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AB-1092 Health care service plans: vision care services: provider claims: fraud.(2017-2018)

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Date Published: 06/13/2018 09:00 PM
AB1092:v97#DOCUMENT

Amended  IN  Senate  June 13, 2018
Amended  IN  Assembly  May 26, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1092


Introduced by Assembly Member Cooley
(Principal coauthor: Senator Nielsen)
(Coauthors: Assembly Members Low and Bonta)
(Coauthors: Senators Atkins and Stone)

February 17, 2017


An act to add Section 14132.07 to the Welfare and Institutions amend Section 1371 of the Health and Safety Code, relating to Medi-Cal. health care service plans.


LEGISLATIVE COUNSEL'S DIGEST


AB 1092, as amended, Cooley. Medi-Cal: eyeglasses. Health care service plans: vision care services: provider claims: fraud.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law requires a health care service plan doing business in this state to establish an antifraud plan to organize and implement an antifraud strategy to identify and reduce costs, and to protect consumers through the timely detection, investigation, and prosecution of suspected fraud. Existing law specifies required elements of an antifraud plan and requires a health care service plan to annually submit a written report to the department director describing the plan’s efforts to deter, detect, and investigate fraud, and to report cases of fraud to a law enforcement agency.
Existing law requires a health care service plan to reimburse a claim or portion of a claim no later than 30 working days after receipt of the claim, unless the plan contests or denies the claim, in which case the plan is required to notify the claimant within 30 working days that the claim is contested or denied. Existing law extends these timelines to 45 working days for a health maintenance organization. Existing law provides for the accrual of interest after these 30- and 45-day periods. Existing law requires a health care service plan or health maintenance organization to comply with additional timelines when a claim is reasonably contested.
This bill would specify that a specialized health care service plan that undertakes solely to arrange for the provision of vision care services may use a statistically reliable method to investigate suspected fraud and to recover overpayments made as a result of fraud, under designated circumstances. The bill would require the health care service plan’s statistically reliable method, and how the plan intends to utilize that method to determine recovery of overpayments made as a result of fraud, to be submitted to, and approved by, the department as elements of the plan’s antifraud plan. The bill would specify procedures and timelines for a provider to contest a plan’s notice of suspected fraud, and the circumstances under which a plan may offset the amount the plan disclosed as overpaid to the provider in an uncontested notice of suspected fraud against a provider’s current claim submissions. Because a violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law provides for a schedule of benefits under the Medi-Cal program, which includes eyeglasses, subject to utilization controls. Existing law provides, except as specified, that certain optional Medi-Cal benefits, including, among others, optometric and optician services, are excluded from coverage under the Medi-Cal program.

This bill, to the extent federal financial participation is available, any necessary federal approvals are obtained, and funds are appropriated by the Legislature for its purposes, would restore coverage of one pair of eyeglasses provided every 2 years to an individual 21 years of age or older. The bill would authorize the department to implement those provisions by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1371 of the Health and Safety Code is amended to read:

1371.
 (a) (1) A health care service plan, including a specialized health care service plan, shall reimburse claims or any a portion of any a claim, whether in state or out of state, as soon as practicable, but no later than 30 working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the claim by the health care service plan, unless the claim or portion thereof is contested by the plan plan, in which case the claimant shall be notified, in writing, that the claim is contested or denied, within 30 working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the claim by the health care service plan. The notice that a claim is being contested shall identify the portion of the claim that is contested and the specific reasons for contesting the claim.

If

(2) If an uncontested claim is not reimbursed by delivery to the claimants’ address of record within the respective 30 or 45 working days after receipt, interest shall accrue at the rate of 15 percent per annum beginning with the first calendar day after the 30- or 45-working-day period. A health care service plan shall automatically include in its payment of the claim all interest that has accrued pursuant to this section without requiring the claimant to submit a request for the interest amount. Any A plan failing to comply with this requirement shall pay the claimant a ten dollar ($10) fee.

For

(3) For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine payer liability for the claim includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the plan to determine the medical necessity for the health care services provided.

If

(4) If a claim or portion thereof is contested on the basis that the plan has not received all information necessary to determine payer liability for the claim or portion thereof and notice has been provided pursuant to this section, the plan shall have 30 working days or, if the health care service plan is a health maintenance organization, 45 working days after receipt of this additional information to complete reconsideration of the claim. If a plan has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim it has determined to be payable within 30 working days of the receipt of that information, or if the plan is a health maintenance organization, within 45 working days of receipt of that information, interest shall accrue and be payable at a rate of 15 percent per annum beginning with the first calendar day after the 30- or 45-working-day period.

