BILL NUMBER: SB 1169	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Lowenthal

                        FEBRUARY 18, 2010

   An act to amend Sections 1367.01, 1371, 1371.35, and 1374.72 of,
and to add Section 1370.8 to, the Health and Safety Code, and to
amend Sections 10123.13, 10123.135, 10123.147, and 10144.5 of, and to
add Section 10123.125 to, the Insurance Code, relating to health
care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1169, as introduced, Lowenthal. Health care coverage: claims:
prior authorization: mental health.
   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
regulation of health insurers by the Department of Insurance.
Existing law requires health care service plans and health insurers
to have written policies and procedures establishing the process by
which the plans or insurers prospectively, retrospectively, or
concurrently review and approve, modify, delay, or deny, based in
whole or in part on medical necessity, requests by providers of
health care services for enrollees or insureds. Existing law requires
health care service plans and health insurers to reimburse
uncontested claims within 30 or 45 working days and specifies that a
claim is contested if the plan or insurer has not received a
completed claim and all information necessary to determine payer
liability.
   This bill would require plans and insurers to assign a tracking
number to a claim or provider request for authorization, upon receipt
thereof, and to provide acknowledgment of receipt thereof, including
identification of the tracking number, to both the provider and the
enrollee or insured, as specified. With respect to claims that are
contested on the basis that the plan or insurer has not received all
information necessary to determine payer liability for the claim, the
bill would require the plan or insurer to provide acknowledgment of
receipt of any of that information within 3 working days, as
specified.
   Existing law requires a health care service plan contract or
health insurance policy to provide coverage for the diagnosis and
medically necessary treatment of severe mental illnesses, as defined,
of a person of any age, and of serious emotional disturbances of a
child, under the same terms and conditions that apply to other
medical conditions. Existing law specifies that these terms and
conditions include maximum lifetime benefits, copayments, and
individual family deductibles.
   This bill would instead require that any form of treatment
limitation, or other action by a plan or insurer that may limit the
receipt of the covered benefits described above, be applied under the
same terms and conditions that apply to other benefits under the
contract or policy.
   Because a willful violation of the bill's provisions with respect
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.
State-mandated local program: yes.


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

  SECTION 1.  Section 1367.01 of the Health and Safety Code is
amended to read:
   1367.01.  (a) A health care service plan and any entity with which
it contracts for services that include utilization review or
utilization management functions, that prospectively,
retrospectively, or concurrently reviews and approves, modifies,
delays, or denies, based in whole or in part on medical necessity,
requests by providers prior to, retrospectively, or concurrent with
the provision of health care services to enrollees, or that delegates
these functions to medical groups or independent practice
associations or to other contracting providers, shall comply with
this section.
   (b)  (1)    A health care service plan that is
subject to this section shall have written policies and procedures
establishing the process by which the plan prospectively,
retrospectively, or concurrently reviews and approves, modifies,
delays, or denies, based in whole or in part on medical necessity,
requests by providers of health care services for plan enrollees.
These policies and procedures shall ensure that decisions based on
the medical necessity of proposed health care services are consistent
with criteria or guidelines that are supported by clinical
principles and processes. These criteria and guidelines shall be
developed pursuant to Section 1363.5. These policies and procedures,
and a description of the process by which the plan reviews and
approves, modifies, delays, or denies requests by providers prior to,
retrospectively, or concurrent with the provision of health care
services to enrollees, shall be filed with the director for review
and approval, and shall be disclosed by the plan to providers and
enrollees upon request, and by the plan to the public upon request.

   (2) Upon receipt of a request by a provider prior to,
retrospectively, or concurrent with, the provision of health care
services to an enrollee, a health care service plan subject to this
section shall assign a tracking number to the request and shall
provide acknowledgment of receipt of the request to both the provider
and the enrollee. The acknowledgment of receipt shall identify the
assigned tracking number and shall be provided via electronic mail,
unless the provider or enrollee has opted out of the electronic
method of transmittal and requested that all acknowledgments of
receipt be transmitted in writing. In the case of an orally submitted
request, the acknowledgment of receipt shall also be provided orally
to the submitting provider. All communications regarding the
request, including, but not limited to, the communications or
responses identified in subdivision (h), shall reference the tracking
number assigned pursuant to this paragraph. 
   (c) A health care service plan subject to this section, except a
plan that meets the requirements of Section 1351.2, shall employ or
designate a medical director who holds an unrestricted license to
practice medicine in this state issued pursuant to Section 2050 of
the Business and Professions Code or pursuant to the Osteopathic Act,
or, if the plan is a specialized health care service plan, a
clinical director with California licensure in a clinical area
appropriate to the type of care provided by the specialized health
care service plan. The medical director or clinical director shall
ensure that the process by which the plan reviews and approves,
modifies, or denies, based in whole or in part on medical necessity,
requests by providers prior to, retrospectively, or concurrent with
the provision of health care services to enrollees, complies with the
requirements of this section.
