PHYSICIAN CONTRACTS UNDER COVERED CALIFORNIA

EXECUTIVE SUMMARY.
Pursuant to Covered California’s policies and its contracts with Qualified Health Plans, the Exchange in California intends to utilize its hoped-for market share to heavily influence the way Providers are paid for services, utilizing “skinny networks,” and payment systems that pay for value, not fee-for-service. While many of the contracts we reviewed have a discounted fee-for-service for the 2014 contract year, we expect changes in payment systems in future contracts. The Provider contracts impose additional administrative burdens, as well. The current contracts are similar to prior contracts and do not incorporate all the changes required under Covered California.
Agreements Reviewed.
1) Blue Shield of California, Independent Physician and Provider Agreement.
2) Molina Healthcare of California, Provider Services Agreement.
3) Health Net, Physician Services Agreement.
4) Anthem Blue Cross, Prudent Buyer Plan, Participating Physician Agreement.
Covered California.

What is Covered California?

Basic components of the Covered California are as follows:

• Beginning in 2014, individuals and small employers (up to 50 employees in California until 2016, then 100 thereafter) may purchase coverage through the Exchange.[i]
• To offer a plan on the Exchange, the plan must be certified as a Qualified Health Plans (QHPs) by the Exchange.[ii]
• Insurance plans in the Exchange must be at least licensed, compliant with all federal and state regulations, and in good standing with the state.[iii]
• The Exchange consists of an individual health insurance market component and a small group market component, known as the Small Business Health Options Program (SHOP).[iv]
• Providers are defined by Covered California as: “A licensed health care facility or as stipulated by local or international jurisdictions, a program, agency or health professional that delivers Covered Services.”[v]

Covered California’s Effect on the Market.

