BILL NUMBER: AB 684	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 21, 2010
	AMENDED IN SENATE  JUNE 3, 2010
	AMENDED IN SENATE  JUNE 18, 2009

INTRODUCED BY   Assembly Member  Ma   Buchanan

    (   Coauthors:  
Assembly Members   Tom Berryhill  
  and Skinner   ) 

                        FEBRUARY 26, 2009

    An act to amend Section 1371 of the Health and Safety
Code, and to amend Section 10123.13 of the Insurance Code, relating
to health care coverage.   An act to add Section 26011.9
to the Public   Resources Code, relating to technology
financing. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 684, as amended,  Ma   Buchanan  .
 Claim reimbursement: late payments: dental services.
  Technology financing California Alternative Energy and
Advanced Transportation Financing Authority Act.  
   The California Alternative Energy and Advanced Transportation
Financing Authority Act, administered by the California Alternative
Energy and Advanced Transportation Financing Authority, among other
things, authorizes the authority until January 1, 2021, to approve a
project, as defined, for financial assistance in the form of a
specified sales and use tax exclusion, in order to promote the
creation of California-based manufacturing, California-based jobs,
the reduction of greenhouse gases, or reductions in air and water
pollution or energy consumption.  
   This bill would authorize the authority to approve a project, as
defined, for financial assistance in the form of bond financing,
loans, loan guarantees, loan risk-factor guarantees, product warranty
guarantees, or federal loan contributions consistent with the
purposes of the federal award, in order to promote the creation of
California-based manufacturing, California-based jobs, and the
reduction of greenhouse gas, air, or water pollution. The bill would
require the authority to publish notice of the availability of
financial assistance and would require the authority to adopt
regulations to evaluate projects based on need, job development,
environmental benefit, and financial risk.  
   The bill would authorize the authority, in consultation with the
State Board of Equalization and the Franchise Tax Board, to develop a
program that allows for repayment of the financial assistance by
providing an offset towards a company's repayment obligation based on
specified state revenues generated as a result of the financial
assistance or by a collective risk pool paid by private parties.
 
   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 that act a crime. Existing law provides for the
regulation of health insurers by the Department of Insurance. Under
existing law, health care service plans and health insurers are
required to reimburse claims within 30 or 45 working days, as
specified, unless the claim or portion thereof is contested.
 
   Existing law 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. A plan or insurer is required
to notify a claimant of a contested claim within a specified period
of time, and to identify the portion of the claim that is contested
and the specific reasons for contesting the claim.  

   With respect to contracts or policies covering dental services,
this bill would require the plan or insurer to acknowledge receipt of
a claim within specified periods of time. The bill would require the
notice that a claim is being contested or denied to identify the
necessary information missing from the claim submission, and to
include a clear and accurate explanation of the necessity for that
information.  
   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   no  .


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

   SECTION 1.    Section 26011.9 is added to the 
 Public Resources Code   , to read:  
   26011.9.  (a) The purpose of this section is to promote the
creation of California-based manufacturing, California-based jobs,
and the reduction of greenhouse gas, air, or water pollution. In
furtherance of this purpose, the authority may approve a project for
financial assistance in the form of bond financing, loans, loan
guarantees, loan risk-factor guarantees, product warranty guarantees,
or federal loan contributions consistent with the purposes of the
federal award.
   (b) For purposes of this section, "project" means the manufacture
or purchase of a technology that would qualify for financial
assistance under Section 26011.8 by a California-based company.
   (c) The authority shall publish notice of the availability of
financial assistance authorized by subdivision (b), including
criteria for approval and application deadlines.
   (d) The authority shall adopt regulations to evaluate projects
based on need, job development, environmental benefit, and financial
risk.
   (e) The authority may develop a program, in coordination with the
State Board of Equalization and the Franchise Tax Board, allowing for
repayment of the financial assistance provided pursuant to this
section by either or both of the following manners:
   (1) Offsetting the repayment obligation of a company receiving
financial assistance based on the amount of revenue received by the
state by either of the following:
   (A) The state tax on the company's income and the company's
employees' incomes resulting from the financial assistance.
   (B) The sales and use tax on the sale of a product of the company
resulting from the financial assistance.
   (2) A collective risk pool paid by private parties.
   (f) The authority may coordinate with the Capital Access Loan
Program established pursuant to Article 8 (commencing with Section
44559) of Chapter 1 of Division 27 of the Health and Safety Code to
implement this section.  
  SECTION 1.    Section 1371 of the Health and
Safety Code is amended to read:
   1371.  (a) (1) 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,
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.
   (2) If an uncontested claim is not reimbursed by delivery to the
claimant's 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.
   (3) 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.
   (4) 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 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
information 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 period.
   (5) 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.
   (b) With respect to a health care service plan contract covering
dental services or a specialized health care service plan contract
covering dental services pursuant to this chapter, the following
shall apply:
   (1) The plan shall acknowledge to the claimant receipt of a claim
within two working days of receipt of an electronic claim or within
15 days of receipt of a paper claim.
   (2) If a claim or portion thereof lacks information necessary for
the plan to determine payer liability for the claim or portion
thereof, both of the following shall apply:
   (A) The notice required under subdivision (a) that the claim or
portion thereof is being contested or denied shall identify the
necessary information missing from the claim submission and include a
clear and accurate explanation of the necessity for that information

   (B) Upon resubmission of the claim with the additional information
identified pursuant to subparagraph (A), the plan shall then
complete the processing of the claim within the 30-working day period
required in subdivision (a).  
  SEC. 2.    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 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.
   (e) With respect to a health insurance policy covering dental
services or a specialized health insurance policy covering dental
services, the following shall apply:
   (1) The insurer shall acknowledge to the claimant receipt of a
claim within two working days of receipt of an electronic claim or
within 15 days of receipt of a paper claim.
   (2) If a claim or portion thereof lacks information necessary for
the insurer to determine payer liability for the claim or portion
thereof, both of the following shall apply:
   (A) The notice required under subdivision (a) that the claim or
portion thereof is being contested or denied shall identify the
necessary information missing from the claim submission and include a
clear and accurate explanation of the necessity for that
information.
   (B) Upon resubmission of the claim with the additional information
identified pursuant to subparagraph (A), the insurer shall then
complete the processing of the claim within the 30-working day period
required in subdivision (a).  
  SEC. 3.    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.  All matter omitted in this version
of the bill appears in the bill as amended in the Senate, June 3,
2010. (JR11)