BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 2533|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 2533
Author: Ammiano (D)
Amended: 8/19/14 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 6-2, 6/25/14
AYES: Hernandez, Beall, De Le�n, DeSaulnier, Evans, Monning
NOES: Morrell, Nielsen
NO VOTE RECORDED: Wolk
SENATE APPROPRIATIONS COMMITTEE : 5-1, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Gaines
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR : 44-28, 5/28/14 - See last page for vote
SUBJECT : Health care coverage: non-contracting providers
SOURCE : California Nurses Association/National Nurses United
DIGEST : This bill 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 non-contracting 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. This bill also prohibits a
non-contracting provider that agrees to provide services under
CONTINUED
AB 2533
Page
2
provisions of this bill from billing an enrollee or insured for
any amount in excess of the in-network reimbursement rate.
ANALYSIS :
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 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.
1.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.
2.Requires health plans to report annually to DMHC on compliance
with the timely access standards.
3.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.
4.Requires DMHC to review information regarding compliance with
CONTINUED
AB 2533
Page
3
the timely access standards and to make recommendations for
changes that further protect enrollees.
5.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.
1.Requires pursuant to regulation, in determining whether an
insurer's arrangements for network provider services comply
with the regulations, the IC to consider to the extent the IC
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
non-contracting 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.Prohibits a non-contracting provider that agrees to provide
CONTINUED
AB 2533
Page
4
services under provisions of this bill from billing an
enrollee or insured for any amount in excess of the in-network
reimbursement note.
3.Requires health plans and health insurers 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.
4.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.
5.Authorizes the IC to investigate and take enforcement action
against insurers regarding non-compliance with the
requirements of this bill and existing law.
6.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.
7.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.
Background
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
CONTINUED
AB 2533
Page
5
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 specified standards.
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 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.
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
CONTINUED
AB 2533
Page
6
the products were not regulated by CDI.
Comments
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
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 DMHC (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 CDI (Insurance Fund).
SUPPORT : (Verified 8/22/14)
CONTINUED
AB 2533
Page
7
California Nurses Association/National Nurses United (source)
Asian Pacific Environmental Network
California Alliance for Retired Americans
California Federation of Teachers
California Optometric Association
California School Employees Association
Campaign for a Healthy California
Health Access
National Multiple Sclerosis Society
San Francisco Labor Council California Chapter of the American
OPPOSITION : (Verified 8/22/14)
America's Health Insurance Plans
American Academy of Pediatrics
Association of California Life and Health Insurance Companies
Association of Northern California Oncologists
CalDerm
California Academy of Eye Physicians and Surgeons
California Academy of Family Physicians
California Association of Health Plans
California Association of Health Underwriters
California Chamber of Commerce
California Chapter of the American Emergency Physicians
California Medical Association
California Podiatric Medical Association
California Psychiatric Association
California Society of Anesthesiologists
California Society of Plastic Surgeons
Medical Oncology Association of Southern California
Osteopathic Physicians and Surgeons of California
The American Congress of Obstetricians and Gynecologists
ARGUMENTS IN 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
CONTINUED
AB 2533
Page
8
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.
ARGUMENTS IN OPPOSITION : The California Chapter of the
American College of Emergency Physicians (California ACEP) is
opposed to this bill stating it undermines current law that
requires insurers to provide adequate provider networks for
patients and undermines physicians' power to negotiate a fair
contract with insurers by statutorily imposing another
provider's contracted rate as the value of their service.
California ACEP also states that this bill seeks to impose a new
standard for reimbursement, the "in-network reimbursement rate"
which, they state, does not exist. A coalition of organizations
writes in opposition that this bill allows health plans and
health insurers to impose unfair contract conditions on
providers, reducing provider participation and consumer access
to timely health care and makes it easier for health plans and
health insurers to create inadequate provider networks. The
coalition further states that this bill undermines providers'
ability to negotiate fair reimbursement rates with health plans
and health insurers and reduces consumer protection and rewards
health insurers and health plans that create and maintain
inadequate provider networks. Finally, the coalition states that
this bill inserts the consumer between providers and commercial
health insurers and health plans over reimbursement rate
negotiations. The California Association of Health Plans (CAHP)
views this bill as an unraveling of the managed care system in
California because it statutorily requires the arrangement of
out-of-network care by non-contracting providers. CAHP strongly
opposes and legislative mandate to pay non-contracting providers
because it will unravel plan networks.
ASSEMBLY FLOOR : 44-28, 5/28/14
AYES: Ammiano, Bloom, Bocanegra, Bonilla, Bonta, Bradford,
Brown, Buchanan, Campos, Chau, Chesbro, Dickinson, Eggman,
Fong, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall,
Roger Hern�ndez, Holden, Jones-Sawyer, Levine, Lowenthal,
Medina, Mullin, Muratsuchi, Nazarian, Pan, John A. P�rez, V.
Manuel P�rez, Quirk, Rendon, Ridley-Thomas, Skinner, Stone,
CONTINUED
AB 2533
Page
9
Ting, Weber, Wieckowski, Williams, Yamada, Atkins
NOES: Achadjian, Allen, Bigelow, Ch�vez, Conway, Dababneh,
Dahle, Donnelly, Fox, Beth Gaines, Gorell, Grove, Hagman,
Harkey, Jones, Linder, Logue, Maienschein, Mansoor, Melendez,
Nestande, Olsen, Patterson, Quirk-Silva, Salas, Wagner,
Waldron, Wilk
NO VOTE RECORDED: Alejo, Ian Calderon, Cooley, Daly, Frazier,
Perea, Rodriguez, Vacancy
JL:e 8/22/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED