Leyva Bill Protecting Consumers Suffering From Kidney Disease and Addiction Clears Senate Health Committee

SB 1156 Prioritizes Needs of Patients, Enhances Continuity of Care

Thursday, April 19, 2018

SACRAMENTO – With strong support from a broad range of organizations, the Senate Health Committee today approved legislation authored by Senator Connie M. Leyva (D-Chino) that seeks to put an end to insurance schemes by profit driven businesses targeted at vulnerable individuals suffering from kidney disease and addiction.

Since the passage of the Affordable Care Act (ACA), patients cannot be denied health coverage based on a pre-existing condition. This significant advancement for consumers has also provided an opportunity for dishonest providers to take advantage of sick people by enrolling them in commercial coverage to maximize high reimbursement rates for services. Unfortunately, this coverage is oftentimes not in the best interest of the patient as it may disrupt their care and could result in higher out-of-pocket costs, as well as being imposed upon consumers even though these patients are eligible for public coverage like Medicare or Medi-Cal.

These troubling practices that take advantage of vulnerable people suffering from kidney disease and addiction can endanger the health, safety and well-being of those patients.  In some instances, dialysis clinics have discouraged patients from seeking kidney transplants—often the recommended course of treatment— and the entity that some dialysis companies use to pay patients’ premiums has a history of cutting off premium payments after a transplant.  In the hopes of continued insurer payouts, some drug treatments center providers seemingly aim to have patients relapse back into addiction.  Oftentimes, they only pay premiums while the individual is in their facility, letting coverage lapse and outpatient care becomes unaffordable when the patient leaves their facility.

“SB 1156 will help to put an end to predatory business practices that allow some providers to make millions of dollars on the backs of patients undergoing dialysis or addiction treatment,” Senator Leyva said.  “By protecting genuine third party payment mechanisms that actually prioritize the needs of their patients, SB 1156 will ensure that the health and well-being of patients is always the top priority and will stop dishonest companies from profiting from someone else’s pain and suffering.  I remain committed to ending these risky health care schemes that hurt patients and drive up health care costs for Californians.”

These providers pay premiums in several ways, including directly to health insurance plans, through a provider-funded nonprofit organization, or by giving patients pre-paid debit cards to pay their premiums.

Under SB 1156, third-party payers would have to:
•    Certify that patients are not eligible for Medicare, Medi-Cal, or Covered California subsidies and would have to disclose to regulators of their intention to pay a patient’s premiums in advance;

•    Ensure continuity of care for consumers by requiring third party payers to pay premiums for the full plan year, even if the patient stops treatments that benefit the provider;

•    Prove they meet these requirements. Failure by the third-party payer to meet these requirements means the financially interested provider is only entitled to a predetermined payment rate for any services provided to that patient.

Supported by America’s Health Insurance Plans, Association of California Life and Health Insurance Companies, Blue Shield of California, California Association of Health Plans, California Labor Federation, California Rural Legal Assistance Foundation and SEIU California, SB 1156 will next be considered by the Senate Appropriations Committee in the coming weeks.