Amended in Senate April 3, 2014

Senate Bill No. 1100

Introduced by Senator Hernandez

February 19, 2014

An act to amend Section 1373.96 of the Health and Safety Code, and to amend Section 10133.56 of the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 1100, as amended, Hernandez. Continuity of care.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or a health insurer to provide for the completion of covered services by a terminated provider for enrollees or insureds who were receiving services from the provider for a specified condition at the time of the provider termination. Existing law also requires a health care service plan begin insert or a health insurer, at the request of a newly covered enrollee or insured, end insert to provide for the completion of covered services by a nonparticipating provider begin delete to a newly covered enrollee who, end delete begin insert if, end insert at the time his or her coverage became effective, begin insert the newly covered enrollee or insured end insert was receiving services from that provider for a specified condition begin insert and if his or her prior coverage was terminated as provided end insert . Existing law requires a health care service plan to provide a disclosure form regarding the benefits, services, and terms of a plan contract and requires the disclosure form to include a description of how an enrollee can request continuity of care under the provisions described above.

This bill would also require a health care service plan to include notice of the process to obtain continuity of care in every evidence of coverage issued after January 1, 2015. The bill would also require a plan to provide a written copy of this information to its contracting providers and provider groups, as well as a copy to its enrollees upon request. begin insert The bill would delete the conditions that needed to be fulfilled in order for a health care service plan or health insurer, upon request of a newly covered enrollee or insured, to be required to provide for the completion of covered services for a specified condition by a nonparticipating provider. end insert The bill would make other technical changes to the provisions governing health insurers and continuity of care. Because a willful violation of the bill’s requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1373.96 of the end insert begin insert Health and Safety Code end insert
begin insert is amended to read: end insert

1373.96.  

(a) A health care service plan shall, at the request of
an enrollee, provide the completion of covered services as set forth
in this section by a terminated provider or by a nonparticipating
provider.

(b) (1) The completion of covered services shall be provided
by a terminated provider to an enrollee who, at the time of the
contract’s termination, was receiving services from that provider
for one of the conditions described in subdivision (c).

(2) The completion of covered services shall be provided by a
nonparticipating provider to a newly covered enrollee who, at the
time his or her coverage became effective, was receiving services
from that provider for one of the conditions described in
subdivision (c).

(c) The health care service plan shall provide for the completion
of covered services for the following conditions:

(1) An acute condition. An acute condition is a medical
condition that involves a sudden onset of symptoms due to an
illness, injury, or other medical problem that requires prompt
medical attention and that has a limited duration. Completion of
covered services shall be provided for the duration of the acute
condition.

(2) A serious chronic condition. A serious chronic condition is
a medical condition due to a disease, illness, or other medical
problem or medical disorder that is serious in nature and that
persists without full cure or worsens over an extended period of
time or requires ongoing treatment to maintain remission or prevent
deterioration. Completion of covered services shall be provided
for a period of time necessary to complete a course of treatment
and to arrange for a safe transfer to another provider, as determined
by the health care service plan in consultation with the enrollee
and the terminated provider or nonparticipating provider and
consistent with good professional practice. Completion of covered
services under this paragraph shall not exceed 12 months from the
contract termination date or 12 months from the effective date of
coverage for a newly covered enrollee.

(3) A pregnancy. A pregnancy is the three trimesters of
pregnancy and the immediate postpartum period. Completion of
covered services shall be provided for the duration of the
pregnancy.

(4) A terminal illness. A terminal illness is an incurable or
irreversible condition that has a high probability of causing death
within one year or less. Completion of covered services shall be
provided for the duration of a terminal illness, which may exceed
12 months from the contract termination date or 12 months from
the effective date of coverage for a new enrollee.

(5) The care of a newborn child between birth and age 36
months. Completion of covered services under this paragraph shall
not exceed 12 months from the contract termination date or 12
months from the effective date of coverage for a newly covered
enrollee.

(6) Performance of a surgery or other procedure that is
authorized by the plan as part of a documented course of treatment
and has been recommended and documented by the provider to
occur within 180 days of the contract’s termination date or within
180 days of the effective date of coverage for a newly covered
enrollee.

