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SB-1156 Health care service plans: 3rd-party payments.(2017-2018)

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Date Published: 04/24/2018 09:00 PM
SB1156:v97#DOCUMENT

Amended  IN  Senate  April 24, 2018
Amended  IN  Senate  March 22, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1156


Introduced by Senator Leyva

February 14, 2018


An act to add Section 1367.016 to the Health and Safety Code, and to add Section 10176.11 to the Insurance Code, relating to health care service plans.


LEGISLATIVE COUNSEL'S DIGEST


SB 1156, as amended, Leyva. Health care service plans: 3rd-party payments.
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. These provisions govern, among other things, procedures by health care service plans and insurers with respect to premium payments.
This bill would require a health care service plan or an insurer that provides a policy of disability insurance that provides coverage for hospital, medical, or surgical expenses to accept payments from specified 3rd-party entities, including an Indian tribe or a local, state, or federal government program. The bill would also require an entity, other than those entities, that is making a 3rd-party premium and cost-sharing payments, payment to provide that assistance in a specified manner and to perform other related duties, including annually providing a statement to the health care service plan or insurer and the applicable department from the recipient of the financial assistance confirming that the recipient has completed and submitted an application for Covered California or Medi-Cal and is not eligible for financial help from either program, assistance from Medi-Cal and requiring the entity to disclose to the applicable department the name of the enrollee or insured, as applicable, for each plan or policy on whose behalf a 3rd-party premium or cost-sharing payment, or both, payment will be made. The bill would require the Department of Managed Health Care or the Department of Insurance, as applicable, to establish a process to make a determination regarding eligibility within 30 days of receiving that disclosure in those cases in which a question about eligibility for a 3rd-party premium or cost-sharing payment, or both, payment results from the disclosure.
Because a willful violation of these requirements by a health care service plan would 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 1367.016 is added to the Health and Safety Code, to read:

1367.016.
 (a) A health care service plan shall accept premium and cost-sharing payments from the following third-party entities:
(1) A Ryan White HIV/AIDS Program under Title XXVI of the federal Public Health Service Act.
(2) An Indian tribe, tribal organization, or urban Indian organization.
(3) A local, state, or federal government program, including a grantee directed by a government program to make payments on its behalf.
(4) Any member of the individual’s family, defined for purposes of this section to include the individual’s spouse, domestic partner, child, parent, grandparent, and siblings.
(b) Any entity that is not specified in subdivision (a) and is making third-party premium and cost-sharing payments shall comply with all of the following requirements if the entity is a provider of services that receives a direct or indirect financial benefit from the third-party premium payments or is an entity that receives the majority of its funding from one or more financially interested health care providers:
(1) It shall provide assistance on the basis of the enrollee’s financial need.
(2) It shall provide assistance for the full plan year. year and notify the recipient prior to any open enrollment periods, if applicable, if financial assistance will be discontinued.
(3) If the entity provides coverage for an enrollee with end stage renal disease, the entity shall not agree not to condition financial assistance on eligibility for, or receipt of, a transplant, and eligibility for financial assistance shall be conditioned solely on income and presence of the qualifying condition without regard to the severity of the condition or the treatment choice. any surgery, transplant, procedure, drug, or device.
(4) It shall agree that eligibility for financial assistance shall be conditioned solely on income.
(5) It shall inform an applicant of financial assistance, and shall inform a recipient annually, of all available health coverage options, including, but not limited to, Medicare, Medicaid, individual market plans, and employer plans, if applicable.
(6) It shall agree not to steer, direct, or advise the patient into or away from a specific coverage program option or health insurance plan.
(7) It shall agree that financial assistance shall not be conditioned on the use of a specific facility or health care provider.
(c) An entity described in subdivision (b) shall not make a third-party premium or cost-sharing payment unless it complies with all of the following requirements:
(1) Annually provides a statement to the health care service plan and the department that it meets the requirements set forth in subdivision (b), as applicable.
(2) Does both of the following:
(A) Annually provides a statement to the health care service plan and the department from the recipient of the financial assistance confirming that the recipient has completed and submitted an application for Covered California or Medi-Cal and is not eligible for financial help from either program. assistance from Medi-Cal.
(B) Annually provides a statement informing the health care service plan and the department that regarding whether the recipient of the financial assistance has applied for Medicare and been denied coverage or is in a waiting period for coverage. would be eligible for Medicare.
(3) (A) Discloses to the health care service plan and the department, at least 60 days prior to making the initial payment, the name of the enrollee for each health care service plan contract on whose behalf a third-party premium or cost-sharing payment, or both, payment described in this subdivision will be made.
(B) The department shall establish a process to make a determination regarding eligibility within 30 days of receiving a disclosure pursuant to subparagraph (A) in those cases in which a question about eligibility for a third-party premium or cost-sharing payment, or both, payment as described in this section results from that disclosure.
(d) If an entity violates any provision of this section relating to third-party premium payments, reimbursement for covered services delivered by the entity to the enrollee for whom the third party third-party premium payments were made shall be limited to the currently prevailing Medicare reimbursement rate. If the entity that violates any provisions provision of this section related to third-party premium payments is a noncontracted provider, reimbursement for covered services delivered by the entity to the health plan for whom the third party third-party premium payment was made shall be governed by the terms and conditions of the enrollee’s policy or the Medicare rate, whichever is lower.

