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AB-1268 Health care coverage: prospective review.(2019-2020)

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Date Published: 04/30/2019 09:00 PM
AB1268:v98#DOCUMENT

Amended  IN  Assembly  April 30, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1268


Introduced by Assembly Member Rodriguez

February 21, 2019


An act to amend Sections 1363.5 and 1367.01 of of, and to add Section 1341.46 to, the Health and Safety Code, and to amend Section 10123.135 of the Insurance Code, relating to health care coverage.


LEGISLATIVE COUNSEL'S DIGEST


AB 1268, as amended, Rodriguez. Health care coverage: prospective review.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, 1975 (Knox-Keene Act), provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of its provisions a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer to have written policies and procedures establishing the process by which the plan or insurer approves, modifies, delays, or denies requests for health care services based in whole or in part on medical necessity, including those plans or insurers that delegate these functions to medical groups, independent practice associations, or to other contracting providers. Existing law requires a plan or insurer to evaluate its criteria used to authorize, modify, or deny health care services at least annually. Existing law creates the Managed Care Administrative Fines and Penalties Fund, into which certain fines and penalties paid by health care service plans for violations of the Knox-Keene Act are deposited.
This bill would require a health care service plan or health insurer, on or before July 1, 2020, and annually on July 1 thereafter, to report to the appropriate department the number of times in the preceding calendar year that it approved or denied each of the 30 health care service was prospectively approved, modified, delayed, or denied. services for which prospective review was most frequently requested. The bill would require an entity that performs utilization review or utilization management functions for a plan or insurer, or to which a plan or insurer delegates these functions, to report to the plan or insurer the number of times in the preceding calendar year that it approved or denied each of the 30 health care services for which prospective review was most frequently requested, and would require the plan or insurer to include that information in its report to the appropriate department. The bill would require a plan or insurer to take the reported information into account when evaluating its criteria used to authorize, modify, or deny health care services. The bill would require each department to determine the form and manner of that reporting. Because
The bill would authorize the Director of the Department of Managed Health Care or the Insurance Commissioner to assess an administrative penalty by order, after appropriate notice and opportunity for hearing, if the director or commissioner determines that a health care service plan or a health insurer has failed to comply with utilization review requirements. The bill would create the Managed Care Penalty Account, within the Managed Care Administrative Fines and Penalties Fund, which would be subject to appropriation by the Legislature, and into which those administrative penalties for a health care service plan’s noncompliance and existing fines and penalties for violations of the Knox-Keene Act would be deposited. The bill would specify that administrative penalties assessed against a health insurer be deposited into the Insurance Fund. Because a willful violation of the bill’s requirements relative to health care service plans would be a crime, 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: YES  

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


SECTION 1.

 Section 1341.46 is added to the Health and Safety Code, to read:

1341.46.
 (a) There is hereby created the Managed Care Penalty Account within the Managed Care Administrative Fines and Penalties Fund.
(b) Moneys in the Managed Care Penalty Account shall be subject to appropriation by the Legislature.
(c) Notwithstanding Section 1341.45, fines and administrative penalties collected pursuant to this chapter shall be deposited into the Managed Care Penalty Account.

SECTION 1.SEC. 2.

 Section 1363.5 of the Health and Safety Code is amended to read:

1363.5.
 (a) A plan shall disclose or provide for the disclosure to the director and to network providers the process the plan, its contracting provider groups, or an entity with which the plan contracts for services that include utilization review or utilization management functions, uses to authorize, modify, or deny health care services under the benefits provided by the plan, including coverage for subacute care, transitional inpatient care, or care provided in skilled nursing facilities. A plan shall also disclose those processes to enrollees or persons designated by an enrollee, or to any other person or organization, upon request. The disclosure to the director shall include the policies, procedures, and the description of the process that are filed with the director pursuant to subdivision (b) of Section 1367.01.
(b) The criteria or guidelines used by a plan, or an entity with which a plan contracts for services that include utilization review or utilization management functions, to determine whether to authorize, modify, or deny health care services shall:
(1) Be developed with involvement from actively practicing health care providers.
(2) Be consistent with sound clinical principles and processes.
(3) Be evaluated, taking into account the information reported pursuant to subdivision (k) of Section 1367.01, and updated if necessary, at least annually.
(4) If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the enrollee in that specified case.
(5) Be available to the public upon request. A plan shall only be required to disclose the criteria or guidelines for the specific procedures or conditions requested. A plan may charge reasonable fees to cover administrative expenses related to disclosing criteria or guidelines pursuant to this paragraph, limited to copying and postage costs. The plan may also make the criteria or guidelines available through electronic communication means.
(c) The disclosure required by paragraph (5) of subdivision (b) shall be accompanied by the following notice: “The materials provided to you are guidelines used by this plan to authorize, modify, or deny care for persons with similar illnesses or conditions. Specific care and treatment may vary depending on individual need and the benefits covered under your contract.”

