BILL ANALYSIS
AB 1455
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1455 (Scott)
As Amended August 30, 2000
Majority vote
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|ASSEMBLY: | |(May 27, 1999) |SENATE: |34-0 |(August 31, |
| | | | | |2000) |
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(vote not relevant)
Original Committee Reference: INS.
SUMMARY : Revises the dispute resolution process for payment
claims for medical services between providers and health care
service plans (health plans).
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Require health plan contracts with providers to have a fast,
fair, and cost-effective dispute resolution mechanism, that it
be accessible to noncontracting providers for billing
disputes, and that health plans annually submit a report to
the Department of Managed Care (DMC) on this dispute
mechanism, as specified.
2)Increase the interest penalty for unpaid uncontested claims
from 10% to 15%, and requires that interest be automatically
included in the claim payment. Require the same penalty on
contested claims which are determined to be payable, and
provides for a $10 fee for non-compliance.
3)Prohibit health plans from denying a claim based on a lack of
authorization for health care services if the services were
related to previously authorized services, it was medically
necessary, and the services were provided after business hours
and the health plan does not have an after-hours authorization
process.
4)Prohibit health plans from engaging in an unfair payment
pattern, defined as a demonstrable and unjust pattern of
reviewing or processing complete and accurate claims that
results in payment delays, reduced payments, denials of
complete and accurate claims, or failure to pay interest due.
AB 1455
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5)Permit DMC, when it has determined that a health plan has
engaged in an unfair payment pattern, to impose monetary
penalties, require health plans to pay claims in an
accelerated manner for three years, and collect costs incurred
by DMC for investigative and enforcement expenses.
6)Require DMC to define in regulations a "complete and accurate
claim," and to report to the Legislature its definitions of
"unjust patterns." Require DMC to make available to the
public upon request, and on its website, information regarding
actions taken on payment practices.
7)Require DMC to adopt regulations ensuring that health plans
have adopted the dispute resolution process provided for in
this bill, and report to the Legislature its recommendations
for additional statutory requirements.
8)Permit providers and health plans to report possible unfair
patterns to DMC by toll-free telephone or email, and require
DMC to report to the Legislature the process of responding to
these patterns.
EXISTING LAW requires:
1)Emergency services and care to be rendered without first
questioning the patient or any other person as to his or her
ability to pay therefor.
2)For emergency care claims, a health plan to notify a claimant
in writing if a complete claim, or portion thereof, is
contested or denied.
3)If an uncontested claim is not paid by a health plan within 30
working days, or by a health maintenance organization (HMO)
within 45 working days, interest on the claim to accrue at 10%
per year.
AS PASSED BY THE ASSEMBLY , this bill required the Department of
Insurance to complete a closed claims study on or before July 1,
2000 on auto insurance claims closed in 1988, a copy of which
was to be submitted to the Legislature.
FISCAL EFFECT : Unknown
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COMMENTS : According to the author, it is increasingly
difficult for providers to obtain full and timely reimbursement
from plan payors for services rendered to enrollees, and
although existing law provides remedies such as civil action or
arbitration, these are not viable alternatives due to the time,
cost and likelihood of retaliation against a provider by a plan.
This bill is sponsored by the California Healthcare
Association, which states that this bill is an innovative and
proactive treatment for California's ailing health care system.
This bill was substantially amended in the Senate and the
Assembly-approved provisions of this bill were deleted in the
Senate. This bill, as amended in the Senate, is identical to
the current version of SB 1177 (Perata), the subject matter of
which was heard in Assembly Health Committee.
Analysis Prepared by : Vincent D. Marchand / HEALTH / (916)
319-2097
FN: 0007173