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AB-685 Health care service plans: reimbursement.(2021-2022)

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Date Published: 03/11/2021 09:00 PM
AB685:v98#DOCUMENT

Amended  IN  Assembly  March 11, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 685


Introduced by Assembly Member Maienschein

February 16, 2021


An act to amend Section 1371.35 of the Health and Safety Code, and to amend Section 10123.13 of the Insurance Code, relating to health care service plans.


LEGISLATIVE COUNSEL'S DIGEST


AB 685, as amended, Maienschein. Health care service plans: reimbursement.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law requires a health care service plan to reimburse complete claims, or portions thereof, no later than 30 working days after receipt of the claim, or 45 working days if a health care service plan is a health maintenance organization. within specified timeframes. Existing law establishes the process and for a health care service plan to contest or deny a claim for reimbursement. Existing law requires a health care service plan to pay the provider, as specified, for failure to reimburse uncontested claims within the respective time frames. Existing law requires every insurer issuing group or individual policies of health insurance that cover hospital, medical, or surgical expenses to reimburse claims within specified timeframes and establishes the process for an insurer to contest or deny a claim for reimbursement.

This bill would require a health care service plan to reimburse each complete claim, or portion thereof, no later than 15 working days after receipt of the complete claim. The bill would also make necessary conforming changes to this provision. 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.

This bill would require health service plans and insurers to obtain an independent board-certified emergency physician review of the medical decisionmaking related to a service before denying benefits, reimbursing for a lesser procedure, reducing reimbursement based on the absence of a medical emergency, or making a determination that medical necessity was not present for claims billed by a licensed physician and surgeon for emergency medical services, as specified. 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 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 15 30 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, in writing, that the claim is contested or denied, within 15 30 working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the claim by the health care service plan. The notice that a claim, 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).
(1) For claims billed by a licensed physician and surgeon for emergency services and care as defined in Section 1317.1, prior to a health care service plan denying benefits, selecting a current procedural terminology (CPT) evaluation and management or procedure code of lesser acuity than billed, reducing reimbursement for a billed emergency service based on a determination of the absence of an emergency medical condition, or making a determination that medical necessity was not present and therefore reimbursement will be for a lower level of care or as a nonemergency service, the health care service plan shall obtain an independent board-certified emergency physician review of the enrollee’s medical record, including the nature of the presenting symptoms, patient history, exam, and medical decisionmaking related to the service. This paragraph does not apply when a reduction in reimbursement is made by a health care service plan based on a contractually agreed-upon adjustment for health care services.
(A) If the independent board-certified emergency physician reviewer determines that the reimbursement or any part of the claim should be reduced, the reviewer shall explain in writing the reason for the reduction of reimbursement.
(B) The written explanation for the reduction and the reviewer’s name, date, signature, and supporting evidence shall be provided to the physician and surgeon.
(2) For the purposes of this subdivision, “independent board-certified emergency physician” shall mean a licensed physician and surgeon in the State of California who is board certified by the American Board of Emergency Medicine or American Osteopathic Board of Emergency Medicine and is not otherwise directly or indirectly hired by the health care service plan, except for the purposes of reviewing emergency medical services claim reduction in payment. The physician shall have substantial professional experience providing emergency medical services within the last two years in a general acute care health facility emergency department.
(b)  If a complete claim, or portion thereof, that is neither contested nor denied, is not reimbursed by delivery to the claimant’s address of record within the respective 15 30 or 45 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 15- 30­ or 45-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, 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 15 30 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 15 30 working days of receipt of the claim. However, if the plan requests a copy of the emergency department report within the 15 30 working days after receipt of the electronic claim from the institutional provider, the plan may also request additional reasonable relevant information within 30 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 15 30 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.
(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 15- 30­ or 45-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 after receipt of this additional information to complete reconsideration of the claim. If a claim, or portion thereof, undergoing reconsideration is not reimbursed by delivery to the claimant’s address of record within the respective 30 or 45 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 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, 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.

SEC. 2.

 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 working days after receipt of the claim by the insurer unless the claim or portion thereof is contested by the insurer, in which case the claimant shall be notified, in writing, that the claim is contested or denied, within 30 working days after receipt of the claim by the 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.
(1) For claims billed by a licensed physician and surgeon for emergency medical services as defined in Section 1317.1 of the Health and Safety Code, prior to a health care service plan denying benefits, selecting a current procedural terminology (CPT) evaluation and management or procedure code of lesser acuity than billed, reducing reimbursement for a billed emergency service based on a determination of the absence of an emergency medical condition, or making a determination that medical necessity was not present and therefore reimbursement will be for a lower level of care or as a nonemergency service, the insurer shall obtain an independent board-certified emergency physician review of the enrollee’s medical record, including the nature of the presenting symptoms, patient history, exam, and medical decisionmaking related to the service. This paragraph does not apply when a reduction in reimbursement is made by an insurer based on a contractually agreed-upon adjustment for health care services.
(A) If the independent board-certified emergency physician reviewer determines that the reimbursement or any part of the claim should be reduced, the reviewer shall explain in writing the reason for the reduction of reimbursement.
(B) The written explanation for the reduction and the reviewer’s name, date, signature, and supporting evidence shall be provided to the physician and surgeon.
(2) For the purposes of this subdivision, “independent board-certified emergency physician” shall mean a licensed physician and surgeon in the State of California who is board certified by the American Board of Emergency Medicine or American Osteopathic Board of Emergency Medicine and is not otherwise directly or indirectly hired by the insurer, except for the purposes of reviewing emergency medical services claim reduction in payment. The physician shall have substantial professional experience providing emergency medical services within the last two years in a general acute care health facility emergency department.
(b) If an uncontested claim is not reimbursed by delivery to the claimant’s address of record within 30 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 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 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 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.

SEC. 2.SEC. 3.

SEC. 2.SEC. 3.

 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.