SEC. 2.SEC. 3.

 Section 1367.01 of the Health and Safety Code is amended to read:

1367.01.
 (a) A health care service plan and an entity with which it contracts for services that include utilization review or utilization management functions, that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers before, retrospectively, or concurrent with the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b) A health care service plan that is subject to this section shall have written policies and procedures establishing the process by which the plan prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to Section 1363.5. These policies and procedures, and a description of the process by which the plan reviews and approves, modifies, delays, or denies requests by providers before, retrospectively, or concurrent with the provision of health care services to enrollees, shall be filed with the director for review and approval, and shall be disclosed by the plan to providers and enrollees upon request, and by the plan to the public upon request.
(c) A health care service plan subject to this section, except a plan that meets the requirements of Section 1351.2, shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act, or, if the plan is a specialized health care service plan, a clinical director with California licensure in a clinical area appropriate to the type of care provided by the specialized health care service plan. The medical director or clinical director shall ensure that the process by which the plan reviews and approves, modifies, or denies, based in whole or in part on medical necessity, requests by providers before, retrospectively, or concurrent with the provision of health care services to enrollees, complies with the requirements of this section.
(d) If health plan personnel, or individuals under contract to the plan to review requests by providers, approve the provider’s request, pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e) No individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity. The decision of the physician or other health care professional shall be communicated to the provider and the enrollee pursuant to subdivision (h).
(f) The criteria or guidelines used by the health care service plan to determine whether to approve, modify, or deny requests by providers before, retrospectively, or concurrent with, the provision of health care services to enrollees shall be consistent with clinical principles and processes. These criteria and guidelines shall be developed pursuant to the requirements of Section 1363.5.
(g) If the health care service plan requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the plan shall request only the information reasonably necessary to make the determination.
(h) In determining whether to approve, modify, or deny requests by providers before, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to this section shall meet the following requirements:
(1) Decisions to approve, modify, or deny, based on medical necessity, requests by providers before, or concurrent with the provision of health care services to enrollees that do not meet the requirements for the time period for review required by paragraph (2), shall be made in a timely fashion appropriate for the nature of the enrollee’s condition, not to exceed five business days from the plan’s receipt of the information reasonably necessary and requested by the plan to make the determination. In cases where the review is retrospective, the decision shall be communicated to the individual who received services, or to the individual’s designee, within 30 days of the receipt of information that is reasonably necessary to make this determination, and shall be communicated to the provider in a manner that is consistent with current law. For purposes of this section, retrospective reviews shall be for care rendered on or after January 1, 2000.
(2) When the enrollee’s condition is such that the enrollee faces an imminent and serious threat to the enrollee’s health, including, but not limited to, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in paragraph (1), would be detrimental to the enrollee’s life or health or could jeopardize the enrollee’s ability to regain maximum function, decisions to approve, modify, or deny requests by providers before, or concurrent with, the provision of health care services to enrollees, shall be made in a timely fashion appropriate for the nature of the enrollee’s condition, not to exceed 72 hours or, if shorter, the period of time required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, after the plan’s receipt of the information reasonably necessary and requested by the plan to make the determination. This section shall not be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management.
(3) Decisions to approve, modify, or deny requests by providers for authorization before, or concurrent with, the provision of health care services to enrollees shall be communicated to the requesting provider within 24 hours of the decision. Except for concurrent review decisions pertaining to care that is underway, which shall be communicated to the enrollee’s treating provider within 24 hours, decisions resulting in denial, delay, or modification of all or part of the requested health care service shall be communicated to the enrollee in writing within two business days of the decision. In the case of concurrent review, care shall not be discontinued until the enrollee’s treating provider has been notified of the plan’s decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(4) Communications regarding decisions to approve requests by providers before, retrospectively, or concurrent with the provision of health care services to enrollees shall specify the specific health care service approved. Responses regarding decisions to deny, delay, or modify health care services requested by providers before, retrospectively, or concurrent with the provision of health care services to enrollees shall be communicated to the enrollee in writing, and to providers initially by telephone or facsimile, except with regard to decisions rendered retrospectively, and then in writing, and shall include a clear and concise explanation of the reasons for the plan’s decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. A written communication to a physician or other health care provider of a denial, delay, or modification of a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to easily contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the enrollee may file a grievance with the plan pursuant to Section 1368, and in the case of Medi-Cal enrollees, shall explain how to request an administrative hearing and aid paid pending under Sections 51014.1 and 51014.2 of Title 22 of the California Code of Regulations.
(5) If the health care service plan cannot make a decision to approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2) because the plan is not in receipt of all of the information reasonably necessary and requested, or because the plan requires consultation by an expert reviewer, or because the plan has asked that an additional examination or test be performed upon the enrollee, provided the examination or test is reasonable and consistent with good medical practice, the plan shall, immediately upon the expiration of the timeframe specified in paragraph (1) or (2) or as soon as the plan becomes aware that it will not meet the timeframe, whichever occurs first, notify the provider and the enrollee, in writing, that the plan cannot make a decision to approve, modify, or deny the request for authorization within the required timeframe, and specify the information requested but not received, or the expert reviewer to be consulted, or the additional examinations or tests required. The plan shall also notify the provider and enrollee of the anticipated date on which a decision may be rendered. Upon receipt of all information reasonably necessary and requested by the plan, the plan shall approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2), whichever applies.
(6) If the director determines that a health care service plan has failed to meet the timeframes in this section, or has failed to meet any other requirement of this section, the director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be deemed an exclusive remedy for the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(i) A health care service plan subject to this section shall maintain telephone access for providers to request authorization for health care services.
(j) A health care service plan subject to this section that reviews requests by providers before, retrospectively, or concurrent with, the provision of health care services to enrollees shall establish, as part of the quality assurance program required by Section 1370, a process by which the plan’s compliance with this section is assessed and evaluated. The process shall include provisions for evaluation of complaints, assessment of trends, implementation of actions to correct identified problems, mechanisms to communicate actions and results to the appropriate health plan employees and contracting providers, and provisions for evaluation of any corrective action plan and measurements of performance.
(k) (1) On or before July 1, 2020, and annually on each July 1 thereafter, a health care service plan that prospectively reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers before the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, enrollees shall, for each of the 30 health care service subject to prospective review, services for which prospective review was most frequently requested by providers in the preceding calendar year, report to the department the number of times in the preceding calendar year the service was approved, modified, delayed, approved or denied.
(2) (A) An entity that performs utilization review or utilization management functions pursuant to a contract with a health care service plan or to which a health care service plan delegates these functions shall, for each of the 30 health care services for which prospective review was most frequently requested by providers in the preceding calendar year, report to the health care service plan the number of times in the preceding calendar year the service was approved or denied.
(B) A health care service plan shall report the information received pursuant to subparagraph (A) to the department as part of the report required pursuant to paragraph (1). That information shall be reported in a manner that identifies each individual entity with which the health care service plan contracts to perform utilization review or utilization management functions or to which the health care service plan delegates these functions.
(3) A prospective review decision made pursuant to a provider request for out-of-network services shall not be subject to this subdivision and shall not be included in the determination of the 30 health care services for which prospective review was most frequently requested by providers in the preceding calendar year.

