Bill Text: CA SB1285 | 2011-2012 | Regular Session | Amended

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Bill Title: Hospital billing: emergency services and care.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2012-08-16 - Set, first hearing. Referred to APPR. suspense file. Set, first hearing. Held in committee and under submission. [SB1285 Detail]

Download: California-2011-SB1285-Amended.html

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BILL NUMBER: SB 1285	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 7, 2012
	AMENDED IN ASSEMBLY  JUNE 26, 2012
	AMENDED IN ASSEMBLY  JUNE 11, 2012
	AMENDED IN SENATE  MAY 9, 2012
	AMENDED IN SENATE  MARCH 26, 2012

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 23, 2012

   An act to amend Section 1371.4 of, and to add Article 3
(commencing with Section 127465) to Chapter 2.5 of Part 2 of Division
107 of, the Health and Safety Code, relating to health care.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1285, as amended, Hernandez. Hospital billing: emergency
services and care.
   Existing law provides for the licensure and regulation of health
facilities by the State Department of Public Health and requires a
licensed facility that maintains and operates an emergency department
to provide emergency services and care to any person requesting the
services or care for any condition in which the person is in danger
of loss of life or serious injury or illness, as specified. Existing
law requires hospitals to maintain a written policy regarding
discount payments for financially qualified patients as well as a
written charity care policy. Existing law requires a hospital to
limit the expected payment for services it provides to certain
low-income patients to the highest amount the hospital would expect
to receive for providing services from a government-sponsored program
of health benefits in which the hospital participates. 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 requires health care service plans, or
their contracting medical providers, to reimburse providers for
emergency services and care provided to their enrollees until the
care results in stabilization of the enrollee.
   This bill would require a hospital with an out-of-network
emergency utilization rate, as defined, of 50% or more to adjust its
total billed charges for emergency services and care provided to a
patient prior to stabilization to an amount no greater than 150% of
the amount the hospital could expect to receive from Medicare for the
services and care. The bill would specify that this provision does
not apply to charges billed by emergency physicians, as defined, or
to charges provided as treatment for an injury that is compensable
for purposes of workers' compensation. The bill would also specify
that its provisions do not apply if any other law requires the
hospital to limit expected payment for the emergency services and
care to a lesser amount, if a contract governs the total billed
charges for the emergency services and care, or if a government
program of health benefits, as specified, is the primary payer for
the emergency services and care. The bill would require health care
service plans or their contracting medical providers to reimburse
hospitals in accordance with these provisions. Because a willful
violation of that reimbursement requirement by a health care service
plan or its contracting medical providers 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.
State-mandated local program: yes.


