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AB-2674 Health care service plans: disciplinary actions.(2017-2018)

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Date Published: 06/14/2018 09:00 PM
AB2674:v94#DOCUMENT

Amended  IN  Senate  June 14, 2018
Amended  IN  Assembly  May 25, 2018
Amended  IN  Assembly  April 16, 2018
Amended  IN  Assembly  April 02, 2018
Amended  IN  Assembly  March 21, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2674


Introduced by Assembly Member Aguiar-Curry

February 15, 2018


An act to add Section 1386.5 to amend Section 1371.39 of the Health and Safety Code, relating to health care service plans.


LEGISLATIVE COUNSEL'S DIGEST


AB 2674, as amended, Aguiar-Curry. Health care service plans: disciplinary actions.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (the act), 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. Care. Existing law prohibits a health care service plan from engaging in an unfair payment pattern, as defined, and requires the department to adopt regulations that ensure that plans have adopted a dispute resolution mechanism, as specified.
This bill would require the department to maintain an electronic database of provider complaints that a health care service plan has underpaid or failed to pay the provider and would establish a procedure for a provider to file a complaint with the department, and a procedure for a health care service plan to provide supporting documentation relating to a provider complaint to the department. The bill would require the department to log the complaint and supporting documentation in the electronic database, as specified, and would require the department, on or before January 1, 2020, and annually thereafter, to review the logged complaints and to take specified action if there is information that a health care service plan rescinded or modified treatment authorization or engaged in an unfair payment pattern, as specified. review complaints of unfair payment patterns on or before July 1, 2019, and annually thereafter. The bill would require the department to conduct an audit and an enforcement action, as specified, if the Director of the Department of Managed Health Care determines the complaint review indicates a possible unfair payment pattern. Upon a final determination by the department that a health care service plan has underpaid or failed to pay a provider, plan’s, or plan’s capitated provider’s, practice, policy, or procedure constitutes a demonstrable and unjust payment pattern or unfair payment pattern, the bill would require the director to assess an administrative penalty in, and to require the plan to pay the provider, an amount not less than the amount owed plus interest. The bill would require the administrative penalties to be transferred to a specified fund upon appropriation by the Legislature. The bill would also prohibit a health care service plan from delegating a statutory liability pursuant to these provisions. By creating new crimes, the 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.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YESNO  

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


SECTION 1.

 Section 1371.39 of the Health and Safety Code is amended to read:

1371.39.
 (a) Providers may report to the department’s Office of Plan and Provider Relations, either Relations through the toll-free provider line (877-525-1295) or (877-525-1295), e-mail address (plans-providers@dmhc.ca.gov), or another method designated by the department, instances in which the provider believes a plan is engaging in an unfair payment pattern.
(b) Plans may report to the department’s Office of Plan and Provider Relations, either Relations through the toll-free provider line (877-525-1295) or (877-525-1295), e-mail address (plans-providers@dmhc.ca.gov), or another method designated by the department, instances in which the plan believes a provider is engaging in an unfair billing pattern.

(1)

(c) “Unfair billing pattern” means engaging in a demonstrable and unjust pattern of unbundling of claims, upcoding of claims, or other demonstrable and unjustified billing patterns, as defined by the department.

(2)The department shall convene appropriate state agencies to make recommendations by July 1, 2001, to the Legislature and the Governor for the purpose of developing a system for responding to unfair billing patterns as defined in this section. This section shall include a process by which information is made available to the public regarding actions taken against providers for unfair billing patterns and the activities that were the basis for the action.

(c)On or before December 31, 2001, the department shall report to the Legislature and the Governor information regarding the development of the definition of “unfair billing pattern” as used in this section. This report shall include, but not be limited to, a description of the process used and a list of the parties involved in the department’s development of this definition as well as recommendations for statutory adoption.

(d) On or before July 1, 2019, and annually thereafter, the department shall review complaints filed pursuant to subdivision (a). If the director determines the review of complaint data indicates a possible unfair payment pattern, the department shall conduct an audit and an enforcement action pursuant to subdivision (s) of Section 1300.71 of Title 28 of the California Code of Regulations.
(e) If the department makes a final determination that a plan’s, or a plan’s capitated provider’s, practice, policy, or procedure constitutes a “demonstrable and unjust payment pattern” or “unfair payment pattern,” the director shall do both of the following for each case used to substantiate a determination that a health care service plan has underpaid or failed to pay a provider in violation of this chapter:
(1) Assess an administrative penalty in an amount not less than the amount owed plus interest.
(2) Require the plan to pay the provider an amount not less than the amount owed plus interest.
(f) Subdivision (e) shall not apply to claims subject to Section 1371.30.

