4609
. (a) In order to prevent the improper selling, leasing, or
transferring of a health care provider's contract, it is the intent
of the Legislature that every arrangement that results in any payor
paying a health care provider a reduced rate for health care services
based on the health care provider's participation in a network or
panel shall be disclosed by the contracting agent to the provider in
advance and shall actively encourage employees to use the network,
unless the health care provider agrees to provide discounts without
that active encouragement.
(b) Beginning July 1, 2000, every contracting agent that sells,
leases, assigns, transfers, or conveys its list of contracted health
care providers and their contracted reimbursement rates to a payor,
as defined in subparagraph (A) of paragraph (3) of subdivision (d),
or another contracting agent shall, upon entering or renewing a
provider contract, do all of the following:
(1) Disclose whether the list of contracted providers may be sold,
leased, transferred, or conveyed to other payors or other
contracting agents, and specify whether those payors or contracting
agents include workers' compensation insurers or automobile insurers.
(2) Disclose what specific practices, if any, payors utilize to
actively encourage employees to use the list of contracted providers
when obtaining medical care that entitles a payor to claim a
contracted rate. For purposes of this paragraph, a payor is deemed to
have actively encouraged employees to use the list of contracted
providers if the employer provides information directly to employees
during the period the employer has medical control advising them of
the existence of the list of contracted providers through the use of
a variety of advertising or marketing approaches that supply the
names, addresses, and telephone numbers of contracted providers to
employees; or in advance of a workplace injury, or upon notice of an
injury or claim by an employee, the approaches may include, but are
not limited to, the use of provider directories, the use of a list of
all contracted providers in an area geographically accessible to the
posting site, the use of wall cards that direct employees to a
readily accessible listing of those providers at the same location as
the wall cards, the use of wall cards that direct employees to a
toll-free telephone number or Internet Web site address, or the use
of toll-free telephone numbers or Internet Web site addresses
supplied directly during the period the employer has medical control.
However, Internet Web site addresses alone shall not be deemed to
satisfy the requirements of this paragraph. Nothing in this paragraph
shall prevent contracting agents or payors from providing only
listings of providers located within a reasonable geographic range of
an employee. A payor who otherwise meets the requirements of this
paragraph is deemed to have met the requirements of this paragraph
regardless of the employer's ability to control medical treatment
pursuant to Sections 4600 and 4600.3.
(3) Disclose whether payors to which the list of contracted
providers may be sold, leased, transferred, or conveyed may be
permitted to pay a provider's contracted rate without actively
encouraging the employees to use the list of contracted providers
when obtaining medical care. Nothing in this subdivision shall be
construed to require a payor to actively encourage the employees to
use the list of contracted providers when obtaining medical care in
the case of an emergency.
(4) Disclose, upon the initial signing of a contract, and within
15 business days of receipt of a written request from a provider or
provider panel, a payor summary of all payors currently eligible to
claim a provider's contracted rate due to the provider's and payor's
respective written agreements with any contracting agent.
(5) Allow providers, upon the initial signing, renewal, or
amendment of a provider contract, to decline to be included in any
list of contracted providers that is sold, leased, transferred, or
conveyed to payors that do not actively encourage the employees to
use the list of contracted providers when obtaining medical care as
described in paragraph (2). Each provider's election under this
paragraph shall be binding on the contracting agent with which the
provider has the contract and any other contracting agent that buys,
leases, or otherwise obtains the list of contracted providers.
A provider shall not be excluded from any list of contracted
providers that is sold, leased, transferred, or conveyed to payors
that actively encourage the employees to use the list of contracted
providers when obtaining medical care, based upon the provider's
refusal to be included on any list of contracted providers that is
sold, leased, transferred, or conveyed to payors that do not actively
encourage the employees to use the list of contracted providers when
obtaining medical care.
(6) If the payor's explanation of benefits or explanation of
review does not identify the name of the network that has a written
agreement signed by the provider whereby the payor is entitled,
directly or indirectly, to pay a preferred rate for the services
rendered, the contracting agent shall do the following:
(A) Maintain a Web site that is accessible to all contracted
providers and updated at least quarterly and maintain a toll-free
telephone number accessible to all contracted providers whereby
providers may access payor summary information.