   (d) If health plan personnel, or individuals under contract to the
plan to review requests by providers, approve the provider's
request, pursuant to subdivision (b), the decision shall be
communicated to the provider pursuant to subdivision (h).
   (e) No individual, other than a licensed physician or a licensed
health care professional who is competent to evaluate the specific
clinical issues involved in the health care services requested by the
provider, may deny or modify requests for authorization of health
care services for an enrollee for reasons of medical necessity. The
decision of the physician or other health care professional shall be
communicated to the provider and the enrollee pursuant to subdivision
(h).
   (f) The criteria or guidelines used by the health care service
plan to determine whether to approve, modify, or deny requests by
providers prior to, retrospectively, or concurrent with, the
provision of health care services to enrollees shall be consistent
with clinical principles and processes. These criteria and guidelines
shall be developed pursuant to the requirements of Section 1363.5.
   (g) If the health care service plan requests medical information
from providers in order to determine whether to approve, modify, or
deny requests for authorization, the plan shall request only the
information reasonably necessary to make the determination.
   (h) In determining whether to approve, modify, or deny requests by
providers prior to, retrospectively, or concurrent with the
provision of health care services to enrollees, based in whole or in
part on medical necessity, a health care service plan subject to this
section shall meet the following requirements:
   (1) Decisions to approve, modify, or deny, based on medical
necessity, requests by providers prior to, or concurrent with the
provision of health care services to enrollees that do not meet the
requirements for the 72-hour review required by paragraph (2), shall
be made in a timely fashion appropriate for the nature of the
enrollee's condition, not to exceed five business days from the plan'
s receipt of the information reasonably necessary and requested by
the plan to make the determination. In cases where the review is
retrospective, the decision shall be communicated to the individual
who received services, or to the individual's designee, within 30
days of the receipt of information that is reasonably necessary to
make this determination, and shall be communicated to the provider in
a manner that is consistent with current law. For purposes of this
section, retrospective reviews shall be for care rendered on or after
January 1, 2000.
   (2) When the enrollee's condition is such that the enrollee faces
an imminent and serious threat to his or her health, including, but
not limited to, the potential loss of life, limb, or other major
bodily function, or the normal timeframe for the decisionmaking
process, as described in paragraph (1), would be detrimental to the
enrollee's life or health or could jeopardize the enrollee's ability
to regain maximum function, decisions to approve, modify, or deny
requests by providers prior to, or concurrent with, the provision of
health care services to enrollees, shall be made in a timely fashion
appropriate for the nature of the enrollee's condition, not to exceed
72 hours after the plan's receipt of the information reasonably
necessary and requested by the plan to make the determination.
Nothing in this section shall be construed to alter the requirements
of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4,
the requirements of this division shall be applicable to all health
plans and other entities conducting utilization review or utilization
management.
   (3) Decisions to approve, modify, or deny requests by providers
for authorization prior to, or concurrent with, the provision of
health care services to enrollees shall be communicated to the
requesting provider within 24 hours of the decision. Except for
concurrent review decisions pertaining to care that is underway,
which shall be communicated to the enrollee's treating provider
within 24 hours, decisions resulting in denial, delay, or
modification of all or part of the requested health care service
shall be communicated to the enrollee in writing within two business
days of the decision. In the case of concurrent review, care shall
not be discontinued until the enrollee's treating provider has been
notified of the plan's decision and a care plan has been agreed upon
by the treating provider that is appropriate for the medical needs of
that patient.
   (4) Communications regarding decisions to approve requests by
providers prior to, retrospectively, or concurrent with the provision
of health care services to enrollees shall specify the specific
health care service approved. Responses regarding decisions to deny,
delay, or modify health care services requested by providers prior
to, retrospectively, or concurrent with the provision of health care
services to enrollees shall be communicated to the enrollee in
writing, and to providers initially by telephone or facsimile, except
with regard to decisions rendered retrospectively, and then in
writing, and shall include a clear and concise explanation of the
reasons for the plan's decision, a description of the criteria or
guidelines used, and the clinical reasons for the decisions regarding
medical necessity. Any written communication to a physician or other
health care provider of a denial, delay, or modification of a
request shall include the name and telephone number of the health
care professional responsible for the denial, delay, or modification.
The telephone number provided shall be a direct number or an
extension, to allow the physician or health care provider easily to
contact the professional responsible for the denial, delay, or
modification. Responses shall also include information as to how the
enrollee may file a grievance with the plan pursuant to Section 1368,
and in the case of Medi-Cal enrollees, shall explain how to request
an administrative hearing and aid paid pending under Sections 51014.1
and 51014.2 of Title 22 of the California Code of Regulations.
