BILL NUMBER: SB 981	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 31, 2008
	PASSED THE ASSEMBLY  AUGUST 27, 2008
	AMENDED IN ASSEMBLY  AUGUST 22, 2008
	AMENDED IN ASSEMBLY  AUGUST 15, 2008
	AMENDED IN ASSEMBLY  AUGUST 4, 2008
	AMENDED IN ASSEMBLY  JUNE 17, 2008
	AMENDED IN ASSEMBLY  SEPTEMBER 7, 2007
	AMENDED IN ASSEMBLY  JULY 2, 2007
	AMENDED IN SENATE  APRIL 17, 2007
	AMENDED IN SENATE  APRIL 9, 2007

INTRODUCED BY   Senator Perata

                        FEBRUARY 23, 2007

   An act to add and repeal Sections 1371.42 and 1379.1 of, and to
add and repeal Article 5.57 (commencing with Section 1374.40) of
Chapter 2.2 of Division 2 of, the Health and Safety Code, relating to
health care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 981, Perata. Health care coverage: noncontracting emergency
physician claims.
   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 payment
of provider claims and the resolution of claim disputes, as
specified, and requires health care service plans to ensure that a
dispute resolution mechanism is accessible to noncontracting
providers for the purpose of resolving billing and claim disputes.
Existing law establishes an independent medical review system in
which requests for review of disputed health care services, as
defined, are conducted by an independent medical review organization.

   Existing law also requires plans to provide subscribers and
enrollees basic health care services, including emergency services,
and requires plans to reimburse providers for emergency services and
care provided to enrollees, except as specified.
   This bill would enact various provisions applicable to
noncontracting emergency physicians, as defined. The bill would
require that payment for each coded and charged covered emergency
medical service rendered by a noncontracting emergency physician be
made at the lesser of the physician's full charge or the interim
payment standard, as specified. The bill would authorize the
physician to file a complaint with the department if a health care
service plan or its contracting risk-bearing organization underpays
or fails to make that payment and would require the department to
investigate the complaint, make a determination within a specified
time period, and, if the complaint is substantiated, take appropriate
enforcement action and require the plan or its risk-bearing
organization to make specified payments. The bill would enact other
related provisions.
   This bill would also prohibit a noncontracting emergency physician
from seeking payment from individual enrollees for covered emergency
medical services he or she rendered, except for allowable copayments
and deductibles, and would require the physician to seek
reimbursement solely from the enrollee's health care service plan or
the plan's contracting risk-bearing organization. The bill would
require a health care service plan that becomes aware that one of its
enrollees has been billed in violation of these provisions to report
that violation to the department. The bill would also provide that
an enrollee shall have no obligation to pay an amount billed in
violation of these provisions.
   In addition, this bill would require the department to take all
steps necessary to establish an Independent Dispute Resolution
Process by July 1, 2009, and would authorize noncontracting emergency
physicians, as defined, or health care service plans or their
contracting risk-bearing organizations to seek review of
noncontracted claim payment disputes, as defined, by that process, as
specified. The bill would require that an independent dispute
resolution organization administer the Internal Dispute Resolution
Process, as specified, and issue determinations within specified time
periods. The bill would, among other things, require the
organization to apply a specified standard regarding claim
reimbursement and would require the department to submit a report to
the appropriate policy and fiscal committees of the Legislature on or
before January 1, 2011, on the adequacy and effectiveness of that
standard, as specified. The bill would also require the department to
collect information about the results obtained from the process and
report annually to the appropriate fiscal and policy committees of
the Legislature. In addition, the bill would require the department
to issue a final report on or before January 1, 2013, regarding the
effectiveness of the process, among other things. The bill would
enact other related provisions.
   The bill would make its provisions operative when the department
adopts the interim payment standard as specified, and the director of
the department declares the establishment of the Independent Dispute
Resolution Process, and would repeal those provisions on December
31, 2013; however, the bill would specify that its provisions shall
not become operative if the department fails to take those actions by
July 1, 2009. The bill would also prohibit the construction of its
provisions to modify state or federal laws or regulations that
prohibit balance billing of Medi-Cal beneficiaries or alter
noncontracted rates.
