SB 133: Health care coverage: continuity of care.
- Session Year: 2017-2018
- House: Senate
- Latest Version Date: 2017-10-04
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 and a health insurer that provides services at alternative rates of payment, at the request of an enrollee or insured, to provide the completion of services by a terminated provider if the enrollee or insured is undergoing a course of treatment for one of any specified conditions, including a serious chronic condition, as defined, at the time of the contract or policy termination. Existing law also requires a health care service plan to provide for the completion of covered services 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 any specified conditions. 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 require a health care service plan to include notice of the process to obtain continuity of care in its disclosure form and in any evidence of coverage issued after January 1, 2018. The bill would also require a plan to provide a written copy of this information to its contracting providers and provider groups, and a copy to its enrollees upon request. The bill would require a plan and health insurer to include notice of the availability of the right to request completion of covered services as part of, to accompany, or to be sent simultaneously with any termination of coverage notice sent under specified circumstances.
Existing law requires a health care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for one of any specified conditions for a newly covered enrollee or a newly covered insured under an individual health care service plan contract or an individual health insurance policy if, at the time his or her coverage became effective, the newly covered enrollee or newly covered insured was receiving services from that nonparticipating provider for a specified condition and whose prior coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, as specified.
This bill would delete the requirement that coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, thereby extending the requirement described above to any prior coverage that was withdrawn from the market, and would specify that, for purposes of these provisions, withdrawn from the market includes circumstances when a health benefit plan is withdrawn from any portion of a market.
Because a willful violation of these requirements by a health care service plan would, in part, be a crime, this 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.
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 and a health insurer that provides services at alternative rates of payment, at the request of an enrollee or insured, to provide the completion of services by a terminated provider if the enrollee or insured is undergoing a course of treatment for one of any specified conditions, including a serious chronic condition, as defined, at the time of the contract or policy termination. Existing law also requires a health care service plan to provide for the completion of covered services 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 any specified conditions. 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 require a health care service plan to include notice of the process to obtain continuity of care in its disclosure form and in any evidence of coverage issued after January 1, 2018. The bill would also require a plan to provide a written copy of this information to its contracting providers and provider groups, and a copy to its enrollees upon request. The bill would require a plan and health insurer to include notice of the availability of the right to request completion of covered services as part of, to accompany, or to be sent simultaneously with any termination of coverage notice sent under specified circumstances.
Existing law requires a health care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for one of any specified conditions for a newly covered enrollee or a newly covered insured under an individual health care service plan contract or an individual health insurance policy if, at the time his or her coverage became effective, the newly covered enrollee or newly covered insured was receiving services from that nonparticipating provider for a specified condition and whose prior coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, as specified.
This bill would delete the requirement that coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, thereby extending the requirement described above to any prior coverage that was withdrawn from the market, and would specify that, for purposes of these provisions, withdrawn from the market includes circumstances when a health benefit plan is withdrawn from any portion of a market.
Because a willful violation of these requirements by a health care service plan would, in part, be a crime, this 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.
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 and a health insurer that provides services at alternative rates of payment, at the request of an enrollee or insured, to provide the completion of services by a terminated provider if the enrollee or insured is undergoing a course of treatment for one of any specified conditions, including a serious chronic condition, as defined, at the time of the contract or policy termination. Existing law also requires a health care service plan to provide for the completion of covered services 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 any specified conditions. Existing law prohibits completion of covered services for a serious chronic condition from exceeding 12 months from the contract termination date or 12 months from the effective date of coverage for a newly covered enrollee or insured. 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 provide that an enrollee or insured who has a condition that will require a heart transplant is not limited by the 12-month period described above and would require the completion of covered services to be provided until the time he or she undergoes the transplant surgery and receives the necessary followup care that is consistent with good professional practice. The bill would require a health care service plan to include notice of the process to obtain continuity of care in its disclosure form and in any evidence of coverage issued after January 1, 2018. The bill would also require a plan to provide a written copy of this information to its contracting providers and provider groups, and a copy to its enrollees upon request. The bill would require a plan and health insurer to include notice of the availability of the right to request completion of covered services as part of, to accompany, or to be sent simultaneously with any termination of coverage notice sent under specified circumstances.
Existing law requires a health care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for one of any specified conditions for a newly covered enrollee or a newly covered insured under an individual health care service plan contract or an individual health insurance policy if, at the time his or her coverage became effective, the newly covered enrollee or newly covered insured was receiving services from that nonparticipating provider for a specified condition and whose prior coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, as specified.
This bill would delete the requirement that coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, thereby extending the requirement described above to any prior coverage that was withdrawn from the market, and would specify that, for purposes of these provisions, withdrawn from the market includes circumstances when a health benefit plan is withdrawn from any portion of a market.
Because a willful violation of these requirements by a health care service plan would, in part, be a crime, this 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.
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 and a health insurer that provides services at alternative rates of payment, at the request of an enrollee or insured, to provide the completion of services by a terminated provider if the enrollee or insured is undergoing a course of treatment for one of any specified conditions, including a serious chronic condition, as defined, at the time of the contract or policy termination. Existing law also requires a health care service plan to provide for the completion of covered services 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 any specified conditions. Existing law prohibits completion of covered services for a serious chronic condition from exceeding 12 months from the contract termination date or 12 months from the effective date of coverage for a newly covered enrollee or insured. 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 provide that an enrollee or insured who has a condition that will require a heart transplant is not limited by the 12-month period described above and would require the completion of covered services to be provided for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary followup care that is consistent with good professional practice. The bill would require a health care service plan to include notice of the process to obtain continuity of care in its disclosure form and in any evidence of coverage issued after January 1, 2018. The bill would also require a plan to provide a written copy of this information to its contracting providers and provider groups, and a copy to its enrollees upon request. The bill would require a plan and health insurer to include notice of the availability of the right to request completion of covered services as part of, to accompany, or to be sent simultaneously with any termination of coverage notice sent under specified circumstances.
Existing law requires a health care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for one of any specified conditions for a newly covered enrollee or a newly covered insured under an individual health care service plan contract or an individual health insurance policy if, at the time his or her coverage became effective, the newly covered enrollee or newly covered insured was receiving services from that nonparticipating provider for a specified condition and whose prior coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, as specified.
This bill would delete the requirement that coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, thereby extending the requirement described above to any prior coverage that was withdrawn from the market. The bill would also require a health care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for a newly covered enrollee and a newly covered insured under an individual health care service plan contract or an individual health insurance policy if the health care service plan or health insurer withdrew a health benefit plan from an entire, or from a portion of a, geographic region of the state, as described. market, and would specify that, for purposes of these provisions, withdrawn from the market includes circumstances when a health benefit plan is withdrawn from any portion of a market.
Because a willful violation of these requirements by a health care service plan would, in part, be a crime, this 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.
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 and a health insurer that provides services at alternative rates of payment, at the request of an enrollee or insured, to provide the completion of services by a terminated provider if the enrollee or insured is undergoing a course of treatment for one of any specified conditions, including a serious chronic condition, as defined, at the time of the contract or policy termination. Existing law also requires a health care service plan to provide for the completion of covered services 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 any specified conditions. Existing law prohibits completion of covered services for a serious chronic condition from exceeding 12 months from the contract termination date or 12 months from the effective date of coverage for a newly covered enrollee or insured. 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 provide that an enrollee or insured who has a condition that will require a transplant is not limited by the 12-month period described above and would require the completion of covered services to be provided for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary followup care that is consistent with good professional practice. The bill would require a health care service plan to include notice of the process to obtain continuity of care in its disclosure form and in any evidence of coverage issued after January 1, 2018. The bill would also require a plan to provide a written copy of this information to its contracting providers and provider groups, and a copy to its enrollees upon request.
Existing law requires a health care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for one of any specified conditions for a newly covered enrollee or a newly covered insured under an individual health care service plan contract or an individual health insurance policy if, at the time his or her coverage became effective, the newly covered enrollee or newly covered insured was receiving services from that nonparticipating provider for a specified condition and whose prior coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, as specified.
This bill would delete the requirement that coverage was withdrawn from the market between December 1, 2013, and March 31, 2014, inclusive, thereby extending the requirement described above to any prior coverage that was withdrawn from the market. The bill would also require a health care service plan and a health insurer to arrange for the completion of covered services by a nonparticipating provider for a newly covered enrollee and a newly covered insured under an individual health care service plan contract or an individual health insurance policy if the health care service plan or health insurer withdrew a health benefit plan from an entire, or from a portion of a, geographic region of the state, as described.
Because a willful violation of these requirements by a health care service plan would, in part, be a crime, this 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.
Existing federal law, the federal Patient Protection and Affordable Care Act, creates various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums in the individual market inside and outside of the Exchanges. Under the transitional reinsurance program, contributions are collected from contributing entities to fund reinsurance payments to issuers of nongrandfathered reinsurance-eligible individual market plans and the administrative costs of operating the reinsurance program for the 2014, 2015, and 2016 benefit years.Existing law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the purchase of qualified health plans through the Exchange by qualified individuals and small employers.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 requires a health care service plan, on and after October 1, 2013, to fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. Existing law requires a plan to consider the claims experience of all enrollees and all insureds in all nongrandfathered individual health benefit plans offered by that plan in this state as a single risk pool for rating purposes in the individual market. Existing law requires a plan to establish, each calendar year, an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool and requires the index rate to be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state under the federal provisions described above and the Exchange user fees. Existing law requires the premium rate for all of the health benefit plans in the individual market within the single risk pool to use the applicable marketwide adjusted index rate, as specified.This bill would delete the reference to the federal transitional reinsurance program in these provisions.Existing federal law, the federal Patient Protection and Affordable Care Act, creates various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums in the individual market inside and outside of the Exchanges. Under the transitional reinsurance program, contributions are collected from contributing entities to fund reinsurance payments to issuers of nongrandfathered reinsurance-eligible individual market plans and the administrative costs of operating the reinsurance program for the 2014, 2015, and 2016 benefit years.
Existing law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the purchase of qualified health plans through the Exchange by qualified individuals and small employers.
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 requires a health care service plan, on and after October 1, 2013, to fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. Existing law requires a plan to consider the claims experience of all enrollees and all insureds in all nongrandfathered individual health benefit plans offered by that plan in this state as a single risk pool for rating purposes in the individual market. Existing law requires a plan to establish, each calendar year, an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool and requires the index rate to be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state under the federal provisions described above and the Exchange user fees. Existing law requires the premium rate for all of the health benefit plans in the individual market within the single risk pool to use the applicable marketwide adjusted index rate, as specified.
This bill would delete the reference to the federal transitional reinsurance program in these provisions.
(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 contracts 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 contracts 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 providers services beyond the contract termination date.
(2)Unless otherwise agreed upon 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 providers 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 does 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 Professions Code, or fraud or other criminal activity.
(i)This section does not require a plan to cover services or provide benefits that are not otherwise covered under the terms and conditions of the plan contract. 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).
(j)Except as provided in subdivision (l), this section does 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)(1)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 subdivision (c) if the newly covered enrollee meets both of the following:
(A)The newly covered enrollees 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, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(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.
(m)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, 2018. 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (l).
(n)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 enrollees health care service plan to provide services under the enrollees 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.
SEC. 2.Section 10133.56 of the Insurance Code is amended to read: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 contracts 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 providers 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (i).
(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 terms have the following meanings:
(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 insureds health insurer to provide services under the insureds 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 insurers contracting provider groups. A terminated provider is not a provider who voluntarily leaves the insurer or contracting provider group.