California’s healthcare landscape will change forever when the new markets go into effect. While estimates vary, over the next three years, Covered California’s QHPs will account for as many as 2.3 million covered lives.[vi] It is estimated that the subsidized and non-subsidized insureds will make up to thirty-four percent of the state’s private insurance market.[vii] The Exchange’s Board of Directors has not only sought to add to the number of people who have health insurance in the state, they have expressed the goal to utilize the health plans and insurers they control, to dramatically alter California’s healthcare payment system. One of the expressed goals of the Exchange is stated as follows: “The Exchange will be a catalyst for change in California’s health care system, using its market role to stimulate new strategies for providing high-quality, affordable health care, promoting prevention and wellness, and reducing health disparities.”[viii] Given the expressed goals of Covered California, Providers can expect dramatic changes to the way they are paid and in the administrative burden they will face under these plans.
Contract Between QHPs and Covered California.
The primary method by which the Exchange will impose its vision on California’s healthcare payment system is through its contract with QHPs in the Exchange. The model contract was issued in July 2013 (“Model Contract”). [ix] It incorporates by reference Exchange policies and other documents. As stated in Section 1: “This Agreement sets forth the expectations of the Exchange and Contractor with respect to: (i) the delivery of services and benefits to Enrollees, (ii) the coordination and cooperation between the Exchange and the Contractor on the promotion of better care and higher value for Enrollees and other health care consumers, and (iii) an enhanced alignment between Contractor and its Participating Providers to deliver better care and higher value. By agreeing to these expectations as set forth in this Agreement, Contractor and the Exchange acknowledge a commitment to be active and engaged participants to promote change and to work collaboratively to define and implement additional initiatives to continuously improve quality and value.”
In addition to imposing changes to the state insurance market through its own policies, Covered California’s Model Contract with QHPs requires that if they offer “substantially similar plans” outside the Exchange, it must be at the same rate as the Exchange product.[x] In addition, several federal and state reforms have significantly impacted individual health insurance, such as the requirement that an insurance plan not impose any lifetime limits on essential benefits; that a health plan not use health related status in determining cost (so-called community rating rules): or, requiring that health plans offer “essential health benefit packages.”[xi] By imposing these conditions on QHPs inside the Exchange, and by requiring plans outside the Exchange to offer similarly priced products, the law is attempting to make at least a level playing field for plans inside the Exchange. This will help ensure the relevancy of the Exchange in the market and its abilities to influence change in the healthcare market.
AGREEMENT REQUIRES QHPs’ BEST EFFORTS TO CHANGE PAYMENT MODEL.
By entering into the Model Contract with the Exchange, QHPs agree to work in partnership with the Exchange to develop and implement policies and practices that will promote the goals and policies of Covered California, impacting not just the enrollees of the Exchange but also Providers under the QHPs plans. QHPs have the opportunity to take a leading role in helping the Exchange support new models of care.[xii]
Value Based Reimbursement Inventory and Performance.
QHPs Contract. Pursuant to the Model Contract, QHPs agree with Covered California to achieve certain milestones to change the relationship between Providers and QHPs. For instance, by the end of 2014, QHPs “will provide an inventory of all current value based provider reimbursement methodologies within the geographic regions served by the Exchange. Value based reimbursement methodologies will include those payments to hospitals and physicians that are linked to quality metrics, performance, costs and/or value measures. Integrated care models that receive such value based reimbursements may be included….” [xiii] In other words, they will develop models wherein the Provider shares in the cost risks of providing care.
In another provision, by January 1, 2016 Contractor “agrees to develop and/or implement alternative reimbursement methodologies.” Methodologies will target the highest frequency conditions and procedures as mutually agreed upon by the Exchange and the QHPs.[xiv]
The Model Contract calls out for particular health care systems. In Attachment 5, Section 2, the Exchange and the QHPs agree that the QHPs will be “encouraged to actively promote the development and use of care models that promote access, care coordination and early identification of at risk enrollees. Such models may include, but are not limited to: (a) Accountable Care Organizations (ACO); (b) Patient Centered Medical Homes (PCMH); (c) The use of a patient-centered, team-based approach to care delivery and member engagement; (d) A focus on additional primary care recruitment, use of mid-level practitioners and development of new primary care and specialty clinics; (e) A focus on expanding primary care access through payment systems and strategies; (f) The use of an intensive outpatient care programs (“Ambulatory ICU”) for enrollees with complex chronic conditions; (g) The use of qualified health professionals to deliver coordinated patient education and health maintenance support, with a proven approach for improving care for high-risk and vulnerable populations; (h) Support of physician and patient engagement in shared decision-making; (i) Providing patient access to their health information; (j) Promoting team care; (k) The use of telemedicine; and (l) Promoting the use of remote patient monitoring.”[xv]
Through the Model Contract, California Care and the QHPs make clear their intention to make radical changes to the payment systems that Providers have counted on, counting value based payments and various new payment models to reach their goals.
PROVIDER CONTRACTS.
Our review of the contracts from the QHPs to the Providers show very little change with the method of payment to Providers. Rather, the contracts we have reviewed show an approach to simply pay a percentage of the amount paid under other contracts. In other words, the current contracts appear to follow a fee for service model.
We expect that in the future, the payments models will change to match the goals listed in the Model Contract with QHPs. The process to update the Model Contracts for 2015 is just beginning.
The chart below shows the payment methods of each of the reviewed 2014 Provider Agreements.
Molina Specialized PPO Standard PPO: 100% Medicare
MediCal: 100% MediCal
Medicare: 70% Payable Rate of Medicare
Molina Medicaid 100% of MediCal
Molina Advantage 100% of Medicare
Anthem Blue Cross PPO Based on 35% to 100% of CMS Fee Schedule for CA
HealthNet HMO Non-capitated: 80% of CMS Allowable
HealthNet Medicare Advantage 100% CMS Allowable
HealthNet MediCal 100% MediCal
HealthNet Healthy Families 120% of MediCal
Blue Shield Medicare Advantage HMO and PPO 95% of Medicare