   (5) If the health care service plan cannot make a decision to
approve, modify, or deny the request for authorization within the
timeframes specified in paragraph (1) or (2) because the plan is not
in receipt of all of the information reasonably necessary and
requested, or because the plan requires consultation by an expert
reviewer, or because the plan has asked that an additional
examination or test be performed upon the enrollee, provided the
examination or test is reasonable and consistent with good medical
practice, the plan shall, immediately upon the expiration of the
timeframe specified in paragraph (1) or (2) or as soon as the plan
becomes aware that it will not meet the timeframe, whichever occurs
first, notify the provider and the enrollee, in writing, that the
plan cannot make a decision to approve, modify, or deny the request
for authorization within the required timeframe, and specify the
information requested but not received, or the expert reviewer to be
consulted, or the additional examinations or tests required. The plan
shall also notify the provider and enrollee of the anticipated date
on which a decision may be rendered. Upon receipt of all information
reasonably necessary and requested by the plan, the plan shall
approve, modify, or deny the request for authorization within the
timeframes specified in paragraph (1) or (2), whichever applies.
   (6) If the director determines that a health care service plan has
failed to meet any of the timeframes in this section, or has failed
to meet any other requirement of this section, the director may
assess, by order, administrative penalties for each failure. A
proceeding for the issuance of an order assessing administrative
penalties 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. The administrative
penalties shall not be deemed an exclusive remedy for the director.
These penalties shall be paid to the Managed Care Administrative
Fines and Penalties Fund and shall be used for the purposes specified
in Section 1341.45.
   (i) A health care service plan subject to this section shall
maintain telephone access for providers to request authorization for
health care services.
   (j) A health care service plan subject to this section that
reviews requests by providers prior to, retrospectively, or
concurrent with, the provision of health care services to enrollees
shall establish, as part of the quality assurance program required by
Section 1370, a process by which the plan's compliance with this
section is assessed and evaluated. The process shall include
provisions for evaluation of complaints, assessment of trends,
implementation of actions to correct identified problems, mechanisms
to communicate actions and results to the appropriate health plan
employees and contracting providers, and provisions for evaluation of
any corrective action plan and measurements of performance.
   (k) The director shall review a health care service plan's
compliance with this section as part of its periodic onsite medical
survey of each plan undertaken pursuant to Section 1380, and shall
include a discussion of compliance with this section as part of its
report issued pursuant to that section.
   (l) This section shall not apply to decisions made for the care or
treatment of the sick who depend upon prayer or spiritual means for
healing in the practice of religion as set forth in subdivision (a)
of Section 1270.
   (m) Nothing in this section shall cause a health care service plan
to be defined as a health care provider for purposes of any
provision of law, including, but not limited to, Section 6146 of the
Business and Professions Code, Sections 3333.1 and 3333.2 of the
Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the
Code of Civil Procedure.
  SEC. 2.  Section 1370.8 is added to the Health and Safety Code, to
read:
   1370.8.  Upon receipt of a claim, a health care service plan shall
assign a tracking number to the claim and shall provide
acknowledgment of receipt of the claim to both the provider and the
enrollee. The acknowledgment of receipt shall identify the assigned
tracking number and shall be provided via electronic mail, unless the
provider or enrollee has opted out of the electronic method of
transmittal and requested that all acknowledgments of receipt be
transmitted in writing. In the case of an orally submitted claim, the
acknowledgment of receipt shall also be provided orally to the
submitting provider or enrollee. All communications regarding the
claim shall reference the tracking number assigned pursuant to this
section.
  SEC. 3.  Section 1371 of the Health and Safety Code is amended to
read:
   1371.   (a)    A health care service plan,
including a specialized health care service plan, shall reimburse
claims or any portion of any claim, whether in state or out of state,
as soon as  practicable   practical  , but
no later than 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, unless the claim or portion
thereof is contested by the plan 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 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 is being contested
shall identify the portion of the claim that is contested and the
specific reasons for contesting the claim.  If 
    (b)    If  an uncontested claim is not
reimbursed by delivery to the claimants' address of record within
the respective 30 or 45 working days after receipt, interest shall
accrue 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 in its payment of the claim
all interest that has accrued pursuant to this section without
requiring the claimant to submit a request for the interest amount.
Any plan failing to comply with this requirement shall pay the
claimant a ten dollar ($10) fee.  For 
    (c)     For  the purposes of this
section, a claim, or portion thereof, is reasonably contested if the
plan has not received the 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 payer liability for the
claim 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 plan to determine the medical necessity for the
health care services provided.  If 
    (d)     If  a claim or portion thereof
is contested on the basis that the plan has not received all
information necessary to determine payer liability for the claim or
portion thereof and notice has been provided pursuant to this section
 , the   both of the following shall apply:
 
   (1) Within three working days of receipt of any of this additional
information, the plan shall provide acknowledgment of receipt of
that information to the claimant. The acknowledgment of receipt shall
be provided via electronic mail unless the claimant has opted out of
the electronic method of transmittal and requested that all
acknowledgments of receipt be transmitted in writing. The
acknowledgment of receipt shall include the tracking number assigned
to the claim pursuant to Section 1370.8. 