   Because the bill would specify additional requirements for health
care service plans, a willful violation of which would be a crime, it
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.


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

  SECTION 1.  (a) It is the intent of this act to protect enrollees
of health care service plans from being billed when the plans, or
their contracting risk-bearing organizations, and noncontracting
emergency physicians dispute the amount of a claim.
   (b) It is further the intent of this act to establish a fair,
fast, and cost-effective dispute resolution process, administered by
an independent third party and overseen by the Department of Managed
Health Care, for the resolution of claim payment disputes between
noncontracting emergency physicians and health care service plans, or
their contracting risk-bearing organizations.
  SEC. 2.  Section 1371.42 is added to the Health and Safety Code, to
read:
   1371.42.  (a) This section shall govern the payment of complete
claims, as described in Section 1371.35, submitted by noncontracting
emergency physicians for covered emergency medical services provided
to plan enrollees.
   (b) Except as provided in subdivision (c), payment for each coded
and charged covered emergency medical service rendered by a
noncontracting emergency physician shall be made in accordance with
the proper coding and bundling standard identified in subdivision (b)
of Section 1374.43 and with applicable provisions of this chapter,
and shall be paid at the lesser of the physician's full charge or the
interim payment standard, less allowable copayments and deductibles
that are the responsibility of the enrollee. Alternatively, a health
care service plan or its contracting risk-bearing organization may
pay for that service in an amount that it believes reflects the
reasonable and customary value of the service and that is no less
than the interim payment standard.
   (c) A health care service plan or a health care service plan's
contracting risk-bearing organization shall not down-code Current
Procedural Terminology codes when making a payment at the interim
payment standard pursuant to this section.
   (d) Notwithstanding subdivision (b), payment of a claim at the
interim payment standard pursuant to this section shall be construed
only as an initial payment that may or may not be determinative of
the reasonable and customary value of the service rendered. A
noncontracting emergency physician's acceptance of a payment at the
interim payment standard pursuant to this section for a service
rendered shall not constitute an agreement by the physician that the
claim for the service has been satisfied. In addition, a payment by a
health care service plan or its contracting risk-bearing
organization at the interim payment standard pursuant to this section
shall not constitute an agreement by the plan or the risk-bearing
organization that the claim should be paid at the interim payment
standard.
   (e) If a health care service plan or a health care service plan's
contracting risk-bearing organization underpays or fails to make a
payment as provided in this section, the noncontracting emergency
physician may file a complaint with the department. The department
shall investigate the complaint and make a determination within 60
days of receipt of the complaint. If the complaint is substantiated,
the department shall take appropriate enforcement action and require
the plan or the plan's contracting risk-bearing organization to do
both of the following:
   (1) Pay the noncontracting emergency physician the amount of the
underpayment.
   (2) Pay the noncontracting emergency physician an amount equal to
the cost of submitting a complaint to the department, not to exceed
twenty-five dollars ($25).
   (f) After making or receiving a timely payment at no less than the
interim payment standard pursuant to this section, the
noncontracting emergency physician, the health care service plan, or
the health care service plan's contracting risk-bearing organization
may seek an adjustment of that payment through any available
processes, including, but not limited to, the department's
Independent Dispute Resolution Process pursuant to Article 5.57
(commencing with Section 1374.40).
   (g) A health care service plan or its contracting risk-bearing
organization shall not attempt to recover an adjustment to the
payment of a noncontracting emergency physician made pursuant to this
section unless and until the department's Independent Dispute
Resolution Process, under Article 5.57 (commencing with Section
1374.40), or a court of law issues a determination that requires that
adjustment.
   (h) For purposes of this section, the following terms have the
following meanings:
   (1) "Covered emergency medical service" shall have the same
meaning as "emergency services and care" as defined in Section
1317.1.
   (2) (A) "Interim payment standard" means 250 percent of the
January 1, 2007, published Medicare rates for services provided by
emergency physicians by region in California.
