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AB-1162 Health care coverage: claims payments.(2021-2022)

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Date Published: 02/18/2021 09:00 PM
AB1162:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1162


Introduced by Assembly Member Villapudua

February 18, 2021


An act to amend Sections 1368.7, 1371, and 1371.35 of, and to add Section 1371.15 to, the Health and Safety Code, and to amend Sections 10112.95, 10123.13, and 10123.147 of, and to add Section 10123.146 to, the Insurance Code, relating to health care coverage.


LEGISLATIVE COUNSEL'S DIGEST


AB 1162, as introduced, Villapudua. Health care coverage: claims payments.
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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer to provide access to medically necessary health care services to its enrollees or insureds who have been displaced by a state of emergency. Existing law enumerates actions that a plan or insurer may be required to take to meet the needs of its enrollees or insureds during the state of emergency. Under existing law, the department may relax time limits for prior authorization during a state of emergency.
Existing law requires a health care service plan or a health insurer to reimburse each complete claim, as specified, as soon as practical, but no later than 30 working days, or for a health maintenance organization, 45 working days, after receipt of the complete claim. Under existing law, within 30 working days, or 45 working days for a health maintenance organization, after receipt of the claim, a plan or insurer can contest or deny a claim, as specified. Existing law also authorizes the plan or insurer to request reasonable additional information about a contested claim within 30 working days, or for a health maintenance organization, 45 working days. Existing law allows the plan or insurer 30 working days, or a health maintenance organization 45 working days, after receipt of the additional information to reconsider the claim. Under existing law, once the plan or insurer has received all the information necessary to determine payer liability for the claim and has not reimbursed the claim deemed to be payable within 30 working days, or 45 working days for a health maintenance organization, interest will accrue as specified.
Under existing law, for an unpaid claim for nonemergency services, the plan or insurer is required to pay interest, and a plan is required to automatically include the interest in its payment to the claimant on an uncontested claim that has not been paid within the prescribed period. Under existing law, if a plan fails to automatically include this interest owed, it is required to also pay the claimant a $10 fee for failing to comply with this requirement. Under existing law, if a claim for emergency services is not contested by the plan or insurer, and the plan or insurer fails to pay the claim within the 30- or 45-day respective period, the plan or insurer is required to pay a fee or interest, as specified.
This bill would require a health care service plan or health insurer to provide access to medically necessary health care services to its enrollees or insureds that are displaced or otherwise affected by a state of emergency. The bill would allow the department to also suspend requirements for prior authorization during a state of emergency.
The bill would shorten the time requirements for a plan or insurer to pay or contest a claim for emergency or nonemergency services to 20 working days. The bill would likewise shorten the time limit for requesting additional information about a claim to 20 working days. The bill would require a plan or insurer to pay a provider any interest and fees that accrue from failure to pay a claim regardless of whether the department institutes an enforcement action against the plan or insurer. The bill would define concurrent review for these purposes, and would authorize telephone, videochat, or onsite conduct to qualify as a concurrent review activity. The bill would also prohibit a plan or insurer from recouping an alleged overpayment on one claim by deducting or withholding the amount of the alleged overpayment from another claim relating to the same or a different enrollee or insured. 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 1368.7 of the Health and Safety Code is amended to read:

1368.7.
 (a) A health care service plan shall provide an enrollee who has been displaced or otherwise affected by a state of emergency, as declared by the Governor pursuant to Section 8625 of the Government Code, access to medically necessary health care services.
(b) Within 48 hours of a declaration by the Governor of a state of emergency that displaces or displaces, has the immediate potential to displace enrollees, displace, or otherwise affects enrollees or health care providers, a health care service plan operating in the county or counties included in the declaration shall file with the department a notification describing whether the plan has experienced or expects to experience any disruption to the operation of the plan, explaining how the plan is communicating with potentially impacted enrollees, and summarizing the actions the plan has taken or is in the process of taking to ensure that the health care needs of enrollees are met. This The department may require the plan to take actions, including, but not limited to, the following:
(1) Relax time limits or suspend requirements for prior authorization, precertification, or referrals.
(2) Extend filing deadlines for claims.
(3) Suspend prescription refill limitations and allow an impacted enrollee to refill his or her the enrollee’s prescriptions at an out-of-network pharmacy.
(4) Authorize an enrollee to replace medical equipment or supplies.
(5) Allow an enrollee to access an appropriate out-of-network provider if an in-network provider is unavailable due to the state of emergency or if the enrollee is out of the area due to displacement.
(6) Have a toll-free telephone number that an affected enrollee may call for answers to questions, including questions about the loss of health insurance identification cards, access to prescription refills, or how to access health care.
(c) This section shall not be construed to limit the Governor’s authority under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code), or the director’s authority under any provision of this chapter.