    (2)    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   all of the  information  necessary
to   determine payer liability to complete
reconsideration of the claim. If a plan has received all of the
information necessary to determine payer liability for a contested
claim and has not reimbursed a claim it has determined to be payable
within 30 working days of the receipt of that information, or if the
plan is a health maintenance organization, within 45 working days of
receipt of that information, interest shall accrue and be payable at
a rate of 15 percent per annum beginning with the first calendar day
after the 30- or  45-working-day   45-working
day  period. 
    The 
    (e)     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.
  SEC. 4.  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 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 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).
   (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 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 30- or  45-working-day
  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 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 30
working days of receipt of the claim. However, if the plan requests a
copy of the emergency department report within the 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 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 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   both of the following shall apply:  

   (1) Within three working days of receipt of any of this additional
information, a plan shall provide acknowledgment of receipt of that
information to the claimant. The acknowledgment of receipt shall be
provided via electronic mail unless the claimant has opted out of the
electronic method of transmittal and requested that all
acknowledgments of receipt be transmitted in writing. The
acknowledgment of receipt shall include the tracking number assigned
to the claim pursuant to Section 1370.8. 
    (2)     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   all of the  information 
necessary to determine payer liability  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   all of
the  information  necessary to determine payer liability
 , 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. 5.  Section 1374.72 of the Health and Safety Code is
amended to read:
   1374.72.  (a) Every health care service plan contract issued,
amended, or renewed on or after July 1, 2000, that provides hospital,
medical, or surgical coverage shall provide coverage for the
diagnosis and medically necessary treatment of severe mental
illnesses of a person of any age, and of serious emotional
disturbances of a child, as specified in subdivisions (d) and (e),
under the same terms and conditions applied to other medical
conditions as specified in subdivision (c).
   (b) These benefits shall include the following:
   (1) Outpatient services.
   (2) Inpatient hospital services.
   (3) Partial hospital services.
   (4) Prescription drugs, if the plan contract includes coverage for
prescription drugs.
   (c)  The terms and conditions applied to the benefits
required by this section, that shall be applied equally to all
benefits under the plan contract, shall   Any form of
treatment limitation or other action by a plan that may limit the
receipt of benefits required by this section shall be applied under
the same terms and conditions that apply to other benefits under the
plan contract. These treatment limitations or actions  include,
but  are  not  be  limited to, the use
of any of the  following:
   (1) Maximum lifetime benefits.
   (2) Copayments.
   (3) Individual and family deductibles.
   (d) For the purposes of this section, "severe mental illnesses"
shall include:
   (1) Schizophrenia.
   (2) Schizoaffective disorder.
   (3) Bipolar disorder (manic-depressive illness).
   (4) Major depressive disorders.
   (5) Panic disorder.
   (6) Obsessive-compulsive disorder.
   (7) Pervasive developmental disorder or autism.
   (8) Anorexia nervosa.
   (9) Bulimia nervosa.
   (e) For the purposes of this section, a child suffering from,
"serious emotional disturbances of a child" shall be defined as a
child who (1) has one or more mental disorders as identified in the
most recent edition of the Diagnostic and Statistical Manual of
Mental Disorders, other than a primary substance use disorder or
developmental disorder, that result in behavior inappropriate to the
child's age according to expected developmental norms, and (2) who
meets the criteria in paragraph (2) of subdivision (a) of Section
5600.3 of the Welfare and Institutions Code.
   (f) This section shall not apply to contracts entered into
pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8
(commencing with Section 14200) of Division 9 of Part 3 of the
Welfare and Institutions Code, between the State Department of Health
Services and a health care service plan for enrolled Medi-Cal
beneficiaries.
   (g) (1) For the purpose of compliance with this section, a plan
may provide coverage for all or part of the mental health services
required by this section through a separate specialized health care
service plan or mental health plan, and shall not be required to
obtain an additional or specialized license for this purpose.
   (2) A plan shall provide the mental health coverage required by
this section in its entire service area and in emergency situations
as may be required by applicable laws and regulations. For purposes
of this section, health care service plan contracts that provide
benefits to enrollees through preferred provider contracting
arrangements are not precluded from requiring enrollees who reside or
work in geographic areas served by specialized health care service
plans or mental health plans to secure all or part of their mental
health services within those geographic areas served by specialized
health care service plans or mental health plans.