   (B) The department shall adjust the interim payment standard to
reflect changes in the Medical Care Professional Services component
of the Western Urban Consumer Price Index (CPI) for the period from
the effective date of the rates described in subparagraph (A) to the
operative date of this section. If the CPI for this period is not
available, the most recent CPI shall be used with the adjustment
period changed to reflect the number of months between the effective
date of the rates described in subparagraph (A) and the operative
date of this section.
   (C) The department shall adjust the interim payment standard in
the manner described in subparagraph (B) every 12 months following
the first adjustment described in subparagraph (B).
   (D) The department shall, by regulation, adopt an interim payment
standard for new Current Procedural Terminology codes recognized for
payment by the federal Medicare program within 60 days of that
recognition. The amount of the new interim payment standard shall be
established by using the same or similar Total Relative Value Unit in
the Medicare rates specified in subparagraph (A), increased by CPI
adjustments pursuant to subparagraphs (B) and (C).
   (E) Notwithstanding any other provision of this paragraph, the
interim payment standard for services provided to enrollees of the
Healthy Families Program shall be 125 percent of the Medi-Cal fee
schedule rate.
   (3) "Noncontracting emergency physician" means an emergency
physician, as defined in Section 1379.1, who does not have a contract
with a patient's health care service plan or the health care service
plan's contracting risk-bearing organization to provide health care
services to the patient.
   (4) "Risk-bearing organization" shall have the meaning set forth
in subdivision (g) of Section 1375.4.
  SEC. 3.  Article 5.57 (commencing with Section 1374.40) is added to
Chapter 2.2 of Division 2 of the Health and Safety Code, to read:

      Article 5.57.  Independent Dispute Resolution Process


   1374.40.  (a) A noncontracting emergency physician, a health care
service plan, or a health care service plan's contracting
risk-bearing organization may seek review of a noncontracted claim
payment dispute through the Independent Dispute Resolution Process
pursuant to this article.
   (b) The Independent Dispute Resolution Process shall be
administered by an independent dispute resolution organization that
contracts with the department pursuant to Section 1374.415.
   (c) The department shall seek assistance and advice in the
implementation of this article in equal portions from billing and
payment experts representing noncontracting emergency physicians and
from billing and payment experts representing health care service
plans and their contracting risk-bearing organizations.
   1374.41.  For purposes of this article, the following terms have
the following meanings:
   (a) "Covered emergency medical service" shall have the same
meaning as "emergency services and care" as defined in Section
1317.1.
   (b) "IDRP" means the Independent Dispute Resolution Process
established by this article.
   (c) "Noncontracted claim payment dispute" means a dispute between
a noncontracting emergency physician and a health care service plan
or a health care service plan's contracting risk-bearing organization
as to the reasonable and customary value of covered emergency
medical services rendered by the physician.
   (d) "Noncontracting emergency physician" means an emergency
physician, as defined in Section 1379.1, who does not have a contract
with a patient's health care service plan or the health care service
plan's contracting risk-bearing organization to provide health care
services to the patient.
   (e) "Organization" means the independent dispute resolution
organization that contracts with the department to administer the
IDRP pursuant to Section 1374.415.
   (f) "Risk-bearing organization" shall have the meaning set forth
in subdivision (g) of Section 1375.4.
   1374.415.  (a) The department shall contract with an independent
dispute resolution organization to administer the IDRP pursuant to
this article.
   (b) The organization shall meet all of the following requirements:

   (1) Be independent of any health care service plan, risk-bearing
organization, or organization of emergency physicians doing business
in this state.
   (2) Not be an affiliate or a subsidiary of, or in any way owned or
controlled by, a health care service plan, a physician, or physician
group, or a trade association of health care service plans,
physicians, or physician groups. A board member, director, officer,
or employee of the organization shall not serve as a board member,
director, or employee of a health care service plan. A board member,
director, or officer of a health care service plan or a trade
association of health care service plans shall not serve as a board
member, director, officer, or employee of the organization.
