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Regulations requires health insurers to have adequate networks and accurate directories



February 04, 2015
Area(s) of Interest: Licensing & Regulatory Issues Payor Contracting Payor Issues and Reimbursement 

Emergency regulations requiring health insurers regulated by the Department of Insurance to create and maintain adequate medical provider networks to provide timely access to medical care went into effect this week, after their approval by the Office of Administrative Law.


California Insurance Commissioner Dave Jones issued the emergency regulations in early January.


"Californians and California businesses deserve better than what they have gotten from most health insurers and HMOs,” Jones said. "This emergency regulation is necessary to make sure that health insurers establish and maintain adequate medical provider networks to meet the health care needs of their policyholders, to make sure medical provider directories are accurate, and to stop the practice of surprising consumers with huge charges for out-of-network providers who provide care without the patients' consent or foreknowledge."


The emergency regulations strengthen current rules and regulations and add new medical provider network requirements that require insurers to, among other things, include an adequate number of primary care physicians accepting new patients and an adequate number of primary care physicians with admitting privileges at network hospitals; build a network capable of the treatment of mental health and substance use disorders; adhere to appointment waiting time standards; and require network facilities to inform patients if an out-of-network provider will participate in non-emergency procedure or care, before the care is provided, so the patient has an opportunity to decline the provider's participation.


Jones said that if an insurance company does not comply with the new regulations, he can deny them the ability to sell insurance next year.


These regulations will only apply to the preferred provider organization (PPO) plans regulated by the Department of Insurance, not plans regulated by the Department of Managed Health Care or those in the Medi-Cal program.


The California Medical Association (CMA) and the American Medical Association see the regulations as a significant step toward ensuring that provider directories are accurate and that networks are adequate. The regulations are consistent with a number of CMA recommendations made over the past year, such as requiring that insurers have clear, publicly available criteria over who is included in a network, and that insurers demonstrate comprehensive quality assurance programs in many areas related to directories and networks.


One significant point of opposition for CMA in the regulations involves a requirement that facilities disclose to patients any likely involvement from out-of-network physicians, as well as an estimate of charges, for an episode of care involving inpatient services. CMA believes the provision needs significant revisions to be workable in practice and to achieve the state's goals without disruption to California's health care delivery system.


The emergency regulations will be in effect for 180 days, at which time the state can submit them for readoption (another 180 days) or go through the regular rulemaking process to make them permanent.


To read the new regulations, click here.

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