   (3) Notwithstanding any other provision of law, in the provision
of benefits required by this section, a health care service plan may
utilize case management, network providers, utilization review
techniques, prior authorization, copayments, or other cost sharing
 , subject to the limitation imposed under subdivision (c) 
.
   (h) Nothing in this section shall be construed to deny or restrict
in any way the department's authority to ensure plan compliance with
this chapter when a plan provides coverage for prescription drugs.
  SEC. 6.  Section 10123.125 is added to the Insurance Code, to read:

   10123.125.  Upon receipt of a claim, a health insurer shall assign
a tracking number to the claim and shall provide acknowledgment of
receipt of the claim to both the provider and the insured. The
acknowledgment of receipt shall identify the assigned tracking number
and shall be provided via electronic mail, unless the provider or
insured has opted out of the electronic method of transmittal and
requested that all acknowledgments of receipt be transmitted in
writing. In the case of an orally submitted claim, the acknowledgment
of receipt shall also be provided orally to the submitting provider
or insured. All communications regarding the claim shall reference
the tracking number assigned pursuant to this section.
  SEC. 7.  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 telemedicine 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 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.
   (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  
   (d) If a claim or portion thereof is contested on the basis that
the insurer has not received information reasonably necessary to
determine payer liability for the claim or portion thereof, both of
the following shall apply:  
   (1) Within three working days of receipt of any of this additional
information, the insurer shall provide acknowledgment of receipt of
that information to the claimant. The acknowledgment of receipt shall
be provided via electronic mail unless the claimant has opted out of
the electronic method of transmittal and requested that all
acknowledgments of receipt be transmitted in writing. The
acknowledgment of receipt shall include the tracking number assigned
to the claim pursuant to Section 10123.125. 
    (2)     If the  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) 
    (e)  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. 8.  Section 10123.135 of the Insurance Code is amended to
read:
   10123.135.  (a) Every  disability   health
 insurer, or an entity with which it contracts for services that
include utilization review or utilization management functions,
 that covers hospital, medical, or surgical expenses and
 that prospectively, retrospectively, or concurrently
reviews and approves, modifies, delays, or denies, based in whole or
in part on medical necessity, requests by providers prior to,
retrospectively, or concurrent with the provision of health care
services to insureds, or that delegates these functions to medical
groups or independent practice associations or to other contracting
providers, shall comply with this section.
   (b)  (1)    A  disability  
health  insurer that is subject to this section, or any entity
with which an insurer contracts for services that include utilization
review or utilization management functions, shall have written
policies and procedures establishing the process by which the insurer
prospectively, retrospectively, or concurrently reviews and
approves, modifies, delays, or denies, based in whole or in part on
medical necessity, requests by providers of health care services for
insureds. These policies and procedures shall ensure that decisions
based on the medical necessity of proposed health care services are
consistent with criteria or guidelines that are supported by clinical
principles and processes. These criteria and guidelines shall be
developed pursuant to subdivision (f). These policies and procedures,
and a description of the process by which an insurer, or an entity
with which an insurer contracts for services that include utilization
review or utilization management functions, reviews and approves,
modifies, delays, or denies requests by providers prior to,
retrospectively, or concurrent with the provision of health care
services to insureds, shall be filed with the commissioner, and shall
be disclosed by the insurer to insureds and providers upon request,
and by the insurer to the public upon request. 
   (2) Upon receipt of a request by a provider prior to,
retrospectively, or concurrent with the provision of health care
services to an insured, a health insurer, or the entity with which
the insurer contracts for services that include utilization review or
utilization management functions, shall assign a tracking number to
the request and shall provide acknowledgment of receipt of the
request to both the provider and the insured. The acknowledgment of
receipt shall identify the assigned tracking number and shall be
provided via electronic mail, unless the provider or insured has
opted out of the electronic method of transmittal and requested that
all acknowledgments of receipt be transmitted in writing. In the case
of an orally submitted request, the acknowledgment of receipt shall
also be provided orally to the submitting provider. All
communications regarding the request, including, but not limited to,
the communications or responses identified in subdivision (h), shall
reference the tracking number assigned pursuant to this paragraph.

   (c) If the number of insureds covered under health benefit plans
in this state that are issued by an insurer subject to this section
constitute at least 50 percent of the number of insureds covered
under health benefit plans issued nationwide by that insurer, the
insurer shall employ or designate a medical director who holds an
unrestricted license to practice medicine in this state issued
pursuant to Section 2050 of the Business and Professions Code or the
Osteopathic Initiative Act, or the insurer may employ a clinical
director licensed in California whose scope of practice under
California law includes the right to independently perform all those
services covered by the insurer. The medical director or clinical
director shall ensure that the process by which the insurer reviews
and approves, modifies, delays, or denies, based in whole or in part
on medical necessity, requests by providers prior to,
retrospectively, or concurrent with the provision of health care
services to insureds, complies with the requirements of this section.