(f)This section does 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 does 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 subdivision (a) if the newly covered insured meets both of the following:
(A)The newly covered insureds 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, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(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)(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 providers 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 providers 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.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(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 contracts 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 contracts 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 providers services beyond the contract termination date.
(2)Unless otherwise agreed upon 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 providers 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 does 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 Professions Code, or fraud or other criminal activity.
(i)This section does not require a plan to cover services or provide benefits that are not otherwise covered under the terms and conditions of the plan contract. 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).
(j)Except as provided in subdivision (l), this section does 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)(1)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 subdivision (c) if the newly covered enrollee meets both of the following:
(A)The newly covered enrollees 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, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(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.
(m)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, 2018. 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (l).
(n)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 enrollees health care service plan to provide services under the enrollees 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.
SEC. 2.Section 10133.56 of the Insurance Code is amended to read: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 contracts 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 providers 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (i).
(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 terms have the following meanings:
(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 insureds health insurer to provide services under the insureds 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 insurers contracting provider groups. A terminated provider is not a provider who voluntarily leaves the insurer or contracting provider group.
(f)This section does 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 does 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 subdivision (a) if the newly covered insured meets both of the following:
(A)The newly covered insureds 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, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(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)(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 providers 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 providers 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.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(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 contracts 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. An enrollee who has a condition that will require a heart transplant shall not be limited by the 12-month period described in this paragraph and completion of covered services shall be provided until the time he or she undergoes the transplant surgery and receives the necessary followup care that is consistent with good professional practice.
(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 contracts 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 providers services beyond the contract termination date.
(2)Unless otherwise agreed upon 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 providers 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 does 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 does not require a plan to cover services or provide benefits that are not otherwise covered under the terms and conditions of the plan contract. 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).
(j)Except as provided in subdivision (l), this section does 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)(1)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 subdivision (c) if the newly covered enrollee meets both of the following:
(A)The newly covered enrollees 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, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(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.
(m)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, 2018. 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (l).
(n)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 enrollees health care service plan to provide services under the enrollees 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.
SEC. 2.Section 10133.56 of the Insurance Code is amended to read: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. An insured who has a condition that will require a heart transplant shall not be limited by the 12-month period described in this subparagraph and completion of covered services shall be provided until the time he or she undergoes the transplant surgery and receives the necessary follow-up care that is consistent with good professional practice.
(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 contracts 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 providers 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (i).
(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 terms have the following meanings:
(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 insureds health insurer to provide services under the insureds 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 insurers contracting provider groups. A terminated provider is not a provider who voluntarily leaves the insurer or contracting provider group.
(f)This section does 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 does 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 subdivision (a) if the newly covered insured meets both of the following:
(A)The newly covered insureds 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, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(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)(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 providers 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 providers 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.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(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 contracts 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. An enrollee who has a condition that will require a heart transplant shall not be limited by the 12-month period described in this paragraph and completion of covered services shall be provided for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary followup care that is consistent with good professional practice.
(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 contracts 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 providers services beyond the contract termination date.
(2)Unless otherwise agreed upon 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 providers 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 does 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 does not require a plan to cover services or provide benefits that are not otherwise covered under the terms and conditions of the plan contract. 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).
(j)Except as provided in subdivision (l), this section does 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)(1)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 subdivision (c) if the newly covered enrollee meets both of the following:
(A)The newly covered enrollees prior coverage was terminated under either of the following circumstances:
(i)Pursuant to under paragraph (5) or (6) of subdivision (a) of Section 1365 or subdivision (d) or (e) of Section 10273.6 of the Insurance Code. Code, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(ii)If the plan withdrew a health benefit plan from an entire, or from a portion of a, geographic region described in Section 1399.855 or Section 10965.9 of the Insurance Code.(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.
(m)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, 2018. 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (l).
(n)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 enrollees health care service plan to provide services under the enrollees 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.
SEC. 2.Section 10133.56 of the Insurance Code is amended to read: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. An insured who has a condition that will require a heart transplant shall not be limited by the 12-month period described in this subparagraph and completion of covered services shall be provided for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary follow-up care that is consistent with good professional practice.
(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 contracts 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 providers 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. Notice as to the availability of the right to request completion of covered services shall be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in subdivision (i).
(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 terms have the following meanings:
(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 insureds health insurer to provide services under the insureds 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 insurers contracting provider groups. A terminated provider is not a provider who voluntarily leaves the insurer or contracting provider group.
(f)This section does 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 does 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 subdivision (a) if the newly covered insured meets both of the following:
(A)The newly covered insureds prior coverage was terminated under either of the following circumstances:
(i)Pursuant to 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. Code, which includes circumstances when a health benefit plan is withdrawn from any portion of a market.
(ii)If the health insurer withdrew a health benefit plan from an entire, or from a portion of a, geographic region described in Section 10965.9 or Section 1399.855 of the Health and Safety Code.(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)(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 providers 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 providers 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.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(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 contracts 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. An enrollee who has a condition that will require a transplant shall not be limited by the 12-month period described in this paragraph and completion of covered services shall be provided for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary followup care that is consistent with good professional practice.
(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 contracts 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 providers services beyond the contract termination date.
(2)Unless otherwise agreed upon 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 providers 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 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 does 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 does not require a plan to cover services or provide benefits that are not otherwise covered under the terms and conditions of the plan contract. 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).
(j)Except as provided in subdivision (l), this section shall does 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)(1)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 subdivision (c) if the newly covered enrollee meets both of the following:
(A)The newly covered enrollees prior coverage was terminated under paragraph either of the following circumstances:
(i)Pursuant to 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. Code.
(ii)If the plan withdrew a health benefit plan from an entire, or from a portion of a, geographic region described in Section 1399.855 or Section 10965.9 of the Insurance Code.
(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.
(m)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, 2018. 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.
(m)(n)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 enrollees health care service plan to provide services under the enrollees 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.
SEC. 2.Section 10133.56 of the Insurance Code is amended to read: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. An insured who has a condition that will require a transplant shall not be limited by the 12-month period described in this subparagraph and completion of covered services shall be provided for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary follow-up care that is consistent with good professional practice.
(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 contracts 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 providers 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 terms have the following meanings:
(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 insureds health insurer to provide services under the insureds 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 insurers contracting provider groups. A terminated provider is not a provider who voluntarily leaves the insurer or contracting provider group.
(f)This section shall does 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 does 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 subdivision (a) if the newly covered insured meets both of the following:
(A)The newly covered insureds prior coverage was terminated under subdivision either of the following circumstances:
(i)Pursuant to 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. Code.
(ii)If the health insurer withdrew a health benefit plan from an entire, or from a portion of a, geographic region described in Section 10965.9 or Section 1399.855 of the Health and Safety Code.
(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)(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 providers 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 providers 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.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
SECTION 1.Section 1399.849 of the Health and Safety Code is amended to read:1399.849.(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.(B)He or she gains a dependent or becomes a dependent.(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.(D)He or she has been released from incarceration.(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.(F)He or she gains access to new health benefit plans as a result of a permanent move.(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:(A)Health status.(B)Medical condition, including physical and mental illnesses.(C)Claims experience.(D)Receipt of health care.(E)Medical history.(F)Genetic information.(G)Evidence of insurability, including conditions arising out of acts of domestic violence.(H)Disability.(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment program established for the state pursuant to Section 1343 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:(A)The actuarial value and cost-sharing design of the health benefit plan.(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.(E)Administrative costs, excluding user fees required by the Exchange.(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.(j)This section shall not apply to a grandfathered health plan.(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs program established for the state pursuant to Sections 1343 and 1341 Section 1343 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
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Date
|
Status
|
|---|---|
| Oct 4, 2017 | Chaptered by Secretary of State. Chapter 481, Statutes of 2017. |
| Oct 4, 2017 | Approved by the Governor. |
