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SB-1340 Health care coverage: provider contracts.(2013-2014)

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SB1340:v96#DOCUMENT

Senate Bill No. 1340
CHAPTER 83

An act to amend Section 1367.49 of the Health and Safety Code, and to amend Section 10133.64 of the Insurance Code, relating to health care coverage.

[ Approved by Governor  July 07, 2014. Filed with Secretary of State  July 07, 2014. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 1340, Hernandez. Health care coverage: provider contracts.
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. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits a contract by or on behalf of a plan or insurer and a licensed hospital, as defined, or any other licensed health care facility owned by a licensed hospital to provide inpatient hospital services or ambulatory care services to subscribers and enrollees of the plan or policyholders and insureds of the insurer from containing a provision that restricts the ability of the plan or insurer to furnish information to subscribers or enrollees of the plan or policyholders or insureds of the insurer concerning the cost range of procedures at the hospital or facility or the quality of services performed by the hospital or facility. Existing law makes a contractual provision inconsistent with this requirement void and unenforceable. Existing law requires a plan or insurer to provide a hospital or facility at least 20 days to review the methodology and data used before cost or quality information is provided to subscribers or enrollees of the plan or to policyholders or insureds of the insurer, as specified. Existing law also establishes requirements applicable to information displayed on an Internet Web site pursuant to these provisions by, or on behalf of, a plan or insurer.
This bill would instead prohibit a contract between a plan or insurer and a provider or supplier, as defined, from containing a provision that restricts the ability of the plan or insurer to furnish information to consumers or purchasers, as defined, concerning the cost range of a procedure or full course of treatment or the quality of services performed by the provider or supplier. The bill would require a plan or insurer to provide a provider or supplier with 30 days to review the methodology and data used and would make related, conforming changes.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1367.49 of the Health and Safety Code is amended to read:

1367.49.
 (a) A contract issued, amended, renewed, or delivered on or after January 1, 2015, by or on behalf of a health care service plan and a provider or supplier shall not contain any provision that restricts the ability of the health care service plan to furnish consumers or purchasers information concerning any of the following:
(1) The cost range of a procedure or a full course of treatment, including, but not limited to, facility, professional, and diagnostic services, prescription drugs, durable medical equipment, and other items and services related to the treatment.
(2) The quality of services performed by the provider or supplier.
(b) Any contractual provision inconsistent with this section shall be void and unenforceable.
(c) A health care service plan shall provide the provider or supplier an advance opportunity of 30 days to review the methodology and data developed and compiled by the health care service plan, and used pursuant to subdivision (a), before cost or quality information is provided to consumers or purchasers, including material revisions or additions of new information. At the time the health care service plan provides a provider or supplier with the opportunity to review the methodology and data, it shall also notify the provider or supplier in writing of their opportunity to provide an Internet Web site link pursuant to subdivision (f).
(d) If the information proposed to be furnished to enrollees and subscribers on the quality of services performed by a provider or supplier is data that the plan has developed and compiled, the plan shall utilize appropriate risk adjustment factors to account for different characteristics of the population, such as case mix, severity of patient’s condition, comorbidities, outlier episodes, and other factors to account for differences in the use of health care resources among providers and suppliers.
(e) Any Internet Web site owned or controlled by a health care service plan, or operated by another person or entity under contract with or on behalf of a health care service plan, that displays the information developed and compiled by the health care service plan as referenced by this section shall prominently post the following statement:

“Individual facilities or health care providers may disagree with the methodology used to define the cost ranges, the cost data, or quality measures. Many factors may influence cost or quality, including, but not limited to, the cost of uninsured and charity care, the type and severity of procedures, the case mix of a facility, special services such as trauma centers, burn units, medical and other educational programs, research, transplant services, technology, payer mix, and other factors affecting individual facilities and health care providers.”

