BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1100
AUTHOR: Hernandez
AMENDED: April 3, 2014
HEARING DATE: April 24, 2014
CONSULTANT: Boughton
SUBJECT : Continuity of care.
SUMMARY : Allows people with individual health insurance
coverage who are in the middle of treatment for certain
conditions, such as cancer or a pregnancy, when they make a
health plan change to complete the treatment even if their
provider is not in the new health plan's network. This bill also
requires notice of the process to request completion of covered
services to be provided in every disclosure form, as specified,
and in any evidence of coverage issued after January 1, 2015.
Existing law:
1.Establishes the California Department of Insurance (CDI) to
regulate health insurers and the Department of Managed Health
Care (DMHC) to regulate health plans.
2.Requires health plans and health insurers to cover the
completion of covered services by a terminated provider, if
requested by an enrollee or insured for the treatment of
certain conditions, and if the provider and plan agree on
terms and reimbursement, as specified. Requires health plans
to cover the completion of covered services by
non-participating providers for new enrollees under similar
circumstances.
3.Establishes the following conditions as eligible for
completion of services:
a. An acute condition, as specified. Requires completion
of covered services to be provided for the duration of the
acute condition;
b. A serious chronic condition, as specified. Requires
completion of covered services to 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
specified, not to exceed 12 months from the contract
termination or 12 months from the effective date of
Continued---
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coverage for a newly covered enrollee;
c. The three trimesters of pregnancy and the immediate
postpartum period. Requires the completion of covered
services to be provided for the duration of pregnancy;
d. A terminal illness, as specified. Requires completion
of covered services to be provided for the duration of the
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;
e. The care of a newborn child between birth and age 36
months. Concludes the completion of covered services at 12
months from the contract termination date or 12 months from
the effective date of coverage for a new enrollee; and,
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 enrollee.
4.Permits a health plan or health insurer to require the
terminated provider (or non-participating provider in the case
of a health plan) to agree in writing to be subject to certain
contract terms and conditions including, but not limited to,
credentialing, hospital privileging, utilization review, peer
review, and quality assurance requirements, as specified. If
the terminated provider (or non-participating provider in the
case of a health plan) does not agree to comply or does not
comply with these contractual terms and conditions, the plan
or insurer is not required to continue the provider's
services.
5.Compensates, unless otherwise agreed to by the provider and
the health plan, the services at rates and methods similar to
those used by the plan or provider group for currently
contracting providers who are not capitated and who are
practicing in the same or similar geographic area. Neither
the plan nor the provider group is required to continue the
services if the provider does not accept the payment rates.
6.Requires, unless otherwise agreed to by the terminated
provider and the health insurer or provider group, the
agreement to be construed to require a rate and method of
payment that are the same as the rate and method of payment
for the same services while under contract with the insurer at
the time of termination. Requires the provider to accept the
reimbursement as payment in full and not bill the insured for
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any amount in excess of the reimbursement rate, with the
exception of copayments and deductibles, as specified.
7.Requires the payment of copayments, deductibles, or other
cost-sharing by the insured during the period of completion of
services with a terminated provider to 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. Applies substantially
similar provisions to health plan enrollees for completion of
services with a terminated or non-participating provider.
8.Requires a health insurer to provide a notice as to the
process by which an insured may request completion of covered
services in any insurer evidence of coverage and disclosure
form issued after March 31, 2004. Requires a written copy to
be provided to contracting providers and provider groups, and
an insured, upon request.
9.Defines, for health insurers, "terminated provider" as 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.
10. States that these continuity of care laws do not:
a. Require a health plan or health insurer to cover
services or provide benefits that are not otherwise covered
under the terms and conditions of the contract;
b. Apply to a newly covered health plan enrollee covered
under an individual subscriber agreement who is undergoing
a course of treatment on the effective date of his or her
coverage; or,
c. Apply to a newly covered health plan 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.
