AB 3260: Health care coverage: reviews and grievances.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2024-06-27
Current Status:
Failed
(2024-08-15: In committee: Held under submission.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
What does this bill do?
The bill changes how health plans and health insurers handle prior authorizations and complaints, affecting patients (enrollees), their providers, and insurers. It shortens and clarifies decision deadlines (including 72 hours for urgent requests), requires plans and insurers to tell patients and providers quickly what clinical information is missing, treats missed decisions as grievances that are generally resolved for the patient unless required records are absent or the treatment is experimental, and extends the time to seek an independent medical review to 12 months. It also requires sharing of correspondence and records with patients and bans one-sided (ex parte) communications during reviews, and allows penalties for violations.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
(1)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 the act a crime. Existing law generally authorizes a health care service plan or disability insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law requires these decisions to be made within 30 days, or less than 72 hours when the enrollee faces an imminent and serious threat to their health. Existing law requires a health care service plan to establish a grievance system to resolve grievances within 30 days, but limits that timeframe to 3 days when the enrollee faces an imminent and serious threat to their health. Existing law requires a plan to provide a written explanation for its grievance decisions, as specified.
This bill would require that utilization review decisions be made within 72 hours from the health care service plans receipt of the clinical information reasonably necessary to make the determination when the enrollees condition is urgent, and would make a determination of urgency by the enrollees health care provider binding on the health care service plan. urgent. If the plan lacks the information reasonably necessary to make a decision regarding an urgent request, the bill would require the plan to notify the enrollee and provider about the information necessary to complete the request within 24 hours of receiving the request. The bill would require the plan to notify the enrollee and the provider of the decision within a reasonable amount of time, but not later than 48 hours after specified circumstances occur. If a health care service plan fails to make a utilization review decision, or provide notice of a decision, within the specified timelines, the bill would require the health care service plan to treat the request for authorization as a grievance and provide notice with specified information to the enrollee that a grievance has commenced. commenced, if the plan has received the information necessary to make a decision.
This bill would require a plans grievance system to include expedited review of urgent grievances, as specified, and would make a determination of urgency by the enrollees health care provider binding on the health care service plan. specified. The bill would require a plan to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent, except as specified. If a plan fails to make a utilization review decision within the applicable timelines, the bill would require a grievance to be automatically resolved in favor of the enrollee. enrollee, except in specified circumstances. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the Independent Medical Review System in the Department of Managed Health Care to review grievances involving a disputed health care service. Existing law authorizes an enrollee to apply to the department for an independent medical review of a decision regarding health care services based in whole or in part on a finding that the disputed services are not medically necessary within 6 months of any specified qualifying periods and authorizes the director to extend that deadline if the circumstances of a case warrant the extension.
This bill would extend the above deadline to 12 months beyond the specified qualifying periods. The bill would require the plan to provide specified correspondence and documents to an enrollee and their representative, if applicable, if the enrollee has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an enrollee and their representative a reasonable opportunity to respond to communications between the department and the plan or the independent review organization before the grievance is resolved. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with a plan, enrollee, or their representatives during the grievance process, except as specified.
(3)Existing law provides for the regulation of disability insurers, including health insurers, by the Department of Insurance. Existing law requires a disability insurer, including an insurer that delegates utilization review or utilization management functions to medical groups, independent practice associations, or other contracting providers, to comply with specified requirements and limitations on their utilization review or utilization management functions. Existing law requires a decision to approve, modify, or deny a request by a provider before, or concurrent with, the provision of health care services to insureds to be made no more than 5 business days from the insurers receipt of information necessary to make the determination. If the insureds condition poses an imminent and serious threat to the insureds health, existing law requires the decision to be made within no more than 72 hours. Existing law requires a decision to be communicated to the requesting provider within 24 hours of the decision, but requires a decision resulting in denial, delay, or modification of all or part of the requested health care service to be communicated within 2 business days, except as specified.
This bill would limit the applicability of the above-described provisions to health insurers. The bill would require a decision to approve, modify, or deny a request by a provider or insured before the provision of health care services to be communicated no more than 7 calendar 5 business days from the health insurers receipt of the request. If the insurer lacks information reasonably necessary to make the decision, the bill would require the insurer to notify the insured and provider within 7 calendar 5 business days from receipt of request and to afford the insured and provider at least 45 days from receipt of that notice to provide the information. If the insureds condition is urgent, as defined, the bill would require a decision to approve, modify, or deny a request by a provider or insured before, or concurrent with, the provision of health care services to be communicated no more than 72 hours from the insurers receipt of the request. If the insurer lacks information reasonably necessary to make the decision, the bill would require the insurer to notify the insured and provider no later than 24 hours from receipt of request and to afford the insured and provider at least 48 hours from receipt of that notice to provide the information. The bill would require an insurer to communicate a decision to modify or deny a concurrent care request, as specified, within 24 hours from the insurers receipt of the request. If an insurer fails to provide notice of a decision, the bill would require an insurer to treat the request as a grievance and immediately notify the insured and provider that a grievance has commenced. commenced, if the insurer has received the information necessary to make a decision.
(4)Existing law establishes the Independent Medical Review System in the department to review grievances involving a disputed health care service. Existing law requires a disability insurance policy issued, amended, renewed, or delivered on or after January 1, 2000, to provide an insured with the opportunity to seek an independent medical review when health care services have been denied, modified, or delayed if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. Existing law authorizes an insured to apply to the department for an independent medical review when specified conditions are met.
If a grievance is filed internally with an insurer, this bill would require an insurer to acknowledge receipt of the grievance within 24 hours of receipt if urgent and 5 calendar days if nonurgent, and then communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. Upon notice from the department to a disability health insurer that an insured has submitted a complaint to the department, the bill would require an insurer to respond within 24 hours if a complaint is urgent, or within 5 calendar days regarding a nonurgent complaint.
This bill would require the department to determine whether or not a complaint is urgent, as specified, unless the insureds provider has already designated the complaint as urgent. The bill would require the insurer to offer to provide specified correspondence and documents to an insured and their representative, if applicable, if the insured has submitted a complaint or independent medical review case to the department. The bill would require the department to provide an insured and their representative a reasonable opportunity to respond to communications between the department and the insurer or the independent review organization before the grievance is adjudicated. resolved. The bill would prohibit the department and its independent medical review organization an insurer from engaging in ex parte communication with an insurer, insured, or their representatives during the grievance process, except as specified. the independent medical review organization deciding a case.
(5)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.
(1)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 the act a crime. Existing law generally authorizes a health care service plan or disability insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law requires these decisions to be made within 30 days, or less than 72 hours when the enrollee faces an imminent and serious threat to their health. Existing law requires a health care service plan to establish a grievance system to resolve grievances within 30 days, but limits that timeframe to 3 days when the enrollee faces an imminent and serious threat to their health. Existing law requires a plan to provide a written explanation for its grievance decisions, as specified.
This bill would require that utilization review decisions be made within 72 hours from the health care service plans receipt of the clinical information reasonably necessary to make the determination when the enrollees condition is urgent, and would make a determination of urgency by the enrollees health care provider binding on the health care service plan. If the plan lacks the information reasonably necessary to make a decision regarding an urgent request, the bill would require the plan to notify the enrollee and provider about the information necessary to complete the request within 24 hours of receiving the request. The bill would require the plan to notify the enrollee and the provider of the decision within a reasonable amount of time, but not later than 48 hours after specified circumstances occur. If a health care service plan fails to make a utilization review decision, or provide notice of a decision, within the specified timelines, the bill would require the health care service plan to treat the request for authorization as a grievance and provide notice with specified information to the enrollee that a grievance has commenced.
This bill would require a plans grievance system to include expedited review of urgent grievances, as specified, and would make a determination of urgency by the enrollees health care provider binding on the health care service plan. The bill would require a plan to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent, except as specified. If a plan fails to make a utilization review decision within the applicable timelines, the bill would require a grievance to be automatically resolved in favor of the enrollee. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the Independent Medical Review System in the Department of Managed Health Care to review grievances involving a disputed health care service. Existing law authorizes an enrollee to apply to the department for an independent medical review of a decision regarding health care services based in whole or in part on a finding that the disputed services are not medically necessary within 6 months of any specified qualifying periods and authorizes the director to extend that deadline if the circumstances of a case warrant the extension.
This bill would extend the above deadline to 12 months beyond the specified qualifying periods. The bill would require the plan to provide specified correspondence and documents to an enrollee and their representative, if applicable, if the enrollee has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an enrollee and their representative a reasonable opportunity to respond to communications between the department and the plan or the independent review organization before the grievance is resolved. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with a plan, enrollee, or their representatives during the grievance process, except as specified.
(3)Existing law provides for the regulation of disability insurers insurers, including health insurers, by the Department of Insurance. Existing Existing law requires a disability insurer, including an insurer that delegates utilization review or utilization management functions to medical groups, independent practice associations, or other contracting providers, to comply with specified requirements and limitations on their utilization review or utilization management functions. Existing law requires a decision to approve, modify, or deny a request by a provider before, or concurrent with, the provision of health care services to insureds to be made no more than 5 business days from the insurers receipt of information necessary to make the determination. If the insureds condition poses an imminent and serious threat to the insureds health, existing law requires the decision to be made within no more than 72 hours. Existing law requires a decision to be communicated to the requesting provider within 24 hours of the decision, but requires a decision resulting in denial, delay, or modification of all or part of the requested health care service to be communicated within 2 business days, except as specified.
This bill would limit the applicability of the above-described provisions to health insurers. The bill would require a decision to approve, modify, or deny a request by a provider or insured before the provision of health care services to be communicated no more than 7 calendar days from the health insurers receipt of the request. If the insurer lacks information reasonably necessary to make the decision, the bill would require the insurer to notify the insured and provider within 7 calendar days from receipt of request and to afford the insured and provider at least 45 days from receipt of that notice to provide the information. If the insureds condition is urgent, as defined, the bill would require a decision to approve, modify, or deny a request by a provider or insured before, or concurrent with, the provision of health care services to be communicated no more than 72 hours from the insurers receipt of the request. If the insurer lacks information reasonably necessary to make the decision, the bill would require the insurer to notify the insured and provider no later than 24 hours from receipt of request and to afford the insured and provider at least 48 hours from receipt of that notice to provide the information. The bill would require an insurer to communicate a decision to modify or deny a concurrent care request, as specified, within 24 hours from the insurers receipt of the request. If an insurer fails to provide notice of a decision, the bill would require an insurer to treat the request as a grievance and immediately notify the insured and provider that a grievance has commenced.
(4)Existing law establishes the Independent Medical Review System in the department to review grievances involving a disputed health care service. Existing law requires a disability insurance policy issued, amended, renewed, or delivered on or after January 1, 2000, to provide an insured with the opportunity to seek an independent medical review when health care services have been denied, modified, or delayed if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. Existing law authorizes an insured to apply to the department for an independent medical review when specified conditions are met.
If a grievance is filed internally with an insurer, this bill would require an insurer to acknowledge receipt of the grievance within 24 hours of receipt if urgent and 5 calendar days if nonurgent, and then communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. Upon notice from the department to a disability insurer that an insured has submitted a grievance complaint to the department, the bill would require an insurer to respond within 24 hours, if directed by the department, regarding an urgent grievance hours if a complaint is urgent, or within 5 calendar days regarding a nonurgent grievance. complaint.
This bill would require the department to determine whether or not a grievance complaint is urgent, as specified, unless the insureds referring or treating provider has already designated the grievance complaint as urgent. The bill would require the insurer to provide specified correspondence and documents to an insured and their representative, if applicable, if the insured has submitted a grievance for review under the Independent Medical Review System. complaint or independent medical review case to the department. The bill would require the department to provide an insured and their representative a reasonable opportunity to respond to communications between the department and the insurer or the independent review organization before the grievance is adjudicated. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with an insurer, insured, or their representatives during the grievance process, except as specified.
(4)(5)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.
(1)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 the act a crime. Existing law generally authorizes a health care service plan or disability insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law requires these decisions to be made within 30 days, or less than 72 hours when the enrollee faces an imminent and serious threat to their health. Existing law requires a health care service plan to establish a grievance system to resolve grievances within 30 days, but limits that timeframe to 3 days when the enrollee faces an imminent and serious threat to their health. Existing law requires a plan to provide a written explanation for its grievance decisions, as specified.
This bill would require that utilization review decisions be made within 72 hours from the health care service plans receipt of the clinical information reasonably necessary to make the determination when the enrollees condition is urgent, and would make a determination of urgency by the enrollees health care provider binding on the health care service plan. If the plan lacks the information reasonably necessary to make a decision regarding an urgent request, the bill would require the plan to notify the enrollee and provider about the information necessary to complete the request within 24 hours of receiving the request. The bill would require the plan to notify the enrollee and the provider of the decision within a reasonable amount of time, but not later than 48 hours after specified circumstances occur. If a health care service plan fails to make a utilization review decision, or provide notice of a decision, within the specified timelines, the bill would require the health care service plan to treat the request for authorization as a grievance and provide notice with specified information to the enrollee that a grievance has commenced.
This bill would require a plans grievance system to include expedited review of urgent grievances, as specified, and would make a determination of urgency by the enrollees health care provider binding on the health care service plan. The bill would require a plan to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent, except as specified. If a plan fails to make a utilization review decision within the applicable timelines, the bill would require a grievance to be automatically resolved in favor of the enrollee. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the Independent Medical Review System in the Department of Managed Health Care to review grievances involving a disputed health care service. Existing law authorizes an enrollee to apply to the department for an independent medical review of a decision regarding health care services based in whole or in part on a finding that the disputed services are not medically necessary within 6 months of any specified qualifying periods and authorizes the director to extend that deadline if the circumstances of a case warrant the extension.
This bill would extend the above deadline to 12 months beyond the specified qualifying periods. The bill would require the department plan to provide specified correspondence and documents to an enrollee and their representative, if applicable, if the enrollee has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an enrollee and their representative a reasonable opportunity to respond to communications between the department and the plan or the independent review organization before the grievance is resolved. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with a plan, enrollee, or their representatives during the grievance process, except as specified.
(3)Existing law provides for the regulation of disability insurers by the Department of Insurance. Existing law establishes the Independent Medical Review System in the department to review grievances involving a disputed health care service. Existing law requires a disability insurance policy issued, amended, renewed, or delivered on or after January 1, 2000, to provide an insured with the opportunity to seek an independent medical review when health care services have been denied, modified, or delayed if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. Existing law authorizes an insured to apply to the department for an independent medical review when specified conditions are met.
If a grievance is filed internally with an insurer, this bill would require an insurer to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. Upon notice from the department to a disability insurer that an insured has submitted a grievance to the department, the bill would require an insurer to respond within 24 hours, if directed by the department, regarding an urgent grievance or within 5 calendar days regarding a nonurgent grievance.
This bill would require the department to determine whether or not a grievance is urgent, as specified, unless the insureds referring or treating provider has already designated the grievance as urgent. The bill would require the department insurer to provide specified correspondence and documents to an insured and their representative, if applicable, if the insured has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an insured and their representative a reasonable opportunity to respond to communications between the department and the insurer or the independent review organization before the grievance is adjudicated. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with an insurer, insured, or their representatives during the grievance process, except as specified.
(4)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.
(1)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 the act a crime. Existing law generally authorizes a health care service plan or disability insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law requires these decisions to be made within 30 days, or less than 72 hours when the enrollee faces an imminent and serious threat to their health. Existing law requires a health care service plan to establish a grievance system to resolve grievances within 30 days, but limits that timeframe to 3 days when the enrollee faces an imminent and serious threat to their health. Existing law requires a plan to provide a written explanation for its grievance decisions, as specified.
This bill would require that utilization review decisions be made within 72 hours from the health care service plans receipt of the clinical information reasonably necessary to make the determination when the enrollees condition is urgent, and would make a determination of urgency by a referring or treating the enrollees health care provider binding on the health care service plan. If the plan lacks the information reasonably necessary to make a decision regarding an urgent request, the bill would require the plan to notify the enrollee and provider about the information necessary to complete the request within 24 hours of receiving the request. The bill would require the plan to notify the enrollee and the provider of the decision within a reasonable amount of time, but not later than 48 hours after specified circumstances occur. If a health care service plan fails to make a utilization review decision within the applicable 72-hour or 30-day timeline, the bill would automatically entitle an enrollee to proceed with a grievance. decision, or provide notice of a decision, within the specified timelines, the bill would require the health care service plan to treat the request for authorization as a grievance and provide notice with specified information to the enrollee that a grievance has commenced.
