Bill Text: CA SB1340 | 2013-2014 | Regular Session | Introduced

California Senate Bill 1340 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Health care coverage: provider contracts.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-07-07 - Chaptered by Secretary of State. Chapter 83, Statutes of 2014. [SB1340 Detail]

Download: California-2013-SB1340-Introduced.html
BILL NUMBER: SB 1340	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Hernandez

                        FEBRUARY 21, 2014

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



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1340, as introduced, Hernandez. 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 by or on behalf of a
plan or insurer and a licensed hospital, as defined, or any other
licensed health care facility owned by a licensed hospital 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 facility
or the quality of services performed by the hospital or facility.
Existing law makes a contractual provision inconsistent with this
requirement void and unenforceable. Existing law requires a plan or
insurer to provide a hospital or facility at least 20 days to review
the methodology and data used before cost or quality information is
provided to subscribers or enrollees of the plan or to policyholders
or insureds of the insurer, as specified. Existing law also
establishes requirements applicable to information displayed on an
Internet Web site pursuant to these provisions by, or on behalf of, a
plan or insurer.
    This bill would instead prohibit a contract between a plan or
insurer and a provider or supplier, as defined, from containing a
provision that restricts the ability of the plan or insurer to
furnish information to consumers or purchasers, as defined,
concerning the cost range of a procedure or full course of treatment
or the quality of services performed by the provider or supplier. The
bill would require a plan or insurer to provide a provider or
supplier with at least 30 days to review the methodology and data
used and would make related, conforming changes.
   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 of the Health and Safety Code is
amended to read:
   1367.49.  (a) A contract issued, amended, renewed, or delivered on
or after January 1,  2012,   2015,  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 to provide inpatient hospital services or
ambulatory care services to subscribers and enrollees of the plan
  provider or supplier  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
facility or the quality of services performed by the hospital or
facility.   consumers or purchasers information concern
  ing any of the following:  
   (1) The cost range of a procedure or a full course of treatment,
including, but not limited to, facility, professional, and diagnostic
services, prescription drugs, durable medical equipment, and other
items and services related to the treatment.  
   (2) The quality of services performed by the provider or supplier.

   (b) Any contractual provision inconsistent with this section shall
be void and unenforceable.
   (c) A health care service plan shall provide the  hospital
or facility   provider or supplier  an advance
opportunity of at least  20   30  days to
review the methodology and data developed and compiled by the health
care service plan, and used pursuant to subdivision (a), before cost
or quality information is provided to  subscribers or
enrollees,   consumers or purchasers,  including
material revisions or  the addition   additions
 of new information. At the time the health care service plan
provides a  hospital or facility   provider or
supplier  with the opportunity to review the methodology and
data, it shall also notify the  hospital or facility
  provider or supplier  in writing of their
opportunity to provide an Internet Web site link pursuant to
subdivision (f).
   (d) If the information proposed to be furnished to enrollees and
subscribers on the quality of services performed by a 
hospital or facility   provider or supplier  is
data that the plan has developed and compiled, 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  hospitals and facilities  
providers and suppliers  .
   (e) Any Internet Web site owned or controlled by a health care
service plan, or operated by another person or entity under contract
with or on behalf of a health care service plan, that displays the
information developed and compiled by the health care service plan as
referenced by this section shall prominently post the following
statement:

   "Individual  hospitals   facilities or health
care providers  may disagree with the methodology used to
define the cost ranges, the cost data, or quality measures. Many
factors may influence cost or quality, including, but not limited to,
the cost of uninsured and charity care, the type and severity of
procedures, the case mix of a hospital, special services such as
trauma centers, burn units, medical and other educational programs,
research, transplant services, technology, payer mix, and other
factors affecting individual  hospitals  
facilities and health care providers  ."

   A health care service plan and a  hospital  
provider or supplier  shall not be precluded from mutually
agreeing in writing to an alternative method of conveying this
statement.
   (f) If a  hospital or facility   provider or
supplier  chooses to provide an Internet Web site link where a
response to the health care service plan's posting may be found, it
shall do so in a timely manner in order to satisfy the requirements
of this section. If a  hospital or facility  
provider or supplier  chooses to provide a response, a plan
shall post, in an easily identified manner, a prominent link to the
 hospital's or facility's   provider's or
supplier's  Internet Web site where a response to the plan's
posting may be found. A health care service plan and a 
hospital   provider or supplier  shall not be
precluded from mutually agreeing in writing to an alternative method
to convey a  hospital's   provider's or supplier'
s  response.
   (g) For the purposes of this section,  "licensed hospital"
means those hospitals as defined in subdivisions (a), (b), and (f)
of Section 1250.   the following definitions shall
apply:  
   (1) "Consumers" means enrollees or subscribers of the health care
service plan or beneficiaries of a self-funded health coverage
arrangement administered by the health care service plan or other
persons entitled to access services through a network established by
the health care service plan.  
   (2) "Provider" has the same meaning as that term is defined in
Section 1367.50.  
   (3) "Purchasers" means the sponsors of a self-funded health
coverage arrangement administered by the health care service plan.
 