11. Allows, under certain circumstances, a new health plan
enrollee or insured to complete treatment from a
non-participating health care provider if his or her
individual health plan contract or insurance policy was
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terminated between December 1, 2013 and March 31, 2014 and he
or she was receiving services from the non-participating
provider for a specified condition on the effective date of
his or her new coverage.
This bill:
1.Deletes the exclusion from the continuity of care law for 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 specified
condition.
2.Deletes the limitation which permits an enrollee of an
individual health plan or insured of an individual health
insurance policy to request continuity of care only if the
newly covered enrollee's or insured's prior coverage was
terminated under specified circumstance and at the time his or
her coverage became effective, the newly covered enrollee or
insured was receiving services from that provider for one of
the specified continuity of care conditions.
3.Deletes a provision in existing law which requires the
completion of covered services to be provided for services
rendered to the newly covered enrollee or insured on and after
the effective date of his or her new coverage.
4.Deletes a provision that makes a violation of the continuity
of care law, as specified, a crime.
5.Requires a notice of the process by which an enrollee may
request completion of covered services to be provided in every
disclosure required under existing law, as specified, and in
any evidence of coverage issued after January 1, 2015.
Requires a plan to provide a written copy of this information
to its contracting providers and provider groups. Requires a
plan to also provide a copy to its enrollees upon request.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, disruptions in
care for some conditions can lead to major setbacks in
treatment, bad outcomes and increased cost. Millions are
accessing insurance coverage in the private market and through
Covered California, some for the first time, others
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transitioning to new Affordable Care Act (ACA) plans. Some
will move from individual market coverage to group coverage
and others will move off and on Covered California plans. As
the insurance market adjusts to the transformation brought
about by the ACA many new products are being developed at
different premium price points with different provider
networks. Individual health insurance purchasers may find
provider networks changing or insurance company participation
in Covered California changing, which could impact one's
ability to continue treatment with a current provider.
Additionally, some have chosen plans based on misinformation
about provider participation in the health plan's network. In
the 1990s, California adopted a legal framework for creating
opportunities for patients undergoing treatment for certain
conditions, such as cancer, surgery, or pregnancy to continue
those services without disruption when a contract is
terminated between a plan or provider. However, this law
applied to people with insurance coverage through a group
contract. AB 369 (Pan), Chapter 4, Statutes of 2014, extended
the "continuity of care law" to people with coverage in the
individual market whose plans were cancelled during a certain
time period. This bill will extend continuity of care
opportunities to all individual purchasers of insurance and
require notification about the process for requesting
continuity of care.
2.Health Insurance Market in Transition. On March 23, 2010, the
federal ACA (Public Law (P.L.) 111-148), as amended by the
Health Care and Education Reconciliation Act of 2010 (P.L.
111-152) became law. Among many other provisions, the new law
makes statutory changes affecting the regulation of and
payment for certain types of private health insurance.
Beginning in 2014, individuals are required to maintain health
insurance or pay a penalty, with exceptions for financial
hardship (if health insurance premiums exceed eight percent of
household adjusted gross income), religion, incarceration, and
immigration status. Several insurance market reforms are
required, such as prohibitions against health insurers
imposing pre-existing health condition exclusions.
Pursuant to the ACA, California has established Covered
California as a state-based exchange that is operating as an
independent government entity with a five-member Board of
Directors. California has also enacted legislation to
incorporate most of the federal insurance market reforms into
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state law, including a requirement that coverage issued,
amended, or renewed on or after January 1, 2014 be compliant
with ACA reforms, such as guaranteed issue, premium limits,
and use of a single risk pool for determining rates.
3.Plan Cancellations. On May 7, 2013, Covered California
adopted model contract requirements that require participating
plans, also known as Qualified Health Plans (QHPs), to
terminate all of their non-ACA compliant policies effective
December 31, 2013. In compliance with this requirement, QHPs
began sending out cancellation letters to their enrollees and
insureds in late September. However, the Commissioner of CDI
did not approve the termination of policies of two companies
under CDI's jurisdiction, indicating that the cancellations
were not in compliance with notice requirements of existing
law. For people insured by these companies, cancellation
periods were extended to allow for adequate notice. As such,
these policy cancellations were permitted in February and
March of 2014. In addition, two carriers chose to withdraw
from the market.