(d) (1) The plan may require the terminated provider whose
services are continued beyond the contract termination date
pursuant to this section to agree in writing to be subject to the same
contractual terms and conditions that were imposed upon the
provider prior to termination, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review,
and quality assurance requirements. If the terminated provider
does not agree to comply or does not comply with these contractual
terms and conditions, the plan is not required to continue the
provider’s services beyond the contract termination date.

(2) Unless otherwise agreed by the terminated provider and the
plan or by the individual provider and the provider group, the
services rendered pursuant to this section shall be compensated at
rates and methods of payment similar to those used by the plan or
the provider group for currently contracting providers providing
similar services who are not capitated and who are practicing in
the same or a similar geographic area as the terminated provider.
Neither the plan nor the provider group is required to continue the
services of a terminated provider if the provider does not accept
the payment rates provided for in this paragraph.

(e) (1) The plan may require a nonparticipating provider whose
services are continued pursuant to this section for a newly covered
enrollee to agree in writing to be subject to the same contractual
terms and conditions that are imposed upon currently contracting
providers providing similar services who are not capitated and
who are practicing in the same or a similar geographic area as the
nonparticipating provider, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review,
and quality assurance requirements. If the nonparticipating provider
does not agree to comply or does not comply with these contractual
terms and conditions, the plan is not required to continue the
provider’s services.

(2) Unless otherwise agreed upon by the nonparticipating
provider and the plan or by the nonparticipating provider and the
provider group, the services rendered pursuant to this section shall
be compensated at rates and methods of payment similar to those
used by the plan or the provider group for currently contracting
providers providing similar services who are not capitated and
who are practicing in the same or a similar geographic area as the
nonparticipating provider. Neither the plan nor the provider group
is required to continue the services of a nonparticipating provider
if the provider does not accept the payment rates provided for in
this paragraph.

(f) The amount of, and the requirement for payment of,
copayments, deductibles, or other cost sharing components during
the period of completion of covered services with a terminated
provider or a nonparticipating provider are the same as would be
paid by the enrollee if receiving care from a provider currently
contracting with or employed by the plan.

(g) If a plan delegates the responsibility of complying with this
section to a provider group, the plan shall ensure that the
requirements of this section are met.

(h) This section shall not require a plan to provide for
completion of covered services by a provider whose contract with
the plan or provider group has been terminated or not renewed for
reasons relating to a medical disciplinary cause or reason, as
defined in paragraph (6) of subdivision (a) of Section 805 of the
Business and Profession Code, or fraud or other criminal activity.

(i) This section shall not require a plan to cover services or
provide benefits that are not otherwise covered under the terms
and conditions of the plan contract. begin delete Except as provided in
subdivision (l), this section shall not apply to a newly covered
enrollee covered under an individual subscriber agreement who is
undergoing a course of treatment on the effective date of his or
her coverage for a condition described in subdivision (c). end delete

(j) Except as provided in subdivision (l), this section shall not
apply to a newly covered enrollee who is offered an out-of-network
option or to a newly covered enrollee who had the option to
continue with his or her previous health plan or provider and
instead voluntarily chose to change health plans.

(k) The provisions contained in this section are in addition to
any other responsibilities of a health care service plan to provide
continuity of care pursuant to this chapter. Nothing in this section
shall preclude a plan from providing continuity of care beyond the
requirements of this section.

(l)  begin delete (1) end delete begin delete   end delete A health care service plan shall, at the request of a newly
covered enrollee under an individual health care service plan
contract, arrange for the completion of covered services as set forth
in this section by a nonparticipating provider for one of the
conditions described in begin delete subdivision (c) if the newly covered
enrollee meets both of the following: end delete begin insert subdivision (c). end insert

begin delete

(A) The newly covered enrollee’s prior coverage was terminated
under paragraph (5) or (6) of subdivision (a) of Section 1365 or
subdivision (d) or (e) of Section 10273.6 of the Insurance Code
between December 1, 2013, and March 31, 2014, inclusive.

(B) At the time his or her coverage became effective, the newly
covered enrollee was receiving services from that provider for one
of the conditions described in subdivision (c).

(2) The completion of covered services required to be provided
under this subdivision apply to services rendered to the newly
covered enrollee on and after the effective date of his or her new
coverage.

