3.Requires contracts between health plans and health care
providers to assure compliance with the timely access
standards developed by DMHC. Requires the contracts to
require reporting by health care providers to health plans
and by health plans to DMHC to ensure compliance with the
standards.
Continued---
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4.Requires health plans to report annually to DMHC on
compliance with the timely access standards
5.Requires DMHC to work with the Office of the Patient
Advocate to assure that the quality of care report card
incorporates information provided regarding the degree to
which health plans and health care providers comply with the
requirements of timely access to care.
6.Requires DMHC to review information regarding compliance
with the timely access standards and to make recommendations
for changes that further protect enrollees.
7.Requires the CDI Insurance Commissioner (IC) to promulgate
regulations applicable to health insurers to ensure that
insureds have the opportunity to access needed health care
services in a timely manner. Requires these regulations to
be designed to assure accessibility of provider services in
a timely manner to individuals comprising the insured or
contracted group pursuant to the benefits covered. Requires
the regulations to assure:
a. Adequacy of number and locations of
providers in relationship to size and location of
group and that services are available at reasonable
times;
b. Adequacy of number and license
classifications in relationship to projected demand;
c. The policy or contract is not inconsistent
with standards of good health and clinically
appropriate care; and,
d. All contracts are fair and reasonable.
8.Requires pursuant to regulation, in determining whether an
insurer's arrangements for network provider services comply
with the regulations, the Commissioner to consider to the
extent the Commissioner deems necessary, the practices of
comparable plans licensed under the Knox-Keene Act.
This bill:
1.Requires, if an enrollee or insured is unable to obtain a
medically necessary covered service in an accessible and
timely manner from a contracted provider, the health plan or
insurer to arrange for, or assist the enrollee in arranging to
receive accessible and timely care or services from a
AB 2533 | Page
3
noncontracting provider, and prohibits the imposition of
copayments, coinsurance, or deductibles on the enrollee that
exceed what the enrollee or insured would pay for services
from a contracting provider.
2.Requires health plans and health insurers (carriers) to report
annually to their regulator on any and all occurrences of
denial of care and on complaints received by the health plan
or insurer regarding accessible and timely access to care.
Requires DMHC and CDI to review these complaints and any
complaints received by the regulators regarding accessibility
or timeliness of care and annually prepare and post on their
Internet Web site a report on the information received.
3.Requires the CDI IC, on or before January 1, 2016, to
promulgate regulations pursuant to this bill and existing law
to ensure that insureds have the opportunity to access
medically necessary health care services in an accessible and
timely manner. Requires every three years, the IC to review
the latest version of the adopted regulations and determine if
the regulations should be updated to further the intent of
this bill.
4.Authorizes the IC to investigate and take enforcement action
against insurers regarding non-compliance with the
requirements of this bill and existing law.
5.Authorizes the IC to, by order, assess administrative
penalties for violations of this bill and existing law subject
to appropriate notice of, and the opportunity for, a hearing,
as specified.
6.Authorizes an insurer to provide to the IC, and the IC to
consider, information regarding the insurer's overall
compliance with the requirements of this bill. Provides that
the administrative penalties available to the IC pursuant to
this bill are not exclusive and may be sought and employed in
any combination with civil, criminal, and other administrative
remedies as determined by the IC.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1.Costs to DMHC as follows (Managed Care Fund):
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a. One-time cost for workload related to issuance of
regulations estimated at $250,000.
b. Plan licensing and enforcement workload likely in the
range of $550,000 for the first year of implementation,
$250,000 ongoing. Actual costs will depend on the number of
cases brought forth pursuant to the bill.
2.Costs to the CDI as follows (Insurance Fund):
a. One-time cost for workload related to issuance of
regulations estimated at $280,000 and $25,000 ongoing for
revisions.
b. Enforcement workload potentially in the low hundreds of
thousands of dollars annually, depending on the number of
cases brought forth pursuant to the bill.