| Sep 22, 2017 | Enrolled and presented to the Governor at 3 p.m. |
| Sep 15, 2017 | Assembly amendments concurred in. (Ayes 38. Noes 0.) Ordered to engrossing and enrolling. |
| Sep 15, 2017 | From committee: That the Assembly amendments be concurred in. (Ayes 9. Noes 0.) |
| Sep 15, 2017 | From committee: Be re-referred to Com. on HEALTH pursuant to Senate Rule 29.10(d). (Ayes 4. Noes 0.) Re-referred to Com. on HEALTH. |
| Sep 15, 2017 | Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(d). |
| Sep 15, 2017 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 15, 2017 | Read third time. Passed. Ordered to the Senate. |
| Sep 13, 2017 | Read second time. Ordered to third reading. |
| Sep 12, 2017 | Read second time and amended. Ordered to second reading. |
| Sep 11, 2017 | From committee: Do pass as amended. (Ayes 12. Noes 3.) (September 11). |
| Aug 30, 2017 | Read second time and amended. Re-referred to Com. on APPR. |
| Aug 29, 2017 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (August 29). |
| Aug 21, 2017 | Read third time and amended. |
| Jul 18, 2017 | From inactive file. |
| Jul 17, 2017 | Notice of intention to remove from inactive file given by Assembly Member Calderon. |
| Jul 13, 2017 | From consent calendar on motion of Assembly Member Bonta. |
| Jul 12, 2017 | Read second time. Ordered to consent calendar. |
| Jul 11, 2017 | From committee: Do pass. Ordered to consent calendar. (Ayes 15. Noes 0.) (July 11). |
| May 26, 2017 | Referred to Com. on HEALTH. |
| May 16, 2017 | In Assembly. Read first time. Held at Desk. |
| May 15, 2017 | Read third time. Passed. (Ayes 39. Noes 0. Page 1072.) Ordered to the Assembly. |
| May 4, 2017 | Read second time. Ordered to consent calendar. |
| May 3, 2017 | From committee: Do pass. Ordered to consent calendar. (Ayes 8. Noes 0. Page 974.) (May 3). |
| Apr 21, 2017 | Set for hearing May 3. |
| Apr 20, 2017 | April 26 set for first hearing canceled at the request of author. |
| Apr 7, 2017 | Set for hearing April 26. |
| Jan 19, 2017 | Referred to Com. on HEALTH. |
| Jan 12, 2017 | From printer. May be acted upon on or after February 11. |
| Jan 11, 2017 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 15, 2017 | Unfinished Business SB133 Hernandez et al. Concurrence | Senate Floor |
Passed |
|
| Sep 15, 2017 | SB 133 Hernandez Senate Third Reading By WOOD | Assembly Floor |
Passed |
|
| Sep 15, 2017 | That the Assembly amendments be concurred in | Senate Standing Committee on Health |
Passed |
|
| Sep 11, 2017 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Aug 29, 2017 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Health |
Passed |
|
| Aug 21, 2017 | SB 133 Hernandez Senate Third Reading By WOOD Amend By WOOD Set #1 | Assembly Floor |
Passed |
|
| Jul 11, 2017 | Do pass. To Consent Calendar. | Assembly Standing Committee on Health |
Passed |
|
| May 15, 2017 | Consent Calendar 2nd SB133 | Senate Floor |
Passed |
|
| May 3, 2017 | Do pass and be ordered to the Consent Calendar | Senate Standing Committee on Health |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| AIDS Legal Referral Panel | ** Support | Oct 9, 2017 |
| America'S Health Insurance Plans | ** Against | Oct 9, 2017 |
| American Diabetes Association | ** Support | Oct 9, 2017 |
| American Heart Association | ** Support | Oct 9, 2017 |
| American Stroke Association | ** Support | Oct 9, 2017 |
| An individual | ** Support | Oct 9, 2017 |
| APLA Health | ** Support | Oct 9, 2017 |
| Asian & Pacific Islander Wellness Center | ** Support | Oct 9, 2017 |
| Asian Americans Advancing Justice - Los Angeles | ** Support | Aug 25, 2017 |
| Asian Law Alliance | ** Support | Oct 9, 2017 |
| Association Of California Life And Health Insurance Companies | ** Against | Oct 9, 2017 |
| California Access Coalition | ** Support | Aug 25, 2017 |
| California Association Of Health Plans | ** Against | Oct 9, 2017 |
| California Chronic Care Coalition | ** Support | Oct 9, 2017 |
| California Department of Finance | ** Against | Oct 9, 2017 |
| California Department of Insurance | ** Support | Oct 9, 2017 |
| California Pan-Ethnic Health Network | ** Support | Oct 9, 2017 |
| California School Employees Association, AFL-CIO | ** Support | Oct 9, 2017 |
| CaliforniaHealth+ Advocates | ** Support | Oct 9, 2017 |
| centro binacional para el desarrollo indigena oaxaqueno | ** Support | Oct 9, 2017 |
| Children Now | ** Support | Aug 25, 2017 |
| Consumers Union | ** Support | Oct 9, 2017 |
| Donor Network West | ** Support | Oct 9, 2017 |
| Epilepsy California | ** Support | Oct 9, 2017 |
| Exceptional Family Resource Center | ** Support | Oct 9, 2017 |
| George Mark Children'S House | ** Support | Oct 9, 2017 |
| Grandparent Autism Network | ** Support | Oct 9, 2017 |
| Having Our Say | ** Support | Oct 9, 2017 |
| Health Access California | ** Support | Oct 9, 2017 |
| Justice in Aging | ** Support | Oct 9, 2017 |
| Latino Coalition for Healthy California | ** Support | Oct 9, 2017 |
| Lifelong Medical Care | ** Support | Oct 9, 2017 |
| Maternal and Child Health Access | ** Support | Oct 9, 2017 |
| National Health Law Program | ** Support | Oct 9, 2017 |
| National Multiple Sclerosis Society | ** Support | Oct 9, 2017 |
| NICOS Chinese Health Coalition | ** Support | Oct 9, 2017 |
| One Legacy | ** Support | Oct 9, 2017 |
| Personal Assistance Service Council | ** Support | Oct 9, 2017 |
| Positive Women's Network | ** Support | Oct 9, 2017 |
| Project Inform | ** Support | Oct 9, 2017 |
| Rasopathies Network Usa | ** Support | Oct 9, 2017 |
| San Francisco Aids Foundation | ** Support | Oct 9, 2017 |
| SCIU of California | * Support | Sep 11, 2017 |
| self | * Indeterminate | Aug 29, 2017 |
| Services, Immigrant Rights & Education Network | ** Support | Oct 9, 2017 |
| Sierra Donor Services | ** Support | Oct 9, 2017 |
| South Asian Networks | ** Support | Oct 9, 2017 |
| The Grandparent Autism Network | ** Support | Oct 9, 2017 |
| western center on law and poverty | ** Support | Oct 9, 2017 |
| Worksite Wellness La | ** Support | Oct 9, 2017 |
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 133
AUTHOR: | Hernandez | ||
VERSION: | September 12, 2017 | ||
HEARING DATE: | September 15, 2017 | ||
CONSULTANT: | Teri Boughton | ||
PURSUANT TO SENATE RULE 29.10
SUBJECT: Health care coverage: continuity of care
SUMMARY:
- Requires a health plan or insurer, at the request of a newly covered enrollee or insured under an individual health care service plan contract or health insurance policy, arrange for the completion of covered services as set forth in existing law by a nonparticipating provider if the newly covered enrollee’s or insured’s prior coverage was terminated, as specified, including when a health benefit plan is withdrawn from any portion of a market. Requires a notice as to the process by which an enrollee or insured may request completion of covered services to be provided as part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described above.
Existing law:
- Establishes the California Department of Insurance (CDI) to regulate health insurers and the Department of Managed Health Care (DMHC) to regulate health plans.
- 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.
- Establishes the following conditions as eligible for completion of services:
- An acute condition, as specified. Requires completion of covered services to be provided for the duration of the acute condition;
- 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 coverage for a newly covered enrollee;
- The three trimesters of pregnancy and the immediate postpartum period. Requires the completion of covered services to be provided for the duration of pregnancy;
- 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;
- 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,
- 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.
- 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.
- 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.
- 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 any amount in excess of the reimbursement rate, with the exception of copayments and deductibles, as specified.
- 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.
- 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.
- Permits, 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 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:
- Requires a health plan or insurer, at the request of a newly covered enrollee or insured under an individual health plan contract or health insurance policy, to arrange for the completion of covered services as set forth in existing law by a nonparticipating provider if the newly covered enrollee’s or insured’s prior coverage was terminated, as specified, including when a health benefit plan is withdrawn from any portion of a market.
- Requires a notice as to the process by which an enrollee or insured may request completion of covered services to be provided to be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in 1) above.
FISCAL EFFECT:
According to the Assembly Appropriations Committee analysis, costs to the DMHC and CDI are expected to be minor and absorbable.
COMMENTS:
- Author’s statement. According to the author, health insurance markets continue to be in flux with uncertainty at the federal level about market rules, premiums, and cost sharing subsidies. At least one insurer is leaving California’s individual market and another is withdrawing products from 16 of 19 regions. Enrollees and insureds of these carriers will be forced to make new plan choices for 2018. A new insurance product may mean loss of access to specialists familiar with the patient’s history in the middle of a specific treatment plan or scheduled surgery. While California has laws to require continuity of care in specified situations for patients covered in the group market, those rules are different when it comes to individual market coverage. This bill will provide a person with individual market coverage who loses his or her access to a product through no fault of his or her own and who has an existing qualifying condition, to obtain completion of covered services if the provider is willing and the plan and provider are able to agree on payment terms. This bill is a common sense measure that will give a person who has coverage in the individual market some peace of mind that his or her treatment may not have to be disrupted when a carrier leaves the individual market or a product is removed and new coverage is not available that includes the patient’s existing provider.
- Individual market changes. Cigna notified agents in June 2017 that they will no longer offer some individual and family plan products in California for the 2018 plan year. Members currently enrolled in these plans will have coverage through the end of 2017. Cigna individual and family health plans were never offered through Covered California. Cigna offered their individual market products primarily in the Bay Area and Southern California.
According to Covered California, Health Net Life will reduce coverage in the following regions, where it serves about 1,367 people: Region 1 (Northern Counties); Region 3 (Contra Costa); Region 7 (Santa Clara); and, Region 11 (Fresno, Kings, and Madera); Health Net will also expand its offerings in Regions 15 and 16 (Los Angeles County); Region 17 (San Bernardino, Riverside); Region 18 (Orange); and, Region 19 (San Diego). Anthem Blue Cross (Anthem) is withdrawing from 16 of California’s 19 regions, affecting about 153,000 people. Anthem will, however, continue to serve Regions 1 (Northern counties); Region 7 (Santa Clara County); and, Region 10 (Central Valley), where it covers over 108,000 enrollees, approximately 41% of its current enrollment. Anthem’s change will impact individual products on and off California’s exchange.
Covered California also indicates that in 2018, more than 82% of consumers will have more than three plans to choose from, 96% will have at least two, and 4% will have one available insurance company (about 60,000 of the 1.4 million people with coverage through Covered California). Six counties will have just one insurance company selling on the exchange: Monterey, San Benito, San Luis Obispo, Santa Barbara, Inyo, and Mono. Portions of El Dorado, Placer, Fresno, Kings, Madera, Ventura, Kern, Riverside, and San Bernardino will also have one plan choice.
- Prior legislation. AB 369 (Pan, Chapter 4, Statutes of 2014) 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 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.
- Support. Health Access California writes that Californians who buy coverage in the individual market on and off exchange deserve the same consumer protections as those who have group coverage through their jobs. Anthem and Cigna consumers who must switch plans through no fault of their own need continuity of care protections if they are in the middle of treatment for a serious health condition. This bill will ensure people with acute, serious, or terminal conditions, as well as children under three years old, pregnant women, and people with already scheduled surgeries and procedures will not face disruption in care and will have time to transition care if needed. The Western Center on Law and Poverty writes that this bill closes this gap in continuity of care protection and importantly notifies all consumers under what circumstance they would be entitled to these protections when forced to enroll in another health plan.
- Opposition. The California Association of Health Plans, The Association of California Life and Health Insurance Companies, and America’s Health Insurance Plans write that this bill reinstates a short-term program indefinitely, requiring carriers to cover out of network providers when a patient’s current health plan has left portions of the market or has ceased to offer a particular benefit plan. The opposition does not see a need to reinstate this program. The opposition believes consumers have a variety of health plans and insurers from which to choose and since provider networks are publicly available on carrier websites potential enrollees and insured can make informed decision when shopping for a plan that includes their current providers.
SUPPORT AND OPPOSITION:
Support: Aids Legal Referral Panel
American Diabetes Association
American Federation of State, County and Municipal Employees, AFL-CIO
American Heart Association/ American Stroke Association
APLA Health
Asian Law Alliance
Asian & Pacific Islander Wellness Center
California Chronic Care Coalition
California Department of Insurance
CaliforniaHealth+ Advocates
California Pan-Ethnic Health Network
California School Employees Association, AFL-CIO
Centro Binacional para el Desarrollo Indigena Oaxaqueno
Consumers Union
Donor Network West
Epilepsy California
Exceptional Family Resource Center
George Mark Children’s House
Grandparent Autism Network
Having Our Say
Health Access California
Justice In Aging
Latino Coalition for Healthy California
LifeLong Medical Care
Maternal and Child Health Access
National Health Law Program
National Multiple Sclerosis Society
NICOS Chinese Health Coalition
One Legacy
Personal Assistance Service Council
Positive Women’s Network
Project Inform
RASopathies Network USA
San Francisco AIDS Foundation
Services, Immigrant Rights & Education Network
Sierra Donor Services
South Asian Networks
The Grandparent Autism Network
Western Center on Law and Poverty
Worksite Wellness LA
An Individual
Oppose: America’s Health Insurance Plans
Association of California Life and Health Insurance Companies
California Association of Health Plans
California Department of Finance
-- END --
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
UNFINISHED BUSINESS
Bill No: SB 133
Amended: 9/12/17
PRIOR SENATE VOTES NOT RELELVANT
SENATE HEALTH COMMITTEE: 9-0, 9/15/17 (Pursuant to Senate Rule 29.10)
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Nielsen, Roth
ASSEMBLY FLOOR: 46-1, 9/15/17
(ROLL CALL NOT AVAILABLE)
DIGEST:
- This bill requires health care service plan and health insurers to, at the request of a newly covered enrollee or insured under an individual health care service plan contract or individual health insurance policy, to arrange for the completion of covered services as set forth in existing law by a nonparticipating provider if the newly covered enrollee’s or insured’s prior coverage was terminated, as specified, which includes when a health benefit plan is withdrawn from any portion of a market. This bill requires a notice as to the process by which an enrollee or insured may request completion of covered services to be provided with any termination of coverage notice sent.
