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

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Date Published: 07/03/2018 09:00 PM
SB1156:v95#DOCUMENT

Amended  IN  Assembly  July 03, 2018
Amended  IN  Senate  May 25, 2018
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 health insurance 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, a financially interested entity, as defined, other than those entities, that is making a 3rd-party premium 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 Medi-Cal and is not eligible for financial 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 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. requiring the entity to disclose to the plan or the insurer the name of the enrollee or insured, as applicable, for each plan or policy on whose behalf a 3rd-party premium payment will be made. The bill would require each plan or insurer to provide to the department information regarding premium payments by financially interested entities and reimbursement for services to providers, and would set forth standards governing the reimbursement of financially interested 3rd parties.
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 payments from the following third-party entities without the need for the entity to seek a determination from the department as described in paragraph (3) of to comply with subdivision (c):
(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. siblings, unless the true source of funds used to make the premium payment originates with a financially interested entity.
(b) Any financially interested entity that is not specified in subdivision (a) and is making third-party premium 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: requirements:
(1) It shall provide assistance solely on the basis of the enrollee’s financial need.
(2) It shall provide assistance for the full plan year and notify the recipient prior to any open enrollment periods, if applicable, if financial assistance will be discontinued. Assistance may be discontinued at the request of the recipient, if the recipient obtains other health insurance coverage, or if the recipient dies during the plan year.
(3) If the entity provides coverage for an enrollee with end stage renal disease, the entity shall agree not to condition financial assistance on eligibility for, or receipt of, any surgery, transplant, procedure, drug, or device.

(4)It shall agree that eligibility for financial assistance shall be conditioned solely on income.

(5)

(4) 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)

(5) 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)

(6) 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 payment unless it complies with all both 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 Medi-Cal and is not eligible for financial assistance from Medi-Cal.

(B)Annually provides a statement informing the health care service plan and the department regarding whether the recipient of the financial assistance would be eligible for Medicare.

(3)(A)Discloses

(2) Discloses to the health care service plan and the department, at least 60 days plan, 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 payment described in this subdivision will be made and the information necessary for the department to determine compliance with subdivision (b) and with paragraphs (1) and (2) of this subdivision. section 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). The department shall accept as accurate the information provided in the disclosure from an entity and base the determination regarding eligibility on the information provided. If it is subsequently discovered that information provided in subparagraph (A) was inaccurate, the disclosure of inaccurate information shall constitute a violation of this section as described in subdivision (d).

(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 premium payments were made shall be limited to the currently prevailing Medicare reimbursement rate. If the entity that violates any 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 premium payments were made shall be governed by the terms and conditions of the enrollee’s policy or the Medicare rate, whichever is lower.

(d) If a financially interested entity makes a third-party payment for an enrollee, reimbursement shall be determined by the following:
(1) For a contracted provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, reimbursement for covered services for the recipient for whom the third-party premium payment was made shall be governed by the terms and conditions of the recipient’s policy or the Medicare rate, whichever is lower. Providers are prohibited from billing the enrollee any difference between the recipient’s policy rate or the Medicare rate other than any cost sharing as outlined in the recipient’s policy.
(2) For a noncontracted provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, reimbursement for covered services for the recipient for whom the third-party premium payment was made shall be governed by the terms and conditions of the recipient’s policy or the Medicare rate, whichever is lower. Providers are prohibited from billing the enrollee any difference between the recipient’s policy rate or the Medicare rate other than any cost sharing as outlined in the recipient’s policy.
(e) For the purposes of this section, third-party premium payments only include health benefit plan premium payments made directly by a provider or other third party, made indirectly through payments to the individual for the purpose of making health benefit plan premium payments, or provided to one or more intermediaries with the intention that the funds be used to make health benefit plan premium payments for the individual. individuals.
(f) As used in this section, “health benefit plan” means any individual or group insurance policy or health care service plan contract that provides medical, hospital, and surgical benefits. The term does not include accident only, credit, or disability income coverage, coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, long-term care insurance, dental or vision coverage, coverage issued as a supplement to liability insurance, insurance arising out of workers’ compensation law or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(g) The following shall occur if a health care service plan subsequently discovers that a financially interested entity fails to provide disclosure pursuant to subdivision (c):
(1) The health care service plan shall be entitled to recover the difference between any payment made to a provider and the payment to which the provider would have been entitled pursuant to subdivision (e), including interest on that difference.
(2) The health care service plan shall notify the department of the amount by which the provider was overpaid. The department shall have the ability to impose on the provider a fine equal to 20 percent of the overpayment.
(h) Each health care service plan licensed by the department shall provide to the department information regarding premium payments by financially interested entities and reimbursement for services to providers under subdivision (d). The information shall be provided at least annually at the discretion of the department and shall include, to the best of the health care service plan’s knowledge, the number of enrollees whose premiums were paid by financially interested entities, disclosures provided to the plan pursuant to subdivision (b), the identities of any providers whose reimbursement rate was governed by subdivision (d), the identities of any providers who failed to provide disclosure as described in (c), and, at the discretion of the department, additional information necessary for the implementation of this section.
(i) For purposes of this section, “provider” means any professional person, organization, health facility, or other person or institution that delivers or furnishes health care services.
(j) As used in this section, “financially interested entity” means any entity described by either of the following criteria:
(1) A provider of health care services that receives a direct or indirect financial benefit from a third-party premium payment.
(2) An entity that receives the majority of its funding from one or more financially interested providers of health care services, parent companies of providers of health care services, subsidiaries of health care service providers, or related entities.
(k) This section does not limit the authority of the Attorney General to take any action to enforce this section.

