Senate Study Bill 3093 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON PETERSEN) A BILL FOR An Act relating to the right of a health care provider to 1 choose whether to participate in a health insurance plan or 2 a provider network arrangement, and including penalties and 3 effective date and applicability date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5536XC (2) 86 av/nh

S.F. _____ Section 1. LEGISLATIVE FINDINGS. The general assembly 1 finds and declares all of the following: 2 1. Health insurers offer a variety of health insurance plans 3 and provider network arrangements. 4 2. In markets where health insurers possess market power, 5 health insurers are able to use that power to compel health 6 care providers to provide health care services under a health 7 insurance plan, or to participate in a provider network 8 arrangement, that a health provider might not otherwise choose 9 to provide services under or participate in. 10 3. Compelling health care providers to provide health care 11 services under a health insurance plan, or to participate 12 in a provider network arrangement, may have an unknown and 13 potentially detrimental impact on patients’ access to health 14 care services and on the quality of health care services 15 provided. 16 4. Compelling health care providers to provide health care 17 services under a health insurance plan, or to participate in a 18 provider network arrangement, may also threaten the financial 19 viability of health care providers by requiring that health 20 care providers assume unpredictable business risk, a concern 21 that is particularly acute when health insurers aggressively 22 require health care providers to assume financial risk for 23 health care costs, often under untested methodologies. 24 Sec. 2. NEW SECTION . 514M.1 Title. 25 This chapter shall be known and may be cited as the “Health 26 Care Providers’ Choice of Health Insurance Plan and Network Act” . 27 Sec. 3. NEW SECTION . 514M.2 Definitions. 28 As used in this chapter, unless the context otherwise 29 requires: 30 1. “American health benefits exchange” means the exchange 31 created pursuant to the Affordable Care Act, as defined in 32 section 249N.2. 33 2. “Health care provider” means the same as defined in 34 section 135.61, a hospital licensed pursuant to chapter 135B, 35 -1- LSB 5536XC (2) 86 av/nh 1/ 5

S.F. _____ or a health care facility licensed pursuant to chapter 135C. 1 3. “Health insurance plan” means any policy or contract 2 of insurance, indemnity, subscription, or membership issued 3 by an insurer, health service corporation, health maintenance 4 organization, or any similar corporation, organization, or a 5 self-insured employee benefit plan, for the purpose of covering 6 medical expenses. These expenses may include but are not 7 limited to hospital, surgical, major medical insurance, dental, 8 optical, prescription drugs, office visits, or any combination 9 of these or any other comparable health care expenses. “Health 10 insurance plan” includes all health insurance plans offered in 11 the American health benefits exchange. 12 4. “Health insurer” means a carrier, as defined in section 13 513B.2, and includes an entity or person that offers or 14 administers a health insurance plan in this state or contracts 15 with a health care provider to furnish specified health care 16 services to enrollees under a health insurance plan. 17 5. “Provider network” means health care providers with whom 18 a health insurer contracts to provide health care services to 19 a specified group of enrollees under a health insurance plan 20 offered in this state. 21 Sec. 4. NEW SECTION . 514M.3 Contract requirements 22 prohibited. 23 1. A health insurer shall not require, as a condition 24 of contracting with the health insurer, that a health care 25 provider provide health care services under all health 26 insurance plans offered or sponsored by, or affiliated with, 27 the health insurer or to participate in all provider network 28 arrangements offered or sponsored by, or affiliated with, the 29 health insurer. 30 2. A health insurer shall not require, as a condition 31 of contracting with the health insurer, that a health care 32 provider provide health care services under any health 33 insurance plan offered or sponsored by, or affiliated with, the 34 health insurer, to which the health care provider did not agree 35 -2- LSB 5536XC (2) 86 av/nh 2/ 5

