BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2533 (Ammiano) - Health care coverage: noncontracting
providers.
Amended: May 6, 2014 Policy Vote: Health 6-2
Urgency: No Mandate: Yes
Hearing Date: August 4, 2014
Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2533 would require a health plan or health
insurer to assist an enrollee in arranging for care from a
noncontracting provider when the enrollee is unable to receive
timely access to medically necessary care from a contracting
provider.
Fiscal Impact:
One-time costs of $1.1 million in 2014-15 and $730,000 in
2015-16 for the development and adoption of regulations and
the review of plan filings. Ongoing costs of $530,000 per
year for review of plan filings and reports and enforcement
activity by the Department of Managed Health Care (Managed
Care Fund).
One-time costs of $400,000 for the development and adoption
of regulations and the review of plan filings and ongoing
costs of $380,000 per year for review of reports and
enforcement activity by the Department of Insurance
(Insurance Fund).
Background: Under current law, health insurers are regulated by
the Department of Insurance and health plans are regulated by
the Department of Managed Health Care (collectively referred to
as "carriers").
Under current law, both the Department of Insurance and the
Department of Managed Health care are required to adopt
regulations to ensure that health plan and health insurance
policy enrollees have timely access to health care services.
Current law and regulations generally require carriers to comply
with timely access requirements by mandating that carriers
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contract with a sufficient number of providers to meet specified
geographic standards and ratios of providers to enrollees.
Regulations adopted by the Department of Managed Health Care
also require health plans to meet specified standards for
waiting times for appointments with primary care and specialty
care physicians and other similar standards.
Proposed Law: AB 2533 would require a health plan or health
insurer to assist an enrollee in arranging for care from a
noncontracting provider when the enrollee is unable to receive
timely access to medically necessary care from a contracting
provider.
Specific provisions of the bill would:
Require a health plan or health insurer to assist an
enrollee in arranging services from a noncontracting
provider (i.e. an out-of-network provider) if the enrollee
cannot arrange for timely access to care from an contracting
provider;
Prohibit the carrier from imposing copayments, coinsurance,
or deductibles that exceed what the enrollee would pay for
services from a contracting provider;
Require carriers to report annually to their respective
regulator on denials of care and on complaints received
regarding a lack of timely access to care;
Require the Department of Insurance to adopt regulations to
implement the bill by January 1, 2016 and to review those
regulations every three years;
Authorize the Department of Insurance to take enforcement
action against insurers for noncompliance with the bill and
existing law regarding timely access to care.
Related Legislation: SB 964 (Hernandez) would require health
plans to use standard survey methodology for reporting on timely
access to care, amongst other provisions. That bill is pending
in the Assembly Appropriations Committee.
Staff Comments: Current law and regulation do not specifically
govern the rates of payment that a health plan or health insurer
would pay a noncontracting provider for services when an
enrollee cannot get care from a contracting provider. Typically,
a carrier will arrange a limited contract with the
noncontracting provider for care and will usually pay a rate
similar to what the carrier would pay a noncontracting provider.
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When a health plan enrollee receives non-emergency care from a
noncontracting provider, the provider could attempt to
"balance-bill" the enrollee for any cost of care not paid by the
health plan. In theory, this could result in a substantial bill
to the enrollee, as the rates that health plans negotiate with
providers may be much lower than the rate that a provider would
ask for. In practice, the Department of Managed Health Care
indicates that it will usually require the health plan to pay
the full cost care and thus the health plan would likely
prohibit the noncontracting provider from balance billing the
enrollee as a condition of arranging care with that provider.
When an insurance policy enrollee receives non-emergency care
from a noncontracting provider, there is no law or regulation
prohibiting the provider from balance-billing the enrollee for
any costs above the rate paid by the insurance plan. This bill
does not prohibit providers from balance billing or require
insurance plans to insulate enrollees from additional costs from
balance billing by noncontracting providers.
Under the bill, the only costs that may be incurred by local
agencies relate to crimes and infractions. Under the California
Constitution, such costs are not reimbursable by the state.