SECTION 1.Section 1386.5 is added to the Health and Safety Code, to read:
1386.5.

(a)The department shall maintain an electronic database of provider complaints that a health care service plan has underpaid or failed to pay the provider in violation of this chapter as follows:

(1)The provider shall submit the dispute to the health care service plan’s internal dispute resolution process established pursuant to subdivision (h) of Section 1367, and wait 45 working days from the date of the receipt of the provider dispute by the health care service plan or until the health care service plan’s written determination, whichever occurs first, before filing a complaint with the department.

(2)A provider may file a complaint with the department pursuant to this section not later than two years after the time period described in paragraph (1).

(3)Upon receipt of a complaint pursuant to this section, the department shall log the complaint and supporting documentation in the electronic database in a manner that allows the department to identify individual complaints and to identify information indicating the health care service plan has violated Section 1371.8 or engaged in an unfair payment pattern pursuant to Section 1371.37, and do all of the following electronically:

(A)Acknowledge receipt of the complaint.

(B)Provide a complaint number to the provider.

(C)Provide the provider with a list of any required supporting documentation.

(D)Provide instructions to the provider regarding how to submit the supporting documentation, including notification that the provider has 90 working days to submit the supporting documentation.

(b)(1)On or before January 1, 2020, and at least annually thereafter, the department shall review the complaints logged pursuant to subdivision (a) and, upon identification of information indicating that a health care service plan has violated Section 1371.8 or engaged in an unfair payment pattern pursuant to Section 1371.37, shall do all of the following:

(A)Inform the health care service plan of any complaints it intends to investigate further in writing.

(B)Provide the relevant complaint numbers created pursuant to subparagraph (B) of paragraph (3) of subdivision (a) to the health care service plan.

(C)Provide the health care service plan with a list of any required supporting documentation.

(D)Provide instructions to the health care service plan regarding how to submit the supporting documentation, including notification that the health care service plan has 90 working days to submit the supporting documentation.

(2)Within 180 working days of receiving all necessary supporting documentation from the health care service plan provided pursuant to subparagraph (D) of paragraph (3) of subdivision (a), the department shall issue a final determination regarding whether the health care service plan has underpaid or failed to pay a provider in violation of this chapter.

(c)(1)Upon a final determination by the department that a health care service plan has underpaid or failed to pay a provider in violation of this chapter, the director shall, by order, do both of the following:

(A)Assess an administrative penalty in an amount not less than the amount owed plus interest.

(B)Require the plan to pay the provider an amount not less than the amount owed plus interest.

(2)(A)Notwithstanding the date on which the director makes a final determination as described in this subdivision, the calculation of the amount of the remedy imposed pursuant to paragraph (1) shall be determined based on the date on which the plan committed the violation.

(B)For purposes of this section, “the date on which the plan committed the violation” means 30 working days after the receipt of the complete claim from the provider by the plan or the plan’s capitated provider, or, if the plan is a health maintenance organization, 45 working days after the receipt of the complete claim from the provider by the plan or the plan’s capitated provider.

(d)(1)Except as provided in paragraph (2), a provider is not required to resubmit a claim to a health care service plan in order to receive payment pursuant to this section.

(2)If the department makes a determination that an extraordinary circumstance exists, the department may require a provider to resubmit a claim to a health care service plan in order to receive payment pursuant to this section, provided that the department also requires the plan to add to the amount owed to the provider a reasonable amount necessary to reimburse the provider for the cost of resubmission.

(e)This section shall not apply to claims subject to Section 1371.30.

(f)Remedies provided by this section are not exclusive, and may be sought and employed in any combination with civil, criminal, and other administrative remedies deemed warranted by the department to enforce this chapter.

(g)A proceeding pursuant to this section shall be conducted in accordance with Section 1374.27.

(h)A health care service plan may not delegate a statutory liability under this section.

(i)The administrative penalties collected pursuant to this section shall be transferred to the Managed Care Administrative Fines and Penalties Fund, as described in Section 1341.45, upon appropriation by the Legislature.

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.