California Legislature—2013–14 Regular Session

Assembly Bill No. 2410

Introduced by Assembly Member Dababneh

February 21, 2014

An act to amend Section 10123.147 of the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 2410, as introduced, Dababneh. Insurance: life and disability insurance.

Exiting law requires insurers issuing group or individual policies of health insurance that covers hospital, medical, or surgical expenses to reimburse each complete claim, as specified, as soon as practical but no later than 30 working days after receipt of the complete claim. Within 30 working days after receipt of the claim, an insurer can contest or deny a claim, as specified, and the insurer can request reasonable additional information about the claim. The provider is required to submit the relevant information requested to the insurer within 15 working days. An insurer is required to pay the greater of $15 per year or interest, as specified, on a claim that is not contested or denied and that has not been delivered to the claimant within 30 working days after receipt.

This bill would instead require insurers to contest or deny a claim and request reasonable additional information within 45 calendar days after receipt of the claim, and require providers to submit the requested additional information to the insurer within 21 calendar days. This bill would also require insurers to pay the greater of $30 per year or interest, as specified, on a claim that is not contested or denied and that has not been delivered to the claimant within 45 working days after receipt.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 10123.147 of the Insurance Code is
amended to read:

10123.147.  

(a) Every insurer issuing group or individual
policies of health insurance that covers hospital, medical, or
surgical expenses, including those telehealth services covered by
the insurer as defined in subdivision (a) of Section 2290.5 of the
Business and Professions Code, shall reimburse each complete
claim, or portion thereof, whether in state or out of state, as soon
as practical, but no later than begin delete 30 working end delete begin insert 45 calendar end insert days after
receipt of the complete claim by the insurer. However, an insurer
may contest or deny a claim, or portion thereof, by notifying the
claimant, in writing, that the claim is contested or denied, within
begin delete 30 working end delete begin insert 45 calendar end insert days after receipt of the complete claim
by the insurer. The notice that a claim, or portion thereof, is
contested shall identify the portion of the claim that is contested,
by revenue code, and the specific information needed from the
provider to reconsider the claim. The notice that a claim, or portion
thereof, is denied shall identify the portion of the claim that is
denied, by revenue code, and the specific reasons for the denial,
including the factual and legal basis known at that time by the
insurer for each reason. If the reason is based solely on facts or
solely on law, the insurer is required to provide only the factual
or legal basis for its reason to deny the claim. The insurer shall
provide a copy of the notice required by this subdivision 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 required by this
subdivision shall include a statement advising 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 was contested
or denied by the insurer and 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. An insurer may delay payment of an uncontested
portion of a complete claim for reconsideration of a contested
portion of that claim so long as the insurer pays those charges
specified in subdivision (b).

(b) If a complete claim, or portion thereof, that is neither
contested nor denied, is not reimbursed by delivery to the
claimant’s address of record within the begin delete 30 working end delete begin insert 45 calendar end insert
days after receipt, the insurer shall pay the greater of begin delete fifteen dollars
($15) end delete begin insert thirty dollars ($30) end insert per year or interest at the rate of 10
percent per annum beginning with the first calendar day after the
begin delete 30-working end delete begin insert 45-calendar end insert day period. An insurer shall automatically
include the begin delete fifteen dollars ($15) end delete begin insert thirty dollars ($30) end insert per year or
interest due in the payment made to the claimant, without requiring
a request therefor.

(c) For the purposes of this section, a claim, or portion thereof,
is reasonably contested if the insurer has not received the completed
claim. A paper claim from an institutional provider shall be deemed
complete upon submission of a legible emergency department
report and a completed UB 92 or other format adopted by the
National Uniform Billing Committee, and reasonable relevant
information requested by the insurer within begin delete 30 working end delete begin insert 45 calendar end insert
days of receipt of the claim. An electronic claim from an
institutional provider shall be deemed complete upon submission
of an electronic equivalent to the UB 92 or other format adopted
by the National Uniform Billing Committee, and reasonable
relevant information requested by the insurer within begin delete 30 working end delete
begin insert 45 calendar end insert days of receipt of the claim. However, if the insurer
requests a copy of the emergency department report within the begin delete 30
working end delete begin insert 45 calendar end insert days after receipt of the electronic claim from
the institutional provider, the insurer may also request additional
reasonable relevant information within begin delete 30 working end delete begin insert 45 calendar end insert
days of receipt of the emergency department report, at which time
the claim shall be deemed complete. A claim from a professional
provider shall be deemed complete upon submission of a completed
HCFA 1500 or its electronic equivalent or other format adopted
by the National Uniform Billing Committee, and reasonable
relevant information requested by the insurer within begin delete 30 working end delete
begin insert 45 calendar end insert days of receipt of the claim. The provider shall provide
the insurer reasonable relevant information within begin delete 15 working end delete begin insert 21
calendar end insert days of receipt of a written request that is clear and
specific regarding the information sought. If, as a result of
reviewing the reasonable relevant information, the insurer requires
further information, the insurer shall have an additional begin delete 15 working end delete
begin insert 21 calendar end insert days after receipt of the reasonable relevant
information to request the further information, notwithstanding
any time limit to the contrary in this section, at which time the
claim shall be deemed complete.

(d) This section shall not apply to claims about which there is
evidence of fraud and misrepresentation, to eligibility
determinations, or in instances where the plan has not been granted
reasonable access to information under the provider’s control. An
insurer shall specify, in a written notice to the provider within begin delete 30
working end delete begin insert 45 calendar end insert days of receipt of the claim, which, if any,
of these exceptions applies to a claim.

(e) If a claim or portion thereof is contested on the basis that
the insurer has not received information reasonably necessary to
determine payer liability for the claim or portion thereof, then the
insurer shall have begin delete 30 working end delete begin insert 45 calendar end insert days after receipt of
this additional information to complete reconsideration of the
claim. If a claim, or portion thereof, undergoing reconsideration
is not reimbursed by delivery to the claimant’s address of record
within the begin delete 30 working end delete begin insert 45 calendar end insert days after receipt of the
additional information, the insurer shall pay the greater of begin delete fifteen
dollars ($15) end delete begin insert thirty dollars ($30) end insert per year or interest at the rate of
10 percent per annum beginning with the first calendar day after
the begin delete 30-working end delete begin insert 45-calendar end insert day period. An insurer shall
automatically include the begin delete fifteen dollars ($15) end delete begin insert end insert begin insert thirty dollars ($30) end insert
per year or interest due in the payment made to the claimant,
without requiring a request therefor.

(f) An insurer shall not delay payment on a claim from a
physician or other provider to await the submission of a claim from
a hospital or other provider, without citing specific rationale as to
why the delay was necessary and providing a monthly update
regarding the status of the claim and the insurer’s actions to resolve
the claim, to the provider that submitted the claim.

(g) An insurer shall not request or require that a provider waive
its rights pursuant to this section.

(h) This section shall apply only to claims for services rendered
to a patient who was provided emergency services and care as
defined in Section 1317.1 of the Health and Safety Code in the
United States on or after September 1, 1999.

(i) This section shall not be construed to affect the rights or
obligations of any person pursuant to Section 10123.13.

(j) This section shall not be construed to affect a written
agreement, if any, of a provider to submit bills within a specified
time period.