Assembly Amendments delete the Senate version of this bill and instead extend continuity of care requirements to people with individual market coverage whose coverage was terminated, as specified, and require health insurance carriers to notify these individuals about the process to request continuity of care.
Existing law:
- Establishes the California Department of Insurance (CDI) to regulate health insurers and the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans).
- 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.
- Establishes the following conditions as eligible for completion of services:
- An acute condition, as specified. Requires completion of covered services to be provided for the duration of the acute condition;
- 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 coverage for a newly covered enrollee;
- The three trimesters of pregnancy and the immediate postpartum period. Requires the completion of covered services to be provided for the duration of pregnancy;
- 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;
- 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,
- 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.
- 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.
- 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.
- 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.
- 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 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:
- Requires a health plan or insurer to, at the request of a newly covered enrollee or insured under an individual health care service plan contract or health insurance policy, to arrange for the completion of covered services as set forth in existing law by a nonparticipating provider if the newly covered enrollee’s or insured’s prior coverage was terminated, as specified, which includes when a health benefit plan is withdrawn from any portion of a market.
- Requires a notice as to the process by which an enrollee or insured may request completion of covered services to be provided to be part of, accompany, or be sent simultaneously with any termination of coverage notice sent in the circumstances described in 1) above.
Comments
- Author’s statement. According to the author, health insurance markets continue to be in flux with uncertainty at the federal level about market rules, premiums, and cost sharing subsidies. At least one insurer is leaving California’s individual market and another is withdrawing products from 16 of 19 regions. Enrollees and insureds of these carriers will be forced to make new plan choices for 2018. A new insurance product may mean loss of access to specialists familiar with the patient’s history in the middle of a specific treatment plan or scheduled surgery. While California has laws to require continuity of care in specified situations for patients covered in the group market, those rules are different when it comes to individual market coverage. This bill will provide an individual with individual market coverage who loses his or her access to a product through no fault of his or her own and who has an existing qualifying condition, to obtain completion of covered services if the provider is willing and the plan and provider are able to agree on payment terms. This bill is a common sense measure that will give a person who has coverage in the individual market some peace of mind that his or her treatment may not have to be disrupted when a carrier leaves the individual market or a product is removed and new coverage is not available that includes the patient’s existing provider.
- Individual market changes. Cigna notified agents in June 2017, that they will no longer offer some individual and family plan products in California for the 2018 plan year. Members currently enrolled in these plans will have coverage through the end of 2017. Cigna individual and family health plans were never offered through Covered California. Cigna offered their individual market products primarily in the Bay Area and Southern California.
According to Covered California, Health Net Life will reduce coverage in the following regions, where it serves about 1,367 people: 1 (Northern Counties); 3 (Contra Costa); 7 (Santa Clara); and, 11 (Fresno, Kings, and Madera); and, will also expand its offerings in Regions 15 and 16 (Los Angeles County); Region 17 (San Bernardino, Riverside); 18 (Orange); and, 19 (San Diego). Anthem Blue Cross (Anthem) is withdrawing from 16 of California’s 19 regions, affecting about 153,000 people. Another 151,000 will be affected off the exchange. Anthem will continue to serve Regions 1 (Northern Counties); 7 (Santa Clara County); and, 10 (Central Valley), where it covers over 108,000 enrollees, approximately 41% of its current enrollment. Anthem’s change will impact individual products on and off California’s exchange. Six counties will have just one insurance company selling on the exchange: Monterey, San Benito, San Luis Obispo, Santa Barbara, Inyo, and Mono. Portions of El Dorado, Placer, Fresno, Kings, Madera, Ventura, Kern, Riverside, and San Bernardino will also have one plan choice.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Assembly Appropriations Committee, costs to the DMHC and CDI are expected to be minor and absorbable.
Aids Legal Referral Panel
American Diabetes Association
American Federation of State, County and Municipal Employees, AFL-CIO
American Heart Association/ American Stroke Association
APLA Health
Asian & Pacific Islander Wellness Center
Asian Law Alliance
California Chronic Care Coalition
California Department of Insurance
California Pan-Ethnic Health Network
California School Employees Association, AFL-CIO
CaliforniaHealth+ Advocates
Centro Binacional para el Desarrollo Indigena Oaxaqueno
Consumers Union
Department of Insurance
Donor Network West
Epilepsy California
Exceptional Family Resource Center
George Mark Children’s House
Grandparent Autism Network
Having Our Say
Health Access California
Justice In Aging
Latino Coalition for Healthy California
LifeLong Medical Care
Maternal and Child Health Access
National Health Law Program
National Multiple Sclerosis Society
NICOS Chinese Health Coalition
One Legacy
Personal Assistance Service Council
Positive Women’s Network
Project Inform
RASopathies Network USA
San Francisco AIDS Foundation
Services, Immigrant Rights & Education Network
Sierra Donor Services
South Asian Networks
The Grandparent Autism Network
Western Center on Law and Poverty
Worksite Wellness LA
OPPOSITION: (Verified 9/14/17)
America’s Health Insurance Plans
Association of California Life and Health Insurance Companies
California Association of Health Plans
Department of Finance
ARGUMENTS IN SUPPORT: Health Access California writes that Californians who buy coverage in the individual market on and off exchange deserve the same consumer protections as those who have group coverage through their jobs. Anthem and Cigna consumers who must switch plans through no fault of their own need continuity of care protections if they are in the middle of treatment for a serious health condition. This bill will ensure people with acute, serious, or terminal conditions, as well as children under three years old, pregnant women, and people with already scheduled surgeries and procedures will not face disruption in care and will have time to transition care if needed. The Western Center on Law and Poverty writes that this bill closes this gap in continuity of care protection and importantly notifies all consumers under what circumstance they would be entitled to these protections when forced to enroll in another health plan.
ARGUMENTS IN OPPOSITION: The California Association of Health Plans, the Association of California Life and Health Insurance Companies, and America’s Health Insurance Plans oppose this bill because this bill reinstates a short-term program indefinitely, requiring carriers to cover out of –network providers when a patient’s current health plan has left portions of the market or has ceased to offer a particular benefit plan. The opposition does not see a need to reinstate this program. The opposition believes consumers have a variety of health plans and insurers from which to choose and since provider networks are publicly available on carrier websites potential enrollees and insured can make informed decision when shopping for a plan that includes their current providers.
9/15/17 20:15:03
**** END ****
SENATE THIRD READING
STR Bill Id:SB 133
Author:(Hernandez)
As Amended Ver:September 12, 2017
Majority vote
SENATE VOTE: 39-0
Committee | Votes | Ayes | Noes |
Health | 10-0 | Wood, Maienschein, Kalra, Burke, Limón, Nazarian, Ridley-Thomas, Santiago, Thurmond, Gloria | |
Appropriations | 12-3 | Gonzalez Fletcher, Bloom, Bocanegra, Bonta, Calderon, Chau, Eggman, Friedman, Eduardo Garcia, Gray, Jones-Sawyer, Reyes | Bigelow, Fong, Obernolte |
SUMMARY: Expands existing law relating to completion of covered services to newly covered enrollees under individual health care service plan (health plan) contracts or insurance policies. Specifically, this bill:
- Deletes provisions that require coverage be terminated between December 1, 2013 and March 31, 2014 to permit an enrollee of an individual health plan or insured of an individual health insurance policy to request, at any time, completion of covered services by a nonparticipating provider under specified circumstances.
- Adds a circumstance in which a newly covered enrollee under an individual health plan contract or insurance policy may request completion of covered services, specifically if a plan or insurer withdraws from an entire, or from a portion of a, geographic region as described in existing law.
- Requires health plans to provide notice that an enrollee may request completion of covered services in specified disclosure forms and evidence of coverages issued after January 1, 2018. Requires health plans to provide written copy of this information to contracting providers and providers groups and to enrollees upon request.
- Makes other technical and conforming changes.
FISCAL EFFECT: According to the Assembly Appropriations Committee analysis of a prior version of this bill:
- Costs to the Department of Managed Health Care (DMHC) (Managed Care Fund) and the California Department of Insurance (Insurance Fund) are expected to be minor and absorbable.
- To the extent Medi-Cal managed care plans incur extra administrative and health care costs that would be recognized and reimbursed by the state, potential cost pressure to Department of Health Care Services (DHCS) to increase managed care capitation rates (General Fund/federal funds) to comply with the provision related to heart transplants. The following are cost considerations:
- Unknown time frame. It should be noted this bill applies to "conditions that will require a heart transplant" — it could be months or years before a heart transplant is required or provided. Depending upon the circumstances of individual cases, this bill could require Medi-Cal managed care plans to reimburse an individual's out-of-network providers for an unknown period of time in anticipation of eventually receiving a heart transplant.
- Transplants in most Medi-Cal managed care plans. In the Medi-Cal program, according to model contracts between most health plans and DHCS, beneficiaries who require a heart transplant are disenrolled from managed care into the fee-for-service (FFS) system after the following has occurred: a transplant has been authorized, the beneficiary is referred to an organ transplant facility and the facility agrees the beneficiary is a candidate for a transplant. The beneficiary then receives a transplant and related services through the FFS system and, if the individual maintains Medi-Cal eligibility, is later re-enrolled in managed care. It is unclear whether this bill will affect continuity of care in this subsequent managed care enrollment, because individuals may no longer meet the criteria as having a condition that will require a transplant, after they have received one. This bill does not appear to affect the FFS system.
- Transplants in county-organized health system (COHS) plans. COHS plans are local public agencies that contract with DHCS to provide managed care in their counties. Transplants are covered benefits in COHS managed care, so beneficiaries would not be disenrolled to FFS. In COHS counties, any costs associated with this bill's expanded requirements related to conditions requiring a heart transplant would be experienced by the COHS plan, and subsequently recognized and reimbursed by the state. Although many of the participating COHS plans are not licensed under DMHC, the Health and Safety Code requirements are incorporated via reference.
- Transplants in California Children's Services (CCS). DHCS is currently administering a program called "Whole-Child Model," to carve CCS services for children with complex conditions into managed care. Five health plans in 21 counties are participating. In participating counties and health plans, this bill could potentially impact the transition from the fee-for-service CCS program to managed care. Specifically, it may require health plans to maintain reimbursement to specific providers who otherwise may not participate in the health plan network. It is unclear, however, what overall impact this will have on program costs.
- Reduced Incentives to Contract. Many highly specialized providers, such as those who provide transplant services, may be in a position of market power due to the demand for their services and have little financial incentive to contract with Medi-Cal managed care plans. By requiring managed care plans to provide reimbursement to these providers for an open-ended period of time regardless of network participation, these incentives are further undermined, which could have the effect of increasing the cost of providing transplant services.
COMMENTS: According to the author, given federal uncertainty, health insurance markets continue to be in flux. At least one insurer is leaving California's individual market, and another is withdrawing products from most regions in the state. Enrollees and insureds of these carriers will be forced to make new plan choices for 2018. While California has laws to require continuity of care in specified situations for patients covered in the group market, those rules do not apply for the individual market. This bill will allow those persons in the individual market who lose access to a product through no fault of their own to obtain completion of covered services, if the provider is willing and the plan and provider are able to agree on payment terms.
- Continuity of Care. According to DMHC, enrollees may receive a notice that their doctor or hospital is no longer participating in their health plan. Usually this means that an enrollee must change doctors or hospitals. In some cases an enrollee may be able to keep his or her doctor or hospital for a limited time and this is called continuity of care. In order to receive continuity of care, an enrollee must call his or her health plan to ask for it. Also, the enrollee's doctor or hospital must agree to keep the enrollee as a patient.
