BILL NUMBER: SB 1387	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Padilla

                        FEBRUARY 21, 2008

   An act to amend Section 1371.1 of, and to add Section 1371.385 to,
the Health and Safety Code, and to amend Sections 10123.145 and
10133.661 of the Insurance Code, relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1387, as introduced, Padilla. Health care coverage: payment
disputes.
   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. Existing law provides
for the regulation of health insurers by the Department of
Insurance.
   Existing law authorizes an insured or health care provider to file
a written complaint with the Department of Insurance with respect to
the handling of a claim or other obligation under a health insurance
policy by a health insurer or production agency, or with respect to
the alleged misconduct by a health insurer or production agency, and
requires the commissioner to, among other things, make a
determination on the complaint within a specified period of time.
   This bill would enact parallel provisions with respect to health
care service plans and authorize enrollees and health care providers
to file those complaints with the Office of Plan and Provider
Relations in the Department of Managed Health Care. The bill would
also authorize enrollees, insureds, and health care providers to file
complaints with respect to unresolved payment disputes, as defined.
   Under existing law, each contract between a health care service
plan or a health insurer and a provider must contain provisions
requiring a fast, fair, and cost-effective dispute resolution
mechanism, as specified. Existing law requires a provider to
reimburse a health care service plan or a health insurer for an
overpayment within a specified period of time after receiving notice
of the overpayment, unless that overpayment is contested by the
provider. If an overpayment is contested, existing law requires that
the plan or insurer be notified in writing within 30 days.
   This bill would specifically provide that an overpayment is
contested if the provider has disputed the overpayment through the
dispute resolution mechanism provided by the plan or insurer or if,
within 30 calendar days following the conclusion of that mechanism,
the provider has filed a written complaint regarding the alleged
overpayment with the Department of Insurance or the Office of Plan
and Provider Relations, as applicable. The bill would require that a
provider filing that written complaint notify the plan or insurer of
the complaint in writing within a specified period of time.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1371.1 of the Health and Safety Code is amended
to read:
   1371.1.   (a)    Whenever a health care service
plan , including a specialized health care service plan, determines
that in reimbursing a claim for provider services an institutional or
professional provider has been overpaid, and then notifies the
provider in writing through a separate notice identifying the
overpayment and the amount of the overpayment, the provider shall
reimburse the health care service plan within 30 working days of
receipt by the provider of the notice of overpayment unless the
overpayment or portion thereof is contested by the provider in which
case the health care service plan shall be notified, in writing,
within 30 working days.  A   provider that contests an
overpayment by filing a complaint as described in paragraph (2) of
subdivision (b) shall notify the health c   are service plan
in writing of the complaint within 30 days of filing the complaint.
 The notice that an overpayment is being contested shall
identify the portion of the overpayment that is contested and the
specific reasons for contesting the overpayment.
   If the provider does not make reimbursement for an uncontested
overpayment within 30 working days after receipt, interest shall
accrue at the rate of 10 percent per annum beginning with the first
calendar day after the 30-working day period. 
   (b) For purposes of this section, an overpayment shall be
considered contested if either of the following have occurred: 