This bill would require a plans grievance system to include expedited review of urgent grievances, as specified, and would make a determination of urgency by a referring or treating the enrollees health care provider binding on the health care service plan. The bill would require a plan to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. nonurgent, except as specified. If a plan fails to make a utilization review decision within the applicable 72-hour or 30-day timeline, timelines, the bill would require a grievance to be automatically resolved in favor of the enrollee. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the Independent Medical Review System in the Department of Managed Health Care to review grievances involving a disputed health care service. Existing law authorizes an enrollee to apply to the department for an independent medical review of a decision regarding health care services based in whole or in part on a finding that the disputed services are not medically necessary within 6 months of any specified qualifying periods and authorizes the director to extend that deadline if the circumstances of a case warrant the extension.
This bill would extend the above deadline to 12 months beyond the specified qualifying periods. The bill would require the department to provide specified correspondence and documents to an enrollee and their representative, if applicable, if the enrollee has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an enrollee and their representative a reasonable opportunity to respond to communications between the department and the plan or the independent review organization before the grievance is adjudicated. resolved. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with a plan, enrollee, or their representatives during the grievance process, except as specified.
(3)Existing law provides for the regulation of disability insurers by the Department of Insurance. Existing law establishes the Independent Medical Review System in the department to review grievances involving a disputed health care service. Existing law requires a disability insurance policy issued, amended, renewed, or delivered on or after January 1, 2000, to provide an insured with the opportunity to seek an independent medical review when health care services have been denied, modified, or delayed if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. Existing law authorizes an insured to apply to the department for an independent medical review when specified conditions are met.
If a grievance is filed internally with an insurer, this bill would require an insurer to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. Upon notice from the department to a disability insurer that an insured has submitted a grievance to the department, the bill would require an insurer to respond within 24 hours, if directed by the department, regarding an urgent grievance or within 5 calendar days regarding a nonurgent grievance.
This bill would require the department to determine whether or not a grievance is urgent, as specified, unless the insureds referring or treating provider has already designated the grievance as urgent. The bill would require the department to provide specified correspondence and documents to an insured and their representative, if applicable, if the insured has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an insured and their representative a reasonable opportunity to respond to communications between the department and the insurer or the independent review organization before the grievance is adjudicated. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with an insurer, insured, or their representatives during the grievance process, except as specified.
(4)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.
(1)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 the act a crime. Existing law generally authorizes a health care service plan or disability insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law requires these decisions to be made within 30 days, or less than 72 hours when the enrollee faces an imminent and serious threat to their health. Existing law requires a health care service plan to establish a grievance system to resolve grievances within 30 days, but limits that timeframe to 3 days when the enrollee faces an imminent and serious threat to their health. Existing law requires a plan to provide a written explanation for its grievance decisions, as specified.
This bill would require that utilization review decisions be made within 72 hours when the enrollees condition is urgent, and would make a determination of urgency by a referring or treating health care provider binding on the health care service plan. If a health care service plan fails to make a utilization review decision within the applicable 72-hour or 30-day timeline, the bill would automatically entitle an enrollee to proceed with a grievance.
This bill would require a plans grievance system to include expedited review of urgent grievances, as specified, and would make a determination of urgency by a referring or treating health care provider binding on the health care service plan. The bill would require a plan to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. If a plan fails to make a utilization review decision within the applicable 72-hour or 30-day timeline, the bill would require a grievance to be automatically resolved in favor of the enrollee. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the Independent Medical Review System in the Department of Managed Health Care to review grievances involving a disputed health care service.
This bill would require the department to provide specified correspondence and documents to an enrollee and their representative, if applicable, if the enrollee has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an enrollee and their representative a reasonable opportunity to respond to communications between the department and the plan or the independent review organization before the grievance is adjudicated. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with a plan, enrollee, or their representatives during the grievance process, except as specified.
(3)Existing law provides for the regulation of disability insurers by the Department of Insurance. Existing law establishes the Independent Medical Review System in the department to review grievances involving a disputed health care service. Existing law requires a disability insurance policy issued, amended, renewed, or delivered on or after January 1, 2000, to provide an insured with the opportunity to seek an independent medical review when health care services have been denied, modified, or delayed if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. Existing law authorizes an insured to apply to the department for an independent medical review when specified conditions are met.
If a grievance is filed internally with an insurer, this bill would require an insurer to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. Upon notice from the department to a disability insurer that an insured has submitted a grievance to the department, the bill would require an insurer to respond within 24 hours, if directed by the department, regarding an urgent grievance or within 5 calendar days regarding a nonurgent grievance.
This bill would require the department to determine whether or not a grievance is urgent, as specified, unless the insureds referring or treating provider has already designated the grievance as urgent. The bill would require the department to provide specified correspondence and documents to an insured and their representative, if applicable, if the insured has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an insured and their representative a reasonable opportunity to respond to communications between the department and the insurer or the independent review organization before the grievance is adjudicated. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with an insurer, insured, or their representatives during the grievance process, except as specified.
(4)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.
(a)A health care service plan and any entity with which it contracts for services that include utilization review or utilization management functions, that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b)A health care service plan that is subject to this section shall have written policies and procedures establishing the process by which the plan prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to Section 1363.5. These policies and procedures, and a description of the process by which the plan reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, shall be filed with the director for review and approval, and shall be disclosed by the plan to providers and enrollees upon request, and by the plan to the public upon request.
(c)A health care service plan subject to this section, except a plan that meets the requirements of Section 1351.2, shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act, or, if the plan is a specialized health care service plan, a clinical director with California licensure in a clinical area appropriate to the type of care provided by the specialized health care service plan. The medical director or clinical director shall ensure that the process by which the plan reviews and approves, modifies, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, complies with the requirements of this section.
(d)If health plan personnel, or individuals under contract to the plan to review requests by providers, approve the providers request, pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e)An individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may not deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity. The decision of the physician or other health care professional shall be communicated to the provider and the enrollee pursuant to subdivision (h).
(f)The criteria or guidelines used by the health care service plan to determine whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall be consistent with clinical principles and processes. These criteria and guidelines shall be developed pursuant to the requirements of Section 1363.5.
(g)If the health care service plan requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the plan shall request only the information reasonably necessary to make the determination.
(h)In determining whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to this section shall meet the following requirements:
(1)Decisions to approve, modify, or deny, based on medical necessity, requests by providers prior to the provision of health care services to enrollees that do not meet the requirements for the time period for urgent review required by paragraph (2), shall be communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed five business days from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
(2)(A)When the enrollees condition is urgent, decisions to approve, modify, or deny requests by providers prior to the provision of health care services to enrollees, shall be communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed 72 hours from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
(B)(i)When the plan lacks the information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the plan shall notify the enrollee and the provider of the specific information necessary to complete the request. The notification shall be made as soon as possible, but no later than 24 hours after the plans receipt of the request from the enrollee or provider. The enrollee and the provider shall be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information.
(ii)The plan shall notify the enrollee and the provider of the plans decision as soon as possible, but no later than 48 hours after the earlier of the following:
(I)The plans receipt of specified additional information as described in this subparagraph.
(II)The end of the period afforded the enrollee and the provider to submit the specified additional information as described in this subparagraph.
(C)This paragraph shall apply unless a shorter period of time is required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, in which case that period of time shall be binding on the health care service plan. Nothing in this section shall be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management.
(D)A request shall be considered urgent when either of the following conditions are met:
(i)The enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including, but not limited to, severe pain or the potential loss of life, limb, or other major bodily function.
(ii)The normal timeframe for the decisionmaking process described in paragraph (1) could be detrimental to the enrollees life or physical or behavioral health, cause severe pain, or jeopardize the enrollees ability either to regain maximum function or to minimize any loss of function.
(E)A determination of urgency by the enrollees health care provider shall be binding on the health care service plan.(3)Decisions to approve, modify, or deny concurrent care requests for an initially approved, ongoing course of treatment to be provided over a period of time or number of treatments shall be communicated to the enrollee and the provider by telephone, facsimile, or electronically, as well as by mail, within 24 hours of the receipt of the request. In the case of concurrent care, coverage shall not be discontinued until the enrollees treating provider has been notified of the plans decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(4)Retrospective review decisions shall be communicated to enrollees and providers by mail within 30 days of the receipt of information that is reasonably necessary to make retrospective determinations.
(5)Communications regarding decisions to approve requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall specify the specific health care service approved. Decisions to deny, delay, or modify health care services requested by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall include a clear and concise explanation of the reasons for the plans decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. Any written communication to a physician or other health care provider of a denial, delay, or modification of a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the enrollee may file a grievance with the plan pursuant to Section 1368, and in the case of Medi-Cal enrollees, shall explain how to request an administrative hearing and aid paid pending under Sections 51014.1 and 51014.2 of Title 22 of the California Code of Regulations.
(6)If the health care service plan fails to make a decision, or provide notice of a decision, to approve, modify, or deny the request for authorization within the timeframes specified in paragraphs (1) through (5), inclusive, the health care service plan shall automatically treat the request for authorization as a grievance consistent with Sections 1368 and 1368.01 and shall immediately provide notice to the enrollee that a grievance has commenced. The notice shall include the enrollees appeal rights under this chapter and the ability of the enrollee to withdraw the grievance if the enrollee so chooses.
(7)Notwithstanding paragraph (6), if the plan has not received the information requested pursuant to subdivision (g), the plan need not treat the request for authorization as a grievance.
(7)(8)If the director determines that a health care service plan has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be deemed an exclusive remedy for the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(i)A health care service plan subject to this section shall maintain telephone access for providers to request authorization for health care services.
(j)A health care service plan subject to this section that reviews requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall establish, as part of the quality assurance program required by Section 1370, a process by which the plans compliance with this section is assessed and evaluated. The process shall include provisions for evaluation of complaints, assessment of trends, implementation of actions to correct identified problems, mechanisms to communicate actions and results to the appropriate health plan employees and contracting providers, and provisions for evaluation of any corrective action plan and measurements of performance.
(k)The director shall review a health care service plans compliance with this section as part of its periodic onsite medical survey of each plan undertaken pursuant to Section 1380, and shall include a discussion of compliance with this section as part of its report issued pursuant to that section.
(l)This section shall not apply to decisions made for the care or treatment of the sick who depend upon prayer or spiritual means for healing in the practice of religion as set forth in subdivision (a) of Section 1270.
(m)This section shall not cause a health care service plan to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.
SEC. 2.Section 1368 of the Health and Safety Code is amended to read:1368.(a)Every plan shall do all of the following:
(1)Establish and maintain a grievance system approved by the department under which enrollees may submit their grievances to the plan. Each system shall provide reasonable procedures in accordance with department regulations that shall ensure adequate consideration of enrollee grievances and rectification when appropriate.
(2)Inform its subscribers and enrollees upon enrollment in the plan and annually thereafter of the procedure for processing and resolving grievances. The information shall include the location and telephone number where grievances may be submitted.
(3)Provide forms for grievances to be given to subscribers and enrollees who wish to register written grievances. The forms used by plans licensed pursuant to Section 1353 shall be approved by the director in advance as to format.
(4)(A)Provide for a written acknowledgment within five calendar days of the receipt of a grievance, except as noted in subparagraph (B). The acknowledgment shall advise the complainant of the following:
(i)That the grievance has been received.
(ii)The date of receipt.
(iii)The name of the plan representative and the telephone number and address of the plan representative who may be contacted about the grievance.
(B)(i)Grievances received by telephone, by facsimile, by email, or online through the plans internet website pursuant to Section 1368.015, that are not coverage disputes, complaints about access to care, network adequacy including complaints about the waiting time for, or distance to, covered health care services, disputed health care services involving medical necessity, or experimental or investigational treatment and that are resolved by the next business day following receipt are exempt from the requirements of subparagraph (A) and paragraph (5). The plan shall maintain a log of all these grievances. The log shall be periodically reviewed by the plan and shall include the following information for each complaint:
(I)The date of the call.
(II)The name of the complainant.
(III)The complainants member identification number.
(IV)The nature of the grievance.
(V)The nature of the resolution.
(VI)The name of the plan representative who took the call and resolved the grievance.
(ii)For health plan contracts in the individual, small group, or large group markets, a health care service plans response to grievances subject to Section 1367.24 shall also comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This paragraph shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(5)Provide subscribers, enrollees, and providers subscribers and enrollees with written responses to grievances, with a clear and concise explanation of the reasons for the plans response. Providers shall also be provided a written response to a grievance if so designated by the subscriber or enrollee or if the provider submitted the grievance. For grievances involving the delay, denial, or modification of health care services, the plan response shall describe the criteria used and the clinical reasons for its decision, including all criteria and clinical reasons related to medical necessity. If a plan, or one of its contracting providers, issues a decision delaying, denying, or modifying health care services based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the decision shall clearly specify the provisions in the contract that exclude that coverage.
(A)In the case of an urgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider by telephone, electronically, or both, as well as by hard copy mailed to their designated mailing address, no later than 72 hours from receipt of the grievance.
(B)In the case of a nonurgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider in writing pursuant to the timeframes set forth in Section 1368.01.
(6)For grievances involving the cancellation, rescission, or nonrenewal of a health care service plan contract, the health care service plan shall continue to provide coverage to the enrollee or subscriber under the terms of the health care service plan contract until a final determination of the enrollees or subscribers request for review has been made by the health care service plan or the director pursuant to Section 1365 and this section. This paragraph shall not apply if the health care service plan cancels or fails to renew the enrollees or subscribers health care service plan contract for nonpayment of premiums pursuant to paragraph (1) of subdivision (a) of Section 1365.
(7)Keep in its files all copies of grievances, and the responses thereto, for a period of five years.
(b)(1)(A)After either completing the grievance process described in subdivision (a), or participating in the process for at least 30 days, a subscriber or enrollee may submit the grievance to the department for review. In any case determined by the department to be a case involving an imminent and serious threat to the health of the patient, including, but not limited to, severe pain, the potential loss of life, limb, or major bodily function, cancellations, rescissions, or the nonrenewal of a health care service plan contract, or in any other case when the department determines that an earlier review is warranted, a subscriber or enrollee shall not be required to complete the grievance process or to participate in the process for at least 30 days before submitting a grievance to the department for review.
(B)A grievance may be submitted to the department for review and resolution prior to any arbitration.
(C)Notwithstanding subparagraphs (A) and (B), the department may refer any grievance that does not pertain to compliance with this chapter to the State Department of Public Health, the California Department of Aging, the federal Health Care Financing Administration, or any other appropriate governmental entity for investigation and resolution.
(2)If the subscriber or enrollee is a minor, or is incompetent or incapacitated, the parent, guardian, conservator, relative, or other designee of the subscriber or enrollee, as appropriate, may submit the grievance to the department as the agent of the subscriber or enrollee. Further, a provider may join with, or otherwise assist, a subscriber or enrollee, or the agent, to submit the grievance to the department. In addition, following submission of the grievance to the department, the subscriber or enrollee, or the agent, may authorize the provider to assist, including advocating on behalf of the subscriber or enrollee. For purposes of this section, a relative includes the parent, stepparent, spouse, adult son or daughter, grandparent, brother, sister, uncle, or aunt of the subscriber or enrollee.
(3)The department shall review the written documents submitted with the subscribers or the enrollees request for review, or submitted by the agent on behalf of the subscriber or enrollee. The department may ask for additional information, and may hold an informal meeting with the involved parties, including providers who have joined in submitting the grievance or who are otherwise assisting or advocating on behalf of the subscriber or enrollee. If after reviewing the record, the department concludes that the grievance, in whole or in part, is eligible for review under the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the department shall immediately notify the subscriber or enrollee, or agent, of that option and shall, if requested orally or in writing, assist the subscriber or enrollee in participating in the independent medical review system.