   (3) Submit to the department the following information upon
initial application to contract with the department for purposes of
this article and, except as otherwise provided, annually thereafter
upon any change to any of the following information:
   (A) The names of all stockholders and owners of more than 5
percent of any stock or options, if a publicly held organization.
   (B) The names of all holders of bonds or notes in excess of one
hundred thousand dollars ($100,000), if any.
   (C) The names of all corporations and organizations that the
organization controls or is affiliated with, and the nature and
extent of any ownership or control, including the affiliated
organization's type of business.
   (D) The names and biographical sketches of all directors,
officers, and executives of the organization, as well as a statement
regarding any past or present relationships the directors, officers,
and executives may have with any health care service plan, disability
insurer, managed care organization, provider group, or board or
committee of a health care service plan, managed care organization,
or provider group.
   (E) A description of the dispute resolution process the
organization proposes to use, including, but not limited to, the
method of selecting dispute resolution experts.
   (F) A description of how the organization ensures compliance with
the conflict-of-interest requirements of this section and any other
conflict-of-interest requirements imposed by the department pursuant
to subdivision (d).
   (c) The organization, any experts it designates to conduct dispute
resolution, or any officer, director, or employee shall not have any
material professional, familial, or financial affiliation, as
determined by the director, with any of the following:
   (1) A health care service plan.
   (2) Any officer, director, or employee of a health care service
plan.
   (3) A physician, a physician's medical group, or the independent
practice association involved in the covered emergency medical
service in dispute or any entity that contracts with a physician, a
physician's medical group, or the independent practice association to
provide billing services regarding the covered emergency medical
services, including, but not limited to, coding of claims,
determination of the amount that should be paid on claims, billing
and collecting fees, or negotiating claims.
   (d) The director may establish additional requirements, including
additional conflict-of-interest standards not specified in this
section, consistent with the purposes of this article, that the
organization shall be required to meet in order to administer the
IDRP and to assist the department in carrying out its
responsibilities.
   (e) The department shall provide, upon the request of an
interested person, a copy of all nonproprietary information, as
determined by the director, filed with the department by an
organization seeking to contract with the department to administer
the IDRP pursuant to this article. The department may charge a
nominal fee to the interested person for photocopying the requested
information.
   (f) For purposes of this section, the following terms have the
following meanings:
   (1) "Material familial affiliation" means any relationship as a
spouse, child, parent, sibling, spouse's parent, or child's spouse.
   (2) "Material professional affiliation" means any
physician-patient relationship, any partnership or employment
relationship, a shareholder or similar ownership interest in a
professional corporation, or any independent contractor arrangement
that constitutes a material financial affiliation with any expert or
any officer or director of the organization. "Material professional
affiliation" does not include affiliations that are limited to staff
privileges at a health facility.
   (3) "Material financial affiliation" means any financial interest
of more than 5 percent of total annual revenue or total annual income
of the organization or individual to which this subdivision applies.
"Material financial affiliation" does not include payment by the
health care service plan to the organization for the services
required by this article, nor does "material financial affiliation"
include an expert's participation as a contracting health care
service plan provider.
   1374.42.  (a) Subject to Sections 1374.425 and 1374.426, any party
to a noncontracted claim payment dispute may elect to participate in
the IDRP by filing a noncontracted claim payment dispute complaint
with the organization.
   (b) If a noncontracting emergency physician elects to participate
in the IDRP, the health care service plan or the health care service
plan's contracting risk-bearing organization shall be required to
participate. If a health care service plan or its contracting
risk-bearing organization elects to participate in the IDRP, the
noncontracting emergency physician shall be required to participate.
   1374.425.  (a) Prior to submitting a noncontracted claim payment
dispute to the organization, a health care service plan or its
contracting risk-bearing organization shall send an electronic or
printed notice to the noncontracting emergency physician stating all
of the following:
   (1) That the health care service plan or its contracting
risk-bearing organization intends to submit the dispute to the
organization.
   (2) The name and identification number of the noncontracting
emergency physician.
   (3) The enrollee's name and identification number.
