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AB-454 Health care provider emergency payments.(2021-2022)

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Date Published: 05/03/2021 09:00 PM
AB454:v97#DOCUMENT

Amended  IN  Assembly  May 03, 2021
Amended  IN  Assembly  April 08, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 454


Introduced by Assembly Member Rodriguez

February 08, 2021


An act to add Section 1367.55 to the Health and Safety Code, and to add Section 10176.65 to the Insurance Code, relating to health care.


LEGISLATIVE COUNSEL'S DIGEST


AB 454, as amended, Rodriguez. Health care provider emergency 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 provides for the regulation of health insurers by the Department of Insurance. Existing law authorizes a health care service plan or health insurer to contract with a provider for alternative rates of payment and authorizes a plan or insurer to seek reimbursement from a provider who has been overpaid for services.
This bill would authorize the Director of the Department of Managed Health Care or the Insurance Commissioner to require a health care service plan or health insurer to provide specified payments and support to a provider during and at least 60 days after the end of a declared state of emergency or other circumstance, as specified. circumstance if two conditions occur, as specified. The bill would require that, when determining the appropriate amount and type of support to be provided by the health care service plan or health insurer, the director or commissioner take specified factors into consideration, including whether the plan or insurer’s providers have received support from the Federal Emergency Management Agency. Because a willful violation of the bill’s requirements relative to health care service plans would be a crime, the 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 1367.55 is added to the Health and Safety Code, to read:

1367.55.
 (a) Notwithstanding any other law, a health care service plan, including a specialized health care service plan and health care service plan that issues, sells, offers, or renews contracts plans for dental services, shall provide supplemental provider reimbursements and other nonmonetary support support, as specified in subdivision (b) to a contracted provider that the director has determined to have been severely impacted due to one or more of the (b), for the duration of all of the following circumstances:
(1) A state or federal declaration of a public health emergency.
(2) A state or federal declaration of emergency for a fire, flood, earthquake, or other natural disaster. Whether a provider has been severely impacted shall be determined by the director.
(3) A state, national, or international shortage of medical equipment, personal protective equipment, or other critical health supplies, including essential pharmaceuticals.
(b) If an authorized public official has declared or determined that a circumstance described in subdivision (a) exists, the (1) The director may require a health care service plan to provide any or all of the following of the supplemental provider reimbursements and other nonmonetary support described in paragraph (2) to a provider for the duration of the existence of the circumstance, as determined by the director, and for at least 60 days after the end of the existence of the circumstance: circumstance if both of the following conditions occur:
(A) An authorized public official has declared or determined that a circumstance described in subdivision (a) exists.
(B) The provider shows both of the following:
(i) The provider practices in a health professional shortage area or the department has determined that the provider is necessary in order to meet network adequacy requirements. The criteria pursuant to this clause may be determined by any of the following:
(I) The practice is in a health professional shortage area, as determined by the federal Health Resources and Services Administration.
(II) The practice is in a medically underserved area or dentally underserved area, as defined by law.
(III) The practice is in a location in which the department has identified a provider shortage based upon its review of network access and availability.
(ii) The provider submits, to the plan, a showing that the provider has been severely impacted for a minimum of three consecutive months, as demonstrated by a decrease in billable claims volume or reimbursement of 50 percent or more, from the same months in the previous calendar year.

(1)A

(2) (A) A payment that is at least equal to the percentage loss of the contracting provider’s last quarter of average reimbursement. The director may order the payment to be made additional times at the director’s discretion based on the duration and severity of the circumstance described in subdivision (a).

(2)

(B) A one-time grant or supplemental payment that reflects the annual average reimbursement or revenue paid by the health care service plan to the contracting provider if the provider can demonstrate a substantial or total loss of their practice due to the circumstance described in subdivision (a).

(3)

(C) Contracting provider rate increases that are in an amount and duration as determined by the director and are necessary to stabilize and ensure the continued operation of the plan’s provider network.

(4)

(D) Nonmonetary support to a contracting provider to assist with new business expenses or other requirements incurred during or caused by the emergency, including providing a contracting provider with personal protective equipment, infection control supplies or materials, medical or diagnostic equipment, and information technology systems. A health care service plan may also be required to provide supplemental reimbursement directly to a contracting provider for the purchase of personal protective equipment, infection control materials, or other medical equipment.
(c) (1) To the extent allowed by federal law or regulation, payments required by the director pursuant to subdivision (b) shall be calculated in the health care service plan’s annual medical loss ratio as direct patient care expenses for the year in which the payment is made.
(2) When determining the appropriate amount and type of support to be provided by the health care service plan, the director shall take into account any insurance coverage, federal, or state relief made available to a provider, including support provided by the Federal Emergency Management Agency, and the provider’s other lines of business.
(3) If a health care service plan can demonstrate to the director that the payments required by the director pursuant to subdivision (b) would place the plan in financial hardship, the director may exempt the plan from those required payments. For purposes of this subdivision, “financial hardship” includes the health care service plan’s tangible net equity being at or below 200 percent.
(4) The total amount paid to the provider for the year, including rate increases pursuant to paragraph (3) of subparagraph (C) of paragraph (2) of subdivision (b), shall not be more than the total amount that would have otherwise been paid to the provider in an average year.
(d) This section does not prevent, prohibit, or otherwise limit a contracting network provider from billing for services delivered to enrollees as determined by the contract and being reimbursed according to the contract terms.
(e) For purposes of this section, “provider” means an individual licensed pursuant to Chapter 4 (commencing with Section 1600) or Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code.

