BILL NUMBER: AB 1059	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Huffman

                        FEBRUARY 18, 2011

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1059, as introduced, 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 is added to the Health and Safety Code,
to read:
   1386.5.  (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 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) Except as provided in subdivision (d), 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) 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) 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) 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) 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) A health care service plan may not delegate a statutory
liability under this section.