Our advice regarding payments:
1. Obtain all applicable schedules.
2. Future contracts will move away from fee-for-service.
3. Understand your patient population and the issues that will come from a different population from the Exchange.
THE MODEL AGREEMENT WILL CHANGE PROVIDER OPERATIONS.
Analysis of the Model Agreement shows significant and specific impact on Providers. Covered California requires QHPs to coordinate specific details with Providers, including operational details of Provider’s business, and to make sure all contracts with Providers comply with federal and state law and the policies of Covered California.[xvi] Covered California expects that Provider compliance will be required in the agreements between QHPs and the Providers. Attachment 5 to the Model Contract lists specific provisions that must be in the agreement between Providers and QHPs. Some of the specific issues can be seen from reviewing the Model Contract, and the Attachments to the Agreement, are listed below:
Network Adequacy: the “Skinny Network Provider Network.”
Hospital advocacy organizations in California have criticized federal and state laws and rules for Exchanges with regard to the proposed adequacy of healthcare networks to treat patients. They argue against changing the status quo in California. Exchange rules and regulations, as well as the practical implications of lowering costs, will reduce the number of Providers.
Fewer Providers.
The Orange County Register recently described the networks provided by the California Exchange as the “Skinny Network Provider Network”: “One of the few effective ways to reconcile these countervailing demands, insurers say, is to eliminate higher-cost hospitals and doctors. As a result, consumers are getting thinner pickings, but at lower prices…. By reducing the number of Providers caring for their insured population, health plans are able to offer a higher volume of patients to the hospitals and doctors who are in the network, which makes it more likely they will agree to accept lower payments.”[xvii]

Federal Law and Provider Networks.
The Affordable Care Act (“ACA”) requires Exchanges to ensure that the Provider network of QHPs offer sufficient choice of Providers for enrollees.[xix] California laws require that health plans demonstrate as part of their license application that they have a contracted hospital in their network and that such facility is within thirty minutes or fifteen miles of an enrollee’s residence or work address. [xxi] California laws have specific deadlines by which patients are to obtain various types of medical appointments.[xxii] With this California legislation, the CHA argues that Covered California should rely upon local laws where they exist to protect consumers.
This is one area where there is little clarity as to how there will be adequate networks to treat patients. Covered California is intent on creating networks that will reduce costs and increase the ability of Providers to care for patients. This appears to be an issue that will need to be monitored by Providers in the future.
Administrative Burdens Imposed on Healthcare Providers.
The Model Contract imposes several administrative burdens on Providers, and apparently makes QHPs a sort of traffic cop which monitors that Providers comply with California Health Care policies, state and federal laws, such as anti-kickback laws, HIPAA standards, EMR standards and more. The Model Contract requires that the duties imposed on QHPs also be imposed on Providers under the Providers’ contracts. Providers are required to agree to abide by California Health Care’s rules and regulations.[xxiii]
Providers Required to Provide Information.
The Model Contract requires that QHPs provide “current and real-time information on costs and quality of treatment provided (region-specific and provider-specific) including cost sharing incurred and remaining cost sharing.”[xxiv] This requirement will impose on QHPs the duty to collect complicated and extensive documentation about all aspects of the healthcare process. This information must come from Providers, including specific information about quality outcomes and costs.
In several different areas, the Model Contract requires disclosure of information required by the Exchange, including, financial and clinical.[xxv] The Model Contract imposes on QHPs to set “Quality, Network Management and Delivery System Standards” to the extent applicable for Participating Providers, which includes disclosure of contracting arrangements with Participating Providers.[xxvi]
Information About Employers.
Providers will be required to provide information about employers to assure continued employer compliance with the Exchange [xxvii] This would require Providers to give information about patients that work for different employers, including issues about health and utilization by such employers, adding to the administrative burden of Providers.
Providers Must Keep Clinical Records.
QHPs agree to make sure that Providers maintain records adequate enough so that there exists a full record of the patients’ conditions. QHPs must: “require each Participating Provider… maintain a medical record documentation system, adequate to fully disclose and document the medical condition of each Enrollee and the extent of Covered Services provided to Enrollees. Clinical records shall be retained for at least seven (7) years following the year of the final Claims payment.”[xxviii] Providers should be alert to these additional requirements under Exchange policies.
QHPs to utilize “Best Efforts” to Get Provider Rate Information.
The Final Contract requires QHPs to obtain from Providers all rate information that Providers utilize with patients. In addition, if the Provider has contracts where the rates are confidential, Providers must use its best efforts to obtain permission and change their confidential contracts to disclose such information.[xxix] Many Providers may be adverse to disclosing such information and they should be aware of this full disclosure requirement.
Duty to Inform About Non-Network Providers.
The model contract also requires QHPs to require Providers to inform enrollees “when they use a non-network provider or facility… for proposed non-emergent covered services.” Such provision requires that the Provider hold the patient “harmless” from any charges should the QHPs not pay for certain services.[xxx] Such a duty on a Provider requires that the Provider determine the nature of the patient’s plans and to warn if the patient might use a non-network provider, again increasing the administrative burden of the Provider. It further requires that the Provider indemnify the patient for charges they would have been able to recover from the QHPs. This could have a financial impact on a Provider, as well.
Social Policies and the Exchange.
Implementing federal and state polices, the Model Contract places duties on QHPs to assure that Providers comply with certain social policies enunciated under the ACA. Under the Model Contract, QHPs must assure that Providers do not discriminate on the basis of state and federal employment laws,[xxxi] and that they themselves do not discriminate for any reason: “During the performance of this Agreement, Contractor shall not, and shall require Participating Providers and other subcontractors, as well as their agents and employees to not, in accordance with the Affordable Care Act, section 1557 (42 U.S.C. 18116), cause an individual to be excluded on the grounds prohibited under Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), or subject to any other applicable State and Federal laws, from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity offered through the Exchange.”[xxxii]
Duty to Comply With Federal and Other Fraud Laws.