(3) A violation of this subdivision does not constitute a crime
under Section 1390.

end delete

(m) The following definitions apply for the purposes of this
section:

(1) “Individual provider” means a person who is a licentiate, as
defined in Section 805 of the Business and Professions Code, or
a person licensed under Chapter 2 (commencing with Section
1000) of Division 2 of the Business and Professions Code.

(2) “Nonparticipating provider” means a provider who is not
contracted with the enrollee’s health care service plan to provide
services under the enrollee’s plan contract.

(3) “Provider” shall have the same meaning as set forth in
subdivision (i) of Section 1345.

(4) “Provider group” means a medical group, independent
practice association, or any other similar organization.

begin insert

(n) Notice as to the process by which an enrollee may request
completion of covered services pursuant to this section shall be
provided in every disclosure form as required under Section 1363
and in any evidence of coverage issued after January 1, 2015. A
plan shall provide a written copy of this information to its
contracting providers and provider groups. A plan shall also
provide a copy to its enrollees upon request.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 10133.56 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

10133.56.  

(a) (1) A health insurer that enters into a contract
with a professional or institutional provider to provide services at
alternative rates of payment pursuant to Section 10133 shall, at
the request of an insured, arrange for the completion of covered
services by a terminated provider, if the insured is undergoing a
course of treatment for any of the following conditions:

(A) An acute condition. An acute condition is a medical
condition that involves a sudden onset of symptoms due to an
illness, injury, or other medical problem that requires prompt
medical attention and that has a limited duration. Completion of
covered services shall be provided for the duration of the acute
condition.

(B) A serious chronic condition. A serious chronic condition is
a medical condition due to a disease, illness, or other medical
problem or medical disorder that is serious in nature and that
persists without full cure or worsens over an extended period of
time or requires ongoing treatment to maintain remission or prevent
deterioration. Completion of covered services shall be provided
for a period of time necessary to complete a course of treatment
and to arrange for a safe transfer to another provider, as determined
by the health insurer in consultation with the insured and the
terminated provider and consistent with good professional practice.
Completion of covered services under this paragraph shall not
exceed 12 months from the contract termination date or 12 months
from the effective date of coverage for a newly covered insured.

(C) A pregnancy. A pregnancy is the three trimesters of
pregnancy and the immediate postpartum period. Completion of
covered services shall be provided for the duration of the
pregnancy.

(D) A terminal illness. A terminal illness is an incurable or
irreversible condition that has a high probability of causing death
within one year or less. Completion of covered services shall be
provided for the duration of a terminal illness, which may exceed
12 months from the contract termination date or 12 months from
the effective date of coverage for a new insured.

(E) The care of a newborn child between birth and age 36
months. Completion of covered services under this paragraph shall
not exceed 12 months from the contract termination date or 12
months from the effective date of coverage for a newly covered
insured.

(F) Performance of a surgery or other procedure that has been
recommended and documented by the provider to occur within
180 days of the contract’s termination date or within 180 days of
the effective date of coverage for a newly covered insured.

(2) The insurer may require the terminated provider whose
services are continued beyond the contract termination date
pursuant to this subdivision, to agree in writing to be subject to
the same contractual terms and conditions that were imposed upon
the provider prior to termination, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review,
and quality assurance requirements. If the terminated provider
does not agree to comply or does not comply with these contractual
terms and conditions, the insurer is not required to continue the
provider’s services beyond the contract termination date.

(3) Unless otherwise agreed upon between the terminated
provider and the insurer or between the terminated provider and
the provider group, the agreement shall be construed to require a
rate and method of payment to the terminated provider, for the
services rendered pursuant to this subdivision, that are the same
as the rate and method of payment for the same services while
under contract with the insurer and at the time of termination. The
provider shall accept the reimbursement as payment in full and
shall not bill the insured for any amount in excess of the
reimbursement rate, with the exception of copayments and
deductibles pursuant to subdivision (c).

(b) Notice as to the process by which an insured may request
completion of covered services pursuant to this section shall be
provided in any insurer evidence of coverage and disclosure form
issued after March 31, 2004. An insurer shall provide a written
copy of this information to its contracting providers and provider
groups. An insurer shall also provide a copy to its insureds upon
request.

(c) The payment of copayments, deductibles, or other
cost-sharing components by the insured during the period of
completion of covered services with a terminated provider pursuant
to subdivision (a) or a nonparticipating provider pursuant to
subdivision (i) shall be the same copayments, deductibles, or other
cost-sharing components that would be paid by the insured when
receiving care from a provider currently contracting with the
insurer.