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

  SECTION 1.  Section 1371.4 of the Health and Safety Code is amended
to read:
   1371.4.  (a) A health care service plan that covers hospital,
medical, or surgical expenses, or its contracting medical providers,
shall provide 24-hour access for enrollees and providers, including,
but not limited to, noncontracting hospitals, to obtain timely
authorization for medically necessary care, for circumstances where
the enrollee has received emergency services and care is stabilized,
but the treating provider believes that the enrollee may not be
discharged safely. A physician and surgeon shall be available for
consultation and for resolving disputed requests for authorizations.
A health care service plan that does not require prior authorization
as a prerequisite for payment for necessary medical care following
stabilization of an emergency medical condition or active labor need
not satisfy the requirements of this subdivision.
   (b) A health care service plan, or its contracting medical
providers, shall reimburse providers for emergency services and care
provided to its enrollees, until the care results in stabilization of
the enrollee, except as provided in subdivision (c). As long as
federal or state law requires that emergency services and care be
provided without first questioning the patient's ability to pay, a
health care service plan shall not require a provider to obtain
authorization prior to the provision of emergency services and care
necessary to stabilize the enrollee's emergency medical condition.
   (c) Payment for emergency services and care may be denied only if
the health care service plan, or its contracting medical providers,
reasonably determines that the emergency services and care were never
performed; provided that a health care service plan, or its
contracting medical providers, may deny reimbursement to a provider
for a medical screening examination in cases when the plan enrollee
did not require emergency services and care and the enrollee
reasonably should have known that an emergency did not exist. A
health care service plan may require prior authorization as a
prerequisite for payment for necessary medical care following
stabilization of an emergency medical condition.
   (d) If there is a disagreement between the health care service
plan and the provider regarding the need for necessary medical care,
following stabilization of the enrollee, the plan shall assume
responsibility for the care of the patient either by having medical
personnel contracting with the plan personally take over the care of
the patient within a reasonable amount of time after the
disagreement, or by having another general acute care hospital under
contract with the plan agree to accept the transfer of the patient as
provided in Section 1317.2, Section 1317.2a, or other pertinent
statute. However, this requirement shall not apply to necessary
medical care provided in hospitals outside the service area of the
health care service plan. If the health care service plan fails to
satisfy the requirements of this subdivision, further necessary care
shall be deemed to have been authorized by the plan. Payment for this
care may not be denied.
   (e) A health care service plan may delegate the responsibilities
enumerated in this section to the plan's contracting medical
providers.
   (f) Subdivisions (b), (c), (d), (h), and (i) shall not apply with
respect to a nonprofit health care service plan that has 3,500,000
enrollees and maintains a prior authorization system that includes
the availability by telephone within 30 minutes of a practicing
emergency department physician.
   (g) A health care service plan, or its contracting medical
providers, that is obligated to reimburse providers for emergency
services and care provided to its enrollees prior to stabilization
pursuant to subdivision (b) shall reimburse hospitals in accordance
with Section 127466.
   (h) The Department of Managed Health Care shall adopt by July 1,
1995, on an emergency basis, regulations governing instances when an
enrollee requires medical care following stabilization of an
emergency medical condition, including appropriate timeframes for a
health care service plan to respond to requests for treatment
authorization.
   (i) The Department of Managed Health Care shall adopt, by July 1,
1999, on an emergency basis, regulations governing instances when an
enrollee in the opinion of the treating provider requires necessary
medical care following stabilization of an emergency medical
condition, including appropriate timeframes for a health care service
plan to respond to a request for treatment authorization from a
treating provider who has a contract with a plan.
   (j) The definitions set forth in Section 1317.1 shall control the
construction of this section.
   (k) (1) A health care service plan that is contacted by a hospital
pursuant to Section 1262.8 shall, within 30 minutes of the time the
hospital makes the initial telephone call requesting information,
either authorize poststabilization care or inform the hospital that
it will arrange for the prompt transfer of the enrollee to another
hospital.
   (2) A health care service plan that is contacted by a hospital
pursuant to Section 1262.8 shall reimburse the hospital for
poststabilization care rendered to the enrollee if any of the
following occur:
   (A) The health care service plan authorizes the hospital to
provide poststabilization care.
   (B) The health care service plan does not respond to the hospital'
s initial contact or does not make a decision regarding whether to
authorize poststabilization care or to promptly transfer the enrollee
within the timeframe set forth in paragraph (1).
   (C) There is an unreasonable delay in the transfer of the
enrollee, and the noncontracting physician and surgeon determines
that the enrollee requires poststabilization care.
   (3) A health care service plan shall not require a hospital
representative or a noncontracting physician and surgeon to make more
than one telephone call pursuant to Section 1262.8 to the number
provided in advance by the health care service plan. The
representative of the hospital that makes the telephone call may be,
but is not required to be, a physician and surgeon.
   (4) An enrollee who is billed by a hospital in violation of
Section 1262.8 may report receipt of the bill to the health care
service plan and the department. The department shall forward that
report to the State Department of Public Health.
   (5) For purposes of this section, "poststabilization care" means
medically necessary care provided after an emergency medical
condition has been stabilized.
  SEC. 2.  Article 3 (commencing with Section 127465) is added to
Chapter 2.5 of Part 2 of Division 107 of the Health and Safety Code,
to read:

