BILL NUMBER: SB 984 CHAPTERED
BILL TEXT
CHAPTER 893
FILED WITH SECRETARY OF STATE SEPTEMBER 28, 1998
APPROVED BY GOVERNOR SEPTEMBER 27, 1998
PASSED THE SENATE AUGUST 30, 1998
PASSED THE ASSEMBLY AUGUST 26, 1998
AMENDED IN ASSEMBLY AUGUST 24, 1998
AMENDED IN ASSEMBLY JUNE 26, 1997
AMENDED IN SENATE MAY 13, 1997
AMENDED IN SENATE APRIL 23, 1997
INTRODUCED BY Senator Rosenthal
FEBRUARY 27, 1997
An act to add Section 1367.02 to the Health and Safety Code, and
to add Section 10123.36 to the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 984, Rosenthal. Health care service plans: economic profiles.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for licensure and regulation of health care service plans
by the Department of Corporations, and prohibits any contract between
a plan and a health care practitioner from containing any incentive
plan that includes specific payment made directly to a health care
practitioner as an inducement to deny, reduce, limit, or delay
specific medically necessary and appropriate services. Existing law
provides for the licensure and regulation of certain disability
insurers by the Department of Insurance. Willful violation of
provisions relating to the regulation of health care service plans is
a crime.
This bill would require every plan, on or before July 1, 1999, to
file with the department a description of policies and procedures
related to economic profiling utilized by the plan and its medical
groups and individual practice associations and would require the
commissioner to make the filings available to the public upon request
with certain exceptions. The bill would also establish procedures
under which a plan, and in some cases its medical groups and
individual practice associations, would be required, upon request, to
share certain economic profiling information. The bill would define
"economic profiling" for this purpose to mean an evaluation of a
particular physician, provider, medical group, or individual practice
association, based in whole or in part on the economic costs or
utilization of services associated with the medical care provided or
authorized by the physician, provider, medical group, or individual
practice association.
The bill would impose similar requirements on certain disability
insurers.
By changing the definition of an existing crime relative to health
care service plans, 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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1367.02 is added to the Health and Safety Code,
to read:
1367.02. (a) On or before July 1, 1999, for purposes of public
disclosure, every health care service plan shall file with the
department a description of any policies and procedures related to
economic profiling utilized by the plan and its medical groups and
individual practice associations. The filing shall describe how
these policies and procedures are used in utilization review, peer
review, incentive and penalty programs, and in provider retention and
termination decisions. The filing shall also indicate in what
manner, if any, the economic profiling system being used takes into
consideration risk adjustments that reflect case mix, type and
severity of patient illness, age of patients, and other enrollee
characteristics that may account for higher or lower than expected
costs or utilization of services. The filing shall also indicate how
the economic profiling activities avoid being in conflict with
subdivision (g) of Section 1367, which requires each plan to
demonstrate that medical decisions are rendered by qualified medical
providers, unhindered by fiscal and administrative management. Any
changes to the policies and procedures shall be filed with the
commissioner pursuant to Section 1352. Nothing in this section shall
be construed to restrict or impair the department, in its
discretion, from utilizing the information filed pursuant to this
section for purposes of ensuring compliance with this chapter.
(b) The commissioner shall make each plan's filing available to
the public upon request. The commissioner shall not publicly
disclose any information submitted pursuant to this section that is
determined by the commissioner to be confidential pursuant to state
law.
(c) Each plan that uses economic profiling shall, upon request,
provide a copy of economic profiling information related to an
individual provider, contracting medical group, or individual
practice association to the profiled individual, group, or
association. In addition, each plan shall require as a condition of
contract that its medical groups and individual practice associations
that maintain economic profiles of individual providers shall, upon
request, provide a copy of individual economic profiling information
to the individual providers who are profiled. The economic profiling
information provided pursuant to this section shall be provided upon
request until 60 days after the date upon which the contract between
the plan and the individual provider, medical group, or individual
practice association terminates, or until 60 days after the date the
contract between the medical group or individual practice association
and the individual provider terminates, whichever is applicable.
(d) For the purposes of this article, "economic profiling" shall
mean any evaluation of a particular physician, provider, medical
group, or individual practice association based in whole or in part
on the economic costs or utilization of services associated with
medical care provided or authorized by the physician, provider,
medical group, or individual practice association.
SEC. 2. Section 10123.36 is added to the Insurance Code, to read:
10123.36. (a) On or before July 1, 1999, for purposes of public
disclosure, every disability insurer that covers hospital, medical,
or surgical expenses, and authorizes insureds to select providers who
have contracted with the insurer for alternative rates of payment as
described in Section 10133, and the disability insurer or any of its
contracting providers or provider groups utilize economic profiling
related to services provided to insureds, shall file with the
department a description of any policies and procedures related to
economic profiling utilized by the insurer and any of its contracting
providers and provider groups. The filing shall describe how these
policies and procedures are used in utilization review, peer review,
incentive and penalty programs, and in provider retention and
termination decisions. The filing shall also indicate in what
manner, if any, the economic profiling system being used takes into
consideration risk adjustments that reflect case mix, type and
severity of patient illness, age of patients, and other policyholder
characteristics that may account for higher or lower than expected
costs or utilization of services. Any changes to the policies and
procedures shall be filed expeditiously with the commissioner.
Nothing in this section shall be construed to restrict or impair the
department, in its discretion, from utilizing the information filed
pursuant to this section for purposes of ensuring compliance with
this chapter.
(b) The commissioner shall make each disability insurer filing
available to the public upon request. The commissioner shall not
publicly disclose any information submitted pursuant to this section
that is determined by the commissioner to be confidential pursuant to
state law.
(c) Each disability insurer that uses economic profiling shall,
upon request, provide a copy of economic profiling information
related to a contracting provider or provider group to the profiled
provider or group. In addition, each disability insurer shall
require as a condition of contract that its contracting provider
groups that maintain economic profiles of individual providers who
may be selected by insureds shall, upon request, provide a copy of
individual economic profiling information to individual providers who
are profiled. The economic profiling information provided pursuant
to this section shall be provided upon request until 60 days after
the date upon which the contract between the insurer and the
individual provider or provider group terminates, or until 60 days
after the date the contract between the provider group and the
individual provider terminates, whichever is applicable.
(d) For the purposes of this section, "economic profiling" shall
mean any evaluation of a particular physician, provider, or provider
group based in whole or in part on the economic costs or utilization
of services associated with medical care provided or authorized by
the physician, provider, or provider group.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.