(d) If an insurer delegates the responsibility of complying with
this section to its contracting entities, the insurer shall ensure that
the requirements of this section are met.

(e) For the purposes of this section, the following begin delete terms have
the following meanings: end delete begin insert definitions apply: end insert

(1) “Provider” means a person who is a licentiate as defined in
Section 805 of the Business and Professions Code or a person
licensed under Chapter 2 (commencing with Section 1000) of
Division 2 of the Business and Professions Code.

(2) “Provider group” includes a medical group, independent
practice association, or any other similar organization.

(3) “Nonparticipating provider” means a provider who is not
contracted with the insured’s health insurer to provide services
under the insured’s policy. A nonparticipating provider does not
include a terminated provider.

(4) “Terminated provider” means a provider whose contract to
provide services to insureds is terminated or not renewed by the
insurer or one of the insurer’s contracting provider groups. A
terminated provider is not a provider who voluntarily leaves the
insurer or contracting provider group.

(f) This section shall not require an insurer or provider group
to provide for the completion of covered services by a provider
whose contract with the insurer or provider group has been
terminated or not renewed for reasons relating to medical
disciplinary cause or reason, as defined in paragraph (6) of
subdivision (a) of Section 805 of the Business and Professions
Code, or fraud or other criminal activity.

(g) This section shall not require an insurer to cover services or
provide benefits that are not otherwise covered under the terms
and conditions of the insurer contract.

(h) The provisions contained in this section are in addition to
any other responsibilities of insurers to provide continuity of care
pursuant to this chapter. Nothing in this section shall preclude an
insurer from providing continuity of care beyond the requirements
of this section.

(i) (1) A health insurer shall, at the request of a newly covered
insured under an individual insurance policy, arrange for the
completion of covered services as set forth in this section by a
nonparticipating provider for one of the conditions described in
begin delete subdivision (a) if the newly covered insured meets both of the
following: end delete begin insert subdivision (a). end insert

begin delete

(A) The newly covered insured’s prior coverage was terminated
under subdivision (d) or (e) of Section 10273.6 or paragraph (5)
or (6) of subdivision (a) of Section 1365 of the Health and Safety
Code between December 1, 2013, and March 31, 2014, inclusive.

(B) At the time his or her coverage became effective, the newly
covered insured was receiving services from that provider for one
of the conditions described in subdivision (a).

(2) The completion of covered services required to be provided
under this subdivision shall apply to services rendered to the newly
covered insured on and after the effective date of his or her new
coverage.

(3)

end delete

begin insert (2) end insert  (A)    The insurer may require a nonparticipating provider
whose services are continued pursuant to this subdivision for a
newly covered insured to agree in writing to be subject to the same
contractual terms and conditions that are imposed upon currently
participating providers providing similar services who are
practicing in the same or a similar geographic area as the
nonparticipating provider, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review,
and quality assurance requirements. If the nonparticipating provider
does not agree to comply or does not comply with these contractual
terms and conditions, the insurer is not required to continue the
provider’s services.

(B) Unless otherwise agreed upon by the nonparticipating
provider and the insurer, the services rendered pursuant to this
subdivision shall be compensated at rates and methods of payment
similar to those used by the insurer for currently participating
providers providing similar services who are practicing in the same
or a similar geographic area as the nonparticipating provider.
Neither the insurer nor the provider group is required to continue
the services of a nonparticipating provider if the provider does not
accept the payment rates provided for in this paragraph. The
provider who agrees to provide services pursuant to this subdivision
shall accept the reimbursement as payment in full and shall not
bill the insured for any amount in excess of the reimbursement
rate, with the exception of copayments and deductibles pursuant
to subdivision (c).

(C) A provider’s agreement to contractual terms and conditions
and acceptance of payment rates to provide the completion of
covered services to an insured pursuant to this subdivision shall
not be construed as an agreement to contractual terms and
conditions or acceptance of payment rates for any other insureds
or for any services other than covered services pursuant to this
subdivision, nor shall it be construed as agreement to any other
contract.

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

All matter omitted in this version of the bill appears in the bill as introduced in the Senate, February 19, 2014. (JR11)