      Article 3.  Hospital Emergency Pricing


   127465.  (a) For purposes of this article, the following
definitions shall apply:
   (1) "Health care service plan" has the same meaning as that term
is defined in Section 1345.
   (2) "Health insurer" means an insurer that issues policies of
health insurance, as defined in Section 106 of the Insurance Code.
   (3) "Hospital" means a hospital licensed under subdivision (a) or
(f) of Section 1250, with an emergency department licensed by the
State Department of Public Health, with the following exceptions:
   (A) "Hospital" does not include designated public hospitals
described in subdivision (d) of Section 14166.1 of the Welfare and
Institutions Code.
   (B) "Hospital" does not include a hospital owned  or
  and  operated by an entity that is a city, a
county, a city and county, the State of California, the University of
California, a local health or hospital authority,    a
health care district,  any other political subdivision of the
state, any combination of political subdivisions of the state
organized pursuant to a joint powers agreement, or a new hospital
that is described in Section 14165.50 of the Welfare and Institutions
Code.
   (4) A "local" patient is a patient whose residence is in the same
county as the hospital at which the patient receives services and
care, or whose residence is in a county adjacent to the county where
the hospital at which the patient receives services and care is
located.
   (5) A "major emergency department encounter" means a patient
encounter in a hospital emergency department for which the hospital's
total billed charges for all inpatient and outpatient services and
care provided, excluding charges billed by an emergency physician, as
that term is defined in Section 127450, are greater than the major
emergency department encounter threshold, as defined in paragraph
(6).
   (6) Commencing January 1, 2013, the "major emergency department
encounter threshold" shall be two thousand dollars ($2,000).
Commencing April 1, 2013, for an emergency encounter that began on or
after April 1 of a given calendar year and through March 31 of the
following calendar year, the "major emergency department encounter
threshold" shall be an amount equal to: $2,000 x (PPI - 129.9)/129.9.
For purposes of this paragraph, "PPI" shall be the Producer Price
Index for general medical and surgical hospitals, commodity code
6221, not seasonally adjusted, as it appears in the PPI Detailed
Report published by the United States Department of Labor, Bureau of
Labor Statistics, as reported in December of the calendar year that
precedes the April 1 through March 31 period during which the
emergency encounter began.
   (7) "Out-of-network" refers to care provided to a patient by a
hospital that has not contracted with the patient's health care
service plan or health insurer for reimbursement at a negotiated rate
with respect to the care provided.
   (8) "Out-of-network emergency utilization rate" means the
percentage of all major emergency department encounters at a hospital
during the course of the two most recent calendar years that are
out-of-network for local, privately insured patients. This rate shall
be calculated by dividing a hospital's total number of major
emergency department encounters during the two most recently
completed calendar years, that involved local, privately insured
patients for whom the emergency services and care provided were
out-of-network, by the hospital's total number of major emergency
department encounters in the same two calendar years of local,
privately insured patients, provided that if the most recent calendar
year ended within the previous 90 days, then data for the two
calendar years preceding the most recently completed calendar year
shall be used.
   (9) "Primary payer" means the payer, other than the patient, who
is or was legally required or responsible to make payment with
respect to an item or service, or any portion thereof, before any
other payer, other than the patient.
   (10) (A) "Privately insured patient" means a patient for whom the
primary payer is a health insurer, a health care service plan, or an
employer plan sponsor, and is not Medicare, Medi-Cal, the Healthy
Families Program, the Federal Temporary High Risk Pool, the Major
Risk Medical Insurance Program, or any other government program of
health benefits or managed care product provided pursuant to any
government program of health benefits.
   (B) "Privately insured patient" does not include any patient
receiving prestabilization emergency services and care as treatment
for an injury that is compensable for purposes of workers'
compensation.
   (b) For purposes of this article, the following shall not be
considered to be a government program of health benefits:
   (1) A health care service plan, qualified health plan, or health
insurance policy or product offered through the California Health
Benefit Exchange established pursuant to Section 100500 of the
Government Code.
   (2) An employer-sponsored health benefit plan or contract