On November 14, 2013, President Obama announced and the
federal Center for Consumer Information and Insurance
Oversight issued a policy giving insurers the option to offer
renewals to people in non-ACA compliant plans who were
enrolled on October 1, 2013. However, implementation was
deferred to states and is subject to state law.
In response to the November 2013 federal policy option to
allow for renewals of insurance coverage, Covered California's
governing board chose to maintain its policy to require the
cancellations (with the exception of the two CDI regulated
carriers) for a number of reasons including that the board
made a determination that for the vast majority of
Californians ACA coverage is better coverage. A special
consumer assistance unit was established to help consumers
through this transition. An unknown, but likely small, subset
of the affected individuals will be in the midst of treatment
for a condition, such as cancer or a scheduled surgery, and
may not be enrolled in a new ACA plan that includes his or her
existing provider.
4.Related legislation. AB 369 (Pan) allows a person with health
coverage in the individual market whose health plan or policy
was cancelled between December 1, 2013, and March 31, 2014, to
request that his or her new health plan or insurance policy
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cover the completion of services for treatment of specified
conditions, such as cancer or pregnancy, from the person's
existing provider who is not a participating provider with the
new health plan or policy.
SB 780 (Jackson) establishes consumer notice requirements for
health insurance preferred provider organizations (PPOs)
regulated by CDI and additional consumer notice requirements
for health plans regulated by DMHC. SB 780 requires PPOs and
DMHC-regulated health plans to allow enrollees with authorized
or scheduled services from a terminated unassigned provider
group or general acute care hospital to receive those services
at in network cost-sharing until completion of the authorized
or scheduled service for at least 60 days from date of the
termination notice. SB 780 is pending in the Assembly.
AB 1507 (Logue) allows an individual or small employer health
benefit plan in effect on October 1, 2013 to be renewed until
October 1, 2014, and continue to be in force until December
31, 2014. AB 1507 is pending in the Assembly Health
Committee.
5.Prior legislation. AB 1180 (Pan), Chapter 441, Statutes of
2013, makes inoperative several provisions in existing law
that implement the health insurance laws of the federal Health
Insurance Portability and Accountability Act of 1996 and
additional provisions that provide former employees rights to
convert their group health insurance coverage to individual
market coverage without medical underwriting. Established
notification requirements informing individuals affected by AB
1180 of health insurance available in 2014.
SB X1 2 (Hernandez), Chapter 2, Statutes of 2013-14 First
Extraordinary Session, and AB X1 2 (Pan), Chapter 1, Statutes
of 2013-14 First Extraordinary Session, conform California law
to the ACA as it relates to the ability to sell and purchase
individual health insurance by prohibiting pre-existing
condition exclusions, establishing modified community rating,
requiring the guaranteed issue and renewal of health
insurance, and ending the practice of carriers conditioning
health insurance on health status, medical condition, claims
experience, genetic information, or other factors.
AB 1596 (Frommer), Chapter 164, Statutes of 2004, provides,
regarding health plans arranging for the completion of covered
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services by a terminated or non-participating provider, that
the duration of covered services for a terminal illness may
exceed 12 months from the contract termination date or 12
months from the effective date of coverage for a new employee.
Exempts a health plan from arranging for the completion of
covered services by terminated or non-participating providers
if the newly covered enrollee is either offered an
out-of-network option or had the option to continue with a
health plan or provider and voluntarily chose to change health
plans.
AB 2759 (Levine), Chapter 489, Statutes of 2004, preserves
individual health care coverage to subscribers of health plans
and policyholders of insurance plans that withdraw from a
California service area.
