Bill Curbing Narrow Networks Opposed

The Assembly Committee on Appropriations last week approved a measure (SB 964) to limit health plans’ use of narrow provider networks. Insurers are balking at the idea, saying the Legislature should not exempt something as important as standardized reporting on provider networks from state statute.

An Assembly floor vote this week or next will decide the issue. The current legislative session officially ends Aug. 31.

SB 964 by Sen. Ed Hernandez (D-West Covina) was prompted by complaints received by his office and by the Department of Managed Health Care. Many insured Californians were upset over lack of access to care, Hernandez said.

“Many of those complaints were about inadequate networks in the state of California,” Hernandez said. “This whole thing starts from the premise that people who purchase coverage should get to see a qualified provider.”

Hernandez wants public reporting on the DMHC website of provider networks, including whether or not those providers see Medi-Cal patients or if they have closed practices.

“Someone will see the list, but they can’t tell if those providers are seeing new patients. The insurance company says we have all these providers, and [consumers will] start calling down that list but not necessarily take Medi-Cal patients, or their practice isn’t open,” Hernandez said.

“What good is paying for coverage if you can’t get access to qualified providers?” he asked.

To make this bill work, DMHC must be exempted from the Administrative Procedure Act, a collection of state guidelines that sets the rulemaking standards for state agencies. To do that for something as vital as the rules for health plans’ standardized reporting methods would be bad policy, according to Nicholas Louizos, director of legislative affairs for the California Association of Health Plans.

“The requirements of the APA are designed to provide the public with a meaningful opportunity to participate in the adoption of state regulations and to ensure that regulations are clear, necessary and legally valid,” Louizos wrote in a letter to legislators and state officials.

“We oppose exempting the development and adoption of standardized reporting methodologies by the DMHC without a valid reason because it sets a bad precedent, especially during a time when the public is asking for more transparency on the part of government and health plans,” Louizos wrote.

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