Today's Law As Amended

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AB-533 Health care coverage: out-of-network coverage.(2015-2016)



SECTION 1.

 Section 1371.30 is added to the Health and Safety Code, immediately following Section 1371.3, to read:

1371.30.
 (a) (1) The department shall establish an independent dispute resolution process for the purpose of processing and resolving a claim dispute between a health care service plan and a noncontracting individual health professional for services subject to Section 1371.9.
(2) If either the noncontracting individual health professional or the plan appeals a claim to the department’s independent dispute resolution process, the other party shall participate in the appeal process as described in this section.
(b) The department shall establish uniform written procedures for the submission, receipt, processing, and resolution of claim payment disputes pursuant to this section and any other guidelines for implementing this article.
(c) The department may contract with one or more independent organizations to conduct the proceedings. The independent organization handling a dispute shall be independent of either party to the dispute. The department shall establish conflict-of-interest standards, consistent with the purposes of this section, that an organization shall meet in order to qualify for participation in the independent dispute resolution program. The department may contract with the same independent organization or organizations as the Department of Insurance.
(d) The determination obtained through the department’s independent dispute resolution process shall be binding on both parties.
(e) This section shall not apply to a Medi-Cal managed health care service plan or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) of, Chapter 8 (commencing with Section 14200) of, and Chapter 8.75 (commencing with Section 14591) of, Part 3 of Division 9 of the Welfare and Institutions Code.
(f) If a health care service plan delegates payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, then the delegated entity shall comply with this section.
(g) This section shall not apply to emergency services and care, as defined in Section 1317.1.

SEC. 2.

 Section 1371.31 is added to the Health and Safety Code, immediately following Section 1371.30, to read:

1371.31.
 (a) For services rendered subject to Section 1371.9, unless otherwise agreed to by the noncontracting individual health professional and the plan, the plan shall base reimbursement for covered services on the amount the individual health professional would have been reimbursed by Medicare for the same or similar services in the general geographic area in which the services were rendered.
(b) If nonemergency services are provided by a noncontracting individual health professional pursuant to subdivision (d) of Section 1371.9, to an enrollee who has voluntarily chosen to use his or her out-of-network benefit for services covered by a preferred provider organization or a point of service plan, unless otherwise agreed to by the plan and the noncontracting individual health professional, the amount paid shall be the amount set forth in the enrollee’s evidence of coverage.
(c) A noncontracting individual health professional who disputes the claim reimbursement shall utilize the independent dispute resolution process described in Section 1371.30.
(d) If a health care service plan delegates by written contract the responsibility for payment of claims to a contracted entity, including, but not limited to, a medical group or independent practice association, then the entity to which that responsibility is delegated shall comply with the requirements of this section.
(e) A payment made by the health care service plan to the noncontracting health care professional for nonemergency services as required by Section 1371.9 and this section, in addition to the applicable cost sharing owed by the enrollee, shall constitute payment in full for nonemergency services rendered.
(f) This section shall not apply to a Medi-Cal managed health care service plan or any other entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) of, Chapter 8 (commencing with Section 14200) of, and Chapter 8.75 (commencing with Section 14591) of, Part 3 of Division 9 of the Welfare and Institutions Code.
(g) This section shall not apply to emergency services and care, as defined in Section 1317.1.

SEC. 3.

 Section 1371.9 is added to the Health and Safety Code, to read:

1371.9.
 (a) (1) A health care service plan contract issued, amended, or renewed on or after July 1, 2016, shall provide that, except as provided in subdivision (d), if an enrollee receives covered services from a contracting health facility at which, or as a result of which, the enrollee receives services provided by a noncontracting individual health professional, the enrollee shall pay the noncontracting individual health professional no more than the same cost sharing that the enrollee would pay for the same covered services received from a contracting individual health professional. This amount shall be referred to as the “in-network cost sharing.”
(2) At the time of payment by the plan to the noncontracting individual health professional, the plan shall inform the noncontracting individual health professional of the in-network cost sharing owed by the enrollee.
(3)  Except as provided in subdivision (d), if a noncontracting individual health professional receives reimbursement for services provided to the enrollee at a contracting health facility from the plan, an enrollee shall not owe the noncontracting individual health professional at the contracting health facility more than the in-network cost-sharing amount.
(4) Except as provided in subdivision (d), a noncontracting individual health professional shall not bill or collect any amount from the enrollee except the in-network cost-sharing amount.
(5) A noncontracting individual health professional shall not bill or collect any amount from the enrollee until the noncontracting individual health professional is informed of the in-network cost-sharing amount pursuant to paragraph (2).
(6) In submitting a claim to the plan, the noncontracting individual health professional at a contracting health facility shall affirm in writing that he or she has not attempted to collect any payment other than in-network cost sharing owed by the enrollee.
(7) (A) If the noncontracting individual health professional has collected more from the enrollee than the in-network cost sharing, the noncontracting individual health professional shall refund any overpayment to the enrollee within 30 business days of receiving notice from the plan of the in-network cost-sharing amount owed by the enrollee pursuant to paragraph (2).
(B) If the noncontracting individual health professional does not refund an overpayment to the enrollee within 30 business days after being informed of the enrollee’s in-network cost sharing, interest shall accrue at the rate of 15 percent per annum beginning with the first calendar day after the 30-business day period.
(C) A noncontracting individual health professional shall automatically include in his or her overpayment refund to the enrollee all interest that has accrued pursuant to this section without requiring the enrollee to submit a request for the interest amount.
(8) A noncontracting individual health professional may advance to collections only the in-network cost sharing, as determined by the plan pursuant to paragraph (2), that the enrollee has failed to pay.
(b) (1) Any cost sharing paid by the enrollee for the services provided by a noncontracting individual health professional at the contracting health facility shall count toward the limit on annual out-of-pocket expenses established under Section 1367.006.
(2) Cost sharing arising from services received by a noncontracting individual health professional at a contracting health facility shall be counted toward any deductible in the same manner as cost sharing would be attributed to a contracting individual health professional.
(c) For purposes of this section, the following definitions shall apply:
(1) “Cost sharing” includes any copayment, coinsurance, or deductible, or any other form of cost sharing paid by the enrollee other than premium or share of premium.
(2) “Contracting health facility” means a health facility that is contracted with the enrollee’s health care service plan to provide services under the enrollee’s plan contract. A contracting health care facility includes, but is not be limited to, the following providers:
(A) Licensed hospital.
(B) Skilled nursing facility.
(C) Ambulatory surgery or other outpatient setting, as described in Section 1248.1.
(D) Laboratory.
(E) Radiology or imaging.
(F) Facilities providing mental health or substance abuse treatment.
(G) Any other provider as the department may by regulation define as a health facility for purposes of this section.
(3) “Individual health professional” means a physician or surgeon or other professional who is licensed by this state to deliver or furnish health care services.
(4) “Noncontracting individual health professional” means a physician and surgeon or other professional who is licensed by the state to deliver or furnish health care services and who is not contracted with the enrollee’s health care service plan.
(d) A noncontracting individual health professional may bill or collect from an enrollee the out of network cost sharing, if applicable, or more than the in-network cost sharing for nonemergency health services provided in a contracting health facility only when the enrollee consents in writing and the written consent demonstrates satisfaction of all of the following criteria:
(1) The enrollee initiated the request for the identified nonemergency health services from the identified noncontracting individual provider.
(2) At least three business days in advance of care, the enrollee consented in writing consistent with this subdivision to the use of the identified noncontracting individual health professional.
(3) At the time of consent under this subdivision, the noncontracting individual health professional gave the enrollee a written estimate of the enrollee’s total out-of-pocket cost of care.
(4) The written consent under this subdivision advises the enrollee that he or she may contact the enrollee’s health care service plan in order to arrange to receive the health service from a contracted provider for lower out-of-pocket costs.
(5) The written consent and estimate are provided to the enrollee in the language spoken by the enrollee.
(e) This section shall not be construed to require a plan to cover services that are not required by law or by the terms and conditions of the plan contract.
(f) This section shall not be construed to exempt a plan or provider from the requirements under Section 1371.4 or 1373.96 nor abrogate the holding in Prospect Medical Group v. Northridge Emergency Medical Group et al., (2009) 45 Cal.4th 497, that an emergency room physician is prohibited from billing an enrollee of a health care service plan directly for sums that the health care service plan has failed to pay for the enrollee’s emergency room treatment.
(g) If a health care service plan delegates payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, the delegated entity shall comply with this section.
(h) This section shall not apply to a Medi-Cal managed health care service plan or any other entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), and Chapter 8.75 (commencing with Section 14591) Part 3 of Division 9 of the Welfare and Institutions Code.
(i) This section shall not apply to emergency services and care, as defined in Section 1317.1.