Only people with certain kinds of health problems or conditions can get continuity of care:
Type of Problem or Condition | Length of Continuity of Care |
Acute Condition (i.e.: pneumonia) | As long as the condition lasts. |
Serious Chronic Condition (i.e.: severe diabetes or heart disease) | No more than 12 months. Usually until the enrollee completes a period of treatment and the doctor can safely transfer care to another doctor. |
Pregnancy | During pregnancy and immediately after the delivery (the post-partum period). |
Terminal Illness | As long as the person lives. |
Child from birth to 36 months | For up to 12 months. |
Scheduled surgery or procedure (i.e.: knee surgery or colonoscopy) | The surgery or procedure must be scheduled to happen within 180 days of the doctor or hospital leaving the health plan. |
An enrollee may also qualify for continuity of care if his or her health plan changes and they are required to switch to a new plan. This can be referred to as new enrollee continuity of care. Specifically, AB 369 (Pan), Chapter 4, Statutes of 2014, extends the completion of covered services provision in the individual market for people whose plans were cancelled during a specified time period. This bill deletes the time limitation of prior coverage terminated by discontinuation or withdrawal of products between December 1, 2013 and March 31, 2014, and allows a newly covered enrollee to request completion of covered services if their previous health plan or insurer withdrew their plan or policy from the market.
- Individual Market Changes. Cigna notified agents in June 2017, that they will no longer offer some individual and family plan products in California for the 2018 plan year. Members currently enrolled in these plans will have coverage through the end of 2017. Cigna individual and family health plans were never offered through Covered California. Cigna offered their EPO and PPO plan products primarily in the Bay Area and Southern California.
Additionally, according to Covered California, Health Net Life will reduce coverage in the following regions, where it serves about 1,367 people: 1 (Northern Counties); 3 (Contra Costa); 7 (Santa Clara); and, 11 (Fresno, Kings, and Madera); and, will also expand its offerings in Regions 15 and 16 (Los Angeles County); Region 17 (San Bernardino, Riverside); 18 (Orange); and, 19 (San Diego). Anthem Blue Cross (Anthem) is withdrawing from 16 of California's 19 regions, affecting about 153,000 people. Anthem will, however, continue to serve Regions 1 (Northern counties); 7 (Santa Clara County); and, 10 (Central Valley), where it covers over 108,000 enrollees, approximately 41% of its current enrollment. Anthem's change will impact individual products on and off California's exchange.
On a prior version of this bill, Consumers Union states that this bill would extend existing continuity of care protections to apply to people with insurance coverage purchased in the individual market. Western Center on Law and Poverty (WCLP) contends that consumers who are required to purchase their own coverage have less continuity of care protections than those consumers who are offered coverage through their employer. WCLP state that this bill closes this gap in continuity of care protection and importantly notifies all consumers under what circumstance they would be entitled to those protections when forced to enroll in another health plan. Additionally, WCLP writes that the need for these additional protections is particularly acute now as federal attempts to make the ACA fail absent repeal have destabilized our health insurance market. Health Access California writes that this bill would assure that consumers are given notice of the availability of these consumer protections.
On a prior version of this bill, the California Association of Health Plans (CAHP), the Association of California Life and Health Insurance Companies (ACLHIC), and America's Health Insurance Plans (AHIP) write in opposition and contend that the sunset date for those transferring from one health plan to another during open enrollment and granting them the right to access continuity of care was meant only as a short term solution to those who were required to change health plans when the ACA-compliant plans were implemented. CAHP, ACLHIC, and AHIP state that consumers have a large variety of health plans and insurers from which to choose from, on a guaranteed-issuance basis, at open enrollment.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0002305
Date of Hearing: September 11, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
SBPCA Bill Id:SB 133
Author:(Hernandez) – As Amended Ver:August 30, 2017
Policy Committee: | Health | Vote: | 10 - 0 |
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Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill expands the applicability of "completion of services" protections for patients—protections which allow health plan enrollees or insureds to continue accessing care from a provider who has been terminated from a health plan or insurer network or, in the case of a newly covered enrollee or insured, from their prior provider who is not contracted with their new plan or policy. Specifically, this bill:
- Removes a reference that restricted the applicability of completion of services in the individual market to a period in 2013-2014, thereby allowing health plan enrollees or insureds whose coverage in the individual market is terminated to access "completion of services" protections under enumerated circumstances.
- Creates a new circumstance for individuals who "have a condition that will require a heart transplant," in which continuity of care protections are not limited to a 12-month period, but continue until the transplant surgery and follow-up care have been provided.
FISCAL EFFECT:
- Costs to Department of Managed Health Care (Managed Care Fund) and the California Department of Insurance (Insurance Fund) are expected to be minor and absorbable.
- To the extent Medi-Cal managed care plans incur extra administrative and health care costs that would be recognized and reimbursed by the state, potential cost pressure to Department of Health Care Services (DHCS) to increase managed care capitation rates (GF/federal) to comply with the provision related to heart transplants. The following are cost considerations:
- Unknown time frame. It should be noted the bill applies to "conditions that will require a heart transplant"— it could be months or years before a heart transplant is required or provided. Depending upon the circumstances of individual cases, this bill could require Medi-Cal managed care plans to reimburse an individual's out-of-network providers for an unknown period of time in anticipation of eventually receiving a heart transplant.
- Transplants in most Medi-Cal managed care plans. In the Medi-Cal program, according to model contracts between most health plans and DHCS, beneficiaries who require a heart transplant are disenrolled from managed care into the fee-for-service (FFS) system after the following has occurred: a transplant has been authorized, the beneficiary is referred to an organ transplant facility and the facility agrees the beneficiary is a candidate for a transplant. The beneficiary then receives a transplant and related services through the FFS system and, if the individual maintains Medi-Cal eligibility, is later re-enrolled in managed care. It is unclear whether this bill will affect continuity of care in this subsequent managed care enrollment, because individuals may no longer meet the criteria as having a condition that will require a transplant, after they have received one. This bill does not appear to affect the FFS system.
- Transplants in county-organized health system (COHS) plans. COHS plans are local public agencies that contract with DHCS to provide managed care in their counties. Transplants are covered benefits in COHS managed care, so beneficiaries would not be disenrolled to FFS. In COHS counties, any costs associated with this bill's expanded requirements related to conditions requiring a heart transplant would be experienced by the COHS plan, and subsequently recognized and reimbursed by the state. Although many of the participating COHS plans are not licensed under DMHC, the Health and Safety Code requirements are incorporated via reference.
- Transplants in CCS. DHCS is currently administering a program called "Whole-Child Model," to carve CCS services for children with complex conditions into managed care. Five health plans in 21 counties are participating. In participating counties and health plans, this bill could potentially impact the transition from the fee-for-service CCS program to managed care. Specifically, it may require health plans to maintain reimbursement to specific providers who otherwise may not participate in the health plan network. It is unclear, however, what overall impact this will have on program costs.
- Reduced Incentives to Contract. Many highly specialized providers, such as those who provide transplant services, may be in a position of market power due to the demand for their services and have little financial incentive to contract with Medi-Cal managed care plans. By requiring managed care plans to provide reimbursement to these providers for an open-ended period of time regardless of network participation, these incentives are further undermined, which could have the effect of increasing the cost of providing transplant services.
COMMENTS:
- Purpose. According to the author, given federal uncertainty, health insurance markets continue to be in flux. At least one insurer is leaving California’s individual market, and another is withdrawing products from most regions in the state. Enrollees and insureds of these carriers will be forced to make new plan choices for 2018. While California has laws to require continuity of care in specified situations for patients covered in the group market, those rules do not apply for the individual market. This bill will allow those persons in the individual market who lose access to a product through no fault of their own to obtain completion of covered services, if the provider is willing and the plan and provider are able to agree on payment terms. It will also establish a special continuity of care provision for individuals with conditions that will require a heart transplant.
- Background. State law provisions allowing for completion of services, also called "continuity of care," allow an individual to continue to see a provider with which the individual has an existing treatment relationship. Existing law establishes the following conditions as eligible for completion of services: acute conditions, serious chronic conditions, pregnancy and the postpartum period, terminal illnesses, infant and toddler health care, and performance of a surgery that is scheduled to occur within 180 days of the provider contract’s termination date or the effective date of coverage. With the exception of terminal illness, these protections offer a time-limited period during which completion of services can take place and/or services can be transitioned to a new provider. For instance, protections for treatment of serious chronic conditions are required to be provided for a period of time necessary to complete a course of treatment and transition to another provider, but are only required up to a 12-month period.
- Individual Insurance Market Changes. Cigna will stop selling certain individual and family plan products in California for the 2018 plan year. Anthem Blue Cross (Anthem) is withdrawing from 16 of California’s 19 regions, affecting about 153,000 people. Health Net Life will reduce coverage in certain regions, affecting about 1,400 people. Individuals whose coverage is terminated will have to choose different plans, with potentially different provider networks. This bill will allow those individuals who meet specific criteria listed above to continue treatment with their current providers for specified periods.
- Prior Legislation. AB 369 (Pan), Chapter 4, Statutes of 2014, extended the completion of covered services provision in the individual market for people whose plans were cancelled during a specified time period directly before and after January 1, 2014, when significant changes occurred in the individual market due to implementation of the federal Affordable Care Act.
- Support. A large number of health and consumer advocates support this bill, stating people in the individual market whose coverage is terminated through no fault of their own deserve the same protections currently afforded to those in the group market. They note this bill will protect patients in the middle of treatment. The American Heart Association writes in strong support of the provision specific to heart patients.
- Opposition. Health plans and insurers oppose this bill, stating it sets a new standard that dramatically changes the purpose of existing continuity of care laws and weakens the integrity of health plan and insurer provider networks. They note continuity of care was always meant to be used as a reasonable method to safely transfer patients to an appropriate provider within a network, not to provide a patient with unlimited access to out-of-network providers. They note it serves as a disincentive for highly specialized care teams to contract with health plans, and question the addition of a specific right for a single condition. Finally, they note they do not see a need to extend completion of covered services to the individual market, as individuals can choose plans at open enrollment.
- Staff Comments. Due to its narrow applicability to conditions that will require heart transplants, this bill has an uncertain fiscal impact on state programs, particularly Medi-Cal. However, protections this bill puts into place strictly for such conditions change the purpose of "completion of services" protections. Current law establishes time-limited protections in certain situations in order to avoid care disruptions during specified types of treatment. In contrast, this bill establishes an open-ended guarantee that a new health plan will maintain the current providers of an individual who has "a condition that will require a heart transplant" until after a transplant happens and follow-up care is provided— regardless of when or whether a transplant will occur, whether the individual is stable and can safely be transferred to another provider, whether the provider is the same provider that will provide the transplant, or other factors. This narrow change also raises broader questions with potentially significant fiscal impacts for the health care delivery system, including the Medi-Cal managed care program, given the ability to contract and manage costs within a network is the core function of health plans and insurers. These questions include:
- Does this bill establish a sensible construct with respect to which individuals with critical health needs are afforded the right to have their new plan reimburse their prior providers on an out-of-network basis for an indefinite period of time, in spite of the potential availability of in-network providers?
- Does this bill effectively balance individuals' established provider relationships with a competitive market for health insurance, in which plans and insurers compete on their ability to craft cost-effective networks that guarantee access to covered services?
- Does this bill increase the leverage of specialized providers, potentially undermining their incentives to contract with health plans and decreasing the likelihood that these providers will be available to patients on an in-network basis?
