09/30/2008 GAAS:691:08 FOR IMMEDIATE RELEASE Print Version | Email / Share
Gov. Schwarzenegger Signs Urgently Needed Legislation to Protect Consumers from Unfair Health Care Practices
Governor Arnold
Schwarzenegger has signed legislation to increase consumer protections by
further limiting the unfair practice of "balance billing,"
an anti-consumer tactic that puts patients in the middle of payment disputes
between health plans and health care providers. He has also signed legislation
to prevent certain health insurance rescissions and to redirect funds collected
from HMO fines to aid those having difficulty paying health care bills and
obtaining health care coverage. The Governor signed these bills because of the
urgent need to protect consumers from unfair health care billing and plan
practices, but he continues to believe that
health care reform must be comprehensive and that fixing California's broken
health care system will require more than a piecemeal approach and incremental
solutions, which was reflected in the majority of bills sent to his desk this
year on the issue.
"By
further limiting unfair balance billing practices that target low-income
consumers and prohibiting rescission of an entire family's health insurance
policy when one family member is found to have misrepresented their health
history, this legislation will improve consumer protections against unfair
health care practices," Governor
Schwarzenegger said. "These deplorable practices further highlight the need to
reform our broken health care system. Californians deserve a financially
sustainable and comprehensive health care reform plan that promotes prevention,
shares responsibility, covers all Californians, contains costs and keeps our
emergency rooms open and operating."
SB
697 by Senator Leland Yee (D-San Francisco) will explicitly prohibit
all health care providers from seeking additional payment from Healthy Families
Program and Access for Infants and Mothers subscribers for covered health care
benefits to supplement reimbursement received from health plans or insurers, a
practice also known as balance billing. This practice is already prohibited for
Medicare and Medi-Cal enrollees under existing federal and state
laws.
Governor Schwarzenegger is committed to taking the
consumer out of the middle of billing disputes between providers and health
plans, and most recently, the Governor directed his Administration's Department
of Managed Health Care (DMHC) to issue new
regulations that makes balance billing, which is an anti-consumer tactic
that puts patients in the middle of payment disputes between health plans and
providers, an unfair billing practice. These regulations have been approved by
the Office of Administrative Law and will take effect on October 15, 2008. In 2006, the Governor
issued Executive Order S-13-06 to
protect insured Californians from balance billing. In addition, the Governor's
comprehensive health care reform proposal calls for an end to balance billing by
all providers, whether or not it is an emergency
service.
Another measure to prevent surprise medical bills signed
by the Governor is AB
1203 by Assemblymember Mary Salas (D-Chula Vista) which requires a
non-contracting hospital to obtain information from a patient covered by a
health care service plan and provide that information to the patient's health
plan or contracting medical group following a medical emergency but prior to
providing post-stabilization care. This bill prohibits the non-contracting
hospital from billing the patient for post-stabilization care, except for
applicable co-payments, co-insurance and deductible, unless the patient or the
patient's spouse or guardian assumes financial responsibility for care, or the
hospital is unable to obtain the health plan's name and contact information.
Further implementing important consumer protections, the
Governor signed AB
2569 by Assemblymember Kevin De León (D-Los Angeles) which prohibits health
plans and insurers from revoking an entire family's coverage based on
misinformation from a single family member and requires the health plan or
insurer to continue health care coverage for family members covered prior to the
rescission. This bill would also place a duty on insurance agents and brokers to
assist applicants in answering health questions completely and accurately, and
explain to applicants the risks and potential consequences of not providing
complete and accurate information.
In July, the Governor signed AB
1150 by Assemblymember Ted Lieu (D-Torrance) which bans health insurance
companies from rewarding their employees for canceling or limiting a patient's
health insurance. The Governor and Speaker Núñez also worked together to pass AB x1 1, the Health
Care Security and Reduction Act. This bill would have required that all
Californians take responsibility for their health coverage while guaranteeing
that no Californian is rescinded and turned away from buying insurance based on
their age or medical history.
As part of the Governor's commitment to covering
Californians and stopping unfair health care rescissions, his DMHC has
reached groundbreaking
agreements with all of California's major health plans over the last six
months where they've agreed to reinstate coverage to California consumers whose
health care coverage had been rescinded.
The Governor also signed
SB
1379 by Senator Denise Ducheny (D-San Diego), and as a result, the fines the
DMHC collects from California's major
health plans will now go into a pool to help some of
the persons who have been denied health insurance due to pre-existing medical
conditions and to encourage new physicians to practice in underserved areas. The
bill transfers $10 million to the Major Risk Medical Insurance Program (MRMIP)
for uninsurable persons and in addition transfers $1 million in fines to the
Steven M. Thompson Physician Corps Loan Repayment Program (STPCLRP). In
following years, the DMHC will annually transfer the first $1 million in fines
to the STPCLRP and any additional fines to the
MRMIP.
