New Calif. Law Increases Oversight of Health Plan Provider Networks

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Gov. Jerry Brown (D) has signed a bill (SB 964) to increase oversight of insurers' provider networks, the Sacramento Business Journal reports (Robertson, Sacramento Business Journal, 10/2).

Background

More than 170 complaints have been filed against Anthem Blue Cross over the insurer's narrow provider networks, while 130 complaints have been filed against Blue Shield of California over the issue.

In addition, Consumer Watchdog has filed lawsuits against Anthem, Blue Shield and Cigna alleging that the insurers misled consumers who enrolled in their health plans about the size their provider networks (California Healthline, 9/29).

Details of Bill

The bill, by Sen. Ed Hernandez (D-West Covina), will:

  • Direct the Department of Managed Health Care to develop standardized methodologies for health insurers to file required annual reports on timeliness compliance;
  • Require DMHC to review and post findings on those reports; and
  • Eliminate an exemption on Medi-Cal managed care plan audits and require DMHC to coordinate those plans' surveys.

Medi-Cal is California's Medicaid program (California Healthline, 8/28).

The reviews are intended to ensure:

  • Continuity of care;
  • Sufficient provider network sizes;
  • Timely access; and
  • Quality management.

Plans sold through Covered California, the state's insurance exchange, also will be reviewed annually to determine their compliance with such standards.

Reaction

Anthony Wright, executive director of Health Access, said the new law will have a "direct impact on the biggest number of consumers."

However, Charles Bacchi, executive vice president of the California Association of Health Plans, said the law is redundant because regulators already review plans for timely access and network sizes. He added that new reporting requirements are costly (Sacramento Business Journal, 10/2).

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