PRIOR VOTES :
Assembly Health: 12- 6
Assembly Appropriations:12- 5
Assembly Floor: 44- 28
COMMENTS :
1.Author's statement. According to the author, as the Patient
Protection and Affordable Care Act (ACA) reaches full
implementation and more and more Californians enroll in health
plans and policies as required by law, tension between efforts
to contain health care costs and preserve access to quality
providers is reaching new heights. To achieve cost savings
goals of the ACA, health plans and insurers are narrowing
provider networks, significantly reducing the number of
providers available to provide care to enrollees and limiting
patient access to care. This bill aims to protect patients
from high out-of-pocket costs for out-of-network services
sought by patients when their plans or insurers fail to meet
accessible and timely access standards for medically necessary
covered or specialty services. This bill builds upon existing
laws and regulations by ensuring that patients in these
circumstances can go out-of-network to a provider arranged by
the plan and pay the same price as they would pay if the
service were provided by a network provider. Having an
insurance card means nothing if you are unable to find a
provider to get care when you need it. Network adequacy is an
extremely important issue, and having access to a high-quality
network of providers is critical.
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2.DMHC and CDI Timely Access. DMHC's Timely Access to
Non-Emergency Health Care Services Regulation (Timely Access
Regulation) became effective January 17, 2010. The purpose
of the Timely Access Regulation is to fully implement AB
2179 (Cohn), Chapter 797, Statutes of 2002, which directed
DMHC and CDI to adopt regulations to ensure enrollees access
to necessary health care services in a timely manner. The
health plans licensed by DMHC had until January 17, 2011 to
fully implement the policies, procedures and systems
necessary to comply with the regulations. In October 2010,
health plans were required to submit a filing to demonstrate
how the standards and regulations would be met. 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;
iii. Within 10 business days of a request
for non-urgent primary care appointments;
iv. Within 15 business days of a request
for an appointment with a specialist;
v. Within 10 business days of a request
for an appointment with non-physician mental
health care providers; and,
vi. Within 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.
The Timely Access Regulation also requires health plans to
provide or arrange for the provision of 24/7 telephone
triage or screening services, as defined for patients to
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obtain timely assistance in determining the urgency of their
condition, including a reasonable call back time (not more
than 30 minutes). Beginning in March 2012, health plans must
also file an annual compliance report. The annual compliance
report includes compliance rates for each of the
time-specific standards. Plans must monitor network
compliance with the standards, and must investigate and
correct deficiencies. Specialized plans licensed by DMHC
are subject to the Timely Access Regulation but to a lesser
extent than the full service health plans. DMHC informs
plans that their interpretation of the full time equivalent
basis and 1:2,000 means that a primary care provider cannot
be assigned more than 2,000 enrollees based upon all plans
and product types that primary care provider contracts
accept. DMHC has only recently begun receiving reliable
data that can be used to determine what the impact is for
primary care providers that contract with multiple plans and
for multiple lines of business. With this new data, DMHC
indicates it will be able to better analyze primary care
providers to enrollee ratios and work with plans to ensure
compliance.
CDI Timely Access Regulations require in arranging for
network provider services, insurers to ensure that:
a. There is the equivalent of at least one
full-time physician per 1,200 covered persons and at
least the equivalent of one full-time primary care
physician per 2,000 covered persons;
b. There are primary care network providers
with sufficient capacity to accept covered persons
within 30 minutes or 15 miles of each covered
person's residence or workplace;
c. There are medically required network
specialists who are certified or eligible for
certification by the appropriate specialty board
with sufficient capacity to accept covered persons
within 60 minutes or 30 miles of a covered person's
residence or workplace. Notwithstanding the above,
the IC may determine that certain medical needs
require network specialty care located closer to
covered persons when the nature and frequency of use
of such health care services support such
modification;
d. There are mental health professionals with
skills appropriate to care for the mental health
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needs of covered persons and with sufficient
capacity to accept covered persons within 30 minutes
or 15 miles of a covered person's residence or
workplace;
e. There is a network hospital with sufficient
capacity to accept covered persons for covered
services within 30 minutes or 15 miles of a covered
person's residence or workplace;
f. Notwithstanding the above, these
requirements are not intended to prevent the covered
person from selecting providers as allowed by their
insurance contract beyond the applicable geographic
area specified by these standards; and,
g. If an insurer is unable to meet the network
access standard(s) due to the absence of practicing
providers located within sufficient geographic
proximity of the insurer's covered persons, the
insurer may apply to the IC for a discretionary
waiver of any network access standard for the
applicable geographic area. Such application should
include, at a minimum, a description of the affected
area and covered persons in that area and how the
insurer determined the absence of practicing
providers.