(B) Disclose through the use of an Internet Web site, a toll-free
telephone number, or through a delivery or mail service to its
contracted providers, within 30 days, any sale, lease assignment,
transfer or conveyance of the contracted reimbursement rates to
another contracting agent or payor.
(7) Nothing in this subdivision shall be construed to impose
requirements or regulations upon payors, as defined in subparagraph
(A) of paragraph (3) of subdivision (d).
(c) Beginning July 1, 2000, a payor, as defined in subparagraph
(B) of paragraph (3) of subdivision (d), shall do all of the
following:
(1) Provide an explanation of benefits or explanation of review
that identifies the name of the network with which the payor has an
agreement that entitles them to pay a preferred rate for the services
rendered.
(2) Demonstrate that it is entitled to pay a contracted rate
within 30 business days of receipt of a written request from a
provider who has received a claim payment from the payor. The
provider shall include in the request a statement explaining why the
payment is not at the correct contracted rate for the services
provided. The failure of the provider to include a statement shall
relieve the payor from the responsibility of demonstrating that it is
entitled to pay the disputed contracted rate. The failure of a payor
to make the demonstration to a properly documented request of the
provider within 30 business days shall render the payor responsible
for the lesser of the provider's actual fee or, as applicable, any
fee schedule pursuant to this division, which amount shall be due and
payable within 10 days of receipt of written notice from the
provider, and shall bar the payor from taking any future discounts
from that provider without the provider's express written consent
until the payor can demonstrate to the provider that it is entitled
to pay a contracted rate as provided in this subdivision. A payor
shall be deemed to have demonstrated that it is entitled to pay a
contracted rate if it complies with either of the following:
(A) Describes the specific practices the payor utilizes to comply
with paragraph (2) of subdivision (b), and demonstrates compliance
with paragraph (1).
(B) Identifies the contracting agent with whom the payor has a
written agreement whereby the payor is not required to actively
encourage employees to use the list of contracted providers pursuant
to paragraph (5) of subdivision (b).
(d) For the purposes of this section, the following terms have the
following meanings:
(1) "Contracting agent" means an insurer licensed under the
Insurance Code to provide workers' compensation insurance, a health
care service plan, including a specialized health care service plan,
a preferred provider organization, or a self-insured employer, while
engaged, for monetary or other consideration, in the act of selling,
leasing, transferring, assigning, or conveying a provider or provider
panel to provide health care services to employees for work-related
injuries.
(2) "Employee" means a person entitled to seek health care
services for a work-related injury.
(3) (A) For the purposes of subdivision (b), "payor" means a
health care service plan, including a specialized health care service
plan, an insurer licensed under the Insurance Code to provide
disability insurance that covers hospital, medical, or surgical
benefits, automobile insurance, or workers' compensation insurance,
or a self-insured employer that is responsible to pay for health care
services provided to beneficiaries.
(B) For the purposes of subdivision (c), "payor" means an insurer
licensed under the Insurance Code to provide workers' compensation
insurance, a self-insured employer, a third-party administrator or
trust, or any other third party that is responsible to pay health
care services provided to employees for work-related injuries, or an
agent of an entity included in this definition.
(4) "Payor summary" means a written summary that includes the
payor's name and the type of plan, including, but not limited to, a
group health plan, an automobile insurance plan, and a workers'
compensation insurance plan.
(5) "Provider" means any of the following:
(A) Any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions Code.
(B) Any person licensed pursuant to the Chiropractic Initiative
Act or the Osteopathic Initiative Act.
(C) Any person licensed pursuant to Chapter 2.5 (commencing with
Section 1440) of Division 2 of the Health and Safety Code.
(D) A clinic, health dispensary, or health facility licensed
pursuant to Division 2 (commencing with Section 1200) of the Health
and Safety Code.
(E) Any entity exempt from licensure pursuant to Section 1206 of
the Health and Safety Code.
(e) This section shall become operative on July 1, 2000.