QHPs are required to assure that Providers are free from conflict of interests that “may interfere with the performance of this agreement….” QHPs must also agree that “it is not aware” of Providers that have a conflict of interest with any rules related to healthcare, including specifically with any laws such as federal anti-kickback laws and Stark laws.[xxxiii]
HIPAA Compliance.
Article 9 of the Model Contract requires QHPs to assure that all Providers comply with all applicable provisions of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), including security and privacy requirements, including compliance with HIPAA.[xxxiv] Physicians may be surprised to learn about this term where the QHPs is taking on the obligation to show that the Provider abides by all aspects of the HIPAA laws with regard to protected health information.
Federal Grace Period Law.
The ACA allows plan enrollees receiving subsidies to have an unpaid premium balance for three months before they may be terminated for delinquency.[xxxv] Physicians and hospitals have pointed out that this is three times longer than what is allowed generally under California law. Pursuant to California Insurance Code section 10133.65, Providers must be given 45 days’ notice before material terms may change. The Department of Health and Human Services (HHS) made a recent decision to treat the first thirty days of the grace period normally, as if the enrollee had paid, but any claims submitted by Providers in the final sixty days may be pended and denied by the Exchange plan upon enrollee termination. If the premium balance is paid prior to the termination of the enrollee for delinquency, then any pending claims must be paid by the plan at that time. The plan may also choose to pay all claims submitted during the grace period.[xxxvi]
As pointed out by Providers in California, this portion of the ACA creates a large financial risk in entering into a contract with the Exchange. The provision effectively requires practices to absorb losses for sixty-days of services provided to patients. Some practices, like oncologists, which much purchase drugs to be used in the course of chemotherapy, could have tens of thousands of dollars of loss for any one patient, and might not be reimbursed if patients fail to pay their premiums.
There is also a concern that consumers could “game” the system by stopping their premium payment in month nine, receiving benefits through month 12, and then because of the “guaranteed issue” clause, enroll in another qualified health plan without fear of denial. The HHS has pledged to not fill this loophole, instead emphasizing the need for coverage over costs to Providers. [xxxvii]
Providers have also pointed out that federal laws do not explicitly require any advanced notice to Providers that claims may be denied due to patient termination for nonpayment of premiums. The first notice is after thirty days delinquency.[xxxviii] The Model Contract with QHPs states that there shall be a 15-day notice to Providers of a delinquency, after the first thirty-day delinquency.[xxxix]
Action Items.
• Physicians should verify the eligibility of exchange patients as close to the time of service as possible each time a service is rendered to the patient. If the verification shows that the patient’s coverage suspended, the physician should treat it as any other patient who has had a lapse in coverage. Patients should have the option to pay cash or not be seen.
AUTOMATICALLY DEEMED PROVIDERS IN EXCHANGE PLANS.
One issue in California that has been raised by physicians particularly, is that plans have automatically listed them as Providers for the Exchange product if they are Providers under non-Exchange products. One reason for this has been the accelerated time frame for which to create the new plans under the Exchange. [xl] 28 CCR S. 1300.71(m) allows QHPs to make material modifications to the underlying contracts so long as they provide 45 days advanced notice with the opportunity to terminate the underlying agreement if the Physician does not agree.
QHPs argue this is appropriate because the minute details of many of the existing health plans provide that the insurer intended to become a Qualified Health Plan under the Exchange, however, they do not use the word “Exchange” or “Qualified Health Plan” in those contracts. They simply identify future products and payment policies consistent with the Exchange.[xli] Further, many Provider contracts provide for changes to payment policies with forty-five days written notice and the opportunity to terminate. This is consistent with California law. [xlii] This puts the onus on the Provider, and especially smaller physician offices that generally do not have in place sophisticated contract review processes, to review notices and contract language.
Example 1: Blue Shield. Blue Shield provides in section 9.5 of its Agreement that for legally required amendments, if Blue Shield’s legal counsel determines that in good faith the Agreement must be modified to comply with federal or state law, Blue Shield may amend its Agreement by delivering to Physician a written amendment to this Agreement incorporating the required modifications along with an explanation as to why it is necessary. If the Physician does not object to the Legally Required Amendment, in writing, within 60 days following receipt, the Legally Required Amendment is deemed accepted by the Physician as an amendment.
Example 2: Molina. Molina provides in section 5.6 of its Agreement that Molina may amend its Agreement without Physician’s consent/knowledge? to comply with federal or state law by delivering to Physician a written amendment to this Agreement after giving 45 business days prior written notice to Physician.
Action Items.
• Find out whether your contract had a legally mandated amendment that was sent to you. Call or email the Health Plan if you do not know.
• Determine whether you agree to the legally mandated amendment (i.e. to be part of Covered California and the applicable rate schedules).
• If you do not agree to the amendment, review the Contract to determine whether you can, and have time to opt out of the amendment.
• If you do not have time to opt out, find out what other options you have.
CONTRACT TERMS AND ACTION ITEMS.
Payments Under the Current Contracts. Review of these Contracts shows very little change from prior contracts. It is a fee-for-service model based upon percentages. QHPs will reimburse the Physician according to a fee schedule, typically attached to the Agreement. Sample language in the Contracts regarding payments is as follows: “In exchange for the provision of Covered Services to Members, Blue Shield shall pay Provider the lesser of (i) the applicable reimbursement rates set forth in Exhibit B thereto, or (ii) Provider’s billed charges, in either case, less the Member’s applicable Copayment.”
It is important to note that only the Physicians are responsible for collecting copayments, deductibles, and coinsurance. Reimbursement rates may vary depending on the type of health plan the patient is enrolled in. Physicians are required to use “best efforts” to accept electronic methods of payment and receive related explanation of benefits via electronic funds transfer.