Nothing in this subdivision shall be construed as restricting the
existing authority of the Medical Board of California.
   (d) If an insurer subject to this section, or individuals under
contract to the insurer to review requests by providers, approve the
provider's request pursuant to subdivision (b), the decision shall be
communicated to the provider pursuant to subdivision (h).
   (e) An individual, other than a licensed physician or a licensed
health care professional who is competent to evaluate the specific
clinical issues involved in the health care services requested by the
provider, may not deny or modify requests for authorization of
health care services for an insured for reasons of medical necessity.
The decision of the physician or other health care provider shall be
communicated to the provider and the insured pursuant to subdivision
(h).
   (f) (1) An insurer shall disclose, or provide for the disclosure,
to the commissioner and to network providers, the process the
insurer, its contracting provider groups, or any entity with which it
contracts for services that include utilization review or
utilization management functions, uses to authorize, delay, modify,
or deny health care services under the benefits provided by the
insurance contract, including coverage for subacute care,
transitional inpatient care, or care provided in skilled nursing
facilities. An insurer shall also disclose those processes to
policyholders or persons designated by a policyholder, or to any
other person or organization, upon request.
   (2) The criteria or guidelines used by an insurer, or an entity
with which an insurer contracts for utilization review or utilization
management functions, to determine whether to authorize, modify,
delay, or deny health care services, shall comply with all of the
following:
   (A) Be developed with involvement from actively practicing health
care providers.
   (B) Be consistent with sound clinical principles and processes.
   (C) Be evaluated, and updated if necessary, at least annually.
   (D) If used as the basis of a decision to modify, delay, or deny
services in a specified case under review, be disclosed to the
provider and the policyholder in that specified case.
   (E) Be available to the public upon request. An insurer shall only
be required to disclose the criteria or guidelines for the specific
procedures or conditions requested. An insurer may charge reasonable
fees to cover administrative expenses related to disclosing criteria
or guidelines pursuant to this paragraph that are limited to copying
and postage costs. The insurer may also make the criteria or
guidelines available through electronic communication means.
   (3) The disclosure required by subparagraph (E) of paragraph (2)
shall be accompanied by the following notice: "The materials provided
to you are guidelines used by this insurer to authorize, modify, or
deny health care benefits for persons with similar illnesses or
conditions. Specific care and treatment may vary depending on
individual need and the benefits covered under your insurance
contract."
   (g) If an insurer subject to this section requests medical
information from providers in order to determine whether to approve,
modify, or deny requests for authorization, the insurer shall request
only the information reasonably necessary to make the determination.

   (h) In determining whether to approve, modify, or deny requests by
providers prior to, retrospectively, or concurrent with the
provision of health care services to insureds, based in whole or in
part on medical necessity, every insurer subject to this section
shall meet the following requirements:
   (1) Decisions to approve, modify, or deny, based on medical
necessity, requests by providers prior to, or concurrent with, the
provision of health care services to insureds that do not meet the
requirements for the 72-hour review required by paragraph (2), shall
be made in a timely fashion appropriate for the nature of the insured'
s condition, not to exceed five business days from the insurer's
receipt of the information reasonably necessary and requested by the
insurer to make the determination. In cases where the review is
retrospective, the decision shall be communicated to the individual
who received services, or to the individual's designee, within 30
days of the receipt of information that is reasonably necessary to
make this determination, and shall be communicated to the provider in
a manner that is consistent with current law. For purposes of this
section, retrospective reviews shall be for care rendered on or after
January 1, 2000.
   (2) When the insured's condition is such that the insured faces an
imminent and serious threat to his or her health, including, but not
limited to, the potential loss of life, limb, or other major bodily
function, or the normal timeframe for the decisionmaking process, as
described in paragraph (1), would be detrimental to the insured's
life or health or could jeopardize the insured's ability to regain
maximum function, decisions to approve, modify, or deny requests by
providers prior to, or concurrent with, the provision of health care
services to insureds shall be made in a timely fashion, appropriate
for the nature of the insured's condition, but not to exceed 72 hours
after the insurer's receipt of the information reasonably necessary
and requested by the insurer to make the determination.
   (3) Decisions to approve, modify, or deny requests by providers
for authorization prior to, or concurrent with, the provision of
health care services to insureds shall be communicated to the
requesting provider within 24 hours of the decision. Except for
concurrent review decisions pertaining to care that is underway,
which shall be communicated to the insured's treating provider within
24 hours, decisions resulting in denial, delay, or modification of
all or part of the requested health care service shall be
communicated to the insured in writing within two business days of
the decision. In the case of concurrent review, care shall not be
discontinued until the insured's treating provider has been notified
of the insurer's decision and a care plan has been agreed upon by the
treating provider that is appropriate for the medical needs of that
patient.
