BILL ANALYSIS Ó AB 502 Page 1 ASSEMBLY THIRD READING AB 502 (Chau) As Amended June 2, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+---------------------+---------------------| |Business & |10-4 |Bonilla, Jones, |Baker, Chang, Gatto, | |Professions | |Bloom, Campos, Dodd, |Wilk | | | |Eggman, Holden, | | | | |Mullin, Ting, Wood | | | | | | | |----------------+------+---------------------+---------------------| |Health |11-7 |Bonta, Bonilla, |Maienschein, Chávez, | | | |Burke, Chiu, Gomez, |Gonzalez, Lackey, | | | |Nazarian, |Patterson, | | | | |Steinorth, Waldron | | | | | | | | |Ridley-Thomas, | | | | |Rodriguez, Santiago, | | | | |Thurmond, Wood | | | | | | | |----------------+------+---------------------+---------------------| |Appropriations |13-3 |Gomez, Bloom, Bonta, |Bigelow, Chang, | | | |Calderon, Daly, |Gallagher | | | |Eggman, Eduardo | | | | |Garcia, Holden, | | | | |Jones, Quirk, | | AB 502 Page 2 | | |Rendon, Wagner, | | | | |Weber | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Requires insurance companies to reimburse registered dental hygienists in alternative practice (RDHAPs) for dental hygiene care legally provided and covered by insurance, and clarifies that RDHAPs are authorized to establish corporations. Specifically, this bill: 1)Exempts professional corporations, rendering professional services by persons duly licensed by the Dental Hygiene Committee of California (DHCC), from the requirement to obtain a certificate of registration in order to render those professional services, and specifies that RDHAPs may be shareholders, officers, or directors of an RDHAP corporation, and that licensed dentists and dental assistants may be professional employees of an RDHAP corporation. 2)Requires health care service plan contracts covering dental services, specialized health care service plan contracts covering dental services, health insurance policies covering dental services, and specialized health insurance policies covering dental services issued, amended, or renewed on or after January 1, 2016, to reimburse RDHAPs for performing dental hygiene services that may lawfully be performed by registered dental hygienists (RDH) and that are reimbursable under the contracts or policies, and would require the plan or insurer to use the same fee schedule for reimbursing both registered dental hygienists and RDHAP. 3)Makes other clarifying and conforming changes. AB 502 Page 3 FISCAL EFFECT: According to the Assembly Appropriations Committee, any costs to the California Department of Insurance and the Department of Managed Health Care to assess compliance with this bill's requirements are expected to be minor and absorbable. COMMENTS: Purpose. This bill is sponsored by the California Dental Hygienists' Association. According to the author, "A number of situations reduce access to RDHAPs... [M]any dental insurance companies recognize dentists in a dental practice as the billable provider of dental hygiene services and even though RDHAPs provide the same billable services that an RDH provide, billed by the dentist, the insurance companies are denying RDHAP's reimbursement for services. This forces patients who cannot easily access care in a traditional dental office to pay out of pocket for the services of a RDHAP or not receive the care due to finances? [The BPC] authorizes RDHAPs to incorporate. Corporation law would protect the RDHAP's business, however, there is not language in the Corporations Code authorizing RDHAPs to establish corporations, leaving them without critical protections. [This bill] would address these issues and ensure that the public has access to quality dental hygiene services." Background. In 1986, the Office of Statewide Health Planning and Development (OSHPD) created the RDHAP. In 1993, the professional designation was made permanent in statute. An RDHAP must have been engaged in the practice of dental hygiene as a registered dental hygienist in any setting, including educational settings and public health settings, for a minimum of 2,000 hours during the immediately preceding 36 months, complete 150 additional hours of education courses, and pass a written exam. An RDHAP has a unique distinction in that they can work for a dentist or as an employee of another RDHAP as an independent contractor, as a sole proprietor of an alternative hygiene practice, or other locations AB 502 Page 4 such as residences of the homebound, schools, residential facilities, and in underserved dental shortage areas, as determined by OSHPD. They may also operate a mobile dental clinic or operate an independent office or offices. As a result, RDHAPs may practice in settings outside of the traditional dental office, and allow patients to receive the same type of professional preventive care they would receive in a dental office in schools, skilled and residential care facilities, hospitals, private homes, and in some instances in an RDHAP's own office. A 2009 survey of California RDHAPs found that more than two-thirds of their patients had no other source of oral health care. RDHAPs also struggle to find referrals to dentists for patients in need of more advanced care and charge lower fees than dentists. The DHCC licenses and regulates approximately 509 RDHAPs. Reimbursement for Services. Currently, many dental insurance companies recognize dentists in a dental practice as the billable provider of dental hygiene services and even though RDHAPs provide the same billable services that an RDH provide, billed by the dentist, the insurance companies are denying RDHAP's reimbursement for services. In its 2014 Sunset Review Report, the DHCC identified as a barrier to RDHAP practice the inability for RDHAPs to collect payment for services rendered. The DHCC noted that RDHAPs have difficulty collecting payment for services from insurance companies based outside of California. This is because not all states have the RDHAP provider status making them ineligible for reimbursement. As a result, some patients who cannot easily access care in a traditional dental office are forced to pay out of pocket for the services of a RDHAP or not receive care due to financial constraints. Professional Corporations. A professional corporation is an AB 502 Page 5 organization made up of individuals of the same trade or profession. The Moscone-Knox Professional Corporations Act of 1968 authorized the formation of professional corporations to obtain certain benefits of the corporate form of doing business, such as limited legal liability. At that time, only medical, law and dental professional corporations were envisioned; there are now 15 authorized healing arts professional corporations. Current law specifies which healing arts licensees may be shareholders, officers, directors or professional employees of professional corporations controlled by a differing profession if the sum of all shares owned by those licensed persons does not exceed 49% of the total shares of the professional corporation. Business and Professions Code Section 1962 authorizes an association, partnership, corporation, or group of three or more registered RDHAPs to practice under an assumed or fictitious name if the association, partnership, corporation, or group holds a permit issued by the DHCC authorizing the holder to use that name connection with the holder's practice, as specified. According to the sponsors, this section was intended to allow RDHAPs to incorporate to gain the protections afforded by corporation law, most importantly, protection against personal liability. However, conforming changes were not made to the Corporations Code. This bill would specify that RDHAPs may be shareholders, officers, or directors of an RDHAP corporation, and specify that licensed dentists and dental assistants may be professional employees of an RDHAP corporation. Analysis Prepared by: Eunie Linden / B. & P. / (916) 319-3301 FN: 0000884 AB 502 Page 6