California Health Plans Face Scrutiny Under Pending Legislation

Under a new bill issued by the California Legislature, California health plans will face new requirements designed to ensure they offer adequate provider networks. The legislation has since sparked controversy, however, due to the narrow-network products that were opened last year by the state exchange.

The bill, which is pending the governor’s signature, states that insurers would have to provide annual reports to the California Department of Managed Health Care about their provider networks. The agency’s assessment of the data would then be posted on its website.

According to a report by Modern Healthcare, lawsuits have been filed against both Anthem Blue Cross and Blue Shield of California alleging the insurers misled consumers about their provider networks. During the first enrollment period, the two firms attracted the largest share of customers, accounting for nearly 60 percent of Covered California signups, the news agency reported.

While the bill was supported by numerous healthcare and consumer groups, including the California Medical Association, the National Health Law Program and AARP, the California Association of Health Plans, a trade group for health insurers, opposed the measure.

“We think this bill is redundant and unnecessary because of the existing surveys that are done by state regulators,” Nicole Kasabian Evans, California Association of Health Plans’ vice president for communications, told Modern Healthcare.

The California Department of Finance additionally opposed the bill on the grounds that the bill could cause financial problems for the Medi-Cal program and would overlap with existing surveys designed to monitor timely access for patients.

Democratic Assemblyman Tom Ammiano issued a bill that would require insurers to cover procedures by out-of-state providers at no additional cost if the care could not be accessed from in-network providers, according to the agency. The legislation passed the Assembly but did not clear the Senate.

“Challenging inadequate networks is something that needs to be done, and it will take patients and health providers working together to make it happen,” Ammiano said.

California Governor Jerry Brown has until the end of September to decide whether he will sign the bill.