Action Items.
• Get all applicable fee schedules.
• Future contracts will move away from fee-for-service.
• Understand your patient population and the issues that will come from a different population from the Exchange, to make sure that the pricing is sufficient to cover costs.
• Check each Health Plan’s website on the first day of each calendar quarter for updated pricing.
• Physicians should be aware that depending upon the type of plan selected, a patient can have significant cost-sharing for copays and deductibles with an Exchange. This may result in greater incidence of bad debt and increased administrative costs due to increased collection efforts.
• Only the Physicians are responsible for collecting copayments, deductibles, and coinsurance. Physicians should require copays at the time of service.
• Implement a policy to check the insurance eligibility of each patient prior to seeing them.
• Implement a policy to require copayments and deductibles be paid prior to seeing a patient unless there is an emergency situation.
• Consider hiring a billing/collection company to assist with the above.
Termination of Contracts. Either party may terminate the Agreement without cause by providing fair written notice (typically 120 days prior). Generally the term of the Contracts are for one year with automatic renewal annually. If the termination is for cause, the QHPs or Physician must give notice of deficiency to cure.
There are also provisions that allow for immediate termination such as licensing issues or failure to maintain malpractice insurance. Physicians can terminate the Contract if a legally required amendment causes financial hardship, or for any reason if it is done timely. Physicians are advised to review termination clauses associated with exchange products carefully.
Action Items.
• Review the terms of each contract to determine whether termination of the entire contract is what you want, or whether you want to opt out of certain provisions.
• Determine whether the termination is without cause, for cause, or in response to a legally required amendment. Based upon what type of termination it is, will dictate the termination procedure that has to be followed.
• If it is an opt out of certain terms, then review the amendment and contract in conjunction carefully, to make sure it is being done timely and properly.
• If you terminate the contract, or it is terminated, then review the terms of the contract to determine whether there are further obligations for you as a physician.
Dispute Resolution Procedures.