SEC. 4.

 Section 10112.8 is added to the Insurance Code, to read:

10112.8.
 (a) (1) A health insurance policy issued, amended, or renewed on or after July 1, 2016, shall provide that, except as provided in subdivision (d), if an insured obtains care from a contracting health facility at which, or as a result of which, the insured receives services provided by a noncontracting individual health professional, the insured shall pay the noncontracting individual health professional no more than the same cost sharing that the insured would pay for the same covered services received from a contracting individual health professional. This amount shall be referred to as the “in-network cost sharing.”
(2) At the time of payment by the health insurer to the noncontracting individual health professional, the health insurer shall inform the noncontracting individual health professional of the in-network cost sharing owed by the insured.
(3) Except as provided in subdivision (d), if a noncontracting individual health professional receives reimbursement for services provided to the insured at a contracting health facility from the health insurer, an insured shall not owe the noncontracting individual health professional at the contracting health facility more than the in-network cost-sharing amount.
(4) This section shall only apply to 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.
(5) Except as provided in subdivision (d), a noncontracting individual health professional shall not bill or collect any amount from the insured except the in-network cost-sharing amount.
(6) A noncontracting individual health professional shall not bill or collect any amount from the insured until the noncontracting individual health professional is informed of the in-network cost-sharing amount pursuant to paragraph (2).
(7) In submitting a claim to the insurer, the noncontracting individual health professional at a contracting health facility shall affirm in writing that he or she has not attempted to collect any payment other than in-network cost sharing owed by the insured.
(8) (A) If the noncontracting individual health professional has collected more from the insured than the in-network cost sharing, the noncontracting individual health professional shall refund any overpayment to the insured within 30 business days of receiving notice from the plan of the in-network cost-sharing amount owed by the insured pursuant to paragraph (2).
(B) If the noncontracting individual health professional does not refund an overpayment to the insured within 30 business days after being informed of the insured’s in-network cost sharing, interest shall accrue at the rate of 15 percent per annum beginning with the first calendar day after the 30-business day period.
(C) A noncontracting individual health professional shall automatically include in his or her overpayment refund to the insured all interest that has accrued pursuant to this section without requiring the insured to submit a request for the interest amount.
(9) A noncontracting individual health professional may advance to collections only the in-network cost sharing, as determined by the plan pursuant to paragraph (2), that the insured has failed to pay.
(b) (1) Any cost sharing paid by the insured for the services provided by a noncontracting individual health professional at the contracting health facility shall count toward the limit on annual out-of-pocket expenses established under Section 10112.28.
(2) Cost sharing arising from services received by a noncontracting individual health professional at a contracting health facility shall be counted toward any deductible in the same manner as cost sharing would be attributed to a contracting individual health professional.
(c) For purposes of this section, the following definitions shall apply:
(1) “Cost sharing” includes any copayment, coinsurance, or deductible, or any other form of cost sharing paid by the insured other than premium or share of premium.
(2) “Contracting health facility” means a health facility that is contracted with the insured’s health insurer to provide services under the insured’s policy. A contracting health facility includes, but is not limited to, the following providers:
(A) Licensed hospital.
(B) Skilled nursing facility.
(C) Ambulatory surgery or other outpatient setting, as described in Section 1248.1 of the Health and Safety Code.
(D) Laboratory.
(E) Radiology or imaging.
(F) Facilities providing mental health or substance abuse treatment.
(G) Any other provider as the commissioner may by regulation define as a health facility for purposes of this section.
(3) “Individual health professional” means a physician and surgeon or other professional who is licensed by this state to deliver or furnish health care services.
(4) “Noncontracting individual health professional” means a physician or surgeon or other professional who is licensed by the state to deliver or furnish health care services and who is not contracted with the insured’s health insurer.
(d) A noncontracting individual health professional may bill or collect from an insurer the out of network cost sharing, if applicable, or more than the in-network cost sharing for nonemergency health services provided in a contracting health facility only when the insured consents in writing and the written consent demonstrates satisfaction of all of the following criteria:
(1) The insured initiated the request for the identified nonemergency health services from the identified noncontracting individual provider.
(2) At least three business days in advance of care, the insured consented in writing consistent with this subdivision to the use of the identified noncontracting individual health professional.
(3) At the time of consent under this subdivision, the noncontracting individual health professional gave the insured a written estimate of the enrollee’s total out-of-pocket cost of care.
(4) The written consent under this subdivision advises the insured that he or she may contact the insured’s health care service plan in order to arrange to receive the health service from a contracted provider for lower out-of-pocket costs.
(5) The written consent and estimate are provided to the insured in the language spoken by the insured.
(e) This section shall not be construed to require an insurer to cover services not required by law or by the terms and conditions of the policy.
(f) This section shall not be construed to exempt a health insurer from the requirements under Section 10112.7 or Section 10133.56.
(g) This section shall not apply to emergency services and care, as defined in Section 1317.1.

