The state Senate yesterday passed a bill to require insurers to give proper notice if they sever ties with a provider so people know their provider of choice is no longer covered in-network. The bill also would force insurers to maintain coverage for appointments made before providers’ network status changed.
“This bill protects health care access for people seeking timely medical care from a doctor in their preferred medical network … and ensures policyholders are held harmless when contracts between their insurer and their health care provider, and that provider is no longer available to them within that existing network,” said Sen. Hannah-Beth Jackson (D-Santa Barbara) on the Senate floor yesterday.
Jackson said she authored SB 780 because of a gap in California’s regulatory system for health care insurance. Because of the bifurcated nature of insurance regulation by two agencies — the Department of Insurance and the Department of Managed Health Care — there is a discrepancy in this provision between the two, she said.
“This measure is in place for the insurance code for the Department of Managed Health Care, but not for the Department of Insurance,” Jackson said. “But I think all patients need this protection.”
Janice Rocco, deputy commissioner at DOI, said the bill’s an important step to make sure consumers continue to get the care they need, rather than be surprised with high out-of-network bills.
“At a time when there’s concern about narrow provider networks, it’s important that the Department of Insurance have information about any changes to the network,” Rocco said. “The department will use the information to determine whether the health insurer is in compliance with the network adequacy laws … and ensure policyholders get the continuity of care they’re entitled to under the law.”
At its core, Jackson said, the measure is simple:
“If I make an appointment with my doctor, and then the relationship between the provider and insurer is terminated, I could be charged for that appointment as if it’s an out-of-network charge,” Jackson said. “But now, if I made the appointment before that termination took place, I shouldn’t be charged [out-of-network costs]. So people can see that physician, and pay the price as if it were still under network. Because it was when they made that appointment.”
Jackson said the DOI can’t do its job unless it gets that change-in-network-status information. “Without this information,” she said, “they cannot enforce network adequacy laws.”
The bill passed the Senate on a 21-7 vote, and now heads to the Assembly.