   (4) Communications regarding decisions to approve requests by
providers prior to, retrospectively, or concurrent with the provision
of health care services to insureds shall specify the specific
health care service approved. Responses regarding decisions to deny,
delay, or modify health care services requested by providers prior
to, retrospectively, or concurrent with the provision of health care
services to insureds shall be communicated to insureds in writing,
and to providers initially by telephone or facsimile, except with
regard to decisions rendered retrospectively, and then in writing,
and shall include a clear and concise explanation of the reasons for
the insurer's decision, a description of the criteria or guidelines
used, and the clinical reasons for the decisions regarding medical
necessity. Any written communication to a physician or other health
care provider of a denial, delay, or modification or a request shall
include the name and telephone number of the health care professional
responsible for the denial, delay, or modification. The telephone
number provided shall be a direct number or an extension, to allow
the physician or health care provider easily to contact the
professional responsible for the denial, delay, or modification.
Responses shall also include information as to how the provider or
the insured may file an appeal with the insurer or seek department
review under the unfair practices provisions of Article 6.5
(commencing with Section 790) of Chapter 1 of Part 2 of Division 1
and the regulations adopted thereunder.
   (5) If the insurer cannot make a decision to approve, modify, or
deny the request for authorization within the timeframes specified in
paragraph (1) or (2) because the insurer is not in receipt of all of
the information reasonably necessary and requested, or because the
insurer requires consultation by an expert reviewer, or because the
insurer has asked that an additional examination or test be performed
upon the insured, provided that the examination or test is
reasonable and consistent with good medical practice, the insurer
shall, immediately upon the expiration of the timeframe specified in
paragraph (1) or (2), or as soon as the insurer becomes aware that it
will not meet the timeframe, whichever occurs first, notify the
provider and the insured, in writing, that the insurer cannot make a
decision to approve, modify, or deny the request for authorization
within the required timeframe, and specify the information requested
but not received, or the expert reviewer to be consulted, or the
additional examinations or tests required. The insurer shall also
notify the provider and enrollee of the anticipated date on which a
decision may be rendered. Upon receipt of all information reasonably
necessary and requested by the insurer, the insurer shall approve,
modify, or deny the request for authorization within the timeframes
specified in paragraph (1) or (2), whichever applies.
   (6) If the commissioner determines that an insurer has failed to
meet any of the timeframes in this section, or has failed to meet any
other requirement of this section, the commissioner may assess, by
order, administrative penalties for each failure. A proceeding for
the issuance of an order assessing administrative penalties shall be
subject to appropriate notice to, and an opportunity for a hearing
with regard to, the person affected. The administrative penalties
shall not be deemed an exclusive remedy for the commissioner. These
penalties shall be paid to the Insurance Fund.
   (i) Every insurer subject to this section shall maintain telephone
access for providers to request authorization for health care
services.
   (j) Nothing in this section shall cause a disability insurer to be
defined as a health care provider for purposes of any provision of
law, including, but not limited to, Section 6146 of the Business and
Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and
Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil
Procedure.
  SEC. 9.  Section 10123.147 of the Insurance Code is amended to
read:
   10123.147.  (a) Every insurer issuing group or individual policies
of health insurance that covers hospital, medical, or surgical
expenses, including those telemedicine services covered by the
insurer as defined in subdivision (a) of Section 2290.5 of the
Business and Professions Code, shall reimburse each complete claim,
or portion thereof, whether in state or out of state, as soon as
practical, but no later than 30 working days after receipt of the
complete claim by the insurer. However, an insurer may contest or
deny a claim, or portion thereof, by notifying the claimant, in
writing, that the claim is contested or denied, within 30 working
days after receipt of the complete claim by the insurer. 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, including the factual and
legal basis known at that time by the insurer for each reason. If the
reason is based solely on facts or solely on law, the insurer is
required to provide only the factual or legal basis for its reason to
deny the claim. The insurer shall provide a copy of the notice
required by this subdivision 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 required by this subdivision shall include a statement
advising 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 was contested or denied by the insurer and the address,
Internet Web site 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. An insurer may delay payment of an
uncontested portion of a complete claim for reconsideration of a
contested portion of that claim so long as the insurer
                           pays those charges specified in
subdivision (b).
