Bill Text: CA AB2389 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Health care coverage: health facilities: cost and

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2010-08-31 - Re-referred to Com. on P.E.,R. & S.S. pursuant to Assembly Rule 77.2. Action rescinded whereby the bill was re-referred to Com. on P.E.,R. & S.S. pursuant to Assembly Rule 77.2. (Page 6934.) To inactive file on motion of Assembly Member Charles Calderon. [AB2389 Detail]

Download: California-2009-AB2389-Amended.html

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BILL NUMBER: AB 2389	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 16, 2010
	AMENDED IN ASSEMBLY  MAY 24, 2010
	AMENDED IN ASSEMBLY  MAY 20, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010

INTRODUCED BY   Assembly Member Gaines

                        FEBRUARY 19, 2010

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



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2389, as amended, Gaines. 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 between a plan or
insurer and a health care provider from containing certain terms.
   This bill would prohibit a contract by or on behalf of a plan or
insurer and a  licensed hospital, as defined, or any other
licensed health care facility, as defined, owned by a licensed
hospital   health care facility, as defined,  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
licensed health care  facility or the quality of services
performed by the  hospital or  facility.  The
bill would require that the cost information be display   ed
in a specified manner and would prohibit a health care service plan
from disclosing negotiated capitation rates or other prepaid
arrangements to enrollees or subscribers in either the cost or
quality information, except as specified. The bill would require a
plan or insurer that furnishes the cost or quality information to
also disclose the location of its facility quality measurements to
subscribers, enrollees, policyholders, and insureds, and to make
specified disclosures regarding those measurements. If the quality
information is quality of care data developed and compiled by the
plan or insurer, the bill would require plans and insurers to provide
affected facilities an opportunity to review the information prior
to furnishing it to subscribers, enrollees, policyholders, or
insureds, as specified, and would also, among other things, require
that the information be based on specified guidelines and be updated
at appropriate intervals, as   specified.  The bill
would make a contractural provision inconsistent with  this
requirement   the bill's requirements  void and
unenforceable.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1367.49 is added to the Health and Safety Code,
to read:
   1367.49.  (a) A contract issued, amended, renewed, or delivered on
or after January 1, 2011, by or on behalf of a health care service
plan and a  licensed hospital or any other licensed health
care facility owned by a licensed hospital   health care
facility  to provide inpatient hospital services or ambulatory
care services to subscribers and enrollees of the plan shall not
contain any provision that restricts the ability of the health care
service plan to furnish information to subscribers or enrollees of
the plan concerning the cost range of procedures at the 
hospital or the licensed health care  facility or the
quality of services performed by the  hospital or 
facility. 
   (b) Information on the cost range of procedures furnished pursuant
to subdivision (a) shall be displayed as an episode of care, unless
an episode of care is not applicable, and may include, but shall not
be limited to, applicable diagnostic tests, prescription drugs,
hospital days, and medical supplies that are associated with a
typical procedure or illness.  
   (c) A health care service plan shall not disclose negotiated
capitation rates or other prepaid arrangements in the information
furnished to enrollees or subscribers pursuant to subdivision (a).
However, if the health care service plan includes in that information
allocated capitation payments to a health care facility for an
episode of care, the plan and the facility shall consult on an
appropriate and reasonable methodology formula.  
   (d) If the information proposed to be furnished pursuant to
subdivision (a) on the quality of services performed by a health care
facility is quality of care data that the plan has developed and
compiled, all of the following requirements shall be satisfied: 

   (1) The information shall be based on nationally recognized
evidence-based or consensus-based clinical recommendations or
guidelines. When available, a plan shall use measures endorsed by the
National Quality Forum or other entities whose work in the area of
quality performance is generally accepted in the health care
industry.  
   (2) 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 health care facilities.  
   (3) The information, and the data used as the basis for that
information, shall be updated at appropriate intervals, but not less
than annually.  
   (4) If the health care service plan is evaluating quality
measurements for which it is also furnishing the cost range of
procedures to its enrollees or subscribers, it shall link the two
together for comparison purposes when appropriate.  
   (5) The health care service plan shall, prior to furnishing the
information to its enrollees or subscribers, provide all of the
following to the affected health care facility:  
   (A) At least 45-days written notice to review the information.
 
   (B) The criteria used in the development and evaluation of quality
measurements and reasonable access to these criteria. The criteria
shall be sufficiently detailed and reasonably understandable to allow
the facility to verify the data against its records.  
   (C) An explanation to the facility that it has the right to
correct errors and seek review of the data used to measure the
quality of services provided at the facility.  
   (D) A reasonable, prompt, and transparent appeal process. If the
facility makes an appeal prior to the expiration of the time period
provided under subparagraph (A), the health care service plan shall
make no changes to its current information about the facility until
the appeal is completed.  
   (e) A health care service plan that furnishes information
concerning the cost range of procedures at a health care facility or
the quality of services provided by the facility to its subscribers
or enrollees pursuant to subdivision (a) shall also disclose the
following to its subscribers or enrollees:  
   (1) Where the plan's facility quality measurements can be found.
 
