BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1100 (Hernandez) - Continuity of care.
Amended: April 3, 2014 Policy Vote: Health 7-1
Urgency: No Mandate: Yes
Hearing Date: May 23, 2014 Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: SB 1100 would allow new enrollees in an individual
market health plan or health insurance policy to continue to
receive treatment for certain conditions from their existing
provider if the existing provider is not in the new health plan
or health insurance policy network.
Fiscal Impact:
Likely costs in the tens of thousands to low hundreds of
thousands per year for review of insurance plan documents,
responding to consumer complaints, and taking enforcement
actions by the Department of Insurance (Insurance Fund).
One-time costs of about $160,000 in 2014-15 and $80,000 in
2015-16, and ongoing costs of about $40,000 per year
thereafter for review of health plan documents, responding
to consumer complaints, and taking enforcement actions by
the Department of Managed Health Care (Managed Care Fund).
No anticipated impact on the Medi-Cal program. Under
current law and practice, Medi-Cal managed care plans are
already required to provide continuity of care for new
enrollees as would be required under this bill.
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. Current law generally
requires health insurers and managed care plans (collectively
referred to as "carriers") to provide "continuity of care" for
enrollees who have certain medical conditions. Specified medical
conditions requiring continuity of care include acute
conditions, serious chronic conditions, pregnancy, terminal
illness, care of a newborn child, or a surgery that has been
authorized.
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Under this requirement, if carrier terminates a contract with a
medical provider, the insurer or health plan must continue to
provide coverage for services provided by the terminated
provider for specified time periods. Current law generally does
not extend continuity of care requirements to newly covered
enrollees who have an individual subscriber agreement (i.e. a
consumer who has bought a health plan in the individual market)
or to enrollees in a health insurance plan.
AB 369 (Pan, Statutes of 2013) allows certain new enrollees in a
health plan or health insurance policy to continue to receive
treatment for certain conditions from their existing provider if
the existing provider is not in the new health plan or health
insurance policy network. AB 369 made a special exception from
the current limitations on continuity of care laws for
individuals whose prior health care coverage had been cancelled
between December 31, 2013 and March 31, 2014 because that
coverage did not comply with requirements in state law
implementing health care coverage market reforms in the federal
Affordable Care Act.
Proposed Law: SB 1100 would allow new enrollees in a health plan
or health insurance policy to continue to receive treatment for
certain conditions from their existing provider if the existing
provider is not in the new health plan or health insurance
policy network.
Under the bill, carriers would be authorized to pay
non-participating providers at the same rates and terms as a
imposed on participating providers. If the provider does not
wish to provide services under those terms and cannot agree to
other terms with the carrier, the provider would not be
obligated to continue to provide services under the bill.
In cases where a new enrollee has a health insurance policy and
the existing provider agrees to continue to provide care under
the bill, the provider would have to accept payment from the
insurer as payment in full for services. The provider would be
prohibited from billing the patient for any amount in excess of
the insurer's reimbursement rate, except for copayments and/or
deductibles allowed under the insurance policy.
Essentially, this bill would extend existing continuity of care
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requirements to all individuals purchasing health care coverage
in the individual market.
Related Legislation:
AB 369 (Pan, Statutes of 2013) allows certain new enrollees
in a health plan or health insurance policy to continue to
receive treatment for certain conditions from their existing
provider if the existing provider is not in the new health
plan or health insurance policy network.
AB 1507 (Logue) would allow an individual or small employer
health plan in effect on October 1, 2013 to continue to be
in effect until December 31, 2014. That bill is pending in
the Assembly Health Committee.
Staff Comments: The only costs that may be incurred by a local
agency relate to crimes and infractions. Under the California
Constitution, such costs are not reimbursable by the state.