(2)

(4) The form and manner of the reporting required pursuant to paragraph (1) shall be determined by the department.
(l) The director shall review a health care service plan’s compliance with this section as part of its periodic onsite medical survey of each plan undertaken pursuant to Section 1380, and shall include a discussion of compliance with this section as part of its report issued pursuant to that section.
(m) (1) On or before July 1, 2021, and at least annually thereafter, the department shall review the information reported pursuant to subdivision (k), information the department received for the same or similar services through enrollee grievances submitted pursuant to Section 1368, and information the department received for the same or similar services through appeals, including those submitted pursuant to Section 1374.30. The department shall establish a process by which a plan’s compliance with this section is reviewed, which shall include an evaluation of complaints and an assessment of trends. If the review indicates a failure to comply with this section, the department may conduct an audit or enforcement action pursuant to Section 1380 or 1386.
(2) If the director determines that a health care service plan has failed to meet a requirement of this section, the director may assess, by order, an administrative penalty for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be an exclusive remedy for the director. These penalties shall be paid to the Managed Care Penalty Account.

(m)

(n) This section shall not apply to decisions made for the care or treatment of the sick who depend upon prayer or spiritual means for healing in the practice of religion as set forth in subdivision (a) of Section 1270.

(n)

(o) This section shall not cause a health care service plan to be defined as a health care provider for purposes of any law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.

SEC. 3.SEC. 4.