   (1) The provider has disputed the overpayment through the dispute
resolution mechanism provided by the health care service plan
pursuant to subdivision (h) of Section 1367.  
   (2) The provider has disputed the overpayment pursuant to the
health care service plan's dispute resolution mechanism, as described
in paragraph (1) and, within 30 calendar days following the
conclusion of that mechanism, has filed a written complaint regarding
the overpayment with the department's Office of Plan and Provider
Relations pursuant to Section 1371.385. 
  SEC. 2.  Section 1371.385 is added to the Health and Safety Code,
to read:
   1371.385.  (a) An enrollee or health care provider may file a
written complaint with the department's Office of Plan and Provider
Relations with respect to the handling of a claim, an unresolved
payment dispute, or other obligation under a health care service plan
contract, or with respect to alleged misconduct by a health care
service plan. The department shall notify the complainant of the
receipt of the complaint within 10 business days of its receipt. The
department shall make a determination on the complaint within 60
calendar days of the date of its receipt, unless the department, in
its discretion, determines that additional time is reasonably
necessary to fully and fairly evaluate the complaint. The department
shall notify the complainant of the final action taken on his or her
complaint within 30 days of the final action. The notification shall
include a summary explaining the department's reasons for the final
action.
   (b) For purposes of this section, "unresolved payment dispute"
means a payment dispute that remains unresolved at the conclusion of
the dispute resolution mechanism provided by the plan pursuant to
subdivision (h) of Section 1367.
  SEC. 3.  Section 10123.145 of the Insurance Code is amended to
read:
   10123.145.   (a)    Whenever an insurer issuing
group or individual policies of disability insurance which covers
hospital, medical, or surgical expenses determines that in
reimbursing a claim for provider services an institutional or
professional provider has been overpaid, and then notifies the
provider in writing through a separate notice identifying the
overpayment and the amount of the overpayment, the provider shall
reimburse the insurer within 30 working days of receipt by the
provider of the notice of overpayment unless the overpayment or
portion thereof is contested by the provider in which case the
insurer shall be notified, in writing, within 30 working days.  A
provider that contests an overpayment by filing a complaint as
described in paragraph (2) of subdivision (b) shall notify the
insurer in writing of the complaint within 30 days of filing the
complaint.  The notice that an overpayment is being contested
shall identify the portion of the overpayment that is contested and
the specific reasons for contesting the overpayment.
   If the provider does not make reimbursement for an uncontested
overpayment within 30 working days after receipt, interest shall
accrue at the rate of 10 percent per annum beginning with the first
calendar day after the 30 working day period. 
   (b) For purposes of this section, an overpayment shall be
considered contested if either of the following have occurred: 

   (1) The provider has disputed the overpayment through the dispute
resolution mechanism provided by the insurer pursuant to subdivision
(a) of Section 10123.137.  
   (2) The provider has disputed the overpayment pursuant to the
insurer's dispute resolution mechanism, as described in paragraph (1)
and, within 30 calendar days following the conclusion of that
mechanism, has filed a written complaint regarding the overpayment
with the department pursuant to subdivision (c) of Section 10133.661.

  SEC. 4.  Section 10133.661 of the Insurance Code is amended to
read:
   10133.661.  On or before July 1, 2006, the commissioner, pursuant
to his or her authority under Section 12921.1, shall also complete
all of the following duties:
   (a) Provide announcements that inform health insurance consumers
and their health care providers of the department's toll-free
telephone number that is dedicated to the handling of complaints and
of the availability of the Internet Web page established under this
section, and the process to register a complaint with the department
and to submit an inquiry to it.
   (b) Establish an Internet Web page located on the department's
public Internet Web site dedicated exclusively to processing
complaints and inquiries relating to health insurance issues from
insureds and their health care providers. The Web page shall provide
insureds and their health care providers with information concerning
filing a complaint and making an inquiry concerning a health insurer
and, at a minimum, shall provide the following information:
   (1) The department's toll-free telephone number.
   (2) A list of all health insurers licensed by the department.
   (3) Educational and informational guides for health insurance
consumers and health care providers describing their rights under
this code. The guides shall be easy to read and understand and shall
be made available to the public, including access on the department's
Internet Web site.
   (4) A separate, standardized complaint form for health care
providers to file a complaint.
   (c)  (1)    An insured or health care provider
may file a written complaint with the department with respect to the
handling of a claim  , an unresolved payment dispute,  or
other obligation under a health insurance policy by a health insurer
or production agency, or with respect to the alleged misconduct by a
health insurer or production agency. The commissioner shall notify
the complainant of the receipt of the complaint within 10 business
days of its receipt. The commissioner shall make a determination on
the complaint within 60 calendar days of the date of its receipt,
unless the commissioner, in his or her discretion, determines that
additional time is reasonably necessary to fully and fairly evaluate
the complaint. The commissioner shall notify the complainant of the
final action taken on his or her complaint within 30 days of the
final action. The notification shall include a summary explaining the
commissioner's reasons for the final action. 
   (2) For purposes of this subdivision, "unresolved payment dispute"
means a payment dispute that remains unresolved at the conclusion of
the dispute resolution mechanism provided by the insurer pursuant to
subdivision (a) of Section 10123.137.