A bill sponsored by the California Medical Association (CMA) passed out of the Assembly Health Committee yesterday that would improve health plan network integrity and reduce consumer confusion by giving providers more control when negotiating material changes to their health plan contracts. The bill passed on a vote of 17 to 1.

The bill, AB 2400 (Ridley-Thomas), will prohibit contracts issued, amended or renewed by health service plans and health insurers after January 1, 2015, from including provisions that terminate provider contracts if they exercise their right to negotiate or refuse a material change to the contract. The bill would also prohibit contracts that are amended or renewed after that date from containing provisions that require participation in unspecified current and future products or product networks, unless the plan discloses the reimbursement rate, method of payment and any other contract terms that are materially different from those of the underlying agreement. Lastly, the bill would require health plans and insurers to provide 90 days advance notice of a material contract change, up from the 45 day advance notice currently required under state law.

This bill will eliminate contracting practices that often lead to consumer confusion and frustration, as physicians often do not know that they are listed as participating in certain networks. While this is certainly not a new problem, it has been exacerbated recently with many physicians being listed as participating in Covered California plans without ever having affirmatively agreed to participate. This not only leads to confusion and frustration among patients and physicians, but it also raises concerns about network adequacy and accuracy. Without a true accounting of physicians who have agreed to participate in a network, insurers and regulators have no way of assessing the adequacy of a network and whether it is sufficient to provide true access to care to its covered enrollees.

CMA recently surveyed California physicians specifically about their experience contracting with Covered California plans. The survey, completed by more than 2,300 physician practices in just two days, found that 80 percent of respondents were, at some point, confused about their participation status in a Covered California plan. The survey results suggest that health plan contracting practices, such as all products clauses and silent amendments, are the primary contributors to the current state of network confusion by patients and providers in California. Survey respondents also report that the confusion has led to patient access issues, loss of patients and has negatively impacted patient care in their practice. The detailed survey results will be released later this week.

Contact: Juan Thomas, (916) 444-5532 or jthomas@cmadocs.org.