BILL NUMBER: AB 1059	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 27, 2011

INTRODUCED BY   Assembly Member Huffman

                        FEBRUARY 18, 2011

   An act to add Section  1386.5   1371.371
 to the Health and Safety Code, relating to health care service
plans.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1059, as amended, Huffman. Health care service plans.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the regulation of health care service plans by the
Department of Managed Health Care. Existing law requires a health
care service plan to pay claims for provided health care services
within a specified period of time and prohibits a health care service
plan from engaging in an unfair payment pattern, as defined.
   This bill would require the director, upon a final determination
that a health care service plan has underpaid or failed to pay a
provider, as specified, to  assess an administrative penalty
and to  require the plan to pay the provider the amount owed
plus interest, as specified.  The bill would authorize the
director to exempt a plan from paying the administrative penalty if
the director makes a written finding that paying both the penalty and
the provider would jeopardize the financial solvency of the plan.
 The bill would also specify that a provider shall not be
required to resubmit a claim to a plan unless the director makes a
determination that an extraordinary circumstance exists and requires
the plan to reimburse the provider for the cost of resubmission, as
specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section  1386.5   1371.371 
is added to the Health and Safety Code, to read:
    1386.5.   1371.371.   (a) Upon a final
determination by the director that a health care service plan has
underpaid or failed to pay a provider in violation of Section
1371.37, the director shall  , by order, do both of the
following:  
   (1) Assess an administrative penalty in an amount not less than
the amount owed plus interest. 
    (2)     Require
  require  the plan to pay the provider an amount
not less than the amount owed plus interest. 
   (b) The director may exempt a plan from paying the administrative
penalty assessed in paragraph (1) of subdivision (a) if the director
makes a written finding that paying that penalty and making the
payment required in paragraph (2) of subdivision (a) would jeopardize
the financial solvency of the plan.  
   (c) 
    (b)  Except as provided in subdivision  (d)
  (c)  , a provider shall not be required to
resubmit a claim to a health care service plan in order to receive
payment pursuant to this section. 
   (d) 
    (c)  If the director makes a determination that an
extraordinary circumstance exists, the director may require a
provider to resubmit a claim to a health care service plan in order
to receive payment pursuant to this section, provided that the
director also requires the plan to add to the amount owed to the
provider a reasonable amount necessary to reimburse the provider for
the cost of resubmission. 
   (e) 
    (d)  The remedies provided by this section are not
exclusive, and may be sought and employed in any combination with
civil, criminal, and other administrative remedies deemed warranted
by the director to enforce this chapter. 
   (f) 
    (e)  Notwithstanding the date on which the director
makes a final determination specified in subdivision (a), the
calculation of the amount of the remedy imposed pursuant to
subdivision (a) shall be based on the date on which the plan
committed the violation specified in that subdivision. 
   (g) 
    (f)  Notwithstanding the provisions of subdivision (a),
a plan shall not be required to pay a provider more than the amount
owed plus interest on a claim, and the department may take into
account any other payments that have been made on that same claim.

   (h) 
    (g)  A health care service plan may not delegate a
statutory liability under this section.