BILL NUMBER: AB 2616	CHAPTERED  09/29/00

	CHAPTER   844
	FILED WITH SECRETARY OF STATE   SEPTEMBER 29, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 28, 2000
	PASSED THE ASSEMBLY   AUGUST 31, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	AMENDED IN SENATE   AUGUST 25, 2000
	AMENDED IN SENATE   JUNE 14, 2000
	AMENDED IN SENATE   MAY 30, 2000

INTRODUCED BY   Assembly Member Margett

                        FEBRUARY 25, 2000

   An act to amend Section 785 of, and to add Section 10123.131 to,
the Insurance Code, relating to health insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2616, Margett.  Health insurance:  payment of claims.
   Existing law regulates providers and certain insurers that cover
hospital, medical, and surgical expenses with respect to the
reimbursement by insurers of claims of providers.  These provisions,
among other matters, specify that a claim is reasonably contested if
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.
   This bill would prohibit these insurers from requesting
information that is not reasonably necessary to determine liability
for the payment of a claim and would require them to pay providers
the cost, as specified, of duplicating all information they request
in connection with a contested claim.
   Existing law regulates the provision of insurance to senior
citizens and exempts various classes of insurance from the laws
regulating insurance for senior citizens, including, until January 1,
2001, disability policies or certificates that are sold through
direct response methods of delivery.
   This bill would extend the duration of that exemption to January
1, 2002.


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


  SECTION 1.  Section 785 of the Insurance Code is amended to read:
   785.  (a) All insurers, brokers, agents, and others engaged in the
transaction of insurance owe a prospective insured who is age 65
years or older, a duty of honesty, good faith, and fair dealing.
This duty is in addition to any other duty, whether express or
implied, that may exist.
   (b) Conduct of an insurer, broker, or agent, or other person
engaged in the transaction of insurance, during the offer and sale of
a policy or certificate previous to the purchase is relevant to any
action alleging a breach of the duty of good faith and fair dealing.

   (c) Except where explicitly provided to the contrary, this article
shall not apply to any of the following:
   (1) Medicare supplement insurance as defined in subdivision (b) of
Section 10192.1.
   (2) Long-term care insurance as defined in Section 10231.2.
   (3) Disability coverage provided through the insured's employer or
former employer.
   (4) Disability insurance policies or certificates principally
designed to provide coverage for accidents or expenses incurred while
traveling if the premium for the policy or certificate is ten
dollars ($10) or less.
   (5) Blanket disability insurance as defined in Section 10270.3.
   (6) Credit disability insurance as defined in Section 779.2.
   (7) Accidental death insurance.
   (8) Until January 1,  2002, disability policies or certificates
that are sold through direct response methods of delivery.
   (9) Disability income insurance as defined in subdivision (i) of
Section 799.01.
   (d) Provided that the requirements of Section 10296 are met, this
article shall not apply to transportation ticket policies and baggage
insurance policy types allowable for sale by travel agents pursuant
to Section 1753.
  SEC. 2.  Section 10123.131 is added to the Insurance Code, to read:

   10123.131.  (a) An insurer shall pay a provider for duplicating
all information it requests in connection with a contested claim, and
for patient records, as follows:
   (1) Except as provided in paragraph (2), the insurer shall pay the
provider for copying twenty-five cents ($0.25) per page, or fifty
cents ($0.50) per page for records that are copied from microfilm.
   (2) The insurer shall pay the provider all reasonable costs, not
exceeding actual costs, incurred by the provider in providing the
insurer copies of X-rays, or tracings derived from
electrocardiography, electroencephalography, or electromyography.
   (b) No insurer subject to this section shall request information
that is not reasonably necessary to determine liability for payment
of a claim.
   (c) 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.
   (d) This section shall not apply to contractual arrangements
between an insurer and its agent, an insurer and a provider, or a
provider and its agent for the costs associated with the provision of
duplication services.