California Insurance Commissioner Dave Jones sponsored Bill AB 2152. (AP Photo/Rich Pedroncelli)

Legislation to protect California consumers when medical provider contracts terminate has made it to the governor’s desk after the Legislature passed it during the final week of the 2011-2012 Legislative session.

Bill AB 2152 requires notice be sent to PPO policyholders if the contract between their hospital or medical provider group is set to terminate with their insurer. The bill also requires the Department of Insurance be notified before contract termination so that it can be verified the insurer will still have an adequate network of medical providers in a given area. The bill requires policyholders be notified at least 10 days in advance and the Department of Insurance at least 30 days before certain hospital and medical group providers contracts are terminated.

Sponsored by Dave Jones, insurance commissioner of California, and the California Department of Insurance, AB 2152 is intended to prevent consumers from seeking care and getting hit with out-of-network prices.

“Consumers deserve to know when their provider is no longer in their health insurer’s network and this legislation will help ensure that consumers are notified by their health insurer if their costs for seeking care from a particular provider will rise significantly,” Jones said in a prepared statement.