   (4) "Supplier" has the same meaning as that term is defined in
Section 1367.50. 
   (h) Section 1390 shall not apply for purposes of this section.
  SEC. 2.  Section 10133.64 of the Insurance Code is amended to read:

   10133.64.  (a) A contract issued, amended, renewed, or delivered
on or after January 1,  2012,   2015,  by
or on behalf of a health insurer and a  licensed hospital or
any other licensed health care facility owned by a licensed hospital
to provide inpatient hospital services or ambulatory care services to
policyholders and insureds of the insurer   provider or
supplier  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 facility or the quality of services provided by the
hospital or facility.   consumers or purchasers
information concerning any of the following:  
   (1) The cost range of a procedure or a full course of treatment,
including, but not limited to, facility, professional, and diagnostic
services, prescription drugs, durable medical equipment, and other
items and services related to the treatment.  
   (2) The quality of services performed by the provider or supplier.

   (b) Any contractual provision inconsistent with this section shall
be void and unenforceable.
   (c) A health insurer shall provide the  hospital or
facility   provider or supplier  an advance
opportunity of at least  20   30  days to
review the methodology and data developed and compiled by the health
insurer, and used pursuant to subdivision (a), before cost or quality
information is provided to  policyholders or insureds,
  consumers or purchasers,  including material
revisions or  the addition   additions  of
new information. At the time the health insurer provides a 
hospital or facility   provider or supplier  with
the opportunity to review the methodology and data, it shall also
notify the  hospital or facility   provider or
supplier  in writing of their opportunity to provide an Internet
Web site link pursuant to subdivision (f).
   (d) If the information proposed to be furnished to policyholders
and insureds on the quality of services performed by a 
hospital or facility   provider or supplier  is
data that the insurer has developed and compiled, 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  hospitals and facilities  
providers and suppliers  .
   (e) Any Internet Web site owned or controlled by a health insurer,
or operated by another person or entity under contract with or on
behalf of a health insurer, that displays the information developed
and compiled by the health insurer as referenced by this section
shall prominently post the following statement:

   "Individual  hospitals   health care
facilities or providers  may disagree with the methodology used
to define the cost ranges, the cost data, or quality measures. Many
factors may influence cost or quality, including, but not limited to,
the cost of uninsured and charity care, the type and severity of
procedures, the case mix of a  hospital  
facility  , special services such as trauma centers, burn units,
medical and other educational programs, research, transplant
services, technology, payer mix, and other factors affecting
individual  hospitals   health care facilities
and providers  ."

   A health insurer and a  hospital   provider
or supplier  shall not be precluded from mutually agreeing in
writing to an alternative method of conveying this statement.
   (f) If a  hospital or facility   provider or
supplier  chooses to provide an Internet Web site link where a
response to the health insurer's posting may be found, it shall do so
in a timely manner in order to satisfy the requirements of this
section. If a  hospital or facility   provider
or supplier  chooses to provide a response, an insurer shall
post, in an easily identified manner, a prominent link to the
 hospital's or facility's   provider's or
supplier's  Internet Web site where a response to the health
insurer's posting may be found. A health insurer and a 
hospital   provider or supplier  shall not be
precluded from mutually agreeing in writing to an alternative method
to convey a  hospital's   provider's or supplier'
s  response.
   (g) For the purposes of this section,  "licensed hospital"
means those hospitals as defined in subdivisions (a), (b), and (f)
of Section 1250 of the Health and Safety Code.   the
following definitions shall apply:  
   (1) "Consumers" means policyholders or insureds of the health
insurer or beneficiaries of a self-funded health coverage arrangement
administered by the health insurer or other persons entitled to
access services through a network established by the health insurer.
 
   (2) "Provider" has the same meaning as that term is defined in
Section 10117.52.  
   (3) "Purchasers" means the sponsors of a self-funded health
coverage arrangement administered by the health insurer.  
   (4) "Supplier" has the same meaning as that term is defined in
Section 10117.52.