SEC. 2.

 Section 10176.65 is added to the Insurance Code, to read:

10176.65.
 (a) Notwithstanding any other law, a health insurer, including a specialized health insurer that contracts with a provider for alternative rates of payment pursuant to Section 10133, shall provide supplemental provider reimbursements and other nonmonetary support support, as specified in subdivision (b) to a contracted provider that the commissioner has determined to have been severely impacted due to one or more of the (b), for the duration of all of the following circumstances:
(1) A state or federal declaration of a public health emergency.
(2) A state or federal declaration of emergency for a fire, flood, earthquake, or other natural disaster. Whether a provider has been severely impacted shall be determined by the commissioner.
(3) A state, national, or international shortage of medical equipment, personal protective equipment, or other critical health supplies, including essential pharmaceuticals.
(b) If an authorized public official has declared or determined that a circumstance described in subdivision (a) exists, the (1) The commissioner may require a health insurer to provide any or all of the following of the supplemental provider reimbursements and other nonmonetary support described in paragraph (2) to a provider for the duration of the existence of the circumstance, as determined by the commissioner, and for at least 60 days after the end of the existence of the circumstance: circumstance if both of the following conditions occur:
(A) An authorized public official has declared or determined that a circumstance described in subdivision (a) exists.
(B) The provider shows both of the following:
(i) The provider practices in a health professional shortage area or the department has determined that the provider is necessary in order to meet network adequacy requirements. The criteria pursuant to this clause may be determined by any of the following:
(I) The practice is in a health professional shortage area, as determined by the federal Health Resources and Services Administration.
(II) The practice is in a medically underserved area or dentally underserved area, as defined by law.
(III) The practice is in a location in which the department has identified a provider shortage based upon its review of network access and availability.
(ii) The provider submits, to the plan, a showing that the provider has been severely impacted for a minimum of three consecutive months, as demonstrated by a decrease in billable claims volume or reimbursement of 50 percent or more, from the same months in the previous calendar year.

(1)A

(2) (A) A payment that is at least equal to the percentage loss of the contracting provider’s last quarter of average reimbursement. The commissioner may order the payment to be made additional times at the commissioner’s discretion based on the duration and severity of the circumstance described in subdivision (a).

(2)

(B) A one-time grant or supplemental payment that reflects the annual average reimbursement or revenue paid by the health insurer to the contracting provider if the contracting provider can demonstrate a substantial or total loss of their practice due to the circumstance described in subdivision (a).

(3)

(C)  Contracting provider rate increases that are in an amount and duration as determined by the commissioner and are necessary to stabilize and ensure the continued operation of the insurer’s provider network.

(4)

(D) Nonmonetary support to a contracting provider to assist with new business expenses or other requirements incurred during or caused by the emergency, including providing a contracting provider with personal protective equipment, infection control supplies or materials, medical or diagnostic equipment, and information technology systems. A health insurer may also be required to provide supplemental reimbursement directly to a contracting provider for the purchase of personal protective equipment, infection control materials, or other medical equipment.
(c) (1) To the extent allowed by federal law or regulation, payments required by the commissioner pursuant to subdivision (b) shall be calculated in the health insurers’s annual medical loss ratio as direct patient care expenses for the year in which the payment is made.
(2) When determining the appropriate amount and type of support to be provided by the health insurer, the commissioner shall take into account any insurance coverage, federal, or state relief made available to a provider, including support provided by the Federal Emergency Management Agency, and the provider’s other lines of business.
(3) If a health insurer can demonstrate to the commissioner that the payments required by the commissioner pursuant to subdivision (b) would place the insurer in financial hardship, the commissioner may exempt the insurer from those required payments. For purposes of this subdivision, “financial hardship” includes the health insurer’s risk-based capital falling below the Company Action Level RBC as defined in paragraph (1) of subdivision (j) of Section 739.
(4) The total amount paid to the provider for the year, including rate increases pursuant to paragraph (3) subparagraph (C) of paragraph (2) of subdivision (b), shall not be more than the total amount that would have otherwise been paid to the provider in an average year.
(d) This section does not prevent, prohibit, or otherwise limit a contracting network provider from billing for services delivered to insureds as determined by the contract and being reimbursed according to the contract terms.
(e) For purposes of this section, “provider” means an individual licensed pursuant to Chapter 4 (commencing with Section 1600) or Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code.

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.