- How will the requirement to reimburse certain high-cost specialty providers for extended periods of time impact overall health care costs?
- In cases where switching providers could be harmful to a patient, do highly specialized providers bear some responsibility to contract or otherwise accommodate patients with complex conditions who wish to maintain their services?
- Are heart transplants truly unique in health care, or should similar protections also apply to other complex conditions?
Changing providers is extremely difficult for individuals with complex health conditions, but it appears to be a feature of our current health care system, particularly in the in individual market where consumers are encouraged to comparison-shop. Many individuals with significant health conditions have desired providers with whom they would like to continue relationships. Many providers that treat high-cost, rare, or sensitive conditions are also very costly to include in health plan networks, or may choose not to contract with health plans as a business decision. It is unclear that the provision of this bill related to conditions that will require heart transplants is crafted in a manner that addresses the above questions in a systematic and thoughtful way.
- Amendments. Given the fiscal issues and questions raised by the provision specific to conditions that will require heart transplants, staff suggests an amendment to strike this provision. Continuity of care protections for conditions that require heart transplants will be continue to be governed by law that applies to all acute or serious chronic conditions.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
Date of Hearing: August 29, 2017
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
SBPCA Bill Id:SB 133
Author:(Hernandez) – As Amended Ver:August 21, 2017
SENATE VOTE: Not relevant.
SUBJECT: Health care coverage: continuity of care.
SUMMARY: Expands existing law relating to completion of covered services to enrollees with specified serious chronic conditions and newly covered enrollees under individual health care service plan (health plan) contracts or insurance policies.
The Assembly amendments delete the Senate approved version of this bill, and instead:
- Expand completion of covered services to an enrollee who has a serious chronic condition that will require a transplant for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary follow-up care that is consistent with good professional practice.
- Delete provisions that require coverage be terminated between December 1, 2013 and March 31, 2014 to permit an enrollee of an individual health plan or insured of an individual health insurance policy to request, at any time, completion of covered services by a nonparticipating provider under specified circumstances.
- Add a circumstance in which a newly covered enrollee under an individual health plan contract or insurance policy may request completion of covered services, specifically if a plan or insurer withdraws from an entire, or from a portion of a, geographic region as described in existing law.
- Require health plans to provide notice that an enrollee may request completion of covered services in specified disclosure forms and evidence of coverages issued after January 1, 2018. Requires health plans to provide written copy of this information to contracting providers and providers groups and to enrollees upon request.
- Make other technical and conforming changes.
EXISTING LAW:
- Establishes the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act), which provides for the licensure and regulation of health plans by the Department of Managed Health Care (DMHC).
- Establishes the regulation of health insurers by the California Department of Insurance (CDI) under the Insurance Code.
- Establishes the federal Patient Protection and Affordable Care Act (ACA), which enacts various health care coverage market reforms including the availability of health insurance exchanges (exchanges) and new individual and small group products offered on and off the exchanges beginning 2014.
- 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.
- Establishes the following conditions as eligible for completion of services:
- An acute condition, as specified. Requires completion of covered services to be provided for the duration of the acute condition;
- 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 coverage for a newly covered enrollee;
- The three trimesters of pregnancy and the immediate postpartum period. Requires the completion of covered services to be provided for the duration of pregnancy;
- 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;
- 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,
- 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.
- Permits a health plan or health insurer to require the terminated provider 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. Exempts the health plan or insurer from being required to continue the provider’s services if the terminated provider does not agree to comply or does not comply with these contractual terms and conditions. Applies these requirements to non-participating providers under the Knox-Keene Act.
- 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. Exempts the health plan or the provider group from being required to continue the services if the provider does not accept the payment rates.
- 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 any amount in excess of the reimbursement rate, with the exception of copayments and deductibles, as specified.
- 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.
- Requires a health insurer to provide 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 to an insured, upon request.
- 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. States that a terminated provider is not a provider who voluntarily leaves the insurer or contracting provider group.
- States that these continuity of care laws do not:
- 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;
- 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,
- 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.
- 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 terminated between December 1, 2013 and March 31, 2014, and he or she was receiving services from the non-participating provider for a condition specified in 5) above on the effective date of his or her new coverage.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, health insurance markets continue to be in flux with uncertainty at the federal level about market rules, premiums, and cost sharing subsidies. At least one insurer is leaving California’s individual market and another is withdrawing products from 16 of 19 regions. Enrollees and insureds of these carriers will be forced to make new plan choices for 2018. For those with medically complex conditions, such as a young child born with a rare heart condition, a new plan may mean loss of access to specialists familiar with the patient’s history in the middle of a specific treatment plan or scheduled surgery. While California has laws to require continuity of care in specified situations for patients covered in the group market, those rules are different when it comes to individual market coverage. This bill will provide an individual with individual market coverage who loses his or her access to a product through no fault or choice of his or her own and who has an existing qualifying condition, to obtain completion of covered services if the provider is willing and the plan and provider are able to agree on payment terms. This bill also permits an individual who has a condition that will require a transplant to complete covered services for the duration of the condition and until the time he or she undergoes the transplant surgery and necessary follow-up consistent with good professional practice. This bill is a common sense measure that will give a person with a medically complex condition who has coverage in the individual market some peace of mind that his or her treatment may not have to be disrupted when a carrier leaves the individual market or a product is removed and new coverage is not available that includes the patient’s existing provider.
- BACKGROUND.
- Continuity of Care. According to the DMHC, enrollees may receive a notice that their doctor or hospital is no longer participating in their health plan. Usually this means that an enrollee must change doctors or hospitals. In some cases an enrollee may be able to keep his or her doctor or hospital for a limited time and this is called continuity of care. In order to receive continuity of care, an enrollee must call his or her health plan to ask for it. Also, the enrollee’s doctor or hospital must agree to keep the enrollee as a patient.
Only people with certain kinds of health problems or conditions can get continuity of care:
Type of Problem or Condition | Length of Continuity of Care |
Acute Condition (i.e.: pneumonia) | As long as the condition lasts. |
Serious Chronic Condition (i.e.: severe diabetes or heart disease) | No more than 12 months. Usually until the enrollee completes a period of treatment and the doctor can safely transfer care to another doctor. |
Pregnancy | During Pregnancy and immediately after the delivery (the post-partum period). |
Terminal Illness | As long as the person lives. |
Child from birth to 36 months | For up to 12 months. |
Scheduled surgery or procedure (i.e.: knee surgery or colonoscopy) | The surgery or procedure must be scheduled to happen within 180 days of the doctor or hospital leaving the health plan. |
In addition to the above provisions, this bill also includes a provision that allows an enrollee who has a serious chronic condition that will require a transplant to qualify for completion of covered services for the duration of the condition and until the time of the surgery and follow-up consistent with good professional practice. Current law limits coverage to no more than 12 months for enrollees with a serious chronic condition.
Additionally, an enrollee may also qualify for continuity of care if his or her health plan changes and they are required to switch to a new plan. This can be referred to as new enrollee continuity of care. Specifically, AB 369 (Pan), Chapter 4, Statutes of 2014, extends the completion of covered services provision in the individual market for people whose plans were cancelled during a specified time period. This bill deletes the time limitation of prior coverage terminated by discontinuation or withdrawal of products between December 1, 2013 and March 31, 2014, and allows a newly covered enrollee to request completion of covered services if their previous health plan or insurer withdrew their plan or policy from the market.
- Individual Market Changes. Cigna notified agents in June 2017, that they will no longer offer some individual and family plan products in California for the 2018 plan year. Members currently enrolled in these plans will have coverage through the end of 2017. Cigna individual and family health plans were never offered through Covered California. Cigna offered their EPO and PPO plan products primarily in the Bay Area and Southern California.
Additionally, according to Covered California, Health Net Life will reduce coverage in the following regions, where it serves about 1,367 people: 1 (Northern Counties); 3 (Contra Costa); 7 (Santa Clara); and, 11 (Fresno, Kings, and Madera); and, will also expand its offerings in Regions 15 and 16 (Los Angeles County); Region 17 (San Bernardino, Riverside); 18 (Orange); and, 19 (San Diego). Anthem Blue Cross (Anthem) is withdrawing from 16 of California’s 19 regions, affecting about 153,000 people. Anthem will, however, continue to serve Regions 1 (Northern counties); 7 (Santa Clara County); and, 10 (Central Valley), where it covers over 108,000 enrollees, approximately 41% of its current enrollment. Anthem’s change will impact individual products on and off California’s exchange.
- Individual Market Changes. Cigna notified agents in June 2017, that they will no longer offer some individual and family plan products in California for the 2018 plan year. Members currently enrolled in these plans will have coverage through the end of 2017. Cigna individual and family health plans were never offered through Covered California. Cigna offered their EPO and PPO plan products primarily in the Bay Area and Southern California.
- SUPPORT. Consumers Union states that this bill would extend existing continuity of care protections to apply to people with insurance coverage purchased in the individual market. Western Center on Law and Poverty (WCLP) contends that consumers who are required to purchase their own coverage have less continuity of care protections than those consumers who are offered coverage through their employer. WCLP state that this bill closes this gap in continuity of care protection and importantly notifies all consumers under what circumstance they would be entitled to those protections when forced to enroll in another health plan. Additionally, WCLP writes that the need for these additional protections is particularly acute now as federal attempts to make the ACA fail absent repeal have destabilized our health insurance market. Health Access California writes that this bill would add clear protections for people awaiting a major transplant and assure that consumers are given notice of the availability of these consumer protections.
- OPPOSITION. The California Association of Health Plans (CAHP), the Association of California Life and Health Insurance Companies (ACLHIC), and America’s Health Insurance Plans (AHIP) contend this bill creates a new benefit to only those who have a condition that may require a transplant in the future to continue. Additionally, CAHP, ACLHIC, and AHIP state that this bill is exceptionally broad, and could include a number of diseases and ailments that may or may not ever require a transplant and would allow these patients to continue to see their non-network providers in perpetuity. Furthermore, CAHP, ACLHIC, and AHIP contend that the sunset date for those transferring from one health plan to another during open enrollment and granting them the right to access continuity of care was meant only as a short term solution to those who were required to change health plans when the ACA-compliant plans were implemented. CAHP, ACLHIC, and AHIP state that consumers have a large variety of health plans and insurers from which to choose from, on a guaranteed-issuance basis, at open enrollment.
- PREVIOUS LEGISLATION.
- AB 369 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 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.
- 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. Establishes notification requirements informing individuals affected by AB 1180 of health insurance available in 2014.
- ABX1 2 (Pan), Chapter 1, Statutes of 2013-14 First Extraordinary Session and SBX1 2 (Hernandez), Chapter 2, Statutes of 2013-14 First Extraordinary Session, established the health insurance market reforms contained in the ACA specific to individual purchasers, such as prohibiting insurers from denying coverage based on preexisting conditions; and, make conforming changes to small employer health insurance laws resulting from final federal regulations.
- 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. 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 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 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. 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.
- AUTHOR’S AMENDMENTS. The author intends to further amend this bill, as follows:
- Narrow the scope of transplants to heart, lung, and liver transplants;
- Clarify that a newly covered enrollee under an individual health plan contract or insurance policy may request completion of covered services when a health benefit plan is withdrawn from any portion of a market; and,
- Add language that the availability of the right to request completion of covered service be part of with any termination of coverage notice.