(4)If after reviewing the record of a grievance, the department concludes that a health care service eligible for coverage and payment under a health care service plan contract has been delayed, denied, or modified by a plan, or by one of its contracting providers, in whole or in part due to a determination that the service is not medically necessary, and that determination was not communicated to the enrollee in writing along with a notice of the enrollees potential right to participate in the independent medical review system, as required by this chapter, the director shall, by order, assess administrative penalties. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice of, and the opportunity for, a hearing with regard to the person affected in accordance with Section 1397. The administrative penalties shall not be deemed an exclusive remedy available to the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(5)The department shall send a written notice of the final disposition of the grievance, and the reasons therefor, to the subscriber or enrollee, the agent, to any provider that has joined with or is otherwise assisting the subscriber or enrollee, and to the plan, within 30 calendar days of receipt of the request for review unless the director, in the directors discretion, determines that additional time is reasonably necessary to fully and fairly evaluate the relevant grievance. In any case not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the departments written notice shall include, at a minimum, the following:
(A)A summary of its findings and the reasons why the department found the plan to be, or not to be, in compliance with any applicable laws, regulations, or orders of the director.
(B)A discussion of the departments contact with any medical provider, or any other independent expert relied on by the department, along with a summary of the views and qualifications of that provider or expert.
(C)If the enrollees grievance is sustained in whole or in part, information about any corrective action taken.
(6)In any department review of a grievance involving a disputed health care service, as defined in subdivision (b) of Section 1374.30, that is not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), in which the department finds that the plan has delayed, denied, or modified health care services that are medically necessary, based on the specific medical circumstances of the enrollee, and those services are a covered benefit under the terms and conditions of the health care service plan contract, the departments written notice shall do either of the following:
(A)Order the plan to promptly offer and provide those health care services to the enrollee.
(B)Order the plan to promptly reimburse the enrollee for any reasonable costs associated with urgent care or emergency services, or other extraordinary and compelling health care services, when the department finds that the enrollees decision to secure those services outside of the plan network was reasonable under the circumstances.
The departments order shall be binding on the plan.
(7)Distribution of the written notice shall not be deemed a waiver of any exemption or privilege under existing law, including, but not limited to, Section 7921.505 of the Government Code, for any information in connection with and including the written notice, nor shall any person employed or in any way retained by the department be required to testify as to that information or notice.
(8)The director shall establish and maintain a system of aging of grievances that are pending and unresolved for 30 days or more that shall include a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more.
(9)A subscriber or enrollee, or the agent acting on behalf of a subscriber or enrollee, may also request voluntary mediation with the plan prior to exercising the right to submit a grievance to the department. The use of mediation services shall not preclude the right to submit a grievance to the department upon completion of mediation. In order to initiate mediation, the subscriber or enrollee, or the agent acting on behalf of the subscriber or enrollee, and the plan shall voluntarily agree to mediation. Expenses for mediation shall be borne equally by both sides. The department shall have no administrative or enforcement responsibilities in connection with the voluntary mediation process authorized by this paragraph.
(c)The plans grievance system shall include a system of aging of grievances that are pending and unresolved for 30 days or more. The plan shall provide a quarterly report to the director of grievances pending and unresolved for 30 or more days with separate categories of grievances for Medicare enrollees and Medi-Cal enrollees. The plan shall include with the report a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more. The plan may include the following statement in the quarterly report that is made available to the public by the director:
Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal enrollees each have separate avenues of appeal that are not available to other enrollees. Therefore, grievances pending and unresolved may reflect enrollees pursuing their Medicare or Medi-Cal appeal rights.
If requested by a plan, the director shall include this statement in a written report made available to the public and prepared by the director that describes or compares grievances that are pending and unresolved with the plan for 30 days or more. Additionally, the director shall, if requested by a plan, append to that written report a brief explanation, provided in writing by the plan, of the reasons why grievances described in that written report are pending and unresolved for 30 days or more. The director shall not be required to include a statement or append a brief explanation to a written report that the director is required to prepare under this chapter, including Sections 1380 and 1397.5.
(d)Subject to subparagraph (C) of paragraph (1) of subdivision (b), the grievance or resolution procedures authorized by this section shall be in addition to any other procedures that may be available to any person, and failure to pursue, exhaust, or engage in the procedures described in this section shall not preclude the use of any other remedy provided by law.
(e)This section does not allow the submission to the department of any provider grievance under this section. However, as part of a providers duty to advocate for medically appropriate health care for the providers patients pursuant to Sections 510 and 2056 of the Business and Professions Code, this subdivision does not prohibit a provider from contacting and informing the department about any concerns the provider has regarding compliance with or enforcement of this chapter.
(f)To the extent required by Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations, there shall be an independent external review pursuant to the standards required by the United States Secretary of Health and Human Services of a health care service plans cancellation, rescission, or nonrenewal of an enrollees or subscribers coverage.
SEC. 3.Section 1368.01 of the Health and Safety Code is amended to read:1368.01.(a)The grievance system shall require the plan to resolve grievances and communicate its final determinations within 30 days, except as provided in subdivision (c).
(b)The grievance system shall include a requirement for expedited plan review of urgent grievances when the enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including, but not limited to, severe pain, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in subdivision (a), could be detrimental to the enrollees life or physical or behavioral health, cause severe pain, or jeopardize the enrollees ability to regain maximum function or minimize any loss of function. A determination of urgency by the enrollees health care provider shall be binding on the health care service plan. When the plan has notice of a case requiring expedited review, the grievance system shall require the plan to immediately inform enrollees and subscribers in writing of their right to notify the department of the grievance. The grievance system shall also require the plan to furnish enrollees, subscribers, health care providers, and the department with a written statement on the disposition no later than 72 hours from receipt of the grievance, except as provided in subdivision (c). Paragraph (4) of subdivision (a) of Section 1368 shall not apply to grievances handled pursuant to this section.
(c)A health care service plan contract in the individual, small group, or large group markets that provides coverage for outpatient prescription drugs shall comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This subdivision shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(d)A health care service plan that fails to comply with the timeframes in this section or with the notice requirements of subparagraph (A) or (B) of paragraph (5) of subdivision (a) and subdivision (b) of Section 1368 shall automatically resolve the grievance in favor of the enrollee. enrollee, except in the following circumstances:
(1)The plan is not in receipt of the clinical information reasonably necessary and requested by the plan to resolve the grievance.
(2)The grievance is a request for services that are experimental or investigational. This paragraph does not apply to grievances related to the provision of prescription drugs if the provider has met the documentation requirements of subdivision (b) of Section 1367.21.
SEC. 4.Section 1374.30 of the Health and Safety Code is amended to read:1374.30.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a health care service plan contract that has been denied, modified, or delayed by a decision of the plan, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a specialized health care service plan, except to the extent that the service (1) involves the practice of medicine, or (2) is provided pursuant to a contract with a health care service plan that covers hospital, medical, or surgical benefits. If a plan, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a plan, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the health care service plan contract. A coverage decision does not encompass a plan or contracting provider decision regarding a disputed health care service.
(d)(1)All enrollee grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an enrollee grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the enrollee request for review shall be treated as a request for the department to review the grievance pursuant to subdivision (b) of Section 1368. All other enrollee grievances, including grievances involving coverage decisions, remain eligible for review by the department pursuant to subdivision (b) of Section 1368.
(2)In any case in which an enrollee or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(3)The department shall be the final arbiter when there is a question as to whether an enrollee grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an enrollee grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(e)Every health care service plan contract that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an enrollee with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the plan, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an enrollee may designate an agent to act on the enrollees behalf, as described in paragraph (2) of subdivision (b) of Section 1368. The provider may join with or otherwise assist the enrollee in seeking an independent medical review, and may advocate on behalf of the enrollee.
(f)Medi-Cal beneficiaries enrolled in a health care service plan shall not be excluded from participation. Medicare beneficiaries enrolled in a health care service plan shall not be excluded unless expressly preempted by federal law. Reviews of cases for Medi-Cal enrollees shall be conducted in accordance with statutes and regulations for the Medi-Cal program.
(g)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare and Medi-Cal programs, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon enrollees under this chapter.
(h)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(i)Every health care service plan shall prominently display in every plan member handbook or relevant informational brochure, in every plan contract, on enrollee evidence of coverage forms, on copies of plan procedures for resolving grievances, on letters of denials issued by either the plan or its contracting organization, on the grievance forms required under Section 1368, and on all written responses to grievances, information concerning the right of an enrollee to request an independent medical review in cases where the enrollee believes that health care services have been improperly denied, modified, or delayed by the plan, or by one of its contracting providers.
(j)An enrollee may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The enrollees provider has recommended a health care service as medically necessary, or
(B)The enrollee has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The enrollee, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by an in-plan provider for the diagnosis or treatment of the medical condition for which the enrollee seeks independent review. The plan shall expedite access to an in-plan provider upon request of an enrollee. The in-plan provider need not recommend the disputed health care service as a condition for the enrollee to be eligible for an independent review.
For purposes of this article, the enrollees provider may be an out-of-plan provider. However, the plan shall have no liability for payment of services provided by an out-of-plan provider, except as provided pursuant to subdivision (c) of Section 1374.34.
(2)The disputed health care service has been denied, modified, or delayed by the plan, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The enrollee has filed a grievance with the plan or its contracting provider pursuant to Section 1368, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The enrollee shall not be required to participate in the plans grievance process for more than 30 days. In the case of a grievance that requires expedited review pursuant to Section 1368.01, the enrollee shall not be required to participate in the plans grievance process for more than three days.
(k)An enrollee may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within 12 months of any of the qualifying periods or events under subdivision (j). The director may extend the application deadline beyond 12 months if the circumstances of a case warrant the extension.
(l)The enrollee shall pay no application or processing fees of any kind.
(m)As part of its notification to the enrollee regarding a disposition of the enrollees grievance that denies, modifies, or delays health care services, the plan shall provide the enrollee with a one- or two-page application form approved by the department, and an addressed envelope, which the enrollee may return to initiate an independent medical review. The plan shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the enrollees diagnosis or condition, the nature of the disputed health care service sought by the enrollee, a means to identify the enrollees case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent medical review process may cause the enrollee to forfeit any statutory right to pursue legal action against the plan regarding the disputed health care service.
(2)A statement indicating the enrollees consent to obtain any necessary medical records from the plan, any of its contracting providers, and any out-of-plan provider the enrollee may have consulted on the matter, to be signed by the enrollee.
(3)Notice of the enrollees right to provide information or documentation, either directly or through the enrollees provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the enrollees medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the enrollees medical condition.
(C)Reasonable information supporting the enrollees position that the disputed health care service is or was medically necessary for the enrollees medical condition, including all information provided to the enrollee by the plan or any of its contracting providers, still in the possession of the enrollee, concerning a plan or provider decision regarding disputed health care services, and a copy of any materials the enrollee submitted to the plan, still in the possession of the enrollee, in support of the grievance, as well as any additional material that the enrollee believes is relevant.
(4)A section designed to collect information on the enrollees ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all enrollees get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(n)Upon notice from the department that the health care service plans enrollee has applied for an independent medical review, the plan or its contracting providers shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the plans receipt of the departments notice of a request by an enrollee for an independent review:
(1)(A)A copy of all of the enrollees medical records in the possession of the plan or its contracting providers relevant to each of the following:
(i)The enrollees medical condition.
(ii)The health care services being provided by the plan and its contracting providers for the condition.
(iii)The disputed health care services requested by the enrollee for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the plan or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The plan shall concurrently provide a copy of medical records required by this subparagraph to the enrollee or the enrollees provider, if authorized by the enrollee, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the enrollee by the plan and any of its contracting providers concerning plan and provider decisions regarding the enrollees condition and care, and a copy of any materials the enrollee or the enrollees provider submitted to the plan and to the plans contracting providers in support of the enrollees request for disputed health care services. This documentation shall include the written response to the enrollees grievance, required by paragraph (4) of subdivision (a) of Section 1368. The confidentiality of any enrollee medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the plan or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the plan and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The plan shall concurrently provide a copy of documents required by this paragraph, except for any information found by the director to be legally privileged information, to the enrollee and the enrollees provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the director to be the proprietary information of the plan.
(o)(1)With respect to an enrollee grievance to the department concerning a disputed health care service, coverage decision, or access to care, network adequacy, including complaints about the waiting time for, or distance to, health care services, the plan shall promptly offer to provide to the enrollee and, to the extent applicable, the enrollees representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the plan concerning the enrollees grievance. Upon the election of the enrollee, the plan shall promptly transmit all correspondence to the enrollee and, to the extent applicable, to the enrollees representative.
(2)If the department determines that the enrollees grievance concerns a coverage decision, access to care, or both, and the department seeks a nonbinding expert opinion from an independent medical review organization, then the plan shall provide the enrollee and, to the extent applicable, the enrollees representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.(3)The(2)For grievances not requiring an independent medical review, the department shall provide to the enrollee and, to the extent applicable, the enrollees representative a reasonable opportunity to respond to any communications between the department and the plan and, if applicable, between the department and the independent medical review organization before the enrollees grievance is resolved.
(4)(3)The department, including its independent medical review organization, shall not engage in ex parte communication with the plan, the enrollee, or the representatives of either party without concurrently providing the plan, the enrollee, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the plan, enrollee, or their representatives did not participate and without providing the plan, enrollee, and their representatives a reasonable opportunity to respond.
(4)Notwithstanding paragraphs (1) to (3), inclusive, copies of an enrollees medical records regarding sensitive services, as defined in subdivision (s) of Section 56.05 of the Civil Code, shall only be provided to the enrollee to whom the services pertain.
(5)This subdivision does not alter the timeframes in this article within which an independent medical review is required to be completed.
SEC. 5.Section 10123.134 is added to the Insurance Code, to read:10123.134.(a)(1)A health insurer shall provide insureds and providers with written responses to grievances, with a clear and concise explanation of the reasons for the health insurers response. Providers shall also be provided a written response to a grievance if so designated by the insured or if the provider submitted the grievance. For grievances involving the delay, denial, or modification of health care services, the health insurers response shall describe the criteria used and the clinical reasons for its decision, including all criteria and clinical reasons related to medical necessity. If a health insurer, or one of its contracting providers or another entity on its behalf, issues a decision delaying, denying, or modifying health care services based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the insured, the decision shall clearly specify the provisions in the contract that exclude that coverage.
(2)In the case of an urgent grievance, the health insurer shall communicate its final determination to the insured and the insureds provider by telephone, electronically, or both, as well as in writing, no later than 72 hours from receipt of the grievance.
(3)In the case of a nonurgent grievance, the health insurer shall communicate its final determination to the insured and the insureds provider in writing within 30 calendar days of receipt.
(b)For grievances involving the cancellation, rescission, or nonrenewal of a health insurer contract, the health insurer shall continue to provide coverage to the insured or subscriber under the terms of the contract until a final determination of the insureds request for review has been made by the health insurer or commissioner. This subdivision shall not apply if the health insurer cancels or fails to renew the insureds contract for nonpayment of premiums.
(c)A determination that a grievance is urgent by an insureds health care provider shall be binding on a health insurer.(d)(c)With respect to an insureds grievance involving a disputed health care service, a health insurer shall comply with Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, including Section 147.136 of Title 45 of the Code of Federal Regulations, except as otherwise provided in this chapter.
(e)(d)A health insurer shall acknowledge receipt of a grievance to the insured, the insureds provider, and the insureds authorized representative, as applicable, in writing within five calendar days of receipt, or within 24 hours of receipt if the grievance is urgent. The written acknowledgment shall advise the complainant of all of the following:
(1)That the grievance has been received.
(2)The date of receipt.
(3)The name, telephone number, and email address of the insurer representative who may be contacted about the grievance.
(f)(e)A health insurer that fails to strictly comply with the time limits or notice requirements in this section shall automatically resolve the grievance in favor of the insured. insured, except in the following circumstances:
(1)The insurer is not in receipt of the clinical information reasonably necessary and requested by the insurer to resolve the grievance.
(2)The grievance is a request for services that are experimental or investigational. This paragraph does not apply to grievances related to the provision of prescription drugs if the provider has met the documentation requirements of subdivision (b) of Section 10123.195.
(g)(f)A health insurer shall keep in its files all copies of grievances, and the responses thereto, for a period of five years.
(h)(g)The department shall be the final arbiter if there is a dispute as to whether a grievance involves a coverage decision or disputed health care service.
(i)(h)For purposes of this section:
(1)Coverage decision has the same meaning as defined in Section 10169.
(2)Disputed health care service has the same meaning as defined in Section 10169, and shall also include a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational.
(3)Grievance means a written or oral expression of dissatisfaction regarding the health insurer or a health care provider, including quality of care concerns, and includes a complaint, dispute, or request for reconsideration or appeal made by an insured, an insureds provider, or an insureds authorized representative. If an insurer is unable to distinguish between a grievance and an inquiry, it shall be considered a grievance.