providing health benefits or coverage for state, local, or other
government employees, retirees, or their family members, including,
but not limited to, a health benefit plan or contract entered into
with the Board of Administration of the Public Employees' Retirement
System pursuant to the Public Employees' Medical and Hospital Care
Act (Part 5 (commencing with Section 22750) of Division 5 of Title 2
of the Government Code).
   (c) The definitions of Section 1317.1, with the exception of the
definition of "hospital," shall control the construction of this
article, unless the context otherwise requires.
   127466.  (a) (1) A hospital with an out-of-network emergency
utilization rate of 50 percent or greater shall adjust its total
billed charges for emergency services and care provided to a patient
prior to stabilization in accordance with paragraph (2). The hospital'
s total billed charges subject to adjustment under this subdivision
shall not include charges billed by an emergency physician, as that
term is defined in Section 127450. This subdivision shall not apply
to any hospital that has an out-of-network emergency utilization rate
that is less than 50 percent.
   (2) The adjustment made pursuant to this subdivision shall be such
that the hospital's total expected payment shall not exceed 150
percent of the amount of payment the hospital reasonably could expect
to receive from Medicare for providing the prestabilization
emergency services and care if the services and care were subject to
payment by Medicare.
   (3) If a contract, including a contract with a health insurer,
health care service plan, or other health care coverage provider,
governs the adjustment of the total billed charges for the
prestabilization emergency services and care provided to a patient by
the hospital, the contract shall control and the provisions of this
subdivision shall not apply.
   (4) The adjustment required by this subdivision shall not apply to
a hospital's charges for prestabilization emergency services and
care provided to a patient as treatment for an injury that is
compensable for purposes of workers' compensation.
   (5) The adjustment required by this subdivision shall not apply to
a hospital's charges for prestabilization emergency services and
care provided to a patient for whom Medicare, Medi-Cal, or any other
government program of health benefits, excluding public employee
benefit plans, is the primary payer for those services and care.
   (6) The adjustment required by this subdivision shall not apply if
existing law, including Article 1 (commencing with Section 127400),
requires a hospital to limit expected payment for prestabilization
emergency services and care provided to a patient to an amount that
is less than the hospital's total billed charges, as adjusted in
accordance with paragraph (2). Nothing in this article shall prevent
a hospital from adjusting its total billed charges to limit expected
payments for prestabilization emergency services and care to amounts
that are less than the total billed charges as adjusted in accordance
with paragraph (2).
   (b) If application of federal law, including Section 2719A of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-19a), and its
implementing regulations, requires that a health care service plan
or health insurer provide payment for prestabilization emergency
services and care in an amount greater than the hospital's total
billed charges for those services and care as adjusted in accordance
with subdivision (a), the hospital shall adjust its total billed
charges such that the total expected payment for the prestabilization
emergency services and care shall be the minimum amount that will
comply with the applicable federal law. Nothing in this subdivision
shall be construed as confirming any federal obligation of a health
insurer or health care service plan to provide payments of any
particular amount for out-of-network emergency services provided to
its policyholders or enrollees prior to stabilization.
   127467.  Nothing in this article shall be construed to require a
hospital to modify its uniform schedule of charges or published
rates, nor shall this article preclude the recognition of a hospital'
s established charge schedule or published rates for purposes of
applying any payment limit, interim payment amount, or other payment
calculation based upon a hospital's rates or charges under the
Medi-Cal program, the Medicare  program  
Program  , workers' compensation, or other federal, state, or
local public program of health benefits.
   127468.  A hospital subject to Section 127466 shall provide
reimbursement for any amount actually paid in excess of the amount
due under this article, including interest. Interest owed by the
hospital shall accrue at the rate set forth in Section 685.010 of the
Code of Civil Procedure, beginning on the date payment is received
by the hospital. However, a hospital is not required to provide a
reimbursement if the amount due is less than five dollars ($5).
  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.