BILL NUMBER: AB 2537	CHAPTERED  08/25/00

	CHAPTER   241
	FILED WITH SECRETARY OF STATE   AUGUST 25, 2000
	APPROVED BY GOVERNOR   AUGUST 24, 2000
	PASSED THE ASSEMBLY   AUGUST 10, 2000
	PASSED THE SENATE   JULY 6, 2000
	AMENDED IN SENATE   JUNE 19, 2000
	AMENDED IN ASSEMBLY   APRIL 13, 2000

INTRODUCED BY   Assembly Member Thomson

                        FEBRUARY 24, 2000

   An act to amend Section 10123.13 of, and to amend and renumber
Section 10123.135 of, the Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2537, Thomson.  Insurance:  payment of contested health care
claims:  recertification of disabilities.
   Existing law provides for the regulation of insurers by the
Insurance Commissioner.
   Existing law generally requires disability insurers to reimburse
health care claims within 30 working days of receipt of the claim,
unless the claim is contested, and provides that interest shall
accrue with respect to uncontested claims remaining unpaid after 30
working days, as specified.  A claim is contested if, among other
things, an insurer has not received a completed claim and all
information necessary to determine payer liability for the claim.
   This bill would provide that interest shall also accrue on
contested health care claims if an insurer has received all
information necessary to determine payer liability and has not
reimbursed a claim determined to be payable within 30 working days of
receipt of that information.
   This bill would also make a nonsubstantive technical change.


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


  SECTION 1.  Section 10123.13 of the Insurance Code, is amended to
read:
   10123.13.  (a) Every insurer issuing group or individual policies
of disability 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 shall identify the portion of
the claim that is contested and the specific reasons for contesting
the claim.
   (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 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) 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. 2.  Section 10123.135 of the Insurance Code, as added by
Chapter 88 of the Statutes of 1999, is amended and renumbered to
read:
   10123.132.  (a) Every disability insurer that covers hospital,
medical, or surgical expenses and that reviews and approves the
medical necessity or appropriateness of requests by providers prior
to, or concurrently with, the provision of health care services to
insureds, shall prominently indicate on each insured's identification
card whether a separate telephone number must be called to verify
eligibility for benefits and coverage.
   (b) A written notice shall accompany the initial mailing of the
insured's identification card modified pursuant to subdivision (a).
The notice shall indicate that the insured's identification card
includes a telephone number that may be used to verify eligibility
for benefits and coverage.  The notice shall also inform the insured
that review and approval of a health care service based on medical
necessity or appropriateness does not constitute eligibility for
benefits and coverage pursuant to the policy or contract.