(4)Urgent has the same meaning as defined in Section 10123.135.
(j)This section does not apply to a specialized health insurance policy that covers only dental or vision benefits or Medicare supplement insurance.(k)(i)The department and commissioner may exercise the authority provided by this code and the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) to implement and enforce this section. If the commissioner assesses a civil penalty for a violation, a hearing requested by the insurer may be conducted by an administrative law judge of the administrative hearing bureau of the department under the formal procedure of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision does not impair or restrict the commissioners authority pursuant to this code or the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). A civil penalty shall not exceed twenty-five thousand dollars ($25,000) for each violation, and shall be scaled based on published factors determined by the department, including the scope and gravity of the violation, the insurers knowledge that a violation was occurring, and the insurers history of violations.
(l)(j)The department may issue guidance to insurers regarding implementation of this section. section before adopting regulations. The guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Regulations shall be adopted by January 1, 2029.
SEC. 6.Section 10123.135 of the Insurance Code is amended to read:10123.135.(a)Every health insurer, or an entity with which it contracts for services that include utilization review or utilization management functions, that covers hospital, medical, or surgical expenses and that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to insureds, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b)A health insurer that is subject to this section, or any entity with which an insurer contracts for services that include utilization review or utilization management functions, shall have written policies and procedures establishing the process by which the insurer prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for insureds. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to subdivision (f). These policies and procedures, and a description of the process by which an insurer, or an entity with which an insurer contracts for services that include utilization review or utilization management functions, reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to insureds, shall be filed with the commissioner, and shall be disclosed by the insurer to insureds and providers upon request, and by the insurer to the public upon request.
(c)If the number of insureds covered under health benefit plans in this state that are issued by an insurer subject to this section constitute at least 50 percent of the number of insureds covered under health benefit plans issued nationwide by that insurer, the insurer shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or the Osteopathic Initiative Act, or the insurer may employ a clinical director licensed in California whose scope of practice under California law includes the right to independently perform all those services covered by the insurer. The medical director or clinical director shall ensure that the process by which the insurer reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to insureds, complies with the requirements of this section. Nothing in this subdivision shall be construed as restricting the existing authority of the Medical Board of California.
(d)If an insurer subject to this section, or individuals under contract to the insurer to review requests by providers, approve the providers request pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e)An individual, other than a licensed physician or a licensed health care provider who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, shall not deny or modify requests for authorization of health care services for an insured for reasons of medical necessity. The decision of the physician or other health care provider shall be communicated to the provider and the insured pursuant to subdivision (h).
(f)(1)An insurer shall disclose, or provide for the disclosure, to the commissioner and to network providers, the process the insurer, its contracting provider groups, or any entity with which it contracts for services that include utilization review or utilization management functions, uses to authorize, delay, modify, or deny health care services under the benefits provided by the insurance contract, including coverage for subacute care, transitional inpatient care, or care provided in skilled nursing facilities. An insurer shall also disclose those processes to policyholders or persons designated by a policyholder, or to any other person or organization, upon request.
(2)The criteria or guidelines used by an insurer, or an entity with which an insurer contracts for utilization review or utilization management functions, to determine whether to authorize, modify, delay, or deny health care services, shall comply with all of the following:
(A)Be developed with involvement from actively practicing health care providers.
(B)Be consistent with sound clinical principles and processes.
(C)Be evaluated, and updated if necessary, at least annually.
(D)If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the policyholder in that specified case.
(E)Be available to the public upon request. An insurer shall only be required to disclose the criteria or guidelines for the specific procedures or conditions requested. An insurer may charge reasonable fees to cover administrative expenses related to disclosing criteria or guidelines pursuant to this paragraph that are limited to copying and postage costs. The insurer may also make the criteria or guidelines available through electronic communication means.
(3)The disclosure required by subparagraph (E) of paragraph (2) shall be accompanied by the following notice: The materials provided to you are guidelines used by this insurer to authorize, modify, or deny health care benefits for persons with similar illnesses or conditions. Specific care and treatment may vary depending on individual need and the benefits covered under your insurance contract.
(g)If an insurer subject to this section requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the insurer shall request only the information reasonably necessary to make the determination.
(h)In determining whether to approve, modify, or deny requests by providers or insureds before, retrospectively, or concurrent with the provision of health care services to insureds, based in whole or in part on medical necessity, every insurer subject to this section shall meet the following requirements:
(1)(A)Decisions to approve, modify, or deny, based on medical necessity, requests by providers or insureds before the provision of health care services to insureds that do not meet the requirements for the time period for review required by paragraph (2), shall be communicated to insureds and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the insureds condition, not to exceed seven calendar five business days from the insurers receipt of the request.
(B)If an insurer lacks information reasonably necessary to make a decision to approve, modify, or deny a nonurgent prior authorization request, the insurer shall notify the insured and provider of the specific information necessary to complete the request in writing in a timely fashion appropriate for the nature of the insureds condition, not to exceed seven calendar five business days from the insurers receipt of the request. The insured and provider shall be afforded at least 45 calendar days from receipt of the notice to provide the specified information.
(2)(A)If the insureds condition is urgent, decisions to approve, modify, or deny requests by providers or insureds before, or concurrent with, the provision of health care services to insureds shall be communicated to insureds and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion, appropriate for the nature of the insureds condition, but not to exceed 72 hours from the insurers receipt of the request.
(B)(i)If an insurer lacks information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the insurer shall notify the insured and provider of the specific information necessary to complete the request. The notification shall be made as soon as possible, but no later than 24 hours after the insurers receipt of the request from the insured or provider. The insured and the provider shall be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information.
(ii)The insurer shall notify the insured and provider of the insurers decision as soon as possible, but no later than 48 hours after the earlier of the following:
(I)The insurers receipt of the specified additional information as described in this subparagraph.
(II)The end of the period afforded the insured and the provider to submit the specified additional information as described in this subparagraph.
(C)This paragraph shall apply unless a shorter period of time is required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, in which case that period of time shall be binding on the health insurer.
(D)A request shall be considered urgent when either of the following conditions are met:
(i)The insured faces an imminent and serious threat to the insureds physical or behavioral health, including severe pain or the potential loss of life, limb, or other major bodily function.
(ii)The normal timeframe for the decisionmaking process described in paragraph (1) could be detrimental to the insureds life or physical or behavioral health, cause severe pain, or jeopardize the insureds ability either to regain maximum function or to minimize any loss of function.
(E)A determination of urgency by the insureds health care provider shall be binding on the health insurer.(3)(A)Decisions to modify or deny concurrent care requests for continuation or extension of an initially approved, ongoing course of treatment to be provided over a period of time or number of treatments shall be communicated to the provider and insured by telephone, facsimile, or electronically, as well as by mail, within 24 hours from the insurers receipt of the request.
(B)In the case of concurrent review, coverage shall not be discontinued until the insureds treating provider has been notified of the insurers decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(C)Notwithstanding subparagraph (B), a health insurer shall provide continued coverage pending the outcome of a grievance concerning a concurrent care denial or modification.
(4)(A)Retrospective review decisions shall be communicated to insureds and providers by mail within 30 calendar days of receipt of a claim.
(B)If an insurer lacks information reasonably necessary to decide the medical necessity of a claim retrospectively, the insurer shall notify the insured and provider in writing of the specific information necessary to complete the claim within 30 calendar days of receipt of the claim. The insured and provider shall be afforded at least 45 days from receipt of the notice to provide the specified information.
(5)(A)Communications regarding decisions to approve requests by providers or insureds before, retrospectively, or concurrent with the provision of health care services to insureds shall specify the specific health care service approved. Decisions to deny, delay, or modify health care services requested by providers or insureds before, retrospectively, or concurrent with the provision of health care services to insureds shall include a clear and concise explanation of the reasons for the insurers decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity.
(B)A written communication to a physician or other health care provider of a denial, delay, or modification or of a request shall include the name, telephone number, and professional credentials of the health care provider professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the provider professional responsible for the denial, delay, or modification. Responses shall also include information as to how the provider or the insured may file an appeal with the insurer or seek department review.
(6)If the health insurer fails to provide notice of a decision to approve, modify, or deny a request for authorization within the time limits specified in paragraphs (1) to (5), inclusive, the insurer shall automatically treat the request for authorization as a grievance and immediately provide notice to the insured and the insureds provider that a grievance has commenced. The notice shall include a description of the insureds appeal rights and the ability of the insured to withdraw the automatic grievance if the insured so chooses. Automatic grievances shall be subject to the same level of urgency as initial requests and shall be resolved pursuant to Section 10123.134.
(7)Notwithstanding paragraph (6), if the insurer has not received the information requested pursuant to subdivision (g), the insurer need not treat the request for authorization as a grievance.
(7)(8)If the commissioner determines that an insurer has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the commissioner may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected. The administrative penalties shall not be deemed an exclusive remedy for the commissioner. These penalties shall be paid to the Insurance Fund.
(i)Every insurer subject to this section shall maintain telephone access during California business hours for providers to request authorization for health care services.
(j)This section shall not cause a health insurer to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.
SEC. 7.Section 10123.136 is added to the Insurance Code, to read:10123.136.(a)This section shall govern complaints submitted to the department by insureds in relation to health insurance coverage.
(b)(1)Notwithstanding any other provision of this code, a health insurer shall provide the following information concerning a complaint to the department within the applicable time limit set forth in paragraph (2):
(A)A written response to the issues raised by the complaint.
(B)A copy of the insurers responses to any grievances.
(C)A complete and legible copy of all medical records related to the complaint. The health insurer shall inform the department if medical records were not used in resolving the grievance.
(D)A complete copy of the insureds policy, with the applicable portions underlined.
(E)All other information used by the insurer or relevant to the resolution of the complaint.
(2)A health insurer shall respond to the department within five calendar days of the departments notice of receiving a nonurgent complaint, and within 24 hours of notice if a complaint is urgent. The insurer shall provide any additional information that is requested by the department within five calendar days of the request, or within 24 hours of the request if a complaint is urgent. The failure of a health insurer to timely provide requested initial or additional information shall result in the department resolving the complaint in favor of the insured.
(c)(1)With respect to a complaint, an independent medical review case, or a combination thereof to the department involving a disputed health care service or coverage decision, an insurer shall promptly offer to provide the insured and the insureds authorized representative, as applicable, with unredacted copies of all written correspondence concerning the complaint, independent medical review, or combination thereof, including ongoing correspondence, between the insurer and department, and between the insurer and independent medical review organization. Upon the election of the insured, the insurer shall promptly transmit all correspondence to the insured and, to the extent applicable, to the insureds representative.
(2)A health insurer shall comply with subdivision (n) of Section 10169 and shall not engage in ex parte communication with the independent medical review organization deciding a case.
(3)The department shall provide the insured with a reasonable opportunity to respond to any communications between the department or independent medical review organization and an insurer before the insureds complaint or independent medical review case is resolved.
(4)Notwithstanding paragraphs (1) to (3), inclusive, copies of an insureds medical records regarding sensitive services, as defined in subdivision (s) of Section 56.05 of the Civil Code, shall only be provided to the insured to whom the services pertain.
(d)(1)The department shall be the final arbiter of fact and shall issue binding orders on health insurers concerning all consumer complaints that do not involve disputed health care services. The department shall resolve complaints that do not concern disputed health care services within 10 calendar days or less if urgent, or within 30 calendar days or less if nonurgent.
(2)Whether or not a complaint is urgent shall be determined by the department consistent with Section 10123.135, unless the complaint is designated as urgent by the insureds provider, in which case the providers designation of urgency shall control.
(e)In a department review of a consumer complaint involving a disputed health care service that is not eligible for the independent medical review system established pursuant to Article 3.5 (commencing with Section 10169), in which the department finds that the health insurer has delayed, denied, or modified health care items or services that are medically necessary, and those items or services are a covered benefit under the terms and conditions of the health insurance policy or as required by law, the department may do any of the following:
(1)Order the health insurer to promptly offer and provide those health care items or services to the insured.
(2)Order the insurer to hold the insured harmless for any amounts exceeding in-network cost sharing for out-of-network services provided due to application of Section 10133.54 or Section 10144.5, or Section 2240.1 of Title 10 of the California Code of Regulations.
(3)Order the insurer to promptly reimburse the insured for any additional costs that the department finds reasonable, associated with urgent care or emergency services, or other extraordinary and compelling health care services, if the department finds that the insureds decision to secure those services outside of the insurers network was reasonable under the circumstances.
(f)If, after reviewing the record of a complaint, the department concludes that a health care item or service eligible for coverage and payment under a health insurance policy was delayed, denied, or modified by a health insurer, or by a participating provider or other entity on its behalf, in whole or in part due to a determination that the item or service is not medically necessary, and that determination was not communicated to the insured in writing along with a notice of the insureds right to participate in the independent medical review system, the commissioner shall, by order, assess administrative penalties. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice of, and the opportunity for, a hearing conducted by the commissioner in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. The administrative penalties are not an exclusive remedy available to the commissioner.
(g)The department and commissioner may exercise the authority provided by this code and the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) to implement and enforce this section. If the commissioner assesses a civil penalty for a violation, a hearing that is requested by the insurer may be conducted by an administrative law judge of the administrative hearing bureau of the department under the formal procedure of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision does not impair or restrict the commissioners authority pursuant to this code or the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). A civil penalty shall not exceed twenty-five thousand dollars ($25,000) for each violation, and shall be scaled based on published factors determined by the department, including the scope and gravity of the violation, the insurers knowledge that a violation was occurring, and the insurers history of violations.
(h)The department may issue guidance to insurers regarding implementation of this section. section before adopting regulations. The guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Regulations shall be adopted by January 1, 2029.
SEC. 8.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)A health care service plan and any entity with which it contracts for services that include utilization review or utilization management functions, that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b)A health care service plan that is subject to this section shall have written policies and procedures establishing the process by which the plan prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to Section 1363.5. These policies and procedures, and a description of the process by which the plan reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, shall be filed with the director for review and approval, and shall be disclosed by the plan to providers and enrollees upon request, and by the plan to the public upon request.
(c)A health care service plan subject to this section, except a plan that meets the requirements of Section 1351.2, shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act, or, if the plan is a specialized health care service plan, a clinical director with California licensure in a clinical area appropriate to the type of care provided by the specialized health care service plan. The medical director or clinical director shall ensure that the process by which the plan reviews and approves, modifies, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, complies with the requirements of this section.
(d)If health plan personnel, or individuals under contract to the plan to review requests by providers, approve the providers request, pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e)An individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may not deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity. The decision of the physician or other health care professional shall be communicated to the provider and the enrollee pursuant to subdivision (h).
(f)The criteria or guidelines used by the health care service plan to determine whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall be consistent with clinical principles and processes. These criteria and guidelines shall be developed pursuant to the requirements of Section 1363.5.
(g)If the health care service plan requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the plan shall request only the information reasonably necessary to make the determination.
(h)In determining whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to this section shall meet the following requirements:
(1)Decisions to approve, modify, or deny, based on medical necessity, requests by providers prior to the provision of health care services to enrollees that do not meet the requirements for the time period for urgent review required by paragraph (2), shall be communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed five business days from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
(2)(A)When the enrollees condition is urgent, decisions to approve, modify, or deny requests by providers prior to the provision of health care services to enrollees, shall be communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed 72 hours from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
(B)(i)When the plan lacks the information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the plan shall notify the enrollee and the provider of the specific information necessary to complete the request. The notification shall be made as soon as possible, but no later than 24 hours after the plans receipt of the request from the enrollee or provider. The enrollee and the provider shall be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information.
(ii)The plan shall notify the enrollee and the provider of the plans decision as soon as possible, but no later than 48 hours after the earlier of the following:
(I)The plans receipt of specified additional information as described in this subparagraph.
(II)The end of the period afforded the enrollee and the provider to submit the specified additional information as described in this subparagraph.
(C)This paragraph shall apply unless a shorter period of time is required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, in which case that period of time shall be binding on the health care service plan. Nothing in this section shall be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management.
(D)A request shall be considered urgent when either of the following conditions are met:
(i)The enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including including, but not limited to, severe pain or the potential loss of life, limb, or other major bodily function.