(e)For purposes of this section, a “third-party payment” includes payments of premiums, copayments, deductibles, or coinsurance on behalf of an enrollee.

(e) For the purposes of this section, third-party premium payments include payments made directly by a third-party, made indirectly through payments to the individual for the purpose of making premium payments, or provided to one or more intermediaries with the intention that the funds be used to make premiums payments for the individual.

SEC. 2.

 Section 10176.11 is added to the Insurance Code, to read:

10176.11.
 (a) An insurer that provides a policy of disability insurance that provides coverage for hospital, medical, or surgical expenses shall accept premium and cost-sharing payments from the following third-party entities:
(1) A Ryan White HIV/AIDS Program under Title XXVI of the federal Public Health Service Act.
(2) An Indian tribe, tribal organization, or urban Indian organization.
(3) A local, state, or federal government program, including a grantee directed by a government program to make payments on its behalf.
(4) Any member of the individual’s family, defined for purposes of this section to include the individual’s spouse, domestic partner, child, parent, grandparent, and siblings.
(b) Any entity that is not specified in subdivision (a) and is making third-party premium and cost-sharing payments shall comply with all of the following requirements if the entity is a provider of services that receives a direct or indirect financial benefit from the third-party premium payments or is an entity that receives the majority of its funding from one or more financially interested health care providers:
(1) It shall provide assistance on the basis of the insured’s financial need.
(2) It shall provide assistance for the full policy year. year and notify the recipient prior to any open enrollment periods, if applicable, if financial assistance will be discontinued.
(3) If the entity provides coverage for an insured with end stage renal disease, the entity shall not agree not to condition financial assistance on eligibility for, or receipt of, a transplant, and eligibility for financial assistance shall be conditioned solely on income and presence of the qualifying condition without regard to the severity of the condition or the treatment choice. any surgery, transplant, procedure, drug, or device.
(4) It shall agree that eligibility for financial assistance shall be conditioned solely on income.
(5) It shall inform an applicant of financial assistance, and shall inform a recipient annually, of all available health coverage options, including, but not limited to, Medicare, Medicaid, individual market plans, and employer plans, if applicable.
(6) It shall agree not to steer, direct, or advise the patient into or away from a specific coverage program option or health insurance plan.
(7) It shall agree that financial assistance shall not be conditioned on the use of a specific facility or health care provider.
(c) An entity described in subdivision (b) shall not make a third-party premium or cost-sharing payment unless it complies with all of the following requirements:
(1) Annually provides a statement to the insurer and the department that it meets the requirements set forth in subdivision (b), as applicable.
(2) Does both of the following:
(A) Annually provides a statement to the insurer and the department from the recipient of the financial assistance confirming that the recipient has completed and submitted an application for Covered California or Medi-Cal and is not eligible for financial help from either program. assistance from Medi-Cal.
(B) Annually provides a statement informing the insurer and the department that regarding whether the recipient of the financial assistance has applied for Medicare and been denied coverage or is in a waiting period for coverage. would be eligible for Medicare.
(3) (A) Discloses to the insurer and the department, at least 60 days prior to making the initial payment, the name of the insured for each policy on whose behalf a third-party premium or cost-sharing payment, or both, payment described in this subdivision will be made.
(B) The department shall establish a process to make a determination regarding eligibility within 30 days of receiving a disclosure pursuant to subparagraph (A) in those cases in which a question about eligibility for a third-party premium or cost-sharing payment, or both, payment as described in this section results from that disclosure.
(d) If an entity violates any provision of this section relating to third-party premium payments, reimbursement for covered services delivered by the entity to the insured for whom the third party third-party premium was made shall be limited to the currently prevailing Medicare reimbursement rate. If the entity that violates any provisions provision of this section related to third-party premium payments is a noncontracted provider, reimbursement for covered services delivered by the entity to the insured for whom the third party third-party premium payment was made shall be governed by the terms and conditions of the insured’s policy.

(e)For purposes of this section, a “third-party payment” includes payments of premiums, copayments, deductibles, or coinsurance on behalf of an insured.

(e) For the purposes of this section, third-party premium payments include payments made directly by a third-party, made indirectly through payments to the individual for the purpose of making premium payments, or provided to one or more intermediaries with the intention that the funds be used to make premiums payments for the individual.

SEC. 3.

 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.