BILL NUMBER: SB 1285 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 26, 2012
INTRODUCED BY Senator Hernandez
FEBRUARY 23, 2012
An act to amend Section 1371.4 of the Health and Safety
Code, relating to health care coverage. 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. Health care service
plans: emergency services. 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 its enrollees until the care
results in stabilization of the enrollee.
This bill would require a hospital with an out-of-network
emergency utilization rate 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 the amount the hospital
could expect to receive from Medicare for the services and care or,
if there is no established payment amount by Medicare or if that
amount is not sufficient to cover the actual cost to the hospital, an
amount no greater than a good faith and reasonable estimate of the
actual cost of providing the necessary services and care, as
specified. 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 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.
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 requires
a health care service plan to obtain timely authorization for
medically necessary care when the enrollee has received emergency
care services but, in the opinion of the treating provider, cannot
yet be discharged safely. Existing law provides that in case of a
disagreement between the health care service plan and the provider
regarding the need for necessary medical care, the plan shall assume
responsibility for the care of the patient, as specified.
This bill would make a technical, nonsubstantive change to these
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no
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), (g) (h)
, and (h) (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.
(g)
(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.
(h)
(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.
(i)
(j) The definitions set forth in Section 1317.1 shall
control the construction of this section.
(j)
(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.
(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 in-patient and out-patient 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) On January 1, 2013, the "major emergency department encounter
threshold" shall be two thousand dollars ($2,000). Beginning on 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 subdivision, "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) "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.
(8) "Privately insured patient" means a patient for whom the
primary payer is a health insurer or a health care service plan.
(9) "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.
(10) "Out-of-network emergency utilization rate" means the
percentage of all major emergency department encounters at a hospital
during the course of a calendar year 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 most recently completed calendar year 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
calendar year of local, privately insured patients; provided that if
the calendar year ended within the previous 90 days, data for the
calendar year preceding the most recently completed calendar year
shall be used.
(b) 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 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. If there is no established payment amount by Medicare for
the emergency services and care provided, or if the established
Medicare payment amount is less than the actual cost to the hospital
of the prestabilization emergency services and care provided, the
adjustment made pursuant to this subdivision shall be such that the
hospital's total expected payment shall not exceed a good faith and
reasonable estimate of the actual cost of providing the necessary
prestabilization emergency services and care.
(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, 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.
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 applicable
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), (g), and (h) 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) 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.
(h) 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.
(i) The definitions set forth in Section 1317.1 shall control the
construction of this section.
(j) (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.