(ii)The normal timeframe for the decisionmaking process described in paragraph (1) could be detrimental to the enrollees life or physical or behavioral health, cause severe pain, or jeopardize the enrollees ability either to regain maximum function or to minimize any loss of function.
(E)A determination of urgency by the enrollees health care provider shall be binding on the health care service plan.
(3)Decisions to approve, modify, or deny concurrent care requests for an initially approved, ongoing course of treatment to be provided over a period of time or number of treatments shall be communicated to the enrollee and the provider by telephone, facsimile, or electronically, as well as by mail, within 24 hours of the receipt of the request. In the case of concurrent care, coverage shall not be discontinued until the enrollees treating provider has been notified of the plans decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(4)Retrospective review decisions shall be communicated to enrollees and providers by mail within 30 days of the receipt of information that is reasonably necessary to make retrospective determinations.
(5)Communications regarding decisions to approve requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall specify the specific health care service approved. Decisions to deny, delay, or modify health care services requested by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall include a clear and concise explanation of the reasons for the plans decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. Any written communication to a physician or other health care provider of a denial, delay, or modification of a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the enrollee may file a grievance with the plan pursuant to Section 1368, and in the case of Medi-Cal enrollees, shall explain how to request an administrative hearing and aid paid pending under Sections 51014.1 and 51014.2 of Title 22 of the California Code of Regulations.
(6)If the health care service plan fails to make a decision, or provide notice of a decision, to approve, modify, or deny the request for authorization within the timeframes specified in paragraphs (1) through (5), inclusive, the health care service plan shall automatically treat the request for authorization as a grievance consistent with Sections 1368 and 1368.01 and shall immediately provide notice to the enrollee that a grievance has commenced. The notice shall include the enrollees appeal rights under this chapter and the ability of the enrollee to withdraw the grievance if the enrollee so chooses.
(7)If the director determines that a health care service plan has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be deemed an exclusive remedy for the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(i)A health care service plan subject to this section shall maintain telephone access for providers to request authorization for health care services.
(j)A health care service plan subject to this section that reviews requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall establish, as part of the quality assurance program required by Section 1370, a process by which the plans compliance with this section is assessed and evaluated. The process shall include provisions for evaluation of complaints, assessment of trends, implementation of actions to correct identified problems, mechanisms to communicate actions and results to the appropriate health plan employees and contracting providers, and provisions for evaluation of any corrective action plan and measurements of performance.
(k)The director shall review a health care service plans compliance with this section as part of its periodic onsite medical survey of each plan undertaken pursuant to Section 1380, and shall include a discussion of compliance with this section as part of its report issued pursuant to that section.
(l)This section shall not apply to decisions made for the care or treatment of the sick who depend upon prayer or spiritual means for healing in the practice of religion as set forth in subdivision (a) of Section 1270.
(m)This section shall not cause a health care service plan to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.
SEC. 2.Section 1368 of the Health and Safety Code is amended to read:1368.(a)Every plan shall do all of the following:
(1)Establish and maintain a grievance system approved by the department under which enrollees may submit their grievances to the plan. Each system shall provide reasonable procedures in accordance with department regulations that shall ensure adequate consideration of enrollee grievances and rectification when appropriate.
(2)Inform its subscribers and enrollees upon enrollment in the plan and annually thereafter of the procedure for processing and resolving grievances. The information shall include the location and telephone number where grievances may be submitted.
(3)Provide forms for grievances to be given to subscribers and enrollees who wish to register written grievances. The forms used by plans licensed pursuant to Section 1353 shall be approved by the director in advance as to format.
(4)(A)Provide for a written acknowledgment within five calendar days of the receipt of a grievance, except as noted in subparagraph (B). The acknowledgment shall advise the complainant of the following:
(i)That the grievance has been received.
(ii)The date of receipt.
(iii)The name of the plan representative and the telephone number and address of the plan representative who may be contacted about the grievance.
(B)(i)Grievances received by telephone, by facsimile, by email, or online through the plans internet website pursuant to Section 1368.015, that are not coverage disputes, complaints about access to care, including complaints about the waiting time for, or distance to, covered health care services, disputed health care services involving medical necessity, or experimental or investigational treatment and that are resolved by the next business day following receipt are exempt from the requirements of subparagraph (A) and paragraph (5). The plan shall maintain a log of all these grievances. The log shall be periodically reviewed by the plan and shall include the following information for each complaint:
(I)The date of the call.
(II)The name of the complainant.
(III)The complainants member identification number.
(IV)The nature of the grievance.
(V)The nature of the resolution.
(VI)The name of the plan representative who took the call and resolved the grievance.
(ii)For health plan contracts in the individual, small group, or large group markets, a health care service plans response to grievances subject to Section 1367.24 shall also comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This paragraph shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(5)Provide subscribers, enrollees, and providers with written responses to grievances, with a clear and concise explanation of the reasons for the plans response. For grievances involving the delay, denial, or modification of health care services, the plan response shall describe the criteria used and the clinical reasons for its decision, including all criteria and clinical reasons related to medical necessity. If a plan, or one of its contracting providers, issues a decision delaying, denying, or modifying health care services based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the decision shall clearly specify the provisions in the contract that exclude that coverage.
(A)In the case of an urgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider by telephone, electronically, or both, as well as by hard copy mailed to their designated mailing address, no later than 72 hours from receipt of the grievance.
(B)In the case of a nonurgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider in writing pursuant to the timeframes set forth in Section 1368.01.
(6)For grievances involving the cancellation, rescission, or nonrenewal of a health care service plan contract, the health care service plan shall continue to provide coverage to the enrollee or subscriber under the terms of the health care service plan contract until a final determination of the enrollees or subscribers request for review has been made by the health care service plan or the director pursuant to Section 1365 and this section. This paragraph shall not apply if the health care service plan cancels or fails to renew the enrollees or subscribers health care service plan contract for nonpayment of premiums pursuant to paragraph (1) of subdivision (a) of Section 1365.
(7)Keep in its files all copies of grievances, and the responses thereto, for a period of five years.
(b)(1)(A)After either completing the grievance process described in subdivision (a), or participating in the process for at least 30 days, a subscriber or enrollee may submit the grievance to the department for review. In any case determined by the department to be a case involving an imminent and serious threat to the health of the patient, including, but not limited to, severe pain, the potential loss of life, limb, or major bodily function, cancellations, rescissions, or the nonrenewal of a health care service plan contract, or in any other case when the department determines that an earlier review is warranted, a subscriber or enrollee shall not be required to complete the grievance process or to participate in the process for at least 30 days before submitting a grievance to the department for review.
(B)A grievance may be submitted to the department for review and resolution prior to any arbitration.
(C)Notwithstanding subparagraphs (A) and (B), the department may refer any grievance that does not pertain to compliance with this chapter to the State Department of Public Health, the California Department of Aging, the federal Health Care Financing Administration, or any other appropriate governmental entity for investigation and resolution.
(2)If the subscriber or enrollee is a minor, or is incompetent or incapacitated, the parent, guardian, conservator, relative, or other designee of the subscriber or enrollee, as appropriate, may submit the grievance to the department as the agent of the subscriber or enrollee. Further, a provider may join with, or otherwise assist, a subscriber or enrollee, or the agent, to submit the grievance to the department. In addition, following submission of the grievance to the department, the subscriber or enrollee, or the agent, may authorize the provider to assist, including advocating on behalf of the subscriber or enrollee. For purposes of this section, a relative includes the parent, stepparent, spouse, adult son or daughter, grandparent, brother, sister, uncle, or aunt of the subscriber or enrollee.
(3)The department shall review the written documents submitted with the subscribers or the enrollees request for review, or submitted by the agent on behalf of the subscriber or enrollee. The department may ask for additional information, and may hold an informal meeting with the involved parties, including providers who have joined in submitting the grievance or who are otherwise assisting or advocating on behalf of the subscriber or enrollee. If after reviewing the record, the department concludes that the grievance, in whole or in part, is eligible for review under the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the department shall immediately notify the subscriber or enrollee, or agent, of that option and shall, if requested orally or in writing, assist the subscriber or enrollee in participating in the independent medical review system.
(4)If after reviewing the record of a grievance, the department concludes that a health care service eligible for coverage and payment under a health care service plan contract has been delayed, denied, or modified by a plan, or by one of its contracting providers, in whole or in part due to a determination that the service is not medically necessary, and that determination was not communicated to the enrollee in writing along with a notice of the enrollees potential right to participate in the independent medical review system, as required by this chapter, the director shall, by order, assess administrative penalties. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice of, and the opportunity for, a hearing with regard to the person affected in accordance with Section 1397. The administrative penalties shall not be deemed an exclusive remedy available to the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(5)The department shall send a written notice of the final disposition of the grievance, and the reasons therefor, to the subscriber or enrollee, the agent, to any provider that has joined with or is otherwise assisting the subscriber or enrollee, and to the plan, within 30 calendar days of receipt of the request for review unless the director, in the directors discretion, determines that additional time is reasonably necessary to fully and fairly evaluate the relevant grievance. In any case not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the departments written notice shall include, at a minimum, the following:
(A)A summary of its findings and the reasons why the department found the plan to be, or not to be, in compliance with any applicable laws, regulations, or orders of the director.
(B)A discussion of the departments contact with any medical provider, or any other independent expert relied on by the department, along with a summary of the views and qualifications of that provider or expert.
(C)If the enrollees grievance is sustained in whole or in part, information about any corrective action taken.
(6)In any department review of a grievance involving a disputed health care service, as defined in subdivision (b) of Section 1374.30, that is not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), in which the department finds that the plan has delayed, denied, or modified health care services that are medically necessary, based on the specific medical circumstances of the enrollee, and those services are a covered benefit under the terms and conditions of the health care service plan contract, the departments written notice shall do either of the following:
(A)Order the plan to promptly offer and provide those health care services to the enrollee.
(B)Order the plan to promptly reimburse the enrollee for any reasonable costs associated with urgent care or emergency services, or other extraordinary and compelling health care services, when the department finds that the enrollees decision to secure those services outside of the plan network was reasonable under the circumstances.
The departments order shall be binding on the plan.
(7)Distribution of the written notice shall not be deemed a waiver of any exemption or privilege under existing law, including, but not limited to, Section 7921.505 of the Government Code, for any information in connection with and including the written notice, nor shall any person employed or in any way retained by the department be required to testify as to that information or notice.
(8)The director shall establish and maintain a system of aging of grievances that are pending and unresolved for 30 days or more that shall include a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more.
(9)A subscriber or enrollee, or the agent acting on behalf of a subscriber or enrollee, may also request voluntary mediation with the plan prior to exercising the right to submit a grievance to the department. The use of mediation services shall not preclude the right to submit a grievance to the department upon completion of mediation. In order to initiate mediation, the subscriber or enrollee, or the agent acting on behalf of the subscriber or enrollee, and the plan shall voluntarily agree to mediation. Expenses for mediation shall be borne equally by both sides. The department shall have no administrative or enforcement responsibilities in connection with the voluntary mediation process authorized by this paragraph.
(c)The plans grievance system shall include a system of aging of grievances that are pending and unresolved for 30 days or more. The plan shall provide a quarterly report to the director of grievances pending and unresolved for 30 or more days with separate categories of grievances for Medicare enrollees and Medi-Cal enrollees. The plan shall include with the report a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more. The plan may include the following statement in the quarterly report that is made available to the public by the director:
Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal enrollees each have separate avenues of appeal that are not available to other enrollees. Therefore, grievances pending and unresolved may reflect enrollees pursuing their Medicare or Medi-Cal appeal rights.
If requested by a plan, the director shall include this statement in a written report made available to the public and prepared by the director that describes or compares grievances that are pending and unresolved with the plan for 30 days or more. Additionally, the director shall, if requested by a plan, append to that written report a brief explanation, provided in writing by the plan, of the reasons why grievances described in that written report are pending and unresolved for 30 days or more. The director shall not be required to include a statement or append a brief explanation to a written report that the director is required to prepare under this chapter, including Sections 1380 and 1397.5.
(d)Subject to subparagraph (C) of paragraph (1) of subdivision (b), the grievance or resolution procedures authorized by this section shall be in addition to any other procedures that may be available to any person, and failure to pursue, exhaust, or engage in the procedures described in this section shall not preclude the use of any other remedy provided by law.
(e)This section does not allow the submission to the department of any provider grievance under this section. However, as part of a providers duty to advocate for medically appropriate health care for the providers patients pursuant to Sections 510 and 2056 of the Business and Professions Code, this subdivision does not prohibit a provider from contacting and informing the department about any concerns the provider has regarding compliance with or enforcement of this chapter.
(f)To the extent required by Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations, there shall be an independent external review pursuant to the standards required by the United States Secretary of Health and Human Services of a health care service plans cancellation, rescission, or nonrenewal of an enrollees or subscribers coverage.
SEC. 3.Section 1368.01 of the Health and Safety Code is amended to read:1368.01.(a)The grievance system shall require the plan to resolve grievances and communicate its final determinations within 30 days, except as provided in subdivision (c).
(b)The grievance system shall include a requirement for expedited plan review of urgent grievances when the enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including, but not limited to, severe pain, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in subdivision (a), could be detrimental to the enrollees life or physical or behavioral health, cause severe pain, or jeopardize the enrollees ability to regain maximum function or minimize any loss of function. A determination of urgency by the enrollees health care provider shall be binding on the health care service plan. When the plan has notice of a case requiring expedited review, the grievance system shall require the plan to immediately inform enrollees and subscribers in writing of their right to notify the department of the grievance. The grievance system shall also require the plan to furnish enrollees, subscribers, health care providers, and the department with a written statement on the disposition no later than 72 hours from receipt of the grievance, except as provided in subdivision (c). Paragraph (4) of subdivision (a) of Section 1368 shall not apply to grievances handled pursuant to this section.
(c)A health care service plan contract in the individual, small group, or large group markets that provides coverage for outpatient prescription drugs shall comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This subdivision shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(d)A health care service plan that fails to comply with the timeframes in this section or with the notice requirements of subparagraph (A) or (B) of paragraph (5) of subdivision (a) and subdivision (b) of Section 1368 shall automatically resolve the grievance in favor of the enrollee.
SEC. 4.Section 1374.30 of the Health and Safety Code is amended to read:1374.30.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a health care service plan contract that has been denied, modified, or delayed by a decision of the plan, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a specialized health care service plan, except to the extent that the service (1) involves the practice of medicine, or (2) is provided pursuant to a contract with a health care service plan that covers hospital, medical, or surgical benefits. If a plan, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a plan, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the health care service plan contract. A coverage decision does not encompass a plan or contracting provider decision regarding a disputed health care service.
(d)(1)All enrollee grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an enrollee grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the enrollee request for review shall be treated as a request for the department to review the grievance pursuant to subdivision (b) of Section 1368. All other enrollee grievances, including grievances involving coverage decisions, remain eligible for review by the department pursuant to subdivision (b) of Section 1368.
(2)In any case in which an enrollee or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(3)The department shall be the final arbiter when there is a question as to whether an enrollee grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an enrollee grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(e)Every health care service plan contract that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an enrollee with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the plan, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an enrollee may designate an agent to act on the enrollees behalf, as described in paragraph (2) of subdivision (b) of Section 1368. The provider may join with or otherwise assist the enrollee in seeking an independent medical review, and may advocate on behalf of the enrollee.
(f)Medi-Cal beneficiaries enrolled in a health care service plan shall not be excluded from participation. Medicare beneficiaries enrolled in a health care service plan shall not be excluded unless expressly preempted by federal law. Reviews of cases for Medi-Cal enrollees shall be conducted in accordance with statutes and regulations for the Medi-Cal program.
(g)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare and Medi-Cal programs, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon enrollees under this chapter.
(h)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(i)Every health care service plan shall prominently display in every plan member handbook or relevant informational brochure, in every plan contract, on enrollee evidence of coverage forms, on copies of plan procedures for resolving grievances, on letters of denials issued by either the plan or its contracting organization, on the grievance forms required under Section 1368, and on all written responses to grievances, information concerning the right of an enrollee to request an independent medical review in cases where the enrollee believes that health care services have been improperly denied, modified, or delayed by the plan, or by one of its contracting providers.
(j)An enrollee may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The enrollees provider has recommended a health care service as medically necessary, or
(B)The enrollee has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The enrollee, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by an in-plan provider for the diagnosis or treatment of the medical condition for which the enrollee seeks independent review. The plan shall expedite access to an in-plan provider upon request of an enrollee. The in-plan provider need not recommend the disputed health care service as a condition for the enrollee to be eligible for an independent review.