SEC. 2.

 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 a portion of a claim, whether in state or out of state, as soon as practicable, but no later than 30 20 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 or denied by the plan, in which case the claimant provider shall be notified, in writing, that the claim is contested or denied, within 30 as soon as possible, but no later than 20 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. Notwithstanding any other law, a claim for a service that has been prior authorized by the plan or plan delegate, or has been subject to concurrent review by the plan or plan delegate, shall not be contested, denied, or pended for additional information prior to payment. However, a plan may adjudicate the claim after payment and recover any overpayment pursuant to the procedure set forth in Section 1371.1.
(2) If an uncontested claim is not reimbursed by delivery to the claimants’ provider’s address of record within the respective 30 or 45 as soon as possible, but no later than 20 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 20-working-day period. A health care service plan shall automatically include in its payment of the claim to the provider all interest that has accrued pursuant to this section without requiring the claimant provider or enrollee to submit a request for the interest amount. A plan failing to comply with this requirement shall pay the claimant provider a ten dollar ($10) fee.
(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.
(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. shall, as soon as possible, but no later than 20 working days after receipt of this additional information, complete reconsideration of the claim and pay the provider any amounts owed. 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 as soon as possible, but no later than 20 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 20-working-day period. A health care service plan shall automatically include in its payment of the claim to the provider the interest that has accrued pursuant to this section without requiring the provider or enrollee to submit a request for the interest amount.
(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 the specialized health care service plan complies with this subdivision.
(1) A specialized health care service plan’s statistically reliable method, and how the specialized health care service 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 specialized health care service plan’s antifraud plan established and approved pursuant to Section 1348. The specialized health care service 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. The statistically reliable method shall be consistent with direction provided by the International Standards for the Professional Practice of Internal Auditing and the guidance provided by the International Professional Practices Framework guide, which are both produced by the Institute of Internal Auditors.
(2) Pursuant to its antifraud plan established and approved pursuant to Section 1348, a specialized 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 specialized health care service plan’s statistically reliable methodology. The description shall include information that ensures that the sample size used to calculate the repayment amount is consistent with the professional guidance provided in the 2009 edition of the American Institute of Certified Public Accountants’ Audit Sampling Considerations of Circular A-133 Compliance Audits.
(B) A clear description of the universe of claims from which the statistical random 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 specialized health care service plan’s statistically reliable methodology was utilized in the specialized health care service plan’s findings of suspected fraud.
(D) Notice that a provider may dispute the specialized health care service 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 specialized health care service 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 specialized health care service plan suspects the claim is fraudulent.
(3) 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 recover overpayments made as a result of suspected fraud only if the universe of claims upon which the statistical analysis is performed consists only of those claims made between 365 days from the date of payment of the earliest in time claim and the date of payment of the latest in time claim. Notice shall be mailed to the provider no later than 60 days following the date of payment of the latest in time claim.
(4) If the provider contests the specialized 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 specialized health care service plan stating the basis upon which the provider believes that the claims are not fraudulent. The specialized health care service plan shall receive and process this contested notice of suspected fraud as a provider dispute pursuant to subdivision (a) of this section, paragraph (1) of subdivision (h) of Section 1367, and the regulations promulgated thereunder.
(5) A specialized health care service plan may offset the amount the specialized health care service 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 specialized health care service plan within 45 working days from the date of receipt by the provider of the notice of suspected fraud.
(B) The specialized health care service plan sends written notice to the provider no less than 10 working days prior to withholding current claim payments in which the specialized health care service plan, at a minimum, states its intent to withhold current claim payments and identifies the claim payments that the specialized health care service plan intends to withhold.
(C) The withheld claim payments do not exceed the amount asserted by the specialized health care service plan to be owed to the specialized health care service plan in its notice of suspected fraud.
(6) This section does not limit or remove a specialized health care service plan’s obligation to comply with its antifraud plan established pursuant to Section 1348, or to limit or remove the specialized health care service plan’s obligation to comply with the requirements for claims subject to subdivision (a).
(7) This subdivision does not limit or remove a specialized health care service plan’s ability to recover overpayments as long as recovery is consistent with applicable law, including subdivision (a) and the regulations promulgated thereunder.
(8) This subdivision does not apply to claims submitted by a physician and surgeon for medical or surgical services that are outside the scope of practice of an optometrist pursuant to the Optometry Practice Act (Chapter 7 (commencing with Section 3000) of Division 2 of the Business and Professions Code).
(c) The obligation of a 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.
(d) Interest and fees required by this section shall be payable by the health care service plan to the provider regardless of whether the department institutes an enforcement action against the plan.
(e) (1) For purposes of this section and Section 1371.35, “concurrent review” means a process implemented by a health care service plan, in real time during the hospital stay or the outpatient course of treatment, to accomplish one or more of the following:
(A) Review the medical necessity of a hospital or other health facility admission, upon or within a short time following the admission.
(B) Assess the medical necessity of ongoing health care services provided to a patient.
(C) Evaluate the appropriateness of the length of stay or level of care.
(D) Periodically review the patient’s condition, progress, ongoing treatment plan, or specific services provided by a health facility with a representative of the patient’s care team.
(E) Explore alternatives to inpatient care.
(2) Concurrent review may be performed by telephone, videochat, or onsite.