   (4) A clear identification of the disputed item, the date of
service, and a clear explanation of the basis upon which the health
care service plan or the contracting risk-bearing organization
believes the claim is inappropriate.
   (5) A request for adjustment of the claim or other action.
   (6) An alternative proposed payment for the service provided, and
the specific methodology and database used to calculate that payment.

   (b) A health care service plan or a plan's contracting
risk-bearing organization may include up to 50 substantially similar
disputes in a single notice pursuant to this section if each disputed
item is clearly identified and the notice contains the information
required by this section. For purposes of this section,
"substantially similar disputes" are those that involve the same or
similar services or codes provided by the same noncontracting
emergency physician.
   (c) When a noncontracting emergency physician receives a notice
pursuant to subdivision (a), the noncontracting emergency physician
may do one of the following:
   (1) Within 30 days of receiving that notice, refund to the health
care service plan or the plan's contracting risk-bearing organization
the difference between the paid amount and the alternative payment
proposed pursuant to paragraph (6) of subdivision (a).
   (2) Within 30 days of receiving that notice, attempt to negotiate
an amount with the health care service plan or the plan's contracting
risk-bearing organization that settles the dispute. The
noncontracting emergency physician may request additional time from
the health care service plan or the plan's contracting risk-bearing
organization to complete a negotiation pursuant to this paragraph.
   (d) If the noncontracting emergency physician does not make a
refund to the plan or the plan's contracting risk-bearing
organization pursuant to paragraph (1) of subdivision (c) and the
negotiation described in paragraph (2) of subdivision (c) is not
completed within 30 days, or the time period granted by the plan or
its risk-bearing organization, the noncontracting emergency physician
shall participate in the internal dispute resolution mechanism of
the plan or its contracting risk-bearing organization, unless the
plan or the risk-bearing organization waives use of that mechanism.
   (e) If the noncontracting emergency physician is not satisfied
with the outcome of the internal dispute resolution mechanism
described in subdivision (d), or if the plan or the contracting
risk-bearing organization waives use of that mechanism, the physician
shall defend the dispute through the IDRP. The physician shall
provide notice to the plan or the plan's contracting risk-bearing
organization of his or her intention to defend within 30 days of
completion of the internal dispute resolution mechanism or within 30
days of receiving notice that the plan or the risk-bearing
organization waives use of that mechanism.
   1374.426.  (a) Prior to submitting a noncontracted claim payment
dispute to the organization, a noncontracting emergency physician
shall send an electronic or printed notice to the health care service
plan or the plan's contracting risk-bearing organization stating all
of the following:
   (1) That the noncontracting emergency physician intends to submit
the dispute to the organization.
   (2) The name and identification number of the noncontracting
emergency physician.
   (3) The contact information for the noncontracting emergency
physician.
   (4) The enrollee's name and identification number.
   (5) A clear identification of the disputed item, the date of
service, and a clear explanation of the basis upon which the
noncontracting emergency physician believes the payment level or
nonpayment of the item is inappropriate.
   (6) A request for adjustment of the claim or other action.
   (7) An alternative proposed payment for the service provided, and
the specific methodology and database used to calculate that payment.

   (b) A noncontracting emergency physician may include up to 50
substantially similar disputes in a single notice pursuant to this
section if each disputed item is clearly identified and the notice
contains the information required by this section. For purposes of
this section, "substantially similar disputes" are those that involve
the same or similar services or codes billed to the same health care
service plan or contracting risk-bearing organization.
   (c) When a health care service plan or a plan's contracting
risk-bearing organization receives a notice pursuant to subdivision
(a), the health care service plan or the contracting risk-bearing
organization may do one of the following:
   (1) Within 30 days of receiving the notice, pay to the
noncontracting emergency physician the difference between the paid
amount, if any, and the alternative payment proposed pursuant to
paragraph (7) of subdivision (a).
   (2) Within 30 days of receiving the notice, negotiate an amount
with the noncontracting emergency physician that settles the dispute.