For purposes of this article, the enrollees provider may be an out-of-plan provider. However, the plan shall have no liability for payment of services provided by an out-of-plan provider, except as provided pursuant to subdivision (c) of Section 1374.34.
(2)The disputed health care service has been denied, modified, or delayed by the plan, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The enrollee has filed a grievance with the plan or its contracting provider pursuant to Section 1368, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The enrollee shall not be required to participate in the plans grievance process for more than 30 days. In the case of a grievance that requires expedited review pursuant to Section 1368.01, the enrollee shall not be required to participate in the plans grievance process for more than three days.
(k)An enrollee may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within 12 months of any of the qualifying periods or events under subdivision (j). The director may extend the application deadline beyond 12 months if the circumstances of a case warrant the extension.
(l)The enrollee shall pay no application or processing fees of any kind.
(m)As part of its notification to the enrollee regarding a disposition of the enrollees grievance that denies, modifies, or delays health care services, the plan shall provide the enrollee with a one- or two-page application form approved by the department, and an addressed envelope, which the enrollee may return to initiate an independent medical review. The plan shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the enrollees diagnosis or condition, the nature of the disputed health care service sought by the enrollee, a means to identify the enrollees case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent medical review process may cause the enrollee to forfeit any statutory right to pursue legal action against the plan regarding the disputed health care service.
(2)A statement indicating the enrollees consent to obtain any necessary medical records from the plan, any of its contracting providers, and any out-of-plan provider the enrollee may have consulted on the matter, to be signed by the enrollee.
(3)Notice of the enrollees right to provide information or documentation, either directly or through the enrollees provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the enrollees medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the enrollees medical condition.
(C)Reasonable information supporting the enrollees position that the disputed health care service is or was medically necessary for the enrollees medical condition, including all information provided to the enrollee by the plan or any of its contracting providers, still in the possession of the enrollee, concerning a plan or provider decision regarding disputed health care services, and a copy of any materials the enrollee submitted to the plan, still in the possession of the enrollee, in support of the grievance, as well as any additional material that the enrollee believes is relevant.
(4)A section designed to collect information on the enrollees ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all enrollees get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(n)Upon notice from the department that the health care service plans enrollee has applied for an independent medical review, the plan or its contracting providers shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the plans receipt of the departments notice of a request by an enrollee for an independent review:
(1)(A)A copy of all of the enrollees medical records in the possession of the plan or its contracting providers relevant to each of the following:
(i)The enrollees medical condition.
(ii)The health care services being provided by the plan and its contracting providers for the condition.
(iii)The disputed health care services requested by the enrollee for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the plan or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The plan shall concurrently provide a copy of medical records required by this subparagraph to the enrollee or the enrollees provider, if authorized by the enrollee, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the enrollee by the plan and any of its contracting providers concerning plan and provider decisions regarding the enrollees condition and care, and a copy of any materials the enrollee or the enrollees provider submitted to the plan and to the plans contracting providers in support of the enrollees request for disputed health care services. This documentation shall include the written response to the enrollees grievance, required by paragraph (4) of subdivision (a) of Section 1368. The confidentiality of any enrollee medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the plan or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the plan and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The plan shall concurrently provide a copy of documents required by this paragraph, except for any information found by the director to be legally privileged information, to the enrollee and the enrollees provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the director to be the proprietary information of the plan.
(o)(1)With respect to an enrollee grievance to the department concerning a disputed health care service, coverage decision, or access to care, including complaints about the waiting time for, or distance to, health care services, the plan shall promptly provide to the enrollee and, to the extent applicable, the enrollees representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the plan concerning the enrollees grievance.
(2)If the department determines that the enrollees grievance concerns a coverage decision, access to care, or both, and the department seeks a nonbinding expert opinion from an independent medical review organization, then the plan shall provide the enrollee and, to the extent applicable, the enrollees representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.
(3)The department shall provide to the enrollee and, to the extent applicable, the enrollees representative a reasonable opportunity to respond to any communications between the department and the plan and, if applicable, between the department and the independent medical review organization before the enrollees grievance is resolved.
(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the plan, the enrollee, or the representatives of either party without concurrently providing the plan, the enrollee, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the plan, enrollee, or their representatives did not participate and without providing the plan, enrollee, and their representatives a reasonable opportunity to respond.
(5)This subdivision does not alter the timeframes in this article within which an independent medical review is required to be completed.
SEC. 5.Section 10169 of the Insurance Code is amended to read:10169.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a disability insurance contract that has been denied, modified, or delayed by a decision of the insurer, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a group or individual policy of vision- or dental-only coverage, except to the extent that (1) the service involves the practice of medicine, or (2) is provided pursuant to a contract with a disability insurer that covers hospital, medical, or surgical benefits. If an insurer, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the insured, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a disability insurer, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the disability insurance contract. A coverage decision does not encompass a disability insurer or contracting provider decision regarding a disputed health care service.(d)(1)In the case of an urgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider by telephone, electronically, or both no later than 72 hours from receipt of the grievance.(2)In the case of a nonurgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider in writing no later than 30 days from receipt of the grievance.(e)(1)(A)Upon notice from the department to a disability insurer that an insured, including the insureds representative, has submitted a grievance to the department, the insurer shall respond to the insured, the insureds representative, and the department within one of the following timeframes, as appropriate:(i)Within 24 hours, if directed by the department, regarding an urgent grievance concerning coverage decisions, disputed health care services, or both.(ii)Within five calendar days regarding a nonurgent grievance concerning coverage decisions, disputed health care services, or both.(B)Whether or not a grievance is urgent shall be determined by the department consistent with Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, unless the grievance is designated as urgent by the insureds referring or treating provider, in which case the providers designation of urgency shall control.(2)All insured grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an insured grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the insured request for review shall be treated as a request for the department to review the grievance. All other insured grievances, including grievances involving coverage decisions, remain eligible for review by the department.(3)In any case in which an insured or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article.(4)The department shall be the final arbiter when there is a question as to whether an insured grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an insured grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article.(f)Every disability insurance policy that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an insured with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the insurer, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an insured may designate an agent to act on the insureds behalf. The provider may join with or otherwise assist the insured in seeking an independent medical review, and may advocate on behalf of the insured.(g)Medicare beneficiaries enrolled in Medicare + Choice products shall not be excluded unless expressly preempted by federal law.(h)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare Program, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon insureds under this chapter.(i)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.(j)Every disability insurer shall prominently display in every insurer member handbook or relevant informational brochure, in every insurance contract, on insured evidence of coverage forms, on copies of insurer procedures for resolving grievances, on letters of denials issued by either the insurer or its contracting organization, and on all written responses to grievances, information concerning the right of an insured to request an independent medical review when the insured believes that health care services have been improperly denied, modified, or delayed by the insurer, or by one of its contracting providers. The departments telephone number, 1-800-927-4357, and internet website, www.insurance.ca.gov, shall also be displayed.(k)An insured may apply to the department for an independent medical review when all of the following conditions are met:(1)(A)The insureds provider has recommended a health care service as medically necessary, or(B)The insured has received urgent care or emergency services that a provider determined was medically necessary, or(C)The insured, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by a contracting provider for the diagnosis or treatment of the medical condition for which the insured seeks independent review. The insurer shall expedite access to a contracting provider upon request of an insured. The contracting provider need not recommend the disputed health care service as a condition for the insured to be eligible for an independent review.For purposes of this article, the insureds provider may be a noncontracting provider. However, the insurer shall have no liability for payment of services provided by a noncontracting provider, except as provided pursuant to Section 10169.3.(2)The disputed health care service has been denied, modified, or delayed by the insurer, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.(3)The insured has filed a grievance with the insurer or its contracting provider, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The insured shall not be required to participate in the insurers grievance process for more than 30 days. In the case of a grievance that requires expedited review, the insured shall not be required to participate in the insurers grievance process for more than three days.(l)An insured may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within six months of any of the qualifying periods or events under subdivision (j). The commissioner may extend the application deadline beyond six months if the circumstances of a case warrant the extension.(m)The insured shall pay no application or processing fees of any kind.(n)As part of its notification to the insured regarding a disposition of the insureds grievance that denies, modifies, or delays health care services, the insurer shall provide the insured with a one- or two-page application form approved by the department, and an addressed envelope, which the insured may return to initiate an independent medical review. The insurer shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the insureds diagnosis or condition, the nature of the disputed health care service sought by the insured, a means to identify the insureds case, and any other material information. The form shall also include the following:(1)Notice that a decision not to participate in the independent review process may cause the insured to forfeit any statutory right to pursue legal action against the insurer regarding the disputed health care service.(2)A statement indicating the insureds consent to obtain any necessary medical records from the insurer, any of its contracting providers, and any noncontracting provider the insured may have consulted on the matter, to be signed by the insured.(3)Notice of the insureds right to provide information or documentation, either directly or through the insureds provider, regarding any of the following:(A)A provider recommendation indicating that the disputed health care service is medically necessary for the insureds medical condition.(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the insureds medical condition.(C)Reasonable information supporting the insureds position that the disputed health care service is or was medically necessary for the insureds medical condition, including all information provided to the insured by the insurer or any of its contracting providers, still in the possession of the insured, concerning an insurer or provider decision regarding disputed health care services, and a copy of any materials the insured submitted to the insurer, still in the possession of the insured, in support of the grievance, as well as any additional material that the insured believes is relevant.(4)A section designed to collect information on the insureds ethnicity, race, and primary language spoken that includes both of the following:(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all insureds get the best care possible.(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.(o)Upon notice from the department that the insured has applied for an independent medical review, the insurer or its contracting providers, shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the insurers receipt of the departments notice of a request by an insured for an independent review:(1)(A)A copy of all of the insureds medical records in the possession of the insurer or its contracting providers relevant to each of the following:(i)The insureds medical condition.(ii)The health care services being provided by the insurer and its contracting providers for the condition.(iii)The disputed health care services requested by the insured for the condition.(B)Any newly developed or discovered relevant medical records in the possession of the insurer or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The insurer shall concurrently provide a copy of medical records required by this subparagraph to the insured or the insureds provider, if authorized by the insured, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.(2)A copy of all information provided to the insured by the insurer and any of its contracting providers concerning insurer and provider decisions regarding the insureds condition and care, and a copy of any materials the insured or the insureds provider submitted to the insurer and to the insurers contracting providers in support of the insureds request for disputed health care services. This documentation shall include the written response to the insureds grievance. The confidentiality of any insured medical information shall be maintained pursuant to applicable state and federal laws.(3)A copy of any other relevant documents or information used by the insurer or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the insurer and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The insurer shall concurrently provide a copy of documents required by this paragraph, except for any information found by the commissioner to be legally privileged information, to the insured and the insureds provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the commissioner to be the proprietary information of the insurer.(p)(1)With respect to an insured grievance to the department concerning a disputed health care service or coverage decision, the insurer shall promptly provide to the insured and, to the extent applicable, the insureds representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the insurer concerning the insureds grievance.(2)If the department determines that the insureds grievance concerns a coverage decision and the department seeks a nonbinding expert opinion from an independent medical review organization, then the insurer shall provide the insured and, to the extent applicable, the insureds representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.(3)The department shall provide to the insured and, to the extent applicable, the insureds representative a reasonable opportunity to respond to any communications between the department and the insurer and, if applicable, between the department and the independent medical review organization before the insureds grievance is adjudicated.(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the insurer, the insured, or the representatives of either party without concurrently providing the insurer, the insured, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the insurer, insured, or their representatives did not participate and without providing the insurer, insured, and their representatives a reasonable opportunity to respond.SEC. 5.Section 10123.134 is added to the Insurance Code, to read:10123.134.(a)(1)A health insurer shall provide insureds and providers with written responses to grievances, with a clear and concise explanation of the reasons for the health insurers response. For grievances involving the delay, denial, or modification of health care services, the health insurers response shall describe the criteria used and the clinical reasons for its decision, including all criteria and clinical reasons related to medical necessity. If a health insurer, or one of its contracting providers or another entity on its behalf, issues a decision delaying, denying, or modifying health care services based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the insured, the decision shall clearly specify the provisions in the contract that exclude that coverage.
(2)In the case of an urgent grievance, the health insurer shall communicate its final determination to the insured and the insureds provider by telephone, electronically, or both, as well as in writing, no later than 72 hours from receipt of the grievance.
(3)In the case of a nonurgent grievance, the health insurer shall communicate its final determination to the insured and the insureds provider in writing within 30 calendar days of receipt.
(b)For grievances involving the cancellation, rescission, or nonrenewal of a health insurer contract, the health insurer shall continue to provide coverage to the insured or subscriber under the terms of the contract until a final determination of the insureds request for review has been made by the health insurer or commissioner. This subdivision shall not apply if the health insurer cancels or fails to renew the insureds contract for nonpayment of premiums.
(c)A determination that a grievance is urgent by an insureds health care provider shall be binding on a health insurer.
(d)With respect to an insureds grievance involving a disputed health care service, a health insurer shall comply with Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, including Section 147.136 of Title 45 of the Code of Federal Regulations, except as otherwise provided in this chapter.
(e)A health insurer shall acknowledge receipt of a grievance to the insured, the insureds provider, and the insureds authorized representative, as applicable, in writing within five calendar days of receipt, or within 24 hours of receipt if the grievance is urgent. The written acknowledgment shall advise the complainant of all of the following:
(1)That the grievance has been received.
(2)The date of receipt.
(3)The name, telephone number, and email address of the insurer representative who may be contacted about the grievance.
(f)A health insurer that fails to strictly comply with the time limits or notice requirements in this section shall automatically resolve the grievance in favor of the insured.
(g)A health insurer shall keep in its files all copies of grievances, and the responses thereto, for a period of five years.
(h)The department shall be the final arbiter if there is a dispute as to whether a grievance involves a coverage decision or disputed health care service.
(i)For purposes of this section:
(1)Coverage decision has the same meaning as defined in Section 10169.
(2)Disputed health care service has the same meaning as defined in Section 10169, and shall also include a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational.
(3)Grievance means a written or oral expression of dissatisfaction regarding the health insurer or a health care provider, including quality of care concerns, and includes a complaint, dispute, or request for reconsideration or appeal made by an insured, an insureds provider, or an insureds authorized representative. If an insurer is unable to distinguish between a grievance and an inquiry, it shall be considered a grievance.
(4)Urgent has the same meaning as defined in Section 10123.135.
(j)This section does not apply to a specialized health insurance policy that covers only dental or vision benefits or Medicare supplement insurance.
(k)The department and commissioner may exercise the authority provided by this code and the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) to implement and enforce this section. If the commissioner assesses a civil penalty for a violation, a hearing requested by the insurer may be conducted by an administrative law judge of the administrative hearing bureau of the department under the formal procedure of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision does not impair or restrict the commissioners authority pursuant to this code or the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(l)The department may issue guidance to insurers regarding implementation of this section. The guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
SEC. 6.Section 10123.135 of the Insurance Code is amended to read:10123.135.(a)Every disability health insurer, or an entity with which it contracts for services that include utilization review or utilization management functions, that covers hospital, medical, or surgical expenses and that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to insureds, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b)A disability health insurer that is subject to this section, or any entity with which an insurer contracts for services that include utilization review or utilization management functions, shall have written policies and procedures establishing the process by which the insurer prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for insureds. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to subdivision (f). These policies and procedures, and a description of the process by which an insurer, or an entity with which an insurer contracts for services that include utilization review or utilization management functions, reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to insureds, shall be filed with the commissioner, and shall be disclosed by the insurer to insureds and providers upon request, and by the insurer to the public upon request.
(c)If the number of insureds covered under health benefit plans in this state that are issued by an insurer subject to this section constitute at least 50 percent of the number of insureds covered under health benefit plans issued nationwide by that insurer, the insurer shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or the Osteopathic Initiative Act, or the insurer may employ a clinical director licensed in California whose scope of practice under California law includes the right to independently perform all those services covered by the insurer. The medical director or clinical director shall ensure that the process by which the insurer reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to insureds, complies with the requirements of this section. Nothing in this subdivision shall be construed as restricting the existing authority of the Medical Board of California.