SEC. 3.

 Section 1371.15 is added to the Health and Safety Code, to read:

1371.15.
 Notwithstanding any other law, a health care service plan shall not recoup an alleged overpayment on one claim by deducting or withholding the amount of the alleged overpayment from another claim relating to the same enrollee or a different enrollee. The plan shall recoup alleged overpayments pursuant to the process set forth in Section 1371.1.

SEC. 4.

 Section 1371.35 of the Health and Safety Code is amended to read:

1371.35.
 (a)  A health care service plan, including a specialized health care service plan, shall reimburse each complete claim, or portion thereof, whether in state or out of state, as soon as practical, but no later than 30 20 working days after receipt of the complete 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 complete claim by the health care service plan. However, a plan may contest or deny a claim, or portion thereof, by notifying the claimant, provider, in writing, that the claim is contested or denied, within 30 as soon as possible, but no later than 20 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, or portion thereof, is contested shall identify the portion of the claim that is contested, by revenue code, and the specific information needed from the provider to reconsider the claim. The notice that a claim, or portion thereof, is denied shall identify the portion of the claim that is denied, by revenue code, and the specific reasons for the denial. A plan may delay payment of an uncontested portion of a complete claim for reconsideration of a contested portion of that claim so long as the plan pays those charges specified in subdivision (b). Notwithstanding any other law, a claim for a service that has been prior authorized by the plan or plan delegate, or has been subject to concurrent review by the plan or plan delegate, shall not be contested, denied, or pended for additional information prior to payment. However, a plan may adjudicate the claim after payment and recover any overpayment pursuant to the procedure set forth in Section 1371.1.
(b)  If a complete claim, or portion thereof, that is neither contested nor denied, is not reimbursed by delivery to the claimant’s provider’s address of record within the respective 30 or 45 as soon as possible, but no later than 20 working days after receipt, the plan shall pay the greater of fifteen dollars ($15) per year or interest at the rate of 15 percent per annum beginning with the first calendar day after the 30- or 45-working-day 20-working-day period. A health care service plan shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the claimant, provider, without requiring a request therefor.
(c)  For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 as soon as possible, but no later than 20 working days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 as soon as possible, but no later than 20 working days of receipt of the claim. However, if the plan requests a copy of the emergency department report within the 30 20 working days after receipt of the electronic claim from the institutional provider, the plan may also request additional reasonable relevant information within 30 as soon as possible, but no later than 20 working days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 as soon as possible, but no later than 20 working days of receipt of the claim. The provider shall provide the plan reasonable relevant information within 10 working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the plan requires further information, the plan shall have an additional 15 working days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete. If a claim, or portion thereof, that has been contested pursuant to this subdivision is payable to the provider, but is not reimbursed by delivery to the provider’s address of record within 20 working days after receipt of the additional information, the plan shall pay the provider the greater of fifteen dollars ($15) per year or interest at the rate of 15 percent per annum beginning with the first calendar day after the 20-working-day period. A health care service plan shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the provider, without requiring a request therefor.
(d)  This section shall not apply to claims about which there is evidence of fraud and misrepresentation, to eligibility determinations, or in instances where the plan has not been granted reasonable access to information under the provider’s control. A plan shall specify, in a written notice sent to the provider within the respective 30- or 45- as soon as possible and within 20 working days of receipt of the claim, which, if any, of these exceptions applies to a claim.
