Bill Text: CA SB359 | 2011-2012 | Regular Session | Enrolled
Bill Title: Hospital billing: emergency services and care.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2012-09-30 - In Senate. Consideration of Governor's veto pending. [SB359 Detail]
Download: California-2011-SB359-Enrolled.html
BILL NUMBER: SB 359 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 31, 2012
PASSED THE ASSEMBLY AUGUST 31, 2012
AMENDED IN ASSEMBLY AUGUST 29, 2012
AMENDED IN ASSEMBLY AUGUST 24, 2012
AMENDED IN ASSEMBLY JUNE 27, 2012
AMENDED IN SENATE JANUARY 10, 2012
AMENDED IN SENATE JANUARY 4, 2012
INTRODUCED BY Senator Hernandez
FEBRUARY 15, 2011
An act to amend Section 1371.4 of, and to add and repeal Article 3
(commencing with Section 127465) of Chapter 2.5 of Part 2 of
Division 107 of, the Health and Safety Code, relating to health care.
LEGISLATIVE COUNSEL'S DIGEST
SB 359, 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.
This bill would require a hospital with an out-of-network
emergency utilization rate, as defined, of 50% or more to notify
payers that its total billed charges for emergency services and care
provided to a patient prior to stabilization are subject to
adjustment such that the hospital's total expected payment would be
60% of the payer's average in-network payments, as defined, but less
than 150% of the payment the hospital reasonably could expect to
receive from Medicare for providing similar emergency services and
care prior to stabilization. The bill would authorize a payer that
receives this notice to reimburse hospitals in accordance with that
adjustment. The bill would specify that these provisions do not apply
to charges billed by physicians or other licensed professionals who
are members of the hospital medical staff 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 in specified instances, including 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 provide for the
repeal of its provisions on January 1, 2017.
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) may adjust its reimbursement to 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) "Average in-network payments" means the average amount of
payments made pursuant to a contract during the preceding calendar
year to hospitals in California that offer a comparable range of
services and, if applicable, education and research programs, by a
health care service plan or health insurer for reimbursement of care
provided by the hospital or hospitals at a negotiated rate, provided
that payments made by the plan or insurer during the preceding
calendar year for in-system care shall not be included in the
calculation of the average.
(2) "Health care service plan" has the same meaning as that term
is defined in Section 1345.
(3) "Health insurer" means an insurer that issues policies of
health insurance, as defined in Section 106 of the Insurance Code.
(4) "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 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.
(C) "Hospital" does not include any of the following:
(i) A rural general acute care hospital, as defined in subdivision
(a) of Section 1250.
(ii) A small and rural hospital, as defined in Section 124840.
(iii) A general acute care hospital that is located within both of
the following:
(I) A county with a population of 1,500,000 or less according to
the 2010 federal census.
(II) A medically underserved population, a medically underserved
area, or a health professions shortage area, as designated by the
federal government pursuant to Section 254b, 254c-14, or 254e of
Title 42 of the United States Code.
(D) "Hospital" does not include a hospital that is part of a
health system in which, as of January 1, 2013, at least 50 percent of
the hospitals are rural general acute care hospitals, as defined in
subdivision (a) of Section 1250, or small and rural hospitals, as
defined in Section 124840, provided that the health system includes
at least five hospitals that are either rural general acute care
hospitals or small and rural hospitals. For purposes of this
subparagraph, both of the following shall apply:
(i) Hospitals are part of the same health system if they are
owned, operated, or substantially controlled by the same person or
other legal entity or entities.
(ii) Hospitals are considered separate hospitals if they are
located at least one mile apart and each has at least 30 beds,
regardless of whether the hospitals operate under the same name or
license.
(5) "In-network" refers to care provided to a patient by a
hospital that has contracted with the patient's health care service
plan or health insurer for reimbursement at a negotiated rate with
respect to the care provided.
(6) "In-system" refers to care provided to a patient by a hospital
that is affiliated with a health care service plan, and the hospital
and affiliated health care service plan are owned, operated, or
substantially controlled by the same person or persons or other legal
entity or entities.
(7) A "local" patient is a patient whose residence meets both of
the following requirements:
(A) Is in the same county as the hospital at which the patient
receives services and care or is in a county adjacent to the county
where the hospital at which the patient receives services and care is
located.
(B) Has a five-digit ZIP Code that is the same as the five-digit
ZIP Code associated with the residences of patients involved in at
least 50 emergency department encounters during the most recently
completed calendar year.
(8) An "emergency department encounter" means the patient has been
registered in the emergency department for a period of five hours or
longer, or has been admitted as an inpatient following registration
and a stay of any length in the emergency department. An emergency
department encounter does not include an encounter that results from
the receipt of patient transfers pursuant to the transfer
requirements of the federal Emergency Medical Treatment and Active
Labor Act (42 U.S.C. Sec. 1395dd) from another hospital that is not
affiliated with, or owned, operated, or substantially controlled by,
the same person or persons or other legal entity or entities as the
hospital receiving the transfer.