(d)If an insurer subject to this section, or individuals under contract to the insurer to review requests by providers, approve the providers request pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e)An individual, other than a licensed physician or a licensed health care professional provider who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may shall not deny or modify requests for authorization of health care services for an insured for reasons of medical necessity. The decision of the physician or other health care provider shall be communicated to the provider and the insured pursuant to subdivision (h).
(f)(1)An insurer shall disclose, or provide for the disclosure, to the commissioner and to network providers, the process the insurer, its contracting provider groups, or any entity with which it contracts for services that include utilization review or utilization management functions, uses to authorize, delay, modify, or deny health care services under the benefits provided by the insurance contract, including coverage for subacute care, transitional inpatient care, or care provided in skilled nursing facilities. An insurer shall also disclose those processes to policyholders or persons designated by a policyholder, or to any other person or organization, upon request.
(2)The criteria or guidelines used by an insurer, or an entity with which an insurer contracts for utilization review or utilization management functions, to determine whether to authorize, modify, delay, or deny health care services, shall comply with all of the following:
(A)Be developed with involvement from actively practicing health care providers.
(B)Be consistent with sound clinical principles and processes.
(C)Be evaluated, and updated if necessary, at least annually.
(D)If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the policyholder in that specified case.
(E)Be available to the public upon request. An insurer shall only be required to disclose the criteria or guidelines for the specific procedures or conditions requested. An insurer may charge reasonable fees to cover administrative expenses related to disclosing criteria or guidelines pursuant to this paragraph that are limited to copying and postage costs. The insurer may also make the criteria or guidelines available through electronic communication means.
(3)The disclosure required by subparagraph (E) of paragraph (2) shall be accompanied by the following notice: The materials provided to you are guidelines used by this insurer to authorize, modify, or deny health care benefits for persons with similar illnesses or conditions. Specific care and treatment may vary depending on individual need and the benefits covered under your insurance contract.
(g)If an insurer subject to this section requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the insurer shall request only the information reasonably necessary to make the determination.
(h)In determining whether to approve, modify, or deny requests by providers prior to, or insureds before, retrospectively, or concurrent with the provision of health care services to insureds, based in whole or in part on medical necessity, every insurer subject to this section shall meet the following requirements:
(1)(A)Decisions to approve, modify, or deny, based on medical necessity, requests by providers prior to, or concurrent with, or insureds before the provision of health care services to insureds that do not meet the requirements for the time period for review required by paragraph (2), shall be made communicated to insureds and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the insureds condition, not to exceed five business seven calendar days from the insurers receipt of the information reasonably necessary and requested by the insurer to make the determination. In cases where the review is retrospective, the decision shall be communicated to the individual who received services, or to the individuals designee, within 30 days of the receipt of information that is reasonably necessary to make this determination, and shall be communicated to the provider in a manner that is consistent with current law. For purposes of this section, retrospective reviews shall be for care rendered on or after January 1, 2000. request.
(B)If an insurer lacks information reasonably necessary to make a decision to approve, modify, or deny a nonurgent prior authorization request, the insurer shall notify the insured and provider of the specific information necessary to complete the request in writing in a timely fashion appropriate for the nature of the insureds condition, not to exceed seven calendar days from the insurers receipt of the request. The insured and provider shall be afforded at least 45 calendar days from receipt of the notice to provide the specified information.
(2)When (A)If the insureds condition is such that the insured faces an imminent and serious threat to his or her health, including, but not limited to, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in paragraph (1), would be detrimental to the insureds life or health or could jeopardize the insureds ability to regain maximum function, urgent, decisions to approve, modify, or deny requests by providers prior to, or insureds before, or concurrent with, the provision of health care services to insureds shall be made communicated to insureds and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion, appropriate for the nature of the insureds condition, but not to exceed 72 hours or, if shorter, the period of time required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, after the insurers receipt of the information reasonably necessary and requested by the insurer to make the determination. from the insurers receipt of the request.
(B)(i)If an insurer lacks information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the insurer shall notify the insured and provider of the specific information necessary to complete the request. The notification shall be made as soon as possible, but no later than 24 hours after the insurers receipt of the request from the insured or provider. The insured and the provider shall be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information.
(ii)The insurer shall notify the insured and provider of the insurers decision as soon as possible, but no later than 48 hours after the earlier of the following:
(I)The insurers receipt of the specified additional information as described in this subparagraph.
(II)The end of the period afforded the insured and the provider to submit the specified additional information as described in this subparagraph.
(C)This paragraph shall apply unless a shorter period of time is required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, in which case that period of time shall be binding on the health insurer.
(D)A request shall be considered urgent when either of the following conditions are met:
(i)The insured faces an imminent and serious threat to the insureds physical or behavioral health, including severe pain or the potential loss of life, limb, or other major bodily function.
(ii)The normal timeframe for the decisionmaking process described in paragraph (1) could be detrimental to the insureds life or physical or behavioral health, cause severe pain, or jeopardize the insureds ability either to regain maximum function or to minimize any loss of function.
(E)A determination of urgency by the insureds health care provider shall be binding on the health insurer.
(3)(A)Decisions to approve, modify, or deny requests by providers for authorization prior to, or concurrent with, the provision of health care services to insureds modify or deny concurrent care requests for continuation or extension of an initially approved, ongoing course of treatment to be provided over a period of time or number of treatments shall be communicated to the requesting provider and insured by telephone, facsimile, or electronically, as well as by mail, within 24 hours of the decision. Except for concurrent review decisions pertaining to care that is underway, which shall be communicated to the insureds treating provider within 24 hours, decisions resulting in denial, delay, or modification of all or part of the requested health care service shall be communicated to the insured in writing within two business days of the decision. In from the insurers receipt of the request.
(B)In the case of concurrent review, care coverage shall not be discontinued until the insureds treating provider has been notified of the insurers decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(C)Notwithstanding subparagraph (B), a health insurer shall provide continued coverage pending the outcome of a grievance concerning a concurrent care denial or modification.
(4)(A)Retrospective review decisions shall be communicated to insureds and providers by mail within 30 calendar days of receipt of a claim.
(B)If an insurer lacks information reasonably necessary to decide the medical necessity of a claim retrospectively, the insurer shall notify the insured and provider in writing of the specific information necessary to complete the claim within 30 calendar days of receipt of the claim. The insured and provider shall be afforded at least 45 days from receipt of the notice to provide the specified information.
(4)(5)(A)Communications regarding decisions to approve requests by providers prior to, or insureds before, retrospectively, or concurrent with the provision of health care services to insureds shall specify the specific health care service approved. Responses regarding decisions Decisions to deny, delay, or modify health care services requested by providers prior to, or insureds before, retrospectively, or concurrent with the provision of health care services to insureds shall be communicated to insureds in writing, and to providers initially by telephone or facsimile, except with regard to decisions rendered retrospectively, and then in writing, and shall include a clear and concise explanation of the reasons for the insurers decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. Any
(B)A written communication to a physician or other health care provider of a denial, delay, or modification or a request shall include the name and telephone number name, telephone number, and professional credentials of the health care professional provider responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the professional provider responsible for the denial, delay, or modification. Responses shall also include information as to how the provider or the insured may file an appeal with the insurer or seek department review under the unfair practices provisions of Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2 of Division 1 and the regulations adopted thereunder. review.
(5)If the insurer cannot make a decision to approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2) because the insurer is not in receipt of all of the information reasonably necessary and requested, or because the insurer requires consultation by an expert reviewer, or because the insurer has asked that an additional examination or test be performed upon the insured, provided that the examination or test is reasonable and consistent with good medical practice, the insurer shall, immediately upon the expiration of the timeframe specified in paragraph (1) or (2), or as soon as the insurer becomes aware that it will not meet the timeframe, whichever occurs first, notify the provider and the insured, in writing, that the insurer cannot make a decision to approve, modify, or deny the request for authorization within the required timeframe, and specify the information requested but not received, or the expert reviewer to be consulted, or the additional examinations or tests required. The insurer shall also notify the provider and enrollee of the anticipated date on which a decision may be rendered. Upon receipt of all information reasonably necessary and requested by the insurer, the insurer shall approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2), whichever applies.(6)If the health insurer fails to provide notice of a decision to approve, modify, or deny a request for authorization within the time limits specified in paragraphs (1) to (5), inclusive, the insurer shall automatically treat the request for authorization as a grievance and immediately provide notice to the insured and the insureds provider that a grievance has commenced. The notice shall include a description of the insureds appeal rights and the ability of the insured to withdraw the automatic grievance if the insured so chooses. Automatic grievances shall be subject to the same level of urgency as initial requests and shall be resolved pursuant to Section 10123.134.
(6)(7)If the commissioner determines that an insurer has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the commissioner may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected. The administrative penalties shall not be deemed an exclusive remedy for the commissioner. These penalties shall be paid to the Insurance Fund.
(i)Every insurer subject to this section shall maintain telephone access during California business hours for providers to request authorization for health care services.
(j)Nothing in this This section shall not cause a disability health insurer to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.
SEC. 7.Section 10123.136 is added to the Insurance Code, to read:10123.136.(a)This section shall govern complaints submitted to the department by insureds in relation to health insurance coverage.
(b)(1)Notwithstanding any other provision of this code, a health insurer shall provide the following information concerning a complaint to the department within the applicable time limit set forth in paragraph (2):
(A)A written response to the issues raised by the complaint.
(B)A copy of the insurers responses to any grievances.
(C)A complete and legible copy of all medical records related to the complaint. The health insurer shall inform the department if medical records were not used in resolving the grievance.
(D)A complete copy of the insureds policy, with the applicable portions underlined.
(E)All other information used by the insurer or relevant to the resolution of the complaint.
(2)A health insurer shall respond to the department within five calendar days of the departments notice of receiving a nonurgent complaint, and within 24 hours of notice if a complaint is urgent. The insurer shall provide any additional information that is requested by the department within five calendar days of the request, or within 24 hours of the request if a complaint is urgent. The failure of a health insurer to timely provide requested initial or additional information shall result in the department resolving the complaint in favor of the insured.
(c)(1)With respect to a complaint, an independent medical review case, or a combination thereof to the department involving a disputed health care service or coverage decision, an insurer shall promptly provide the insured and the insureds authorized representative, as applicable, with unredacted copies of all written correspondence concerning the complaint, independent medical review, or combination thereof, including ongoing correspondence, between the insurer and department, and between the insurer and independent medical review organization.
(2)A health insurer shall comply with subdivision (n) of Section 10169 and shall not engage in ex parte communication with the independent medical review organization deciding a case.
(3)The department shall provide the insured with a reasonable opportunity to respond to any communications between the department or independent medical review organization and an insurer before the insureds complaint or independent medical review case is resolved.
(d)(1)The department shall be the final arbiter of fact and shall issue binding orders on health insurers concerning all consumer complaints that do not involve disputed health care services. The department shall resolve complaints that do not concern disputed health care services within 10 calendar days or less if urgent, or within 30 calendar days or less if nonurgent.
(2)Whether or not a complaint is urgent shall be determined by the department consistent with Section 10123.135, unless the complaint is designated as urgent by the insureds provider, in which case the providers designation of urgency shall control.
(e)In a department review of a consumer complaint involving a disputed health care service that is not eligible for the independent medical review system established pursuant to Article 3.5 (commencing with Section 10169), in which the department finds that the health insurer has delayed, denied, or modified health care items or services that are medically necessary, and those items or services are a covered benefit under the terms and conditions of the health insurance policy or as required by law, the department may do any of the following:
(1)Order the health insurer to promptly offer and provide those health care items or services to the insured.
(2)Order the insurer to hold the insured harmless for any amounts exceeding in-network cost sharing for out-of-network services provided due to application of Section 10133.54 or Section 10144.5, or Section 2240.1 of Title 10 of the California Code of Regulations.
(3)Order the insurer to promptly reimburse the insured for any additional costs that the department finds reasonable, associated with urgent care or emergency services, or other extraordinary and compelling health care services, if the department finds that the insureds decision to secure those services outside of the insurers network was reasonable under the circumstances.
(f)If, after reviewing the record of a complaint, the department concludes that a health care item or service eligible for coverage and payment under a health insurance policy was delayed, denied, or modified by a health insurer, or by a participating provider or other entity on its behalf, in whole or in part due to a determination that the item or service is not medically necessary, and that determination was not communicated to the insured in writing along with a notice of the insureds right to participate in the independent medical review system, the commissioner shall, by order, assess administrative penalties. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice of, and the opportunity for, a hearing conducted by the commissioner in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. The administrative penalties are not an exclusive remedy available to the commissioner.
(g)The department and commissioner may exercise the authority provided by this code and the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) to implement and enforce this section. If the commissioner assesses a civil penalty for a violation, a hearing that is requested by the insurer may be conducted by an administrative law judge of the administrative hearing bureau of the department under the formal procedure of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision does not impair or restrict the commissioners authority pursuant to this code or the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(h)The department may issue guidance to insurers regarding implementation of this section. The guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
SEC. 6.SEC. 8.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)A health care service plan and any entity with which it contracts for services that include utilization review or utilization management functions, that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b)A health care service plan that is subject to this section shall have written policies and procedures establishing the process by which the plan prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to Section 1363.5. These policies and procedures, and a description of the process by which the plan reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, shall be filed with the director for review and approval, and shall be disclosed by the plan to providers and enrollees upon request, and by the plan to the public upon request.
(c)A health care service plan subject to this section, except a plan that meets the requirements of Section 1351.2, shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act, or, if the plan is a specialized health care service plan, a clinical director with California licensure in a clinical area appropriate to the type of care provided by the specialized health care service plan. The medical director or clinical director shall ensure that the process by which the plan reviews and approves, modifies, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, complies with the requirements of this section.
(d)If health plan personnel, or individuals under contract to the plan to review requests by providers, approve the providers request, pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e)An individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may not deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity. The decision of the physician or other health care professional shall be communicated to the provider and the enrollee pursuant to subdivision (h).
(f)The criteria or guidelines used by the health care service plan to determine whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall be consistent with clinical principles and processes. These criteria and guidelines shall be developed pursuant to the requirements of Section 1363.5.
(g)If the health care service plan requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the plan shall request only the information reasonably necessary to make the determination.
(h)In determining whether to approve, modify, or deny requests by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to this section shall meet the following requirements:
(1)Decisions to approve, modify, or deny, based on medical necessity, requests by enrollees or providers prior to the provision of health care services to enrollees that do not meet the requirements for the time period for urgent review required by paragraph (2), shall be communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed five business days from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
(2)(A)When the enrollees condition is urgent, decisions to approve, modify, or deny requests by enrollees or providers prior to the provision of health care services to enrollees, shall be communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed 72 hours from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
(B)(i)When the plan lacks the information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the plan shall notify the enrollee and the provider of the specific information necessary to complete the request. The notification shall be made as soon as possible, but no later than 24 hours after the plans receipt of the request from the enrollee or provider. The enrollee and the provider shall be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information.
(ii)The plan shall notify the enrollee and the provider of the plans decision as soon as possible, but no later than 48 hours after the earlier of the following:
(I)The plans receipt of specified additional information as described in this subparagraph.
(II)The end of the period afforded the enrollee and the provider to submit the specified additional information as described in this subparagraph.
(C)This paragraph shall apply unless a shorter period of time is required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, in which case that period of time shall be binding on the health care service plan. Nothing in this section shall be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management.
(D)A request shall be considered urgent when either of the following conditions are met:
(i)The enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including but not limited to, severe pain or the potential loss of life, limb, or other major bodily function.
(ii)The normal timeframe for the decisionmaking process described in paragraph (1) could be detrimental to the enrollees life or physical or behavioral health, cause severe pain, or jeopardize the enrollees ability either to regain maximum function or to minimize any loss of function.
(E)A determination of urgency by the enrollees health care provider shall be binding on the health care service plan.
(3)Decisions to approve, modify, or deny concurrent care requests for an initially approved, ongoing course of treatment to be provided over a period of time or number of treatments shall be communicated to the enrollee and the provider by telephone, facsimile, or electronically, as well as by mail, within 24 hours of the receipt of the request. In the case of concurrent care, coverage shall not be discontinued until the enrollees treating provider has been notified of the plans decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(4)Retrospective review decisions shall be communicated to enrollees and providers by mail within 30 days of the receipt of information that is reasonably necessary to make retrospective determinations.