Each Agreement has a dispute resolution procedure. Physicians must first file a complaint with the Health Plan’s internal grievance department. Physicians and Health Plans then agree to meet and confer. If this does not work, then the parties agree to binding arbitration.
Action Item. Obtain a copy of the Provider Manual for each Health Plan to determine the procedure for dispute resolution.
Out of Network Referrals. Physicians must notify enrollees “when they use a non-network provider or facility…for proposed non-emergency services.” The Provider shall hold the patient “harmless” from an charges should the QHPs not pay for any out-of-network services.
Action Items.
• Attempt to make a referral within the network as proscribed in the QHPs.
• If an out-of-network referral is required, then contact the QHPs, request and obtain pre-authorization in writing prior to providing the out-of-network referral.
• Let the patient know, in writing, that the referral is out-of-network.
• Physicians must notify enrollees “when they use a non-network provider.
QHPs Refuses Treatment. If the QHPs refuses to pay for treatment, Physicians must rely upon California Welfare and Institutions Code Section 14133.3: “A service is ‘medically necessary’ or a ‘medical necessity’ when it is reasonable and necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain.” The Physician then can use the insurance company’s internal grievance policy to file a claim for payment, seek independent review from the Department of Insurance, or advise the patient of a private right of action and seek bad faith damages.
Patient Abandonment.