(e)  If a claim or portion thereof is contested on the basis that the plan has not received information reasonably necessary to determine payer liability for the claim or portion thereof, then the plan shall have 30 working days or, if the health care service plan is a health maintenance organization, 45 working days request the information needed from each third party as soon as possible, but no later than 20 working days after receipt of the claim. The plan shall adjudicate the claim as soon as possible, but no later than 20 working days after receipt of this additional information to complete reconsideration of the claim. information. If a claim, or portion thereof, undergoing reconsideration that has been contested pursuant to this subdivision is payable to the provider, but is not reimbursed by delivery to the claimant’s provider’s address of record within the respective 30 or 45 20 working days after receipt of the additional information, the plan shall pay the greater of fifteen dollars ($15) per year or interest at the rate of 15 percent per annum beginning with the first calendar day after the 30- or 45-working-day 20-working-day period. A health care service plan shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the claimant, provider, without requiring a request therefor.
(f)  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. This section shall not be construed to prevent a plan from assigning, by a written contract, the responsibility to pay interest and late charges pursuant to this section to medical groups, independent practice associations, or other entities.
(g)  A plan shall not delay payment on a claim from a physician or other provider to await the submission of a claim from a hospital or other provider, without citing specific rationale as to why the delay was necessary and providing a monthly update regarding the status of the claim and the plan’s actions to resolve the claim, to the provider that submitted the claim.
(h)  A health care service plan shall not request or require that a provider waive its rights pursuant to this section.
(i)  This section shall not apply to capitated payments.
(j)  This section shall apply only to claims for services rendered to a patient who was provided emergency services and care as defined in Section 1317.1 in the United States on or after September 1, 1999.
(k)  This section shall not be construed to affect the rights or obligations of any person pursuant to Section 1371.
( l)  This section shall not be construed to affect a written agreement, if any, of a provider to submit bills within a specified time period.
(m) Interest and fees required by this section shall be payable by the plan to the provider regardless of whether the department institutes an enforcement action against the plan.

SEC. 5.

 Section 10112.95 of the Insurance Code is amended to read:

10112.95.
 (a) A health insurer shall provide an insured who has been displaced or otherwise affected by a state of emergency, as declared by the Governor pursuant to Section 8625 of the Government Code, access to medically necessary health care services.
(b) Within 48 hours of a declaration by the Governor of a state of emergency that displaces or displaces, has the immediate potential to displace insureds, displace or otherwise affects insureds or health care providers, a health insurer operating in the county or counties included in the declaration shall file with the department a notification describing whether the insurer has experienced or expects to experience any disruption to the operation of the insurer, explaining how the insurer is communicating with potentially impacted insureds, and summarizing the actions the insurer has taken or is in the process of taking to ensure that the health care needs of insureds are met. This The department may require the insurer to take actions, including, but not limited to, the following:
(1) Relax time limits or suspend requirements for prior authorization, precertification, or referrals.
(2) Extend filing deadlines for claims.
(3) Suspend prescription refill limitations and allow an impacted insured to refill his or her the insured’s prescriptions at an out-of-network pharmacy.
(4) Authorize an insured to replace medical equipment or supplies.
(5) Allow an insured to access an appropriate out-of-network provider if an in-network provider is unavailable due to the state of emergency or if the insured is out of the area due to displacement.
(6) Have a toll-free telephone number that an affected insured may call for answers to questions, including questions about the loss of health insurance identification cards, access to prescription refills, or how to access health care.
(c) This section shall not be construed to limit the Governor’s authority under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code), or the commissioner’s authority under any provision of this part.

SEC. 6.