The plan or the plan's contracting risk-bearing organization may
request additional time from the noncontracting emergency physician
to complete a negotiation pursuant to this paragraph.
   (d) If the plan or the plan's contracting risk-bearing
organization does not pay the noncontracting emergency physician
pursuant to paragraph (1) of subdivision (c) and the negotiation
described in paragraph (2) of subdivision (c) is not completed within
30 days, or the time period granted by the physician, the plan or
the plan's contracting risk-bearing organization may require the
physician to participate in its internal dispute resolution
mechanism.
   (e) If the plan or the plan's contracting risk-bearing
organization does not require the noncontracting emergency physician
to participate in the internal dispute resolution mechanism described
in subdivision (d), the plan or the plan's contracting risk-bearing
organization shall defend the dispute through the IDRP. The plan or
the risk-bearing organization shall provide notice to the
noncontracting emergency physician within 30 days of determining
whether to require the plan to participate in the internal dispute
resolution mechanism.
   (f) If the noncontracting emergency physician is not satisfied
with the outcome of the internal dispute resolution mechanism
described in subdivision (d), the noncontracting emergency physician
may elect to submit the dispute to the IDRP. The physician shall
submit the dispute to the organization within 30 days of completion
of the internal dispute resolution mechanism.
   1374.43.  (a) The organization shall, subject to the department's
approval, establish and publish written policies and procedures for
receiving and rendering determinations regarding noncontracted claim
payment disputes. These policies and procedures shall include, but
not be limited to, a dispute resolution process in which the
organization renders a determination of the reasonable and customary
value of the health care service or services rendered by applying the
standard regarding reimbursement of a claim contained in
subparagraph (B) of paragraph (3) of subdivision (a) of Section
1300.71 of Title 28 of the California Code of Regulations. The
organization shall apply that standard as it read on January 1, 2007.
On or before January 1, 2011, the department shall submit a report
to the appropriate policy and fiscal committees of the Legislature on
the adequacy and effectiveness of the standard and make
recommendations for changes to the standard, if appropriate.
   (b) The determination issued by the organization shall include
necessary determinations regarding related billing issues, including,
but not limited to, appropriate coding and bundling of services. The
determination of appropriate coding shall include consideration of
the proper intensity of the services that the noncontracting
emergency physician provided. The organization shall use the coding
and bundling rules under current usage by the Medicare carrier for
payment of physician services for California to render those
determinations, provided that those rules do not include any
reduction in payment for the use of nonphysician health care
practitioners described in subparagraph (A) of paragraph (1) of
subdivision (d) of Section 1379.1. The organization or the department
shall retain claims documentation or coding experts to assist with
questions related to claims documentation and coding.
   (c) The organization shall not make determinations regarding a
coverage dispute between a health care service plan and an enrollee,
including, but not limited to, a coverage dispute subject to Article
5.5 (commencing with Section 1374.30). Notwithstanding subdivision
(b) of Section 1374.40, a noncontracted claim payment dispute that
arises as a result of that coverage dispute shall not be eligible for
review by the IDRP unless the coverage dispute is resolved in favor
of the enrollee.
   (d) Within 60 days following the filing of a noncontracted claim
payment dispute complaint with the organization, the organization
shall issue its determination regarding that complaint to both the
department and the parties to the dispute. Within 15 days following
the issuance of that determination, the nonprevailing party shall
satisfy any orders in the determination.
   (e) (1) In the determination issued pursuant to subdivision (d),
the organization shall choose either of the following:
    (A) The noncontracting emergency physician's initial charge.
    (B) The initial amount the health care service plan or its
contracting risk-bearing organization paid or the alternative
proposed payment suggested pursuant to paragraph (6) of subdivision
(a) of Section 1374.425 or paragraph (7) of subdivision (a) of
Section 1374.426. The alternative proposed payment shall be used in
place of the initial amount paid if the health care service plan or
its contracting risk-bearing organization paid nothing initially or
if the health care service plan or its contracting risk-bearing
organization believes that payment at the interim payment standard
constituted an overpayment.