Existing law requires a health care service plan or a health insurer to provide for the completion of covered services by a terminated Provider for enrollees or insureds who were receiving services from the Provider for a specified condition at the time of the contract or policy termination.
Existing law also requires a health care service plan to provide for the completion of covered services by a nonparticipating Provider to a newly covered enrollee who, at the time his or her coverage became effective, was receiving services from that Provider for a specified condition. Existing law specifies that this provision does not apply to a newly covered enrollee under an individual subscriber agreement.
Action Items.
• Review contract provisions on providing care to enrollees who have been terminated from coverage.
• Do not deny coverage to a patient immediately if coverage has been terminated.
• Coordinate with the health plan to ensure that reimbursement is received for the provided services.
• Written communication regarding Health Care Plans (Better!)
• Do: Treat patients with chronic conditions until they find a new doctor or you have given them “reasonable notice.”
• Document files with attempt to find appropriate heath care.
Physician Prohibitions. The following acts are prohibited in the Contracts.
• Charging a “Surcharge.” “Surcharge” means an additional fee which is charged to a Member for a Medical Service, but which is not approved by the applicable state regulatory authority, and is neither disclosed nor provided for in theMember’s Benefit Agreement.
• Charging for Not “Medically Necessary” Services. Collecting payment from patients for services the Health Plan finds are not “medically necessary” without having the patient sign a prior authorization to be charged.
• Language in Contracts: Means, with respect to the provision of medical services, supplies and drugs: (a) required by a Member; (b) provided in accordance with recognized professional medical and surgical practices and standards; (c) appropriate and necessary for the symptoms, diagnosis, or treatment of the Member’s medical condition; (d) provided for the diagnosis and direct care and treatment of such medical condition; (e) not furnished primarily for the convenience of the Member, the Member’s family, or the treating provider or other provider, (f) furnished at the most appropriate level that can be provided consistent with generally accepted medical standards of care; and (g) consistent with Blue Shield Medical Policy.
• Discrimination. Discriminating against patients, this includes whether they have coverage or not.
• Language in Contracts: “Physician’s primary consideration shall be the quality of the health care services rendered to Members. Physician shall not discriminate against any Member in the provision of Medical Services on the basis of sex, marital status, sexual orientation, race, color, religion, ancestry, national origin, disability, health status, health insurance coverage, utilization of medical or mental health services or supplies, or other unlawful basis including, without limitation, the filing by such Member of any complaint, grievance or legal action against Physician.”
Action Items.
• Do not charge patients a surcharge for any fees other than copays or deductibles.
• Do not bill or collect for services that are not “medically necessary” without prior patient authorization that the patient is financially responsible for the cost of such services. Physicians should obtain prior written authorization from the patient prior to providing services that are not “medically necessary” unless due to specific circumstances the Physician cannot and the Physician can then seek payment from a patient for these services.
• Implement policies for verification of insurance and collection of copays and deductibles that are consistent so as not to create an appearance of discrimination.
CONCLUSION.
Healthcare Providers are central to providing a higher quality, less expensive health care system in California. Covered California intends to dominate the market with their Exchange products and further intends to utilize the QHPs to implement their policies by requiring QHPs to require certain information from Providers, by creating value based compensation systems, and by requiring the QHPs to monitor compliance by Providers. Providers must exercise diligence in entering into contracts with QHPs to provide services under the Exchange. They must understand the obligations imposed upon them and the intentions of Covered California to change the method of Provider compensation in order to be prosperous in the new healthcare landscape.

For More Information Contact:
Matthew Kinley – mkinley@tldlaw.com or
Pamela Tahim – ptahim@tldlaw.com
(877) 923-0971

 