A health care service plan and a provider or supplier shall not be precluded from mutually agreeing in writing to an alternative method of conveying this statement.
(f) If a provider or supplier chooses to provide an Internet Web site link where a response to the health care service plan’s posting may be found, it shall do so in a timely manner in order to satisfy the requirements of this section. If a provider or supplier chooses to provide a response, a plan shall post, in an easily identified manner, a prominent link to the provider’s or supplier’s Internet Web site where a response to the plan’s posting may be found. A health care service plan and a provider or supplier shall not be precluded from mutually agreeing in writing to an alternative method to convey a provider’s or supplier’s response.
(g) For the purposes of this section, the following definitions shall apply:
(1) “Consumers” means enrollees or subscribers of the health care service plan or beneficiaries of a self-funded health coverage arrangement administered by the health care service plan or other persons entitled to access services through a network established by the health care service plan.
(2) “Provider” has the same meaning as that term is defined in Section 1367.50.
(3) “Purchasers” means the sponsors of a self-funded health coverage arrangement administered by the health care service plan.
(4) “Supplier” has the same meaning as that term is defined in Section 1367.50.
(h) Section 1390 shall not apply for purposes of this section.

SEC. 2.

 Section 10133.64 of the Insurance Code is amended to read:

10133.64.
 (a) A contract issued, amended, renewed, or delivered on or after January 1, 2015, by or on behalf of a health insurer and a provider or supplier shall not contain any provision that restricts the ability of the health insurer to furnish consumers or purchasers information concerning any of the following:
(1) The cost range of a procedure or a full course of treatment, including, but not limited to, facility, professional, and diagnostic services, prescription drugs, durable medical equipment, and other items and services related to the treatment.
(2) The quality of services performed by the provider or supplier.
(b) Any contractual provision inconsistent with this section shall be void and unenforceable.
(c) A health insurer shall provide the provider or supplier an advance opportunity of 30 days to review the methodology and data developed and compiled by the health insurer, and used pursuant to subdivision (a), before cost or quality information is provided to consumers or purchasers, including material revisions or additions of new information. At the time the health insurer provides a provider or supplier with the opportunity to review the methodology and data, it shall also notify the provider or supplier in writing of their opportunity to provide an Internet Web site link pursuant to subdivision (f).
(d) If the information proposed to be furnished to policyholders and insureds on the quality of services performed by a provider or supplier is data that the insurer has developed and compiled, the insurer shall utilize appropriate risk adjustment factors to account for different characteristics of the population, such as case mix, severity of patient’s condition, comorbidities, outlier episodes, and other factors to account for differences in the use of health care resources among providers and suppliers.
(e) Any Internet Web site owned or controlled by a health insurer, or operated by another person or entity under contract with or on behalf of a health insurer, that displays the information developed and compiled by the health insurer as referenced by this section shall prominently post the following statement:

“Individual health care facilities or providers may disagree with the methodology used to define the cost ranges, the cost data, or quality measures. Many factors may influence cost or quality, including, but not limited to, the cost of uninsured and charity care, the type and severity of procedures, the case mix of a facility, special services such as trauma centers, burn units, medical and other educational programs, research, transplant services, technology, payer mix, and other factors affecting individual health care facilities and providers.”

A health insurer and a provider or supplier shall not be precluded from mutually agreeing in writing to an alternative method of conveying this statement.
(f) If a provider or supplier chooses to provide an Internet Web site link where a response to the health insurer’s posting may be found, it shall do so in a timely manner in order to satisfy the requirements of this section. If a provider or supplier chooses to provide a response, an insurer shall post, in an easily identified manner, a prominent link to the provider’s or supplier’s Internet Web site where a response to the health insurer’s posting may be found. A health insurer and a provider or supplier shall not be precluded from mutually agreeing in writing to an alternative method to convey a provider’s or supplier’s response.
(g) For the purposes of this section, the following definitions shall apply:
(1) “Consumers” means policyholders or insureds of the health insurer or beneficiaries of a self-funded health coverage arrangement administered by the health insurer or other persons entitled to access services through a network established by the health insurer.
(2) “Provider” has the same meaning as that term is defined in Section 10117.52.
(3) “Purchasers” means the sponsors of a self-funded health coverage arrangement administered by the health insurer.
(4) “Supplier” has the same meaning as that term is defined in Section 10117.52.