S.F. _____ to provide health care services at the time that the health 1 care provider initially entered into a contract with the health 2 insurer. 3 3. A health insurer shall not require, as a condition 4 of contracting with the health insurer, that a health care 5 provider participate in any provider network arrangement to 6 which the health care provider did not agree to participate at 7 the time that the health care provider initially entered into a 8 contract with the health insurer. 9 Sec. 5. NEW SECTION . 514M.4 Contract termination 10 prohibited. 11 1. A health insurer shall not terminate any contractual 12 relationship with a health care provider on the grounds that 13 the health care provider refused to agree to provide health 14 care services under a health insurance plan to which the health 15 care provider did not agree to provide services under that 16 health insurance plan at the time that the health care provider 17 initially entered into a contract with the health insurer. 18 2. A health insurer shall not terminate any contractual 19 relationship with a health care provider on the grounds that 20 the health care provider refused to agree to participate in a 21 provider network arrangement to which the health care provider 22 did not agree to participate at the time that the health care 23 provider initially entered into a contract with the health 24 insurer. 25 Sec. 6. NEW SECTION . 514M.5 Waiver prohibited. 26 The provisions of this chapter shall not be waived by 27 contract and any contractual arrangement that is in conflict 28 with the provisions of this chapter or that purports to waive 29 any requirements of this chapter is null and void. 30 Sec. 7. NEW SECTION . 514M.6 Penalties. 31 A health insurer that fails to comply with the provisions 32 of this chapter is subject, upon notice and hearing, to a 33 civil fine not to exceed one thousand dollars per day for each 34 violation. 35 -3- LSB 5536XC (2) 86 av/nh 3/ 5

S.F. _____ Sec. 8. NEW SECTION . 514M.7 Rules. 1 The commissioner of insurance shall adopt rules pursuant to 2 chapter 17A to administer this chapter. 3 Sec. 9. NEW SECTION . 514M.8 Severability. 4 If any provision of this chapter or the application 5 thereof to any person or circumstances is held invalid, the 6 invalidity shall not affect other provisions or applications 7 of the chapter which can be given effect without the invalid 8 provisions or application and, to this end, the provisions of 9 this chapter are severable. 10 Sec. 10. EFFECTIVE UPON ENACTMENT. This Act, being deemed 11 of immediate importance, takes effect upon enactment. 12 Sec. 11. APPLICABILITY. This chapter is applicable to a 13 contract between a health insurer and a health care provider 14 that is issued, amended, or renewed on or after July 1, 2016. 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanation’s substance by the members of the general assembly. 18 This bill creates the health care providers’ choice of 19 health insurance plan and network Act. The bill includes 20 legislative findings that, in markets where health insurers 21 possess market power, that power may be used to compel 22 health care providers to provide health care services under a 23 health insurance plan or to participate in a provider network 24 arrangement that a health provider might not otherwise choose 25 to provide services under or participate in, may have a 26 detrimental impact on patients’ access to health care services 27 or the quality of health care services provided, or may 28 threaten the financial viability of health care providers. 29 The bill creates new Code chapter 514M which prohibits a 30 health insurer from requiring, as a condition of contracting 31 with the health insurer, that a health care provider provide 32 health care services under all health insurance plans offered 33 by the insurer. 34 The bill prohibits a health insurer from requiring a health 35 -4- LSB 5536XC (2) 86 av/nh 4/ 5

S.F. _____ care provider to provide health care services under any health 1 insurance plan offered by the insurer or to participate in any 2 provider network arrangement that the health care provider did 3 not agree to at the time that the provider initially entered 4 into a contract with the insurer. The bill prohibits a health 5 insurer from terminating a contractual relationship with a 6 health care provider because the provider refused to agree to 7 provide health care services under a health insurance plan or 8 participate in a provider network arrangement that the provider 9 did not agree to at the time of entering into the contract. 10 The bill provides that the provisions of new Code chapter 11 514M cannot be waived, a health insurer that fails to comply 12 with the requirements of the new Code chapter is subject to a 13 civil fine not to exceed $1,000 per day for each violation of 14 the Code chapter, and the provisions of the new Code chapter 15 are severable if any provision or application of the Code 16 chapter is held invalid. The commissioner of insurance is 17 directed to adopt rules to administer the new Code chapter. 18 The bill is effective upon enactment and is applicable to 19 contracts between health insurers and health care providers 20 that are issued, amended, or renewed on or after July 1, 2016. 21 -5- LSB 5536XC (2) 86 av/nh 5/ 5