[i] Health & Safety Code section 1357.500(k)(1)(A); Insurance Code section 10753(q)(1)(A).
[ii] California Government Code 100501(f); ACA §1311(e).
[iii] ACA §1311(c)(1).
[iv] California Government Code §100502; ACA §1311(b).
[v] Covered California Qualified Health Plan Contract for 2014, http://www.healthexchange.ca.gov/Solicitations/Documents/QHPModelContract-Final.pdf, Glossary, Section 13.76.
[vi] California Health Benefit Exchange, Building Covered California: Blueprint Overview and Establishment Grant (Nov. 14, 2012.) http://www.healthexchange.ca.gov/BoardMeetings/Documents/November%2014_2012/IX_HBEX_CoveredCaBoardLevel2-Blueprint11-14-2012_Final.pdf
[vii] Ken Jacobs, Laurel Lucia and Dave Graham-Squire, UC-Berkeley Center for Labor Research and Education, Eligibility for Medi-Cal and the Health Benefit Exchange in California under the Affordable Care Act (Aug. 2010), p. 2.
[viii] California Health Benefit Exchange, Health Benefit Exchange Vision, Missions and Values (October 21, 2011). http://www.healthexchange.ca.gov/Documents/Meeting-Materials/21Oct2011/CA-HBEXVisionMissionValues10-21-11-Final.pdf
[ix] Covered California Qualified Health Plan Contract for 2014, http://www.healthexchange.ca.gov/Solicitations/Documents/QHPModelContract-Final.pdf
[x] Id. at Section 3.04(a).
[xi] Congressional Research Service, PPACA and Exchanges, http://www.fas.org/sgp/crs/misc/R42663.pdf, pp 37 – 38.
[xii] Covered California Qualified Health Plan Contract Attachments for 2014, http://www.healthexchange.ca.gov/Solicitations/Documents/QHPModelContractAttachments-Final.pdf, Attachment 7.00.
[xiii] http://www.healthexchange.ca.gov/Solicitations/Documents/QHPModelContractAttachments-Final.pdf, Attachment 7.02.
[xiv] Id. Attachment 7.03
[xv] Id. Attachment 5.02.
[xvi] http://www.healthexchange.ca.gov/Solicitations/Documents/QHPModelContract-Final.pdf, Sections 1.06. and 1.08(b)
[xvii] Orange County Register, Nov. 13, 2013; http://www.ocregister.com/articles/health-536618-network-california.html
[xix] Establishment of exchange network adequacy standards; 45 CFR 155.1050
[xxi] Title 28, California Code of Regulations, Section 1300.51(c).
[xxii] California Health & Safety Code sections 1342, 1367 & 1367.03.
[xxiii] Covered California Qualified Health Plan Contract for 2014, supra, Provider Agreement, Standard, Attachment 5.
[xxiv] Covered California Qualified Health Plan Contract for 2014, supra, Attachment 5.
[xxv] Covered California Qualified Health Plan Contract for 2014, supra, Quality, Network Management and Delivery, System Standards (Article 4), Section 3.32.
[xxvi] Covered California Qualified Health Plan Contract Attachments for 2014, supra, Attachment 7, Section 7.01 of the Quality, Network Management and Delivery System Standards.
[xxvii]Covered California Qualified Health Plan Contract for 2014, supra, Section 3.05(a)(iv)
[xxviii] Id., Clinical Records, Section 10.01
[xxix] Id., Rate Information, Section 3.09(f)
[xxx] Id., Enrollee’s Out-of-Network and Other Costs; Network Requirements
Section 3.15
[xxxi] Covered California Qualified Health Plan Contract for 2014, supra, Nondiscrimination, Section 3.33.
[xxxii] Covered California Qualified Health Plan Contract for 2014, supra, Section 3.33
[xxxiii] Id., Conflict of Interest, Integrity. Section 3.34
[xxxiv] Id., Article 9, Protection of Personally Identifiable Data and Information Assets; Covered California Qualified Health Plan Contract Attachments for 2014, supra, Provider Agreement-Standard. Attachment 5. Provider Agreement-Standard Terms.
[xxxv] ACA § 1412(c)(2)(B)(iv)(II).
[xxxvi] 77 Fed. Reg 18471 (Mar. 27, 2012).
[xxxvii] 77 Fed. Reg. 18428 (Mar. 28, 2012).
[xxxviii] Id. at 18429 ["issuers must notify providers who submit claims that an enrollee is in the second or third month of the grace period and that a claim may be denied if the outstanding premiums are not paid in full."]
[xxxix] Covered California Qualified Health Plan Contract for 2014, supra. Notice to Provider Regarding Enrollee’s Grace Period Status, Section 3.25.
[xl] California Medical Association, Blue Shield automatically opts some practices into exchange products, (July, 2013); http://www.cmanet.org/news/detail/?article=blue-shield-automatically-opts-some-practices