 Section 10123.13 of the Insurance Code is amended to read:

10123.13.
 (a) Every insurer issuing group or individual policies of health insurance that covers hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse claims or any portion of any claim, whether in state or out of state, for those expenses as soon as practical, but no later than 30 20 working days after receipt of the claim by the insurer unless the claim or portion thereof is contested or denied by the insurer, in which case the claimant provider shall be notified, in writing, that the claim is contested or denied, within 30 as soon as possible, but no later than 20 working days after receipt of the claim by the insurer. The notice that a claim is being contested or denied shall identify the portion of the claim that is contested or denied and the specific reasons including for each reason the factual and legal basis known at that time by the insurer for contesting or denying the claim. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or the legal basis for its reason for contesting or denying the claim. The insurer shall provide a copy of the notice to each insured who received services pursuant to the claim that was contested or denied and to the insured’s health care provider that provided the services at issue. The notice shall advise the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that the insurer contested or denied, and the notice shall include the address, Internet Web site internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. The notice to the insured may also be included on the explanation of benefits. Notwithstanding any other law, a claim for a service that has been prior authorized by the insurer or the insurer’s delegate, or has been subject to concurrent review by the insurer or the insurer’s delegate, shall not be contested, denied, or pended for additional information prior to payment. However, an insurer may adjudicate the claim after payment and recover any overpayment pursuant to the procedure set forth in Section 10123.145.
(b) If an uncontested claim is not reimbursed by delivery to the claimant’s provider’s address of record within 30 as soon as possible, but no later than 20 working days after receipt, interest shall accrue and shall be payable at the rate of 10 percent per annum beginning with the first calendar day after the 30-working day 20-working-day period.
(c) For purposes of this section, a claim, or portion thereof, is reasonably contested when the insurer has not received a 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 liability for the claims 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 insurer to determine the medical necessity for the health care services provided to the claimant. If an insurer has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim determined to be payable within 30 20 working days of receipt of that information, interest shall accrue and be payable at a rate of 10 percent per annum beginning with the first calendar day after the 30-working day 20-working-day period.
(d) The obligation of the insurer to comply with this section shall not be deemed to be waived when the insurer requires its contracting entities to pay claims for covered services.
(e) Interest and fees required by this section shall be payable by the insurer to the provider regardless of whether the department institutes an enforcement action against the insurer.
(f) (1) For purposes of this section and Section 10123.147, “concurrent review” means a process implemented by an insurer, in real time during the hospital stay or the outpatient course of treatment, to accomplish one or more of the following:
(A) Review the medical necessity of a hospital or other health facility admission, upon or within a short time following the admission.
(B) Assess the medical necessity of ongoing health care services provided to a patient.
(C) Evaluate the appropriateness of the length of stay or level of care.
(D) Periodically review the patient’s condition, progress, ongoing treatment plan, or specific services provided by a health facility with a representative of the patient’s care team.
(E) Explore alternatives to inpatient care.
(2) Concurrent review may be performed by telephone, videochat, or onsite.

SEC. 7.

 Section 10123.146 is added to the Insurance Code, to read:

10123.146.
 Notwithstanding any other law, a health insurer shall not recoup an alleged overpayment on one claim by deducting or withholding the amount of the alleged overpayment from another claim relating to the same insured or a different insured. The insurer shall recoup alleged overpayments pursuant to the process set forth in Section 10123.145.

SEC. 8.

 Section 10123.147 of the Insurance Code is amended to read:

10123.147.
 (a) Every insurer issuing group or individual policies of health insurance that covers hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse each complete claim, or portion thereof, whether in state or out of state, as soon as practical, but no later than 30 20 working days after receipt of the complete claim by the insurer. However, an insurer may contest or deny a claim, or portion thereof, by notifying the claimant, provider, in writing, that the claim is contested or denied, within 30 as soon as possible, but no later than 20 working days after receipt of the complete claim by the insurer. The notice that a claim, or portion thereof, is contested shall identify the portion of the claim that is contested, by revenue code, and the specific information needed from the provider to reconsider the claim. The notice that a claim, or portion thereof, is denied shall identify the portion of the claim that is denied, by revenue code, and the specific reasons for the denial, including the factual and legal basis known at that time by the insurer for each reason. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or legal basis for its reason to deny the claim. The insurer shall provide a copy of the notice required by this subdivision to each insured who received services pursuant to the claim that was contested or denied and to the insured’s health care provider that provided the services at issue. The notice required by this subdivision shall include a statement advising the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that was contested or denied by the insurer and the address, Internet Web site internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. An insurer may delay payment of an uncontested portion of a complete claim for reconsideration of a contested portion of that claim so long as the insurer pays those charges specified in subdivision (b). Notwithstanding any other law, a claim for a service that has been prior authorized by the insurer or the insurer’s delegate, or has been subject to concurrent review by the insurer or the insurer’s delegate, shall not be contested, denied, or pended for additional information prior to payment. However, an insurer may adjudicate the claim after payment and recover any overpayment pursuant to the procedure set forth in Section 10123.145.
(b) If a complete claim, or portion thereof, that is neither contested nor denied, is not reimbursed by delivery to the claimant’s provider’s address of record within the 30 as soon as possible, but no later than 20 working days after receipt, the insurer shall pay the greater of fifteen dollars ($15) per year or interest at the rate of 10 percent per annum beginning with the first calendar day after the 30-working day 20-working-day period. An insurer shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the claimant, provider, without requiring a request therefor.
(c) For the purposes of this section, a claim, or portion thereof, is reasonably contested if the insurer has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 as soon as possible, but no later than 20 working days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 as soon as possible, but no later than 20 working days of receipt of the claim. However, if the insurer requests a copy of the emergency department report within the 30 20 working days after receipt of the electronic claim from the institutional provider, the insurer may also request additional reasonable relevant information within 30 as soon as possible, but no later than 20 working days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 as soon as possible, but no later than 20 working days of receipt of the claim. The provider shall provide the insurer reasonable relevant information within 15 working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the insurer requires further information, the insurer shall have an additional 15 working days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete. If a claim, or portion thereof, that has been contested pursuant to this subdivision is payable to the provider, but is not reimbursed by delivery to the provider’s address of record within 20 working days after receipt of the additional information, the insurer shall pay the provider the greater of fifteen dollars ($15) per year or interest at the rate of 15 percent per annum beginning with the first calendar day after the 20-working-day period. An insurer shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the provider, without requiring a request therefor.
(d) This section shall not apply to claims about which there is evidence of fraud and misrepresentation, to eligibility determinations, or in instances where the plan has not been granted reasonable access to information under the provider’s control. An insurer shall specify, in a written notice to the provider as soon as possible and within 30 20 working days of receipt of the claim, which, if any, of these exceptions applies to a claim.
(e) If a claim or portion thereof is contested on the basis that the insurer has not received information reasonably necessary to determine payer liability for the claim or portion thereof, then the insurer shall have 30 working days request the information needed from each third party as soon as possible, but no later than 20 working days after receipt of the claim. The insurer shall adjudicate the claim as soon as possible, but no later than 20 working days after receipt of this additional information to complete reconsideration of the claim. information. If a claim, or portion thereof, undergoing reconsideration that has been contested pursuant to this subdivision is payable to the provider, but is not reimbursed by delivery to the claimant’s provider’s address of record within the 30 20 working days after receipt of the additional information, the insurer shall pay the greater of fifteen dollars ($15) per year or interest at the rate of 10 percent per annum beginning with the first calendar day after the 30-working day 20-working-day period. An insurer shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the claimant, provider, without requiring a request therefor.
(f) An insurer shall not delay payment on a claim from a physician or other provider to await the submission of a claim from a hospital or other provider, without citing specific rationale as to why the delay was necessary and providing a monthly update regarding the status of the claim and the insurer’s actions to resolve the claim, to the provider that submitted the claim.
(g) An insurer shall not request or require that a provider waive its rights pursuant to this section.
(h) This section shall apply only to claims for services rendered to a patient who was provided emergency services and care as defined in Section 1317.1 of the Health and Safety Code in the United States on or after September 1, 1999.
(i) This section shall not be construed to affect the rights or obligations of any person pursuant to Section 10123.13.
(j) This section shall not be construed to affect a written agreement, if any, of a provider to submit bills within a specified time period.
(k) Interest and fees required by this section shall be payable by the insurer to the provider regardless of whether the department institutes an enforcement action against the insurer.

SEC. 9.

 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.