REGISTERED SUPPORT / OPPOSITION:
Support
AIDS Legal Referral Panel
American Federation of State, County and Municipal Employees, AFL-CIO
American Heart Association/American Stroke Association
APLA Health
Asian Americans Advancing Justice – Los Angeles
Asian and Pacific Islander Wellness Center, Inc.
California Access Coalition
California Pan-Ethnic Health Network
California School Employees Association, AFL-CIO
California State Council of the Service Employees International Union
Children Now
Consumers Union
Donor Network West
Epilepsy California
Exceptional Family Resource Center
George Mark Children’s House
Grandparent Autism Network
Health Access California
Justice in Aging
Latino Coalition for a Healthy California
LifeLong Medical Care
National Health Law Program
NICOS Chinese Health Coalition
Personal Assistance Services Council
Positive Women’s Network
Project Inform
RASopathies Network USA
San Francisco AIDS Foundation
Sierra Donor Services
South Asian Network
Western Center on Law and Poverty
Opposition
America’s Health Insurance Plans
Association of California Life and Health Insurance Companies
California Association of Health Plans
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097
SENATE THIRD READING
STR Bill Id:SB 133
Author:(Hernandez)
As Introduced Ver:January 11, 2017
Majority vote
SENATE VOTE: 39-0
Committee | Votes | Ayes | Noes |
Health | 15-0 | Wood, Maienschein, Bonta, Burke, Gallagher, Limón, McCarty, Nazarian, Patterson, Ridley-Thomas, Rodriguez, Santiago, Thurmond, Waldron, Gloria |
SUMMARY: Deletes references to the federal transitional reinsurance program in the individual market for purposes of health care service plans (health plans).
FISCAL EFFECT: None
COMMENTS: According to the author, under the terms of the ACA, the reinsurance program was always intended to be temporary with the collection of contributions subject to end in 2016. This bill is needed to update California law related to the single risk pool to reflect that reinsurance payments are no longer being made and therefore do not necessitate adjustment. This bill is also necessary to keep California law current in response to statutory and regulatory changes as well as administrative changes at the federal level.
ACA. Enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expands access to quality, affordable insurance and health care. As of January 1, 2014, insurers are no longer able to deny coverage or charge higher premiums based on preexisting conditions (under rules referred to as guaranteed issue and modified community rating, respectively). These aspects of the ACA, along with tax credits for low and middle income people buying insurance on their own in new health benefit exchanges, make it easier for people with preexisting conditions to gain insurance coverage. However, if not accompanied by other regulatory measures, these provisions could have unintended consequences for the insurance market. For example, insurers may try to compete by avoiding sicker enrollees rather than by providing the best value to consumers. In addition, in the early years of market reform, insurers faced uncertainty as to how to price coverage as new people gained coverage, potentially leading to premium volatility. To discourage behavior that could lead to adverse selection, the ACA makes it difficult for people to wait until they are sick to purchase insurance (i.e. by limiting open enrollment periods, requiring most people to have insurance coverage or pay a penalty, and providing subsidies to help with the cost of insurance). Three provisions of the ACA: 1) risk adjustment (redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees by protecting against adverse selection and risk selection in the individual and small group markets, inside and outside the exchanges by spreading financial risk across the markets); 2) reinsurance (see discussion below); and, 3) risk corridors (limits losses and gains beyond an allowable range by stabilizing premiums and protects against inaccurate premium setting during initial years of the reform), were intended to promote insurer competition on the basis of quality and value and promote insurance market stability, particularly in the early years of reform.
The ACA established a transitional reinsurance program to stabilize premiums inside and outside of the health benefit exchanges. The transitional reinsurance program will collect contributions from contributing entities to fund reinsurance payments to issuers of eligible market plans, the administrative costs of operating the reinsurance program, and the General Fund of the United States (U.S.) Treasury for the 2014, 2015, and 2016 benefit years. The program transfers funds to individual market insurance plans with higher-cost enrollees in order to reduce the incentive for insurers to charge higher premiums due to new market reforms that guarantee the availability of coverage regardless of health status.
Reinsurance is meant to stabilize premiums by reducing the incentive for insurers to charge higher premiums due to concerns about higher-risk people enrolling early in the program, whereas risk adjustment is meant to stabilize premiums by mitigating the effects of risk selection across plans. Thus, reinsurance payments are only made to individual market plans that are subject to new market rules (e.g., guaranteed issue), whereas risk adjustment payments are made to both individual and small group plans. Additionally, reinsurance payments are based on actual costs, whereas risk adjustment payments are based on expected costs. As reinsurance is based on actual rather than predicted costs, reinsurance payments will also account for low-risk individuals who may have unexpectedly high costs (such as costs incurred due to an accident or sudden onset of an illness). Under reinsurance, some plans may receive payments for high-cost/high-risk enrollees, and still be eligible for payment for those enrollees under risk adjustment.
To cover the costs of reinsurance payments and administering the program, funds are collected from all health insurance issuers and third party administrators (including those in the individual and group markets). The U.S. Department of Health and Human Services issues reinsurance payments to plans based on need, rather than issuing payments proportional to the amount of contributions from each state.
The American Care Act and the Better Care Reconciliation Act. On May 4, 2017, the House of Representatives voted 217-213 to pass the American Health Care Act (AHCA) (H.R. 1628). The AHCA would repeal and replace the ACA. On June 22 and 26, 2017, Senate Republican leaders released the discussion draft of the Better Care Reconciliation Act (BCRA), the Senate version of its repeal and replace legislation. The BCRA includes a more gradual phase-out of Medicaid expansion starting in 2021, Medicaid per-capita caps with tighter indexing in later years, and modified ACA premium subsidies tied to a less generous benchmark plan in 2020. Additionally, states could apply for waivers through a loosened ACA 1332 waiver process and waive essential health benefits, among other potential waivers. The BCRA also defunds Planned Parenthood for one year, repeals ACA taxes, and repeals the employer and individual mandates. Cost-sharing subsidies are appropriated through 2019, thereafter those subsidies are repealed. The Senate has yet to vote on the BCRA.
Health Access California states in support that since the reinsurance program has expired, it is appropriate to eliminate reference to the program in state law.
There is no registered opposition.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0001203
Date of Hearing: July 11, 2017
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
SBPCA Bill Id:SB 133
Author:(Hernandez) – As Introduced Ver:January 11, 2017
SENATE VOTE: 39-0
SUBJECT: Individual market: single risk pool: index rate.
SUMMARY: Deletes references to the federal transitional reinsurance program in the individual market for purposes of health care service plans (health plans).
EXISTING LAW:
- Establishes the federal Patient Protection and Affordable Care Act (ACA), which enacts various health care coverage market reforms including the guaranteed availability of insurance and various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums inside and outside of the health benefit exchanges.
- Establishes in state government, the California Health Benefits Exchange (Exchange), referred to as Covered California, as an independent public entity not affiliated with an agency or department, and requires Covered California to compare and make available through selective contracting health insurance for individuals and small business purchasers as authorized under the ACA.
- Provides for the regulation of health plans by the Department of Managed Health Care.
- Requires a health plan, on and after October 1, 2013, to fairly and affirmatively offer, market, and sell all of the health plan’s health benefit plans sold in the individual market for plan years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services.
FISCAL EFFECT: None
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, under the terms of the ACA, the reinsurance program was always intended to be temporary with the collection of contributions subject to end in 2016. This bill is needed to update California law related to the single risk pool to reflect that reinsurance payments are no longer being made and therefore do not necessitate adjustment. This bill is also necessary to keep California law current in response to statutory and regulatory changes as well as administrative changes at the federal level.
- BACKGROUND.
- ACA. Enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expands access to quality, affordable insurance and health care. As of January 1, 2014, insurers are no longer able to deny coverage or charge higher premiums based on preexisting conditions (under rules referred to as guaranteed issue and modified community rating, respectively). These aspects of the ACA, along with tax credits for low and middle income people buying insurance on their own in new health benefit exchanges, make it easier for people with preexisting conditions to gain insurance coverage. However, if not accompanied by other regulatory measures, these provisions could have unintended consequences for the insurance market. For example, insurers may try to compete by avoiding sicker enrollees rather than by providing the best value to consumers. In addition, in the early years of market reform, insurers faced uncertainty as to how to price coverage as new people gained coverage, potentially leading to premium volatility. To discourage behavior that could lead to adverse selection, the ACA makes it difficult for people to wait until they are sick to purchase insurance (i.e. by limiting open enrollment periods, requiring most people to have insurance coverage or pay a penalty, and providing subsidies to help with the cost of insurance). Three provisions of the ACA: i) risk adjustment (redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees by protecting against adverse selection and risk selection in the individual and small group markets, inside and outside the exchanges by spreading financial risk across the markets); ii) reinsurance (see discussion below); and, iii) risk corridors (limits losses and gains beyond an allowable range by stabilizing premiums and protects against inaccurate premium setting during initial years of the reform), were intended to promote insurer competition on the basis of quality and value and promote insurance market stability, particularly in the early years of reform.
The ACA established a transitional reinsurance program to stabilize premiums inside and outside of the health benefit exchanges. The transitional reinsurance program will collect contributions from contributing entities to fund reinsurance payments to issuers of eligible market plans, the administrative costs of operating the reinsurance program, and the General Fund of the U.S. Treasury for the 2014, 2015, and 2016 benefit years. The program transfers funds to individual market insurance plans with higher-cost enrollees in order to reduce the incentive for insurers to charge higher premiums due to new market reforms that guarantee the availability of coverage regardless of health status.
Reinsurance is meant to stabilize premiums by reducing the incentive for insurers to charge higher premiums due to concerns about higher-risk people enrolling early in the program, whereas risk adjustment is meant to stabilize premiums by mitigating the effects of risk selection across plans. Thus, reinsurance payments are only made to individual market plans that are subject to new market rules (e.g., guaranteed issue), whereas risk adjustment payments are made to both individual and small group plans. Additionally, reinsurance payments are based on actual costs, whereas risk adjustment payments are based on expected costs. As reinsurance is based on actual rather than predicted costs, reinsurance payments will also account for low-risk individuals who may have unexpectedly high costs (such as costs incurred due to an accident or sudden onset of an illness). Under reinsurance, some plans may receive payments for high-cost/high-risk enrollees, and still be eligible for payment for those enrollees under risk adjustment.
To cover the costs of reinsurance payments and administering the program, funds are collected from all health insurance issuers and third party administrators (including those in the individual and group markets). The U.S. Department of Health and Human Services issues reinsurance payments to plans based on need, rather than issuing payments proportional to the amount of contributions from each state. - The American Care Act and the Better Care Reconciliation Act. On May 4, 2017, the House of Representatives voted 217-213 to pass the American Health Care Act (AHCA) (H.R. 1628). The AHCA would repeal and replace the ACA. On June 22 and 26, 2017, Senate Republican leaders released the discussion draft of the Better Care Reconciliation Act (BCRA), the Senate version of its repeal and replace legislation. The BCRA includes a more gradual phase-out of Medicaid expansion starting in 2021, Medicaid per-capita caps with tighter indexing in later years, and modified ACA premium subsidies tied to a less generous benchmark plan in 2020. Additionally, states could apply for waivers through a loosened ACA 1332 waiver process and waive essential health benefits, among other potential waivers. The BCRA also defunds Planned Parenthood for one year, repeals ACA taxes, and repeals the employer and individual mandates. Cost-sharing subsidies are appropriated through 2019, thereafter those subsidies are repealed. The Senate has yet to vote on the BCRA.