SEC. 5.

 Section 10112.81 is added to the Insurance Code, to read:

10112.81.
 (a) (1) The commissioner shall establish an independent dispute resolution process for the purpose of processing and resolving a claim dispute between an insurer and a noncontracting individual health professional for services subject to Section 10112.8.
(2) If either the noncontracting individual health professional or the insurer appeals a claim to the department’s independent dispute resolution process, the other party shall participate in the appeal process as described in this section.
(b) The commissioner shall establish uniform written procedures for the submission, receipt, processing, and resolution of claim payment disputes pursuant to this section, and any other guideline for implementing this article.
(c) The commissioner may contract with one or more independent organizations to conduct the proceedings. The independent organization handling a dispute shall be independent of either party to the dispute. The commissioner shall establish conflict-of-interest standards, consistent with the purposes of this section, that an organization shall meet in order to qualify for participation in the independent dispute resolution program. The commissioner may contract with the same independent organization or organizations as the Department of Managed Health Care.
(d) The determination obtained through the independent dispute resolution process shall be binding on both parties.
(e) This section shall not apply to emergency services and care, as defined in Section 1317.1 of the Health and Safety Code.

SEC. 6.

 Section 10112.82 is added to the Insurance Code, to read:

10112.82.
 (a) For services rendered subject to Section 10112.8, unless otherwise agreed to by the noncontracting individual health professional and the insurer, the insurer shall base reimbursement for covered services on the amount the individual health professional would have been reimbursed by Medicare for the same or similar services in the general geographic area in which the services were rendered.
(b) If nonemergency services are provided by a noncontracting individual health professional, pursuant to subdivision (d) of Section 10112.8, to an insured who has voluntarily chosen to use his or her out-of-network benefit for services covered by a preferred provider organization or a point-of-service plan, unless otherwise agreed to by the insurer and the noncontracting individual health professional, the amount paid shall be the amount set forth in the insured’s evidence of coverage.
(c) A noncontracting individual health professional who disputes the claim reimbursement shall utilize the independent dispute resolution process described in Section 10112.81.
(d) A payment made by a health insurer to a noncontracting health care professional for nonemergency services as required by Section 10112.81 and this section, in addition to the applicable cost sharing owed by the insured, shall constitute payment in full for the nonemergency services rendered.
(e) This section shall not apply to a Medicare plan or a Medicare supplemental plan.
(f) This section shall not apply to emergency services and care, as defined in Section 1317.1 of the Health and Safety Code.
SEC. 7.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.