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 health insurance shall accept premium payments from the following third-party entities without the need for the entity to seek a determination from the department as described in paragraph (3) of to comply with subdivision (c):
(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. siblings, unless the true source of funds used to make the premium payment originates with a financially interested entity.
(b) Any financially interested entity that is not specified in subdivision (a) and is making third-party premium 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: requirements:
(1) It shall provide assistance solely on the basis of the insured’s financial need.
(2) It shall provide assistance for the full policy year and notify the recipient prior to any open enrollment periods, if applicable, if financial assistance will be discontinued. Assistance may be discontinued at the request of the recipient, if the recipient obtains other health insurance coverage, or if the recipient dies during the plan year.
(3) If the entity provides coverage for an insured with end stage renal disease, the entity shall agree not to condition financial assistance on eligibility for, or receipt of, any surgery, transplant, procedure, drug, or device.

(4)It shall agree that eligibility for financial assistance shall be conditioned solely on income.

(5)

(4) 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)

(5) 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)

(6) 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 payment unless it complies with all both 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 Medi-Cal and is not eligible for financial assistance from Medi-Cal.

(B)Annually provides a statement informing the insurer and the department regarding whether the recipient of the financial assistance would be eligible for Medicare.

(3)(A)Discloses

(2) Discloses to the insurer and the department, at least 60 days insurer, prior to making the initial payment, the name of the insured for each policy on whose behalf a third-party premium payment described in this subdivision will be made and the information necessary for the department to determine compliance with subdivision (b) and with paragraphs (1) and (2) of this subdivision. section 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). The department shall accept as accurate the information provided in the disclosure from an entity and base the determination regarding eligibility on the information provided. If it is subsequently discovered that information provided in subparagraph (A) was inaccurate, the disclosure of inaccurate information shall constitute a violation of this section as described in subdivision (d).

(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 premium payments were made shall be limited to the currently prevailing Medicare reimbursement rate. If the entity that violates any 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 premium payments were made shall be governed by the terms and conditions of the insured’s policy.

(d) If a financially interested entity makes a third-party payment for an insured, reimbursement shall be determined by the following:
(1) For a contracted provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, reimbursement for covered services for the recipient for whom the third-party premium payment was made shall be governed by the terms and conditions of the recipient’s policy or the Medicare rate, whichever is lower. Providers are prohibited from billing the insured any difference between the recipient’s policy rate or the Medicare rate other than any cost sharing as outlined in the recipient’s policy.
(2) For a noncontracted provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, reimbursement for covered services for the recipient for whom the third-party premium payment was made shall be governed by the terms and conditions of the recipient’s policy or the Medicare rate, whichever is lower. Providers are prohibited from billing the insured any difference between the recipient’s policy rate or the Medicare rate other than any cost sharing as outlined in the recipient’s policy.
(e) For the purposes of this section, third-party premium payments only include health benefit plan premium payments made directly by a provider or other third party, made indirectly through payments to the individual for the purpose of making health benefit plan premium payments, or provided to one or more intermediaries with the intention that the funds be used to make health benefit plan premium payments for the individual. individuals.
(f) As used in this section, “health benefit plan” means any individual or group insurance policy or health care service plan contract that provides medical, hospital, and surgical benefits. The term does not include accident only, credit, or disability income coverage, coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, long-term care insurance, dental or vision coverage, coverage issued as a supplement to liability insurance, insurance arising out of workers’ compensation law or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(g) The following shall occur if an insurer subsequently discovers that a financially interested entity fails to provide disclosure pursuant to subdivision (c):
(1) The insurer shall be entitled to recover the difference between any payment made to a provider and the payment to which the provider would have been entitled pursuant to subdivision (e), including interest on that difference.
(2) The insurer shall notify the department of the amount by which the provider was overpaid. The commissioner shall have the ability to impose on the provider a fine equal to 20 percent of the overpayment.
(h) Each insurer licensed by the department shall provide to the department information regarding premium payments by financially interested entities and reimbursement for services to providers under subdivision (d). The information shall be provided at least annually at the discretion of the department and shall include, to the best of the insurer’s knowledge, the number of insureds whose premiums were paid by financially interested entities, disclosures provided to the insurer pursuant to subdivision (b), the identities of any providers whose reimbursement rate was governed by subdivision (d), the identities of any providers who failed to provide disclosure as described in (c), and, at the discretion of the department, additional information necessary for the implementation of this section.
(i) For purposes of this section, “provider” means any professional person, organization, health facility, or other person or institution that delivers or furnishes health care services.
(j) As used in this section, “financially interested entity” means any entity described by either of the following criteria:
(1) A provider of health care services that receives a direct or indirect financial benefit from a third-party premium payment.
(2) An entity that receives the majority of its funding from one or more financially interested providers of health care services, parent companies of providers of health care services, subsidiaries of health care service providers, or related entities.
(k) This section does not limit the authority of the Attorney General to take any action to enforce this section.

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.