- ACA. Enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expands access to quality, affordable insurance and health care. As of January 1, 2014, insurers are no longer able to deny coverage or charge higher premiums based on preexisting conditions (under rules referred to as guaranteed issue and modified community rating, respectively). These aspects of the ACA, along with tax credits for low and middle income people buying insurance on their own in new health benefit exchanges, make it easier for people with preexisting conditions to gain insurance coverage. However, if not accompanied by other regulatory measures, these provisions could have unintended consequences for the insurance market. For example, insurers may try to compete by avoiding sicker enrollees rather than by providing the best value to consumers. In addition, in the early years of market reform, insurers faced uncertainty as to how to price coverage as new people gained coverage, potentially leading to premium volatility. To discourage behavior that could lead to adverse selection, the ACA makes it difficult for people to wait until they are sick to purchase insurance (i.e. by limiting open enrollment periods, requiring most people to have insurance coverage or pay a penalty, and providing subsidies to help with the cost of insurance). Three provisions of the ACA: i) risk adjustment (redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees by protecting against adverse selection and risk selection in the individual and small group markets, inside and outside the exchanges by spreading financial risk across the markets); ii) reinsurance (see discussion below); and, iii) risk corridors (limits losses and gains beyond an allowable range by stabilizing premiums and protects against inaccurate premium setting during initial years of the reform), were intended to promote insurer competition on the basis of quality and value and promote insurance market stability, particularly in the early years of reform.
- SUPPORT. Health Access California states that since the reinsurance program has expired, it is appropriate to eliminate reference to the program in state law.
- RELATED LEGISLATION.
- AB 156 (Wood) deletes references to the federal transitional reinsurance program in the individual market and is pending in the Senate Health Committee.
- AB 157 (Wood) deletes references to the federal transitional reinsurance program in the small group market and is pending in the Senate Health Committee.
- SB 134 (Hernandez) deletes references to the federal transitional reinsurance program in the small group market and is pending in the Assembly Health Committee.
- PREVIOUS LEGISLATION.
- AB 1602 (John A. Pérez), Chapter 655, Statutes of 2010, and SB 900 (Alquist), Chapter 659, Statutes of 2010, established the California’s Exchange and its powers and duties.
- ABX1 2 (Pan), Chapter 1, Statutes of 2013-14 First Extraordinary Session and SBX1 2 (Hernandez), Chapter 2, Statutes of 2013-14 First Extraordinary Session, established the health insurance market reforms contained in the ACA specific to individual purchasers, such as prohibiting insurers from denying coverage based on preexisting conditions; and, make conforming changes to small employer health insurance laws resulting from final federal regulations.
- SB 961 (Hernandez) and AB 1461 (Monning) of 2012 were identical bills that would have reformed California’s individual market similar to the provisions in SBX1 2. SB 961 and AB 1461 were vetoed by Governor Brown who indicated that without the strong foundation that federal law provides, a state-level mandate on insurers alone could encourage healthy people to wait until they got sick or injured before purchasing coverage and would lead to skyrocketing premiums, making coverage more unaffordable.
REGISTERED SUPPORT / OPPOSITION:
Support
Health Access California
Opposition
None on file.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
CONSENT
Bill No: SB 133
:
SENATE HEALTH COMMITTEE: 8-0, 5/3/17
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Nielsen
NO VOTE RECORDED: Roth
DIGEST: This bill deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual health plan single risk pool index rate adjustments.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which, among other things, requires a health insurance issuer to consider the claims experience of all enrollees in all health plans (other than grandfathered health plans), as specified, offered by such issuer in the individual market in a state, including those enrollees who do not enroll in such plans through a health benefit exchange, to be members of a single risk pool.
- Establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) under the Health and Safety Code and the California Department of Insurance (CDI) to regulate health insurers under the Insurance Code.
- Requires a health plan to consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that health plan in this state, whether offered by health plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through California’s health benefit exchange (known as Covered California) and insureds and enrollees who enroll in individual coverage outside of Covered California.
- Requires each year, a health plan to establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool.
- Requires the index rate to be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to specified sections of the ACA, and Covered California user fees, as described in federal regulations.
This bill deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual health plans with regard to the single risk pool index rate.
Background
- Reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014. The table below describes the three programs.
Program: | Reinsurance | Risk Corridors | Risk Adjustment |
Purpose: | Provides funding to issuers that incur high claims costs for enrollees | Limits issuer losses (and gains) | Transfers funds from lower risk plans to higher risk plans |
Participants: | All issuers and third party administrators on behalf of group health plans contribute funding; non-grandfathered individual market plans (inside and outside the Exchange) are eligible for payments | Qualified health plans | Non-grandfathered individual and small group market plans, inside and outside the Exchange |
Time Frame: | 3 years (2014-2016) | 3 years (2014-2016) | Permanent |
- Implementation of the ACA. California law makers passed at least 50 laws to harmonize California law with the ACA. Prior to the enactment of the major ACA coverage expansions, over 40 million Americans (including seven million Californians) were uninsured. The percentage of Californians under age 65 without insurance has fallen to 7.1% in 2016. California has a history of strong consumer protections in its health insurance market; enacting some reforms even before the ACA required them. The Republican Congressional leadership and President Donald Trump have called for a “repeal and replace” of the ACA. The President has issued an Executive Order to direct his administration to reduce regulatory burdens on the health insurance industry and others. Federal legislation has been introduced which would substantially roll back gains made in California. The federal Department of Health and Human Services has also promulgated regulations to make changes in the health insurance market rules. Since California has been described as one of the more successful states in terms of implementation of the ACA, it is important for Legislature to critically evaluate federal policy changes prior to adoption in order to ensure those changes do not negatively affect the progress that has been made in California.
Comments
Author’s statement. According to the author, under the terms of the ACA, the reinsurance program was always intended to be temporary with the collection of contributions subject to end in 2016. This bill is needed to update California law related to the single risk pool to reflect that reinsurance payments are no longer being made and therefore do not necessitate adjustment. This bill is also necessary to keep California law current in response to statutory and regulatory changes as well as administrative changes at the federal level.
AB 156 (Wood, 2017) contains similar provisions to this bill that apply to the Insurance Code.
SB 134 (Hernandez, 2017) contains similar provisions to this bill that apply to health plans that operate in the small group market. AB 157 (Wood) contains similar provisions to SB 134 that apply to the Insurance Code.
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) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
AB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increasing the geographic rating regions to 19 and requiring no later than June 1, 2017, DMHC, in collaboration with the Exchange and the CDI, to review the geographic rating regions and submit a report to the appropriate policy committees.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Health Access California
None received
ARGUMENTS IN SUPPORT: Health Access California writes that the reinsurance program was a temporary program that helped to stabilize premiums in the individual market during the initial years of ACA implementation by providing payments to health plans that enroll higher-cost individuals. The program was created to protect against overall premium increases by offsetting the expenses of high-cost consumers entering the individual market. Since the reinsurance program has expired, it is appropriate to eliminate reference to the program in state law.
5/5/17 13:56:35
**** END ****
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 133
AUTHOR: | Hernandez | ||
VERSION: | January 11, 2017 | ||
HEARING DATE: | May 3, 2017 | ||
CONSULTANT: | Teri Boughton | ||
SUBJECT: Individual market: single risk pool: index rate
SUMMARY:
Deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual health plan single risk pool index rate adjustments.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things requires a health insurance issuer to consider the claims experience of all enrollees in all health plans (other than grandfathered health plans), as specified, offered by such issuer in the individual market in a state, including those enrollees who do not enroll in such plans through a health benefit exchange, to be members of a single risk pool.
- Establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) under the Health and Safety Code and the California Department of Insurance (CDI) to regulate health insurers under the Insurance Code.
- Requires a health plan to consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that health plan in this state, whether offered by health plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through California’s health benefit exchange (known as Covered California) and insureds and enrollees who enroll in individual coverage outside of Covered California.
- Requires each year, a health plan to establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool.
- Requires the index rate to be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to specified sections of the ACA, and Covered California user fees, as described in federal regulations.
This bill: Deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual health plans with regard to the single risk pool index rate.
FISCAL EFFECT:
This bill is keyed nonfiscal.
COMMENTS:
- Author’s statement. According to the author, under the terms of the ACA, the reinsurance program was always intended to be temporary with the collection of contributions subject to end in 2016. This bill is needed to update California law related to the single risk pool to reflect that reinsurance payments are no longer being made and therefore do not necessitate adjustment.
This bill is also necessary to keep California law current in response to statutory and regulatory changes as well as administrative changes at the federal level. - Background on the reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014. The table below describes the three programs.
Program: | Reinsurance | Risk Corridors | Risk Adjustment |
Purpose: | Provides funding to issuers that incur high claims costs for enrollees | Limits issuer losses (and gains) | Transfers funds from lower risk plans to higher risk plans |
Participants: | All issuers and third party administrators on behalf of group health plans contribute funding; non-grandfathered individual market plans (inside and outside the Exchange) are eligible for payments | Qualified health plans | Non-grandfathered individual and small group market plans, inside and outside the Exchange |
Time Frame: | 3 years (2014-2016) | 3 years (2014-2016) | Permanent |
- Implementation of the ACA. California law makers passed at least 50 laws to harmonize California law with the ACA. Prior to the enactment of the major ACA coverage expansions, over 40 million Americans (including 7 million Californians) were uninsured. The percentage of Californians under age 65 without insurance has fallen to 7.1% in 2016. California has a history of strong consumer protections in its health insurance market; enacting some reforms even before the ACA required them. The Republican Congressional leadership and President Donald Trump have called for a “repeal and replace” of the ACA. The President has issued an Executive Order to direct his administration to reduce regulatory burdens on the health insurance industry and others. Federal legislation has been introduced which would substantially roll back gains made in California. The federal Department of Health and Human Services has also promulgated regulations to make changes in the health insurance market rules. Since California has been described as one of the more successful states in terms of implementation of the ACA, it is important for Legislature to critically evaluate federal policy changes prior to adoption in order to ensure those changes do not negatively affect the progress that has been made in California.
- Related legislation. AB 156 (Wood) contains similar provisions to this bill that apply to the Insurance Code.
SB 134 contains similar provisions to this bill that apply to health plans that operate in the small group market. AB 157 (Wood) contains similar provisions to SB 134 that apply to the Insurance Code.
- Prior legislation. SB X1 2 (Hernandez, Chapter 2, Statutes of 2013) and AB X1 2 (Pan, Chapter 1, Statues of 2013) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
SB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increase the geographic rating regions to 19 and require no later than June 1, 2017, DMHC in collaboration with the Exchange and the CDI to review the geographic rating regions and submit a report to the appropriate policy committees.
- Support. Health Access California writes that the reinsurance program was a temporary program that helped to stabilize premiums in the individual market during the initial years of ACA implementation by providing payments to health plans that enroll higher-cost individuals. The program was created to protect against overall premium increases by offsetting the expenses of high-cost consumers entering the individual market. Since the reinsurance program has expired, it is appropriate to eliminate reference to the program in state law.
SUPPORT AND OPPOSITION:
Support: Health Access of California
Oppose: None received
-- END --
Discussed in Hearing
4MIN
Senate Standing Committee on Health
1MIN
Assembly Floor
2MIN
Senate Floor
10MIN
Assembly Standing Committee on Appropriations
38MIN
Assembly Standing Committee on Health
1MIN
Assembly Floor
Bill Author
Bill Co-Author(s):