 Section 10123.135 of the Insurance Code is amended to read:

10123.135.
 (a) A disability insurer, or an entity with which it contracts for services that include utilization review or utilization management functions, that covers hospital, medical, or surgical expenses and that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers before, retrospectively, or concurrent with the provision of health care services to insureds, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b) A disability insurer that is subject to this section, or an entity with which an insurer contracts for services that include utilization review or utilization management functions, shall have written policies and procedures establishing the process by which the insurer prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for insureds. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to subdivision (f). These policies and procedures, and a description of the process by which an insurer, or an entity with which an insurer contracts for services that include utilization review or utilization management functions, reviews and approves, modifies, delays, or denies requests by providers before, retrospectively, or concurrent with the provision of health care services to insureds, shall be filed with the commissioner, and shall be disclosed by the insurer to insureds and providers upon request, and by the insurer to the public upon request.
(c) If the number of insureds covered under health benefit plans in this state that are issued by an insurer subject to this section constitute at least 50 percent of the number of insureds covered under health benefit plans issued nationwide by that insurer, the insurer shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or the Osteopathic Initiative Act, or the insurer may employ a clinical director licensed in California whose scope of practice under California law includes the right to independently perform all those services covered by the insurer. The medical director or clinical director shall ensure that the process by which the insurer reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers before, retrospectively, or concurrent with the provision of health care services to insureds, complies with the requirements of this section. This subdivision does not restrict the existing authority of the Medical Board of California.
(d) If an insurer subject to this section, or individuals under contract to the insurer to review requests by providers, approve the provider’s request pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e) An individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, shall not deny or modify requests for authorization of health care services for an insured for reasons of medical necessity. The decision of the physician or other health care provider shall be communicated to the provider and the insured pursuant to subdivision (h).
(f) (1) An insurer shall disclose, or provide for the disclosure, to the commissioner and to network providers, the process the insurer, its contracting provider groups, or an entity with which it contracts for services that include utilization review or utilization management functions, uses to authorize, delay, modify, or deny health care services under the benefits provided by the insurance contract, including coverage for subacute care, transitional inpatient care, or care provided in skilled nursing facilities. An insurer shall also disclose those processes to policyholders or persons designated by a policyholder, or to any other person or organization, upon request.
(2) The criteria or guidelines used by an insurer, or an entity with which an insurer contracts for utilization review or utilization management functions, to determine whether to authorize, modify, delay, or deny health care services, shall comply with all of the following:
(A) Be developed with involvement from actively practicing health care providers.
(B) Be consistent with sound clinical principles and processes.
(C) Be evaluated, taking into account the information reported pursuant to subdivision (j), and updated if necessary, at least annually.
(D) If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the policyholder in that specified case.
(E) Be available to the public upon request. An insurer shall only be required to disclose the criteria or guidelines for the specific procedures or conditions requested. An insurer may charge reasonable fees to cover administrative expenses related to disclosing criteria or guidelines pursuant to this paragraph that are limited to copying and postage costs. The insurer may also make the criteria or guidelines available through electronic communication means.
(3) The disclosure required by subparagraph (E) of paragraph (2) shall be accompanied by the following notice: “The materials provided to you are guidelines used by this insurer to authorize, modify, or deny health care benefits for persons with similar illnesses or conditions. Specific care and treatment may vary depending on individual need and the benefits covered under your insurance contract.”
(g) If an insurer subject to this section requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the insurer shall request only the information reasonably necessary to make the determination.
(h) In determining whether to approve, modify, or deny requests by providers before, retrospectively, or concurrent with the provision of health care services to insureds, based in whole or in part on medical necessity, every insurer subject to this section shall meet the following requirements:
(1) Decisions to approve, modify, or deny, based on medical necessity, requests by providers before, or concurrent with, the provision of health care services to insureds that do not meet the requirements for the time period for review required by paragraph (2), shall be made in a timely fashion appropriate for the nature of the insured’s condition, not to exceed five business days from the insurer’s receipt of the information reasonably necessary and requested by the insurer to make the determination. In cases where the review is retrospective, the decision shall be communicated to the individual who received services, or to the individual’s designee, within 30 days of the receipt of information that is reasonably necessary to make this determination, and shall be communicated to the provider in a manner that is consistent with current law. For purposes of this section, retrospective reviews shall be for care rendered on or after January 1, 2000.
(2) When the insured’s condition is such that the insured faces an imminent and serious threat to the insured’s health, including, but not limited to, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in paragraph (1), would be detrimental to the insured’s life or health or could jeopardize the insured’s ability to regain maximum function, decisions to approve, modify, or deny requests by providers before, or concurrent with, the provision of health care services to insureds shall be made in a timely fashion, appropriate for the nature of the insured’s condition, but not to exceed 72 hours or, if shorter, the period of time required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, after the insurer’s receipt of the information reasonably necessary and requested by the insurer to make the determination.
