BILL ANALYSIS �
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THIRD READING
Bill No: SB 1100
Author: Hernandez (D)
Amended: 4/3/14
Vote: 21
SENATE HEALTH COMMITTEE : 7-1, 4/24/14
AYES: Hernandez, Beall, De Le�n, DeSaulnier, Evans, Monning,
Wolk
NOES: Morrell
NO VOTE RECORDED: Nielsen
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SUBJECT : Continuity of care
SOURCE : Health Access California
DIGEST : This bill 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.
ANALYSIS : Existing law:
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1.Establishes the 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 specified conditions that are eligible for
completion of services.
4.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.
5.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, as specified.
6.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.
7.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
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under an individual subscriber agreement who is undergoing
a course of treatment on the effective date of his/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/her
previous health plan or provider and instead voluntarily
chose to change health plans.
1.Allows, under certain circumstances, a new health plan
enrollee or insured to complete treatment from a
non-participating health care provider, as specified.
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/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/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/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
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plan to also provide a copy to its enrollees upon request.
Background
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-Affordable Care Act (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 of 2013. 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 Board
(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/her existing provider.
Prior Legislation
AB 1180 (Pan, Chapter 441, Statutes of 2013) makes inoperative
several provisions in existing law that implement the health
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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
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, as specified.
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.
AB 1522 (Thomson, 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. The bill died in Conference
Committee in 2002.
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SB 103 (Speier, 2001) would have required every health plan to
ensure the continuation of covered services to an enrollee 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. The bill 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
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 CDI (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
DMHC (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.
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SUPPORT : (Verified 5/23/14)
Health Access California (source)
AFSCME, AFL-CIO
American Cancer Society Cancer Action Network
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
OPPOSITION : (Verified 5/23/14)
Association of California Life and Health Insurance Companies
California Association of Health Plans
Kaiser Permanente
ARGUMENTS IN 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.
ARGUMENTS IN 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. CAHP states this was a
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, and that individuals
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purchasing coverage in today's insurance market have more
options than ever. CAHP says 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 states they must oppose any measure that
unduly distracts our members with new and costly requirements.
JL:nl 5/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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