Health care service plans and health insurance: third-party payments.

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. These provisions govern, among other things, procedures by health care service plans and insurers with respect to premium payments. This bill would require a health care service plan or an insurer that provides a policy of health insurance to accept payments from specified third-party entities, including an Indian tribe or a local, state, or federal government program. The bill would also require a financially interested entity, as defined, other than those entities, that is making a third-party premium payment to provide that assistance in a specified manner and to perform other related duties, including disclosing to the plan or the insurer the name of the enrollee or insured, as applicable, for each plan or policy on whose behalf a third-party premium payment will be made. The bill would require each plan or insurer to provide to the appropriate department information regarding premium payments by financially interested entities and reimbursement for services to providers, and would set forth standards governing the reimbursement of financially interested providers, including, but not limited to, chronic dialysis clinics, that meet certain criteria. Commencing January 1, 2022, the bill would require reimbursement to contracted providers to be the higher of the Medicare reimbursement rate or the rate determined pursuant to an independent dispute resolution process, as established by the bill, if either party seeks a rate determination pursuant to that process, and would require reimbursement for noncontracted providers to be governed by the terms and conditions of the health care service plan contract or health insurance policy, or the rate determined pursuant to the dispute resolution process, as prescribed. The reimbursement rates and dispute resolution process established by the bill would not apply to reimbursement for an enrollee or insured on behalf of whom a financially interested provider was already making premium payments to a health care service plan or insurer on or before October 1, 2019, except under specified circumstances. The bill would not alter existing obligations and requirements applicable to a health care service plan or health insurer relating to offering, marketing, selling, and issuing a health benefit plan, and cancellation or nonrenewal, as specified. The bill would specify that its requirements do not supersede or modify any privacy and information security requirements and protections in federal and state law regarding protected health information or personally identifiable information. The bill would declare that an enrollee's or insured's loss of coverage due to a financially interested entity's failure to pay premiums on a timely basis would be deemed a triggering event to allow for special enrollment, requiring a health care service plan or health insurer to allow an individual to enroll in or change individual health benefit plans, as specified. Existing law establishes requirements for the licensure and regulation of clinics by the State Department of Public Health, which include certain types of specialty clinics, such as chronic dialysis clinics, as defined. A violation of these provisions is a crime. This bill would prohibit a chronic dialysis clinic from steering, directing, or advising a patient regarding any specific coverage program option or health care service plan contract. The bill would require a chronic dialysis clinic to post a notice requiring questions about Medicare coverage for patients with end stage renal disease to be directed to the Health Insurance Counseling and Advocacy Program, as specified. This bill would make certain of its provisions operative, for specified financially interested entities, on July 1, 2020, or upon a finding by the United States Department of Health and Human Services Office of Inspector General that compliance by the financially interested entities with those provisions does not violate federal law, as specified. By expanding the requirements applicable to chronic dialysis clinics, and because a willful violation of certain of the bill's requirements by a health care service plan would be a crime, this 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.