(3) Decisions to approve, modify, or deny requests by providers for authorization before, or concurrent with, the provision of health care services to insureds shall be communicated to the requesting provider within 24 hours of the decision. Except for concurrent review decisions pertaining to care that is underway, which shall be communicated to the insured’s treating provider within 24 hours, decisions resulting in denial, delay, or modification of all or part of the requested health care service shall be communicated to the insured in writing within two business days of the decision. In the case of concurrent review, care shall not be discontinued until the insured’s treating provider has been notified of the insurer’s decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(4) Communications regarding decisions to approve requests by providers before, retrospectively, or concurrent with the provision of health care services to insureds shall specify the specific health care service approved. Responses regarding decisions to deny, delay, or modify health care services requested by providers before, retrospectively, or concurrent with the provision of health care services to insureds shall be communicated to insureds in writing, and to providers initially by telephone or facsimile, except with regard to decisions rendered retrospectively, and then in writing, and shall include a clear and concise explanation of the reasons for the insurer’s decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. A written communication to a physician or other health care provider of a denial, delay, or modification or a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to easily contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the provider or the insured may file an appeal with the insurer or seek department review under the unfair practices provisions of Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1 and the regulations adopted thereunder.
(5) If the insurer cannot make a decision to approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2) because the insurer is not in receipt of all of the information reasonably necessary and requested, or because the insurer requires consultation by an expert reviewer, or because the insurer has asked that an additional examination or test be performed upon the insured, provided that the examination or test is reasonable and consistent with good medical practice, the insurer shall, immediately upon the expiration of the timeframe specified in paragraph (1) or (2), or as soon as the insurer becomes aware that it will not meet the timeframe, whichever occurs first, notify the provider and the insured, in writing, that the insurer cannot make a decision to approve, modify, or deny the request for authorization within the required timeframe, and specify the information requested but not received, or the expert reviewer to be consulted, or the additional examinations or tests required. The insurer shall also notify the provider and insured of the anticipated date on which a decision may be rendered. Upon receipt of all information reasonably necessary and requested by the insurer, the insurer shall approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2), whichever applies.
(6) If the commissioner determines that an insurer has failed to meet the timeframes in this section, or has failed to meet any other requirement of this section, the commissioner may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected. The administrative penalties shall not be deemed an exclusive remedy for the commissioner. These penalties shall be paid to the Insurance Fund.
(i) Every insurer subject to this section shall maintain telephone access for providers to request authorization for health care services.
(j) (1) On or before July 1, 2020, and annually on each July 1 thereafter, a disability insurer that prospectively reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers before the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, insureds shall, for each of the 30 health care service subject to prospective review, services for which prospective review was most frequently requested by providers in the preceding calendar year, report to the department the number of times in the preceding calendar year the service was approved, modified, delayed, approved or denied.
(2) (A) An entity that performs utilization review or utilization management functions pursuant to a contract with a disability insurer or to which a disability insurer delegates these functions shall, for each of the 30 health care services for which prospective review was most frequently requested by providers in the preceding calendar year, report to the disability insurer the number of times in the preceding calendar year the service was approved or denied.
(B) A disability insurer shall report the information received pursuant to subparagraph (A) to the department as part of the report required pursuant to paragraph (1). That information shall be reported in a manner that identifies each individual entity with which the disability insurer contracts to perform utilization review or utilization management functions or to which the disability insurer delegates these functions.
(3) A prospective review decision made pursuant to a provider request for out-of-network services shall not be subject to this subdivision and shall not be included in the determination of the 30 health care services for which prospective review was most frequently requested by providers in the preceding calendar year.

(2)

(4) The form and manner of the reporting required pursuant to paragraph (1) shall be determined by the department.
(k) (1) On or before July 1, 2021, and at least annually thereafter, the department shall review the information reported pursuant to subdivision (j), information the department received for the same or similar services through an insured’s grievances submitted pursuant to Section 1368, and information the department received for the same or similar services through appeals, including those submitted pursuant to Section 10169. The department shall establish a process by which a disability insurer’s compliance with this section is reviewed, which shall include an evaluation of complaints and an assessment of trends. If the review indicates a failure to comply with this section, the department may conduct an audit or enforcement action.
(2) If the commissioner determines that a disability insurer has failed to meet a requirement of this section, the commissioner may assess, by order, an administrative penalty for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). The administrative penalties shall not be an exclusive remedy for the commissioner. These penalties shall be paid to the Insurance Fund.

(k)

(l) This section shall not cause a disability insurer to be defined as a health care provider for purposes of any law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.

SEC. 4.SEC. 5.

 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.