   (2) The choice described in paragraph (1) shall be based on the
preponderance of the evidence submitted and on the amount that more
closely reflects the reasonable and customary value of the service or
services rendered consistent with the reimbursement standard
identified in subdivision (a) of Section 1374.43 and the coding and
bundling standard identified in subdivision (b) of Section 1374.43.
   (3) The losing party shall be responsible for paying the fee
described in subdivision (c) of Section 1374.44.
   (f) The department shall seek civil penalties pursuant to Section
1387 if the department finds that the noncontracting emergency
physician, the health care service plan, or the health care service
plan's contracting risk-bearing organization does either of the
following:
   (1) Shows a pattern or practice of violating this article.
   (2) Engages in a practice that abuses the IDRP.
   (g) (1) The department may review the determinations issued by the
organization pursuant to this section. The director may assess
administrative penalties against a health care service plan, its
contracting risk-bearing organization, or a noncontracting emergency
physician if the director finds that the plan, the risk-bearing
organization, or the physician commits either of the acts described
in subdivision (f).
                          (2) A noncontracting emergency physician, a
health care service plan, or a health care service plan's
contracting risk-bearing organization that willfully files false
claims, records, or defenses in the IDRP or that engages in a
practice of willfully delaying, obstructing, or hindering the IDRP
shall be assessed an administrative penalty of the greater of ten
thousand dollars ($10,000) or three times the amount of any payments
at issue.
   (3) A proceeding for the issuance of an order assessing an
administrative penalty pursuant to this subdivision 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.
   (h) Nothing in this section shall restrict, impair, or limit the
director's authority to suspend, revoke, or otherwise modify a health
care service plan's license for engaging in the acts described in
subdivision (f).
   1374.44.  (a) To the maximum extent possible, the organization and
the department shall create a simplified, cost-effective process for
the resolution of noncontracted claim payment disputes under this
article. Requirements for documentation and attachments shall be kept
to a minimum. A party to a noncontracted claim payment dispute shall
be entitled to submit a written justification of its position to the
organization, which shall not exceed 1,000 words.
   (b) A party to a noncontracting claim payment dispute may submit
to the organization in a single filing a single claim or up to 50
claims that are substantially similar. A party may also require that
up to 50 substantially similar claims brought against it by the other
party be considered a single filing. For purposes of this
subdivision, "substantially similar claims" are those that involve
the same or similar services or codes provided by the same
noncontracting emergency physician or billed to the same health care
service plan or contracting risk-bearing organization.
   (c) The department shall establish a fee schedule to pay for the
actual aggregate cost of processing disputes pursuant to this
article. These fees shall be paid directly to the organization in the
manner prescribed by the department. The fees set by the department
pursuant to this subdivision shall not exceed the following:
   (1) Fifty dollars ($50) for a single claim.
   (2) One hundred dollars ($100) for two to 10 claims filed in a
single filing.
   (3) Three hundred dollars ($300) for 11 to 25 claims filed in a
single filing.
   (4) Five hundred dollars ($500) for 26 to 50 claims filed in a
single filing.
   (d) The department may, through the annual budget process, adjust
the fees described in subdivision (c) to reflect the cost of
processing disputes pursuant to this article.
   1374.45.  (a) The organization shall collect information about
results obtained from the IDRP and shall present the aggregate
information collected to the department on a monthly basis.
   (b) The department shall collect information about the results
obtained from the IDRP and shall report annually to the appropriate
fiscal and policy committees of the Legislature. The department shall
issue a final report on or before January 1, 2013, regarding all of
the following:
   (1) The effectiveness of the IDRP.
   (2) Whether the operation of the IDRP should be extended.
   (3) The impact of the IDRP on emergency safety net providers,
reimbursement rates, contracts, and enrollee access to care.
   (c) The records of and determinations made through the IDRP shall
be made available to the public.
   (d) Notwithstanding subdivision (c), the department and the
organization shall maintain the confidentiality of any information
found by the director to be the proprietary information of the plan,
the contracting risk-bearing organization, or the noncontracting
emergency physician. The department and the organization shall also
maintain the confidentiality of patient information as required under
state and federal law.