The obligation of the plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services.

(b) Notwithstanding any other law, a specialized health care service plan that undertakes solely to arrange for the provision of vision care services may use a statistically reliable method to investigate suspected fraud and to recover overpayments made as a result of fraud only if all of the requirements of this subdivision are met.
(1) A health care service plan’s statistically reliable method, and how the plan intends to utilize that method to determine recovery of overpayments made as a result of fraud, shall be submitted to, and approved by, the department as elements of the plan’s antifraud plan established and approved pursuant to Section 1348. The plan’s utilization of a statistically reliable method shall help protect and promote the interests of enrollees and shall help ensure a stable health care delivery system.
(2) Pursuant to its antifraud plan established and approved pursuant to Section 1348, a health care service plan shall provide a written notice of suspected fraud to a provider that includes, at a minimum, all of the following:
(A) A clear description of the plan’s statistically reliable methodology.
(B) A clear description of the universe of claims from which the statistical sample was drawn and, if different, the universe of claims upon which the statistical analysis was applied to generate the recovery amount.
(C) A clear explanation of how the plan’s statistically reliable methodology was utilized in the plan’s findings of suspected fraud.
(D) Notice that a provider may dispute the plan’s findings within 45 working days from the date of receipt of the notice of suspected fraud.
(E) The following information for each of the claims in the statistical sample that was utilized in the plan’s findings:
(i) The claim number.
(ii) The name of the patient.
(iii) The date of service.
(iv) The date of payment.
(v) A clear explanation of the basis upon which the plan suspects the claim is fraudulent.
(3) A health care service plan may use a statistically reliable method to recover overpayments made as a result of suspected fraud under this subdivision only if, for the universe of claims upon which the statistical analysis was performed to generate the stated recovery amount, the difference between the date of payment of the earliest-in-time claim in the universe of claims and the date of payment of the latest-in-time claim in the universe of claims does not exceed 365 days. A health care service plan may use a statistically reliable method to recover overpayments made as a result of suspected fraud for a consecutive 365-day universe of claims period only if each individual period for recovering overpayments is no longer than the 365 days specified in this paragraph, the total time is consistent with the current statute of limitation for fraud, and each period independently complies with the requirements of this subdivision.
(4) If the provider contests the health care service plan’s notice of suspected fraud, the provider, within 45 working days of the date of receipt of the notice of suspected fraud, shall send written notice to the plan stating the basis upon which the provider believes that the claims are not fraudulent. The plan shall receive and process this contested notice of suspected fraud as a provider dispute pursuant to subdivision (a), paragraph (1) of subdivision (h) of Section 1367, and the regulations promulgated thereunder.
(5) A health care service plan may offset the amount the plan disclosed as overpaid to the provider in an uncontested notice of suspected fraud against the provider’s current claim submissions only if all of the following requirements are met:
(A) The provider fails to reimburse the plan within 45 working days from the date of receipt by the provider of the notice of suspected fraud.
(B) The plan sends written notice to the provider no less than 10 working days prior to withholding current claim payments in which the plan, at a minimum, states its intent to withhold current claim payments and identifies the claim payments that the plan intends to withhold.
(C) The withheld claim payments do not exceed the amount asserted by the plan to be owed to the plan in its notice of suspected fraud.
(6) This section does not limit or remove a health care service plan’s obligation to comply with its antifraud plan established pursuant to Section 1348, or to limit or remove the plan’s obligation to comply with the requirements for claims subject to subdivision (a).
(c) The obligation of a health care service plan to comply with this section is not waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services.

SEC. 2.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SECTION 1.Section 14132.07 is added to the Welfare and Institutions Code, to read:
14132.07.

(a)Notwithstanding Section 14131.10, one pair of eyeglasses provided every two years shall be covered for an individual who is 21 years of age or older.

(b)(1)The department may seek approval of any necessary state plan amendments to implement this section.

(2)This section shall be implemented only to the extent that federal financial participation is available, any necessary federal approvals have been obtained, and funds are appropriated by the Legislature for its purposes.

(c)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section by means of all-county letters, provider bulletins, or similar instructions, without taking further regulatory action.