AB 2152

Bill Subjects

Abstract

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 to submit a block transfer filing to the department at least 75 days prior to the termination of its contract with a provider group or a general acute care hospital and to provide 60 days' notice of the contract's termination to enrollees assigned to the terminated provider. Existing law specifies that a health care service plan is not required to send this notice to enrollees of a preferred provider organization unless the terminated provider is a general acute care hospital. This bill would, commencing July 1, 2013, make these provisions inapplicable with respect to a contract between a plan and a provider that provides benefits to enrollees and subscribers through a preferred provider arrangement. The bill would instead require the plan under those contracts to notify the department at least 30 days prior to terminating a contract with a provider group or general acute care hospital where the termination would affect 800 or more covered lives who have obtained services from the provider group or hospital within the preceding 6 months. Where the termination would affect 2,000 or more covered lives who have obtained services from the provider group or hospital within the preceding 6 months, the bill would require the plan to send a written notice at least 10 days prior to the termination date to all of those covered lives, as specified. Because a willful violation of these requirements would be a crime, the bill would impose a state-mandated local program. Existing law provides for the regulation of health insurers by the Department of Insurance. Under existing law, a health insurer may contract with providers for alternative rates of payment. Existing law requires those insurers to file a policy with the department describing how the insurer facilitates the continuity of care for new insureds under group policies receiving services for an acute condition from a noncontracting provider. Existing law also requires those health insurers to, at the request of an insured, arrange for the completion of covered services by a terminated provider if the insured is undergoing treatment for certain conditions, as specified. This bill would, commencing July 1, 2013, require a health insurer to notify the department at least 30 days prior to terminating a contract with a provider group or general acute care hospital to provide services at alternative rates of payment if the termination would affect 800 or more covered lives who have obtained services from the provider group or hospital within the preceding 6 months. Where that termination would affect 2,000 or more covered lives who have obtained services from the provider group or hospital within the preceding 6 months, the bill would, commencing July 1, 2013, require the insurer to send a written notice to all of those covered lives at least 10 days prior to the termination date, as specified. Existing law requires disability insurance policies to include a disclosure form that contains specified information, including the principal benefits and coverage of the policy, the exceptions, reductions, and limitations that apply to the policy, and a statement, with respect to health insurance policies, describing how participation in the policy may affect the choice of physician, hospital, or health care providers, and describing the extent of financial liability that may be incurred if care is furnished by a nonparticipating provider. With respect to health insurance policies, this bill would require the disclosure form to include additional information, including conditions and procedures for cancellation, rescission, or nonrenewal, a description of the limitations on the insured's choice of provider, and, with respect to insurers that contract for alternate rates of payment, a statement describing the basic method of reimbursement made to its participating providers, as specified. The bill would also require the first page of the disclosure form for health insurance policies to include other specified information. The bill would require a health insurer, medical group, or participating provider that uses or receives financial bonuses or other incentives to provide a written summary of specified information to any requesting person. The bill would make these provisions operative on July 1, 2013. 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.