   (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 30 working days after receipt, the
insurer shall pay the greater of fifteen dollars ($15) per year or
interest at the rate of 10 percent per annum beginning with the first
calendar day after the 30-working-day period. An insurer 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 insurer 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 insurer within 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
insurer within 30 working days of receipt of the claim. However, if
the insurer requests a copy of the emergency department report within
the 30 working days after receipt of the electronic claim from the
institutional provider, the insurer 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
insurer within 30 working days of receipt of the claim. The provider
shall provide the insurer reasonable relevant information within 15
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 insurer requires
further information, the insurer 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. An
insurer shall specify, in a written notice to the provider within 30
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 insurer has not received information reasonably necessary to
determine payer liability for the claim or portion thereof, 
then the   both of the following shall apply:  

   (1) Within three working days of receipt of any of this additional
information, the insurer shall provide acknowledgment of receipt of
that information to the claimant. The acknowledgment of receipt shall
be provided via electronic mail unless the claimant has opted out of
the electronic method of transmittal and requested that all
acknowledgments of receipt be transmitted in writing. The
acknowledgment of receipt shall include the tracking number assigned
to the claim pursuant to Section 10123.125. 
    (2)     The    insurer shall
have 30 working days after receipt of  this additional
  all of the  information  necessary to
determine payer liability  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 30 working days after receipt of  the additional
  all of the  information  necessary to
determine payer liability  , the insurer shall pay the greater
of fifteen dollars ($15) per year or interest at the rate of 10
percent per annum beginning with the first calendar day after the
30-working-day period. An insurer 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) An insurer 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 insurer's actions to resolve the claim,
to the provider that submitted the claim.
   (g) An insurer shall not request or require that a provider waive
its rights pursuant to this section.
   (h) 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 of the Health and Safety Code in the United States
on or after September 1, 1999.
   (i) This section shall not be construed to affect the rights or
obligations of any person pursuant to Section 10123.13.
   (j) 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. 10.  Section 10144.5 of the Insurance Code is amended to read:

   10144.5.  (a) Every policy of  disability  
health  insurance  that covers hospital, medical, or
surgical expenses in this state  that is issued, amended, or
renewed on or after July 1, 2000, shall provide coverage for the
diagnosis and medically necessary treatment of severe mental
illnesses of a person of any age, and of serious emotional
disturbances of a child, as specified in subdivisions (d) and (e),
under the same terms and conditions applied to other medical
conditions, as specified in subdivision (c).
   (b) These benefits shall include the following:
   (1) Outpatient services.
   (2) Inpatient hospital services.
   (3) Partial hospital services.
   (4) Prescription drugs, if the policy or contract includes
coverage for prescription drugs.
   (c)  The terms and conditions applied to the benefits
required by this section that shall be applied equally to all
benefits under the disability insurance policy shall  
Any form of treatment limitation or other action by an insurer that
may   limit the receipt of benefits required by this section
shall be applied under the same terms and conditions that apply to
other benefits under the policy. These treatment limitations or
actions  include, but  are  not  be 
limited to, the  use of any of the  following:
   (1) Maximum lifetime benefits.
   (2) Copayments and coinsurance.
   (3) Individual and family deductibles.
   (d) For the purposes of this section, "severe mental illnesses"
shall include:
   (1) Schizophrenia.
   (2) Schizoaffective disorder.
   (3) Bipolar disorder (manic-depressive illness).
   (4) Major depressive disorders.
   (5) Panic disorder.
   (6) Obsessive-compulsive disorder.
   (7) Pervasive developmental disorder or autism.
   (8) Anorexia nervosa.
   (9) Bulimia nervosa.
   (e) For the purposes of this section, a child suffering from,
"serious emotional disturbances of a child" shall be defined as a
child who (1) has one or more mental disorders as identified in the
most recent edition of the Diagnostic and Statistical Manual of
Mental Disorders, other than a primary substance use disorder or
developmental disorder, that result in behavior inappropriate to the
child's age according to expected developmental norms, and (2) who
meets the criteria in paragraph (2) of subdivision (a) of Section
5600.3 of the Welfare and Institutions Code.
   (f) (1) For the purpose of compliance with this section, a
 disability   health  insurer may provide
coverage for all or part of the mental health services required by
this section through a separate specialized health care service plan
or mental health plan, and shall not be required to obtain an
additional or specialized license for this purpose.
   (2) A  disability   health  insurer
shall provide the mental health coverage required by this section in
its entire in-state service area and in emergency situations as may
be required by applicable laws and regulations. For purposes of this
section,  disability   health  insurers are
not precluded from requiring insureds who reside or work in
geographic areas served by specialized health care service plans or
mental health plans to secure all or part of their mental health
services within those geographic areas served by specialized health
care service plans or mental health plans.
   (3) Notwithstanding any other provision of law, in the provision
of benefits required by this section, a  disability 
 health  insurer may utilize case management, managed care,
or utilization review  , subject to the limitation imposed under
subdivision (c) .
   (4) Any action that a  disability   health
 insurer takes to implement this section, including, but not
limited to, contracting with preferred provider organizations, shall
not be deemed to be an action that would otherwise require licensure
as a health care service plan under the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code.
   (g) This section shall not apply to accident-only, specified
disease, hospital indemnity, Medicare supplement, dental-only, or
vision-only insurance policies.
  SEC. 11.  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.