   (2) That facility quality measurements provided by the plan are
only a guide to choosing a facility, that enrollees or subscribers
should confer with their existing facility before making a decision,
and that these measurements have a risk of error and should not be
the sole basis for selecting a facility.  
   (3) Information explaining the facility quality measurement
process, including the basis upon which quality is measured and any
limitation of the data used.  
   (4) Reasonable details on the factors and criteria used by the
facility quality measurement system, including whether severity cost
adjustments have been utilized.  
   (5) How an enrollee or subscriber may register a complaint about
the plan's facility quality measurements or provide feedback on the
quality measurement system.  
   (b) 
    (f)  Any contractural provision inconsistent with this
section shall be void and unenforceable. 
   (c) 
    (g)  For purposes of this section, the following
definitions apply: 
   (1) "Health care facility" means a licensed hospital or any other
licensed health care facility owned by a licensed hospital. 

   (1) 
    (2)  "Licensed hospital" has the same meaning as set
forth in Section 4028 of the Business and Professions Code. 
   (2) 
    (3)  "Licensed health care facility" means any
institution or health facility, other than a long-term health care
facility as defined pursuant to Section 1418, licensed by the State
Department of Public Health to deliver or furnish health care
services. 
   (d) 
    (h)  Section 1390 shall not apply for purposes of this
section.
  SEC. 2.  Section 10133.64 is added to the Insurance Code, to read:
   10133.64.  (a) A contract issued, amended, renewed, or delivered
on or after January 1, 2011, by or on behalf of a health insurer and
a  licensed hospital or any other licensed health care
facility owned by a licensed hospital   health care
facility  to provide inpatient hospital services or ambulatory
care services to policyholders and insureds of the insurer shall not
contain any provision that restricts the ability of the health
insurer to furnish information to policyholders or insureds
concerning the cost range of procedures at the  hospital or
the licensed  health care facility or the quality of
services provided by the  hospital or  facility.

   (b) Information on the cost range of procedures furnished pursuant
to subdivision (a) shall be displayed as an episode of care, unless
an episode of care is not applicable, and may include, but shall not
be limited to, applicable diagnostic tests, prescription drugs,
hospital days, and medical supplies that are associated with a
typical procedure or illness.  
   (c) If the information proposed to be furnished pursuant to
subdivision (a) on the quality of services performed by a health care
facility is quality of care data that the insurer has developed and
compiled, all of the following requirements shall be satisfied: 

   (1) The information shall be based on nationally recognized
evidence-based or consensus-based clinical recommendations or
guidelines. When available, an insurer shall use measures endorsed by
the National Quality Forum or other entities whose work in the area
of quality performance is generally accepted in the health care
industry.  
   (2) 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 health care facilities.  
   (3) The information, and the data used as the basis for that
information, shall be updated at appropriate intervals, but not less
than annually.  
   (4) If the health insurer is evaluating quality measurements for
which it is also furnishing the cost range of procedures to its
policyholders or insureds, it shall link the two together for
comparison purposes when appropriate.  
   (5) The health insurer shall, prior to furnishing the information
to its policyholders or insureds, provide all of the following to the
affected health care facility:  
   (A) At least 45-days written notice to review the information.
 
   (B) The criteria used in the development and evaluation of quality
measurements and reasonable access to these criteria. The criteria
shall be sufficiently detailed and reasonably understandable to allow
the facility to verify the data against its records.  
   (C) An explanation to the facility that it has the right to
correct errors and seek review of the data used to measure the
quality of services provided at the facility.  
   (D) A reasonable, prompt, and transparent appeal process. If the
facility makes an appeal prior to the expiration of the time period
provided under subparagraph (A), the health insurer shall make no
changes to its current information about the facility until the
appeal is completed.  
   (d) A health insurer that furnishes information concerning the
cost range of procedures at a health care facility or the quality of
services provided by the facility to its policyholders or insureds
pursuant to subdivision (a) shall also disclose the following to its
policyholders or insureds:  
   (1) Where the insurer's facility quality measurements can be
found.  
   (2) That facility quality measurements provided by the insurer are
only a guide to choosing a facility, that policyholders or insureds
should confer with their existing facility before making a decision,
and that these measurements have a risk of error and should not be
the sole basis for selecting a facility.  
   (3) Information explaining the facility quality measurement
process, including the basis upon which quality is measured and any
limitation of the data used.  
   (4) Reasonable details on the factors and criteria used by the
facility quality measurement system, including whether severity cost
adjustments have been utilized.  
   (5) How a policyholder or insured may register a complaint about
the insurer's facility quality measurements or provide feedback on
the quality measurement system.  
   (b) 
    (e)  Any contractural provision inconsistent with this
section shall be void and unenforceable. 
   (c) 
    (f)  For purposes of this section, the following
definitions apply: 
   (1) "Health care facility" means a licensed hospital or any other
licensed health care facility owned by a licensed hospital. 

   (1) 
    (2)  "Licensed hospital" has the same meaning as set
forth in Section 4028 of the Business and Professions Code. 
   (2) 
    (3)  "Licensed health care facility" means any
institution or health facility, other than a long-term health care
facility as defined pursuant to Section 1418 of the Health and Safety
Code, licensed by the State Department of Public Health to deliver
or furnish health care services.