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 and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance and authorizes health insurers to contract with providers for alternative rates of payment. Existing law, known as the Health Care Providers' Bill of Rights, prescribes restrictions on the types of contractual provisions that may be included in agreements between health care service plans or health insurers and health care providers. Under existing law, if a change is made by amending a manual, policy, or procedure document referenced in the contract between a health care service plan and a provider, the plan is required to provide at least 45 business days' notice to the provider and the provider has the right to negotiate and agree to the change and terminate the contract prior to the change, as specified, except that if the contract between the plan and the provider provides benefits through a preferred provider arrangement, the provider only has the right to terminate the contract prior to the change. Existing law authorizes the contract between a health insurer and a provider to contain provisions permitting a material change to the contract by the insurer if the insurer provides at least 45 business days' notice to the provider. This bill would require a health care service plan to provide at least 90 business days' notice to a contracting provider if a change is made by amending a manual, policy, or procedure document referenced in the contract and would require that the provider under a preferred provider arrangement have the right to negotiate and agree to the change. The bill would authorize a contract between a provider and a health insurer for alternative rates of payment to contain provisions permitting a material change to the contract by the insurer if the insurer provides at least 90 business days' notice to the provider. The bill would also prohibit a contract between a plan or insurer and a provider that is issued, amended, or renewed on or after January 1, 2015, from including any provision that would require a provider to accept or participate in any additional products or product networks, without making specified disclosures, or that would terminate the health care provider's contract, or the provider's eligibility to participate in other product networks, when the provider exercises the right to negotiate, accept, or refuse a material change to the contract. By expanding the scope of a crime with respect to health care service plans, this bill would create 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.