BILL NUMBER: AB 1985	CHAPTERED
	BILL TEXT

	CHAPTER  669
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2010
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2010
	PASSED THE SENATE  AUGUST 19, 2010
	PASSED THE ASSEMBLY  AUGUST 23, 2010
	AMENDED IN SENATE  JULY 15, 2010
	AMENDED IN SENATE  JUNE 21, 2010

INTRODUCED BY   Assembly Member Galgiani

                        FEBRUARY 17, 2010

   An act to add Section 5023.6 to the Penal Code, relating to the
Department of Corrections and Rehabilitation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1985, Galgiani. Corrections: contract health care providers.
   Existing law authorizes the Department of Corrections and
Rehabilitation to enter into contracts with providers of health care
services to provide health care services to inmates.
   This bill would require the department, by January 1, 2011, to
adopt industry standard claim forms for use by contract health care
providers, to be able to accept electronic submissions of claims from
contract health care providers, to perform periodic audits of claims
paid to contract health care providers, and to provide remote
electronic access to claim status information to contract health care
providers. The bill would authorize the department to adopt policies
and procedures for enabling electronic health care claims management
and processing, and would exempt the adoption, amendment, and repeal
of policies and procedures for this limited purpose from the
rulemaking provisions of the Administrative Procedure Act.


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

  SECTION 1.  (a) The Legislature finds and declares all of the
following:
   (1) Contractors providing hospital care, specialty care, emergency
medical transportation, and other health care services form an
essential component of the continuum of care that the Department of
Corrections and Rehabilitation is required to deliver to its inmates.

   (2) The department will process approximately 300,000 individual
claims from contract health care providers in the 2009-10 fiscal
year.
   (3) The department has historically struggled to pay its contract
health care providers in a timely manner, causing additional costs to
the department and threatening the availability of competent,
cost-effective providers willing to serve the department.
   (4) Manual claims processing by the department has resulted in
significant and costly errors. A department audit of claims paid
during the period of July 1, 2007, to June 30, 2009, inclusive,
identified millions of dollars in billing and payment errors, which
have resulted in more than fifteen million dollars ($15,000,000) in
contractor refunds to the state as of June 1, 2010.
   (5) The department has made significant progress in reducing its
payment backlog and increasing billing accuracy by processing certain
health care claims electronically.
   (b) It is the intent of the Legislature that the department
achieve even greater efficiency, accuracy, timeliness, and cost
savings in processing contract health care claims by adopting
industry standard electronic health care management and processing
practices and performing periodic audits of claims paid.
  SEC. 2.  Section 5023.6 is added to the Penal Code, to read:
   5023.6.  (a) The Department of Corrections and Rehabilitation
shall, by January 1, 2011, do all of the following:
   (1) Adopt industry standard claim forms for use by contract health
care service providers.
   (2) Be able to accept secure electronic submission of claims from
contract health care service providers.
   (3) Perform periodic audits of claims paid to contract health care
providers.
   (4) Provide secure, remote electronic access to claim status
information to those contract health care service providers
submitting claims electronically in the manner required by the
department.
   (b) The department may adopt policies and procedures for the
purpose of enabling electronic health care claims management and
processing. The adoption, amendment, or repeal of policies and
procedures for this limited purpose are exempt from the rulemaking
provisions of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code).