  SEC. 4.  Section 1379.1 is added to the Health and Safety Code, to
read:
   1379.1.  (a) A noncontracting emergency physician who provides
services at a general acute care hospital shall seek reimbursement
for covered emergency medical services provided to an enrollee of a
health care service plan solely from that plan or a contracting
risk-bearing organization that is financially responsible for the
covered emergency medical services rendered under the contract
between the plan and the risk-bearing organization. The
noncontracting emergency physician shall not seek payment from
individual enrollees for those covered emergency medical services,
except for allowable copayments and deductibles. A noncontracting
emergency physician subject to this section shall have the right to
receive reimbursement owed pursuant to the provisions of this chapter
from the plan or the contracting risk-bearing organization that is
financially responsible for the covered emergency medical services.
   (b) An enrollee who is billed by a noncontracting emergency
physician in violation of this section may report receipt of the bill
to the health care service plan and the department. A health care
service plan that becomes aware that one of its enrollees has been
billed in violation of this section shall also report that violation
to the department. The department shall take appropriate action
against a noncontracting emergency physician upon a determination
that the physician has violated this section, including the issuance
of a written warning, a cease and desist order, or other actions, as
provided in Section 1387.
   (c) An enrollee shall have no obligation to pay an amount billed
in violation of this section.
   (d) For purposes of this section, the following terms have the
following meanings:
   (1) "Covered emergency medical service" shall have the same
meaning as "emergency medical services and care" as defined in
Section 1317.1.
   (2) (A) Except as provided in subparagraph (B), "emergency
physician" means a physician who is employed or contracted with to
provide emergency medical services in the emergency department of a
general acute care hospital. "Emergency physician" also includes a
nonphysician health care practitioner providing emergency services at
a general acute care hospital under the supervision of a physician
described in this subparagraph.
   (B) "Emergency physician" shall not include a physician specialist
who is called into the emergency department of a general acute care
hospital.
   (3) "Noncontracting emergency physician" means an emergency
physician, as defined in paragraph (2), who does not have a contract
with a patient's health care service plan or the health care service
plan's contracting risk-bearing organization to provide health care
services to the patient.
   (4) "Risk-bearing organization" shall have the meaning set forth
in subdivision (g) of Section 1375.4.
  SEC. 5.  Nothing in this act shall be construed to modify state or
federal laws or regulations that prohibit balance billing of Medi-Cal
beneficiaries or alter noncontracted rates.
  SEC. 6.  The Department of Managed Health Care shall take all steps
necessary to establish the Independent Dispute Resolution Process
identified in Article 5.57 (commencing with Section 1374.40) of
Chapter 2.2 of Division 2 of the Health and Safety Code on or before
July 1, 2009, and shall issue a declaration to the appropriate policy
committees of the Legislature on the date that the process is
established. The department shall also post this declaration on its
Internet Web site. The department also shall, by regulation, adopt
the interim payment standard, as defined in subparagraph (A) of
paragraph (2) of subdivision (h) of Section 1371.42 of the Health and
Safety Code, by July 1, 2009. The department may adopt emergency
regulations to implement this act 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 initial adoption of regulations pursuant to this section shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health, or safety.
  SEC. 7.  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.
  SEC. 8.  (a) Sections 1 to 5, inclusive, of this act shall become
operative when the Department of Managed Health Care adopts the
interim payment standard and the Director of the Department of
Managed Health Care declares that the Independent Dispute Resolution
Process has been established under Section 6 of this act.
   (b) Notwithstanding subdivision (a), Sections 1 to 5, inclusive,
of this act shall not become operative if the Department of Managed
Health Care fails to establish the Independent Dispute Resolution
Process or to adopt the interim payment standard by July 1, 2009 as
required by Section 6 of this act.
   (c) Sections 1 to 5, inclusive, of this act shall become
inoperative on December 31, 2013, and as of that date are repealed,
unless a later enacted statute that is enacted on or before December
31, 2013, deletes or extends that date.