AB 1286 (Frommer), Chapter 591, Statutes of 2003, and SB 244
(Speier), Chapter 590, Statutes of 2003, require a health plan
and a provider to include in any written, printed, or
electronic communication to an enrollee a specific statement
concerning continuity of care rights. These bills require that
a health care service plan submit a block transfer filing to
DMHC at least 75 days prior to the termination of its contract
with a provider group or a general acute care hospital,
provide 60 days' notice of the contract's termination to
enrollees assigned to the terminated provider, and specify the
requirements for an insurer to provide completion of covered
services by a terminated provider and for a plan to provide
those services either by a terminated provider or by a
non-participating provider to a newly covered enrollee. In
addition, these bills also require a plan and a health insurer
to provide completion of covered services for a surgery or
procedure recommended and documented by a provider under
specified circumstances.
AB 1522 (Thomson) of 2001 would have required a provider
organization to continue to provide health care services to
patients for one year after its contract is not renewed with a
health care service plan or health insurer or be subject to
disciplinary action and fines. AB 1522 was amended on the
Senate Floor to establish intent that enrollees receive
continuity of care. AB 1522 died in Conference Committee in
2002.
SB 103 (Speier) of 2001 would have required every health plan
to ensure the continuation of covered services to an enrollee
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by a terminated provider, instead of existing law, which
requires every health plan to, at the request of the enrollee,
arrange for the continuation of covered services. SB 103 was
amended to establish intent with regard to continuity of care.
SB 103 died in Conference Committee in 2002.
SB 1129 (Sher), Chapter 180, Statutes of 1998, requires health
plans and disability insurers to provide continuity of care,
at the request of an enrollee, who is currently being treated
for an acute or serious condition or a pregnancy by a provider
terminated by the plan.
AB 1152 (Bordonaro), Chapter 504, Statutes of 1995, requires
health care plan contracts, certain group disability insurance
policies, and certain non-profit hospital service plan
contracts to file a policy with CDI or the Department of
Corporations (predecessor to DMHC) describing coverage for new
subscribers, enrollees, or insureds receiving services during
a current episode of care from a non-contracting provider. AB
1152 also requires that this policy be provided to enrollees,
subscribers, or insureds on request, as well as to all new
enrollees, insureds, or subscribers, except those who are not
eligible.
1.Support. Health Access California sponsors this bill to
ensure that consumers who change polices to get a better deal
on coverage can also benefit from continuity of care
protections. The Congress of California Seniors writes in
support that this bill reaffirms that a health plan or insurer
in California must allow completion of covered medical
services for specified medical conditions, such as pregnancy
or cancer, by the provider who initiated the services. This
would be allowed even if the original provider is not
otherwise eligible to do so, and ensure the billing rate for
covered services could not be increased unfairly. The March
of Dimes supports this bill and requests an amendment to
clarify that the postpartum period is the 60 day period
beginning on the last day of the pregnancy.
2.Opposition. The California Association of Health Plans (CAHP)
writes in opposition that the original continuity of care
statute was devised to help people forced to change
employer-based coverage through no fault of their own. In
many cases this meant they lost access to a provider
delivering services for serious medical conditions. This was a
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remedy in the employer market primarily in situations where an
employee lost access to an open-network plan that allowed them
to see the doctor of their choice. Individuals purchasing
coverage in today's insurance market have more options than
ever. It is difficult to imagine which consumers would benefit
from this bill. Furthermore, the notification and
administrative requirements of this bill come at a time when
California's health plans are strictly focused on ensuring
that Covered California and health reform in general are a
success. CAHP must oppose any measure that unduly distracts
our members with new and costly requirements.
SUPPORT AND OPPOSITION :
Support: Health Access California (sponsor)
American Federation of State, County and Municipal
Employees AFL-CIO
California Council of Community Mental Health Agencies
California Healthcare Institute
California Primary Care Association
Congress of California Seniors
March of Dimes
Mental Health America of California
Pharmaceutical Research and Manufacturers of America
Western Center on Law and Poverty
Oppose: California Association of Health Plans
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