(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 emergency department encounters at a hospital
during the course of the rate reporting period that are
out-of-network for local, privately insured patients. This rate shall
be calculated by dividing a hospital's total number of emergency
department encounters during the rate reporting period 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
emergency department encounters that involved local, privately
insured patients in the rate reporting period.
(11) "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.
(12) (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 emergency services and care prior to stabilization as
treatment for an injury that is compensable for purposes of workers'
compensation.
(13) "Rate reporting period" means, for the purposes of
calculating the out-of-network emergency utilization rate, a
three-year period, provided that if the most recent calendar year
ended within the previous 90 days, then data for the three-year
period used to calculate the out-of-network emergency utilization
rate shall be taken from the three calendar years preceding the most
recently completed calendar year.
(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 notify payers at the
time the hospital submits bills, statements, or other demands for
payment for emergency services and care provided to a patient prior
to stabilization, other than services and care described in paragraph
(5), (6), (7), or (9), that the hospital's out-of-network emergency
utilization rate is 50 percent or greater and therefore its total
billed charges for emergency services and care provided to a patient
prior to stabilization may be subject to adjustment in accordance
with this section. This subdivision shall not apply to any hospital
that has an out-of-network emergency utilization rate that is less
than 50 percent, nor shall this subdivision apply to a hospital if
the hospital can establish that in the preceding six-month period the
percentage of all emergency department encounters at the hospital
that were out-of-network for local, privately insured patients was
less than 50 percent.
(2) A hospital's total billed charges subject to adjustment under
this subdivision shall not include charges billed by a physician and
surgeon licensed pursuant to Chapter 5 (commencing with Section 2000)
of Division 2 of the Business and Professions Code or any other
licensed professional who is a member of the hospital medical staff.
(3) The adjustment made pursuant to this subdivision shall be such
that the hospital's total expected payment from a payer for
emergency services and care prior to stabilization shall be 60
percent of the payer's average in-network payments, but shall in no
event be less than 150 percent of the payment the hospital reasonably
could expect to receive from Medicare for providing similar
emergency services and care prior to stabilization. If the payer does
not have average in-network payments for similar emergency services
and care prior to stabilization, then the hospital's total expected
payment shall be in accordance with existing law.
(4) A payer that receives the notification made by a hospital
pursuant to paragraph (1) may adjust the reimbursement to the
hospital pursuant to this section.
(5) 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 emergency
services and care provided to a patient prior to stabilization by the
hospital, the contract shall control and the provisions of this
subdivision shall not apply.
(6) The adjustment required by this subdivision shall not apply to
a hospital's charges for emergency services and care provided to a
patient prior to stabilization as treatment for an injury that is
compensable for purposes of workers' compensation.
(7) The adjustment required by this subdivision shall not apply to
a hospital's charges for emergency services and care provided to a
patient prior to stabilization 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.
(8) The adjustment required by this subdivision shall not apply to
a hospital's charges for emergency services and care provided to a
patient prior to stabilization where all of the following conditions
are met:
(A) The primary payer is a health insurer, health care service
plan, or other health care coverage provider.
(B) As of January 1, 2013, the primary payer and the hospital are
parties to a contract governing the adjustment of total billed
charges for emergency services and care provided to patients prior to
stabilization.
(C) On or after January 1, 2013, and before the provision of the
emergency services and care to the patient prior to stabilization,
the primary payer terminates the contract described in subparagraph
(B), except where the termination is due to the hospital's breach of
the contract, or the primary payer fails to timely renew the contract
described in subparagraph (B) after the hospital makes a timely and
binding offer to renew on substantially the same terms and including
reasonable rate adjustments. The hospital shall have the burden of
proving that it made a timely and binding renewal offer that met the
requirements of this paragraph in any proceeding applying this
subdivision.
(9) 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 emergency services
and care provided to a patient prior to stabilization to an amount
that is less than the hospital's total billed charges, as adjusted in
accordance with paragraph (3). Nothing in this article shall prevent
a hospital from adjusting its total billed charges to limit expected
payments for emergency services and care prior to stabilization to
amounts that are less than the total billed charges as adjusted in
accordance with paragraph (3).
(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 emergency services and care
prior to stabilization 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's total billed charges shall be
adjusted such that its total expected payment for the emergency
services and care prior to stabilization 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).
127469. Nothing in this article shall be construed to supersede
or repeal Section 1371, 1371.35, 1371.36, 1371.37, 1371.38, or
1371.39.
127470. This article shall remain in effect only until January 1,
2017, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2017, deletes or extends
that date.