3.Complaint Data. While it is difficult to determine the
specific nature of the complaint, DMHC indicates in 2012 there
1,737 access complaints and in 2013 890 access complaints.
According to CDI, From January 1, 2012 thru June 20, 2014, CDI
received 179 complaints relating to Network Adequacy.
However, none of those cases specifically relate Timely Access
to Care. During this same period, CDI has tracked 186
telephone inquiries where the caller has alleged a problem
with timely access to care, but the products were not
regulated by CDI.
4.Related legislation. SB 964 (Hernandez) would require health
plans to use standardized survey methodology, if developed by
DMHC, for timely access reporting, among other provisions. SB
964 is set for hearing on June 24, 2012 in the Assembly Health
Committee.
5.Prior legislation. AB 2179 (Cohn), Chapter 797, Statutes of
2002, required DMHC and CDI to develop and to adopt
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regulations to ensure that enrollees have access to needed
health care services.
6.Support. The California Nurses Association writes that the
bill provides parity between CDI and DMHC by insuring access
to out-of-network specialty care. The California Chapter of
the American College of Emergency Physicians writes that they
see first-hand the consequences that inadequate networks have
when they regularly treat patients whose conditions have
worsened due to delayed care, and who are then forced to seek
treatment in the emergency department. Health Access
California writes that existing protections on timely access
that are similar to this bill are not codified and not
specifically addressed in regulation. Instead it reflects
enforcement actions by DMHC. Health Access is unaware of
prior enforcement actions by CDI to protect consumers
out-of-network cost sharing. However, existing Insurance Code
provisions might fairly be interpreted to provide such
consumer protections. This bill would assure Californians
timely access to necessary care at in-network cost sharing, a
basic consumer protection which all Californians should have.
7.Opposition. The California Association of Health Underwriters
(CAHU) believes this bill will result in health plans taking
on increased health care costs and make premiums less
affordable for consumers and employers. CAHU believes a
better solution would be for stakeholders to craft a workable,
affordable, consensus solution to network adequacy issues.
The California Association of Health Plans (CAHP) believes
this bill unravels the managed care system in California by
statutorily requiring the arrangement of out-of-network care
by noncontracting providers. CAHP writes that this bill
conflicts with regulations already promulgated and requires
more administrative resources for new reporting requirements
that are redundant and unneeded. Association of California
Life & Health Insurance Companies (ACLHIC) believes this bill
is confusing because it is already current practice in the
industry and required under existing law. ACLHIC writes that
this bill is unclear whether this language explicitly bans the
provider from balance billing and whether or not the insurer
would be expected to pay "billed charges" which can far exceed
what is "usual and customary." America's Health Insurance
Plans indicates that CDI already has regulations in place in
addition to the requirements in the federal exchange rule as
do the National Committee for Quality Assurance accreditation
standards.
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SUPPORT AND OPPOSITION :
Support: California Nurses Association (sponsor)
American College of Emergency Physicians, California
Chapter
California Alliance for Retired Americans
California School Employees Association
Communications Workers of America, AFL-CIO District 9
California School Employees Association
Campaign for a Healthy California
Health Access California
SRB Inc Insurance Associates
Oppose: Association of California Life and Health Insurance
Companies
America's Health Insurance Plans
California Association of Health Plans
California Association of Health Underwriters
California Chamber of Commerce
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