(5)Communications regarding decisions to approve requests by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall specify the specific health care service approved. Decisions to deny, delay, or modify health care services requested by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall include a clear and concise explanation of the reasons for the plans decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. Any written communication to a physician or other health care provider of a denial, delay, or modification of a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the enrollee may file a grievance with the plan pursuant to Section 1368, and in the case of Medi-Cal enrollees, shall explain how to request an administrative hearing and aid paid pending under Sections 51014.1 and 51014.2 of Title 22 of the California Code of Regulations.
(6)If the health care service plan fails to make a decision, or provide notice of a decision, to approve, modify, or deny the request for authorization within the timeframes specified in paragraphs (1) through (5), inclusive, the health care service plan shall automatically treat the request for authorization as a grievance consistent with Sections 1368 and 1368.01 and shall immediately provide notice to the enrollee that a grievance has commenced. The notice shall include the enrollees appeal rights under this chapter and the ability of the enrollee to withdraw the grievance if the enrollee so chooses.
(7)If the director determines that a health care service plan has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be deemed an exclusive remedy for the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(i)A health care service plan subject to this section shall maintain telephone access for providers to request authorization for health care services.
(j)A health care service plan subject to this section that reviews requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall establish, as part of the quality assurance program required by Section 1370, a process by which the plans compliance with this section is assessed and evaluated. The process shall include provisions for evaluation of complaints, assessment of trends, implementation of actions to correct identified problems, mechanisms to communicate actions and results to the appropriate health plan employees and contracting providers, and provisions for evaluation of any corrective action plan and measurements of performance.
(k)The director shall review a health care service plans compliance with this section as part of its periodic onsite medical survey of each plan undertaken pursuant to Section 1380, and shall include a discussion of compliance with this section as part of its report issued pursuant to that section.
(l)This section shall not apply to decisions made for the care or treatment of the sick who depend upon prayer or spiritual means for healing in the practice of religion as set forth in subdivision (a) of Section 1270.
(m)This section shall not cause a health care service plan to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.
SEC. 2.Section 1368 of the Health and Safety Code is amended to read:1368.(a)Every plan shall do all of the following:
(1)Establish and maintain a grievance system approved by the department under which enrollees may submit their grievances to the plan. Each system shall provide reasonable procedures in accordance with department regulations that shall ensure adequate consideration of enrollee grievances and rectification when appropriate.
(2)Inform its subscribers and enrollees upon enrollment in the plan and annually thereafter of the procedure for processing and resolving grievances. The information shall include the location and telephone number where grievances may be submitted.
(3)Provide forms for grievances to be given to subscribers and enrollees who wish to register written grievances. The forms used by plans licensed pursuant to Section 1353 shall be approved by the director in advance as to format.
(4)(A)Provide for a written acknowledgment within five calendar days of the receipt of a grievance, except as noted in subparagraph (B). The acknowledgment shall advise the complainant of the following:
(i)That the grievance has been received.
(ii)The date of receipt.
(iii)The name of the plan representative and the telephone number and address of the plan representative who may be contacted about the grievance.
(B)(i)Grievances received by telephone, by facsimile, by email, or online through the plans internet website pursuant to Section 1368.015, that are not coverage disputes, complaints about access to care, including complaints about the waiting time for, or distance to, covered health care services, disputed health care services involving medical necessity, or experimental or investigational treatment and that are resolved by the next business day following receipt are exempt from the requirements of subparagraph (A) and paragraph (5). The plan shall maintain a log of all these grievances. The log shall be periodically reviewed by the plan and shall include the following information for each complaint:
(I)The date of the call.
(II)The name of the complainant.
(III)The complainants member identification number.
(IV)The nature of the grievance.
(V)The nature of the resolution.
(VI)The name of the plan representative who took the call and resolved the grievance.
(ii)For health plan contracts in the individual, small group, or large group markets, a health care service plans response to grievances subject to Section 1367.24 shall also comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This paragraph shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(5)Provide subscribers, enrollees, and providers with written responses to grievances, with a clear and concise explanation of the reasons for the plans response. For grievances involving the delay, denial, or modification of health care services, the plan response shall describe the criteria used and the clinical reasons for its decision, including all criteria and clinical reasons related to medical necessity. If a plan, or one of its contracting providers, issues a decision delaying, denying, or modifying health care services based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the decision shall clearly specify the provisions in the contract that exclude that coverage.
(A)In the case of an urgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider by telephone, electronically, or both, as well as by hard copy mailed to their designated mailing address, no later than 72 hours from receipt of the grievance.
(B)In the case of a nonurgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider in writing pursuant to the timeframes set forth in Section 1368.01.
(6)For grievances involving the cancellation, rescission, or nonrenewal of a health care service plan contract, the health care service plan shall continue to provide coverage to the enrollee or subscriber under the terms of the health care service plan contract until a final determination of the enrollees or subscribers request for review has been made by the health care service plan or the director pursuant to Section 1365 and this section. This paragraph shall not apply if the health care service plan cancels or fails to renew the enrollees or subscribers health care service plan contract for nonpayment of premiums pursuant to paragraph (1) of subdivision (a) of Section 1365.
(7)Keep in its files all copies of grievances, and the responses thereto, for a period of five years.
(b)(1)(A)After either completing the grievance process described in subdivision (a), or participating in the process for at least 30 days, a subscriber or enrollee may submit the grievance to the department for review. In any case determined by the department to be a case involving an imminent and serious threat to the health of the patient, including, but not limited to, severe pain, the potential loss of life, limb, or major bodily function, cancellations, rescissions, or the nonrenewal of a health care service plan contract, or in any other case when the department determines that an earlier review is warranted, a subscriber or enrollee shall not be required to complete the grievance process or to participate in the process for at least 30 days before submitting a grievance to the department for review.
(B)A grievance may be submitted to the department for review and resolution prior to any arbitration.
(C)Notwithstanding subparagraphs (A) and (B), the department may refer any grievance that does not pertain to compliance with this chapter to the State Department of Public Health, the California Department of Aging, the federal Health Care Financing Administration, or any other appropriate governmental entity for investigation and resolution.
(2)If the subscriber or enrollee is a minor, or is incompetent or incapacitated, the parent, guardian, conservator, relative, or other designee of the subscriber or enrollee, as appropriate, may submit the grievance to the department as the agent of the subscriber or enrollee. Further, a provider may join with, or otherwise assist, a subscriber or enrollee, or the agent, to submit the grievance to the department. In addition, following submission of the grievance to the department, the subscriber or enrollee, or the agent, may authorize the provider to assist, including advocating on behalf of the subscriber or enrollee. For purposes of this section, a relative includes the parent, stepparent, spouse, adult son or daughter, grandparent, brother, sister, uncle, or aunt of the subscriber or enrollee.
(3)The department shall review the written documents submitted with the subscribers or the enrollees request for review, or submitted by the agent on behalf of the subscriber or enrollee. The department may ask for additional information, and may hold an informal meeting with the involved parties, including providers who have joined in submitting the grievance or who are otherwise assisting or advocating on behalf of the subscriber or enrollee. If after reviewing the record, the department concludes that the grievance, in whole or in part, is eligible for review under the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the department shall immediately notify the subscriber or enrollee, or agent, of that option and shall, if requested orally or in writing, assist the subscriber or enrollee in participating in the independent medical review system.
(4)If after reviewing the record of a grievance, the department concludes that a health care service eligible for coverage and payment under a health care service plan contract has been delayed, denied, or modified by a plan, or by one of its contracting providers, in whole or in part due to a determination that the service is not medically necessary, and that determination was not communicated to the enrollee in writing along with a notice of the enrollees potential right to participate in the independent medical review system, as required by this chapter, the director shall, by order, assess administrative penalties. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice of, and the opportunity for, a hearing with regard to the person affected in accordance with Section 1397. The administrative penalties shall not be deemed an exclusive remedy available to the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(5)The department shall send a written notice of the final disposition of the grievance, and the reasons therefor, to the subscriber or enrollee, the agent, to any provider that has joined with or is otherwise assisting the subscriber or enrollee, and to the plan, within 30 calendar days of receipt of the request for review unless the director, in the directors discretion, determines that additional time is reasonably necessary to fully and fairly evaluate the relevant grievance. In any case not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the departments written notice shall include, at a minimum, the following:
(A)A summary of its findings and the reasons why the department found the plan to be, or not to be, in compliance with any applicable laws, regulations, or orders of the director.
(B)A discussion of the departments contact with any medical provider, or any other independent expert relied on by the department, along with a summary of the views and qualifications of that provider or expert.
(C)If the enrollees grievance is sustained in whole or in part, information about any corrective action taken.
(6)In any department review of a grievance involving a disputed health care service, as defined in subdivision (b) of Section 1374.30, that is not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), in which the department finds that the plan has delayed, denied, or modified health care services that are medically necessary, based on the specific medical circumstances of the enrollee, and those services are a covered benefit under the terms and conditions of the health care service plan contract, the departments written notice shall do either of the following:
(A)Order the plan to promptly offer and provide those health care services to the enrollee.
(B)Order the plan to promptly reimburse the enrollee for any reasonable costs associated with urgent care or emergency services, or other extraordinary and compelling health care services, when the department finds that the enrollees decision to secure those services outside of the plan network was reasonable under the circumstances.
The departments order shall be binding on the plan.
(7)Distribution of the written notice shall not be deemed a waiver of any exemption or privilege under existing law, including, but not limited to, Section 7921.505 of the Government Code, for any information in connection with and including the written notice, nor shall any person employed or in any way retained by the department be required to testify as to that information or notice.
(8)The director shall establish and maintain a system of aging of grievances that are pending and unresolved for 30 days or more that shall include a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more.
(9)A subscriber or enrollee, or the agent acting on behalf of a subscriber or enrollee, may also request voluntary mediation with the plan prior to exercising the right to submit a grievance to the department. The use of mediation services shall not preclude the right to submit a grievance to the department upon completion of mediation. In order to initiate mediation, the subscriber or enrollee, or the agent acting on behalf of the subscriber or enrollee, and the plan shall voluntarily agree to mediation. Expenses for mediation shall be borne equally by both sides. The department shall have no administrative or enforcement responsibilities in connection with the voluntary mediation process authorized by this paragraph.
(c)The plans grievance system shall include a system of aging of grievances that are pending and unresolved for 30 days or more. The plan shall provide a quarterly report to the director of grievances pending and unresolved for 30 or more days with separate categories of grievances for Medicare enrollees and Medi-Cal enrollees. The plan shall include with the report a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more. The plan may include the following statement in the quarterly report that is made available to the public by the director:
Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal enrollees each have separate avenues of appeal that are not available to other enrollees. Therefore, grievances pending and unresolved may reflect enrollees pursuing their Medicare or Medi-Cal appeal rights.
If requested by a plan, the director shall include this statement in a written report made available to the public and prepared by the director that describes or compares grievances that are pending and unresolved with the plan for 30 days or more. Additionally, the director shall, if requested by a plan, append to that written report a brief explanation, provided in writing by the plan, of the reasons why grievances described in that written report are pending and unresolved for 30 days or more. The director shall not be required to include a statement or append a brief explanation to a written report that the director is required to prepare under this chapter, including Sections 1380 and 1397.5.
(d)Subject to subparagraph (C) of paragraph (1) of subdivision (b), the grievance or resolution procedures authorized by this section shall be in addition to any other procedures that may be available to any person, and failure to pursue, exhaust, or engage in the procedures described in this section shall not preclude the use of any other remedy provided by law.
(e)This section does not allow the submission to the department of any provider grievance under this section. However, as part of a providers duty to advocate for medically appropriate health care for the providers patients pursuant to Sections 510 and 2056 of the Business and Professions Code, this subdivision does not prohibit a provider from contacting and informing the department about any concerns the provider has regarding compliance with or enforcement of this chapter.
(f)To the extent required by Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations, there shall be an independent external review pursuant to the standards required by the United States Secretary of Health and Human Services of a health care service plans cancellation, rescission, or nonrenewal of an enrollees or subscribers coverage.
SEC. 3.Section 1368.01 of the Health and Safety Code is amended to read:1368.01.(a)The grievance system shall require the plan to resolve grievances and communicate its final determiniations determinations within 30 days, except as provided in subdivision (c).
(b)The grievance system shall include a requirement for expedited plan review of urgent grievances when the enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including, but not limited to, severe pain, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in subdivision (a), could be detrimental to the enrollees life or physical or behavioral health, cause severe pain, or jeopardize the enrollees ability to regain maximum function or minimize any loss of function. A determination of urgency by the enrollees health care provider shall be binding on the health care service plan. When the plan has notice of a case requiring expedited review, the grievance system shall require the plan to immediately inform enrollees and subscribers in writing of their right to notify the department of the grievance. The grievance system shall also require the plan to furnish enrollees, subscribers, health care providers, and the department with a written statement on the disposition no later than 72 hours from receipt of the grievance, except as provided in subdivision (c). Paragraph (4) of subdivision (a) of Section 1368 shall not apply to grievances handled pursuant to this section.
(c)A health care service plan contract in the individual, small group, or large group markets that provides coverage for outpatient prescription drugs shall comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This subdivision shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(d)A health care service plan that fails to comply with the timeframes in this section or with the notice requirements of subparagraph (A) or (B) of paragraph (5) of subdivision (a) and subdivision (b) of Section 1368 shall automatically resolve the grievance in favor of the enrollee.
SEC. 4.Section 1374.30 of the Health and Safety Code is amended to read:1374.30.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a health care service plan contract that has been denied, modified, or delayed by a decision of the plan, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a specialized health care service plan, except to the extent that the service (1) involves the practice of medicine, or (2) is provided pursuant to a contract with a health care service plan that covers hospital, medical, or surgical benefits. If a plan, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a plan, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the health care service plan contract. A coverage decision does not encompass a plan or contracting provider decision regarding a disputed health care service.
(d)(1)All enrollee grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an enrollee grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the enrollee request for review shall be treated as a request for the department to review the grievance pursuant to subdivision (b) of Section 1368. All other enrollee grievances, including grievances involving coverage decisions, remain eligible for review by the department pursuant to subdivision (b) of Section 1368.
(2)In any case in which an enrollee or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(3)The department shall be the final arbiter when there is a question as to whether an enrollee grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an enrollee grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(e)Every health care service plan contract that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an enrollee with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the plan, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an enrollee may designate an agent to act on the enrollees behalf, as described in paragraph (2) of subdivision (b) of Section 1368. The provider may join with or otherwise assist the enrollee in seeking an independent medical review, and may advocate on behalf of the enrollee.
(f)Medi-Cal beneficiaries enrolled in a health care service plan shall not be excluded from participation. Medicare beneficiaries enrolled in a health care service plan shall not be excluded unless expressly preempted by federal law. Reviews of cases for Medi-Cal enrollees shall be conducted in accordance with statutes and regulations for the Medi-Cal program.
(g)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare and Medi-Cal programs, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon enrollees under this chapter.
(h)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(i)Every health care service plan shall prominently display in every plan member handbook or relevant informational brochure, in every plan contract, on enrollee evidence of coverage forms, on copies of plan procedures for resolving grievances, on letters of denials issued by either the plan or its contracting organization, on the grievance forms required under Section 1368, and on all written responses to grievances, information concerning the right of an enrollee to request an independent medical review in cases where the enrollee believes that health care services have been improperly denied, modified, or delayed by the plan, or by one of its contracting providers.
(j)An enrollee may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The enrollees provider has recommended a health care service as medically necessary, or
(B)The enrollee has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The enrollee, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by an in-plan provider for the diagnosis or treatment of the medical condition for which the enrollee seeks independent review. The plan shall expedite access to an in-plan provider upon request of an enrollee. The in-plan provider need not recommend the disputed health care service as a condition for the enrollee to be eligible for an independent review.
For purposes of this article, the enrollees provider may be an out-of-plan provider. However, the plan shall have no liability for payment of services provided by an out-of-plan provider, except as provided pursuant to subdivision (c) of Section 1374.34.
(2)The disputed health care service has been denied, modified, or delayed by the plan, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The enrollee has filed a grievance with the plan or its contracting provider pursuant to Section 1368, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The enrollee shall not be required to participate in the plans grievance process for more than 30 days. In the case of a grievance that requires expedited review pursuant to Section 1368.01, the enrollee shall not be required to participate in the plans grievance process for more than three days.
(k)An enrollee may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within 12 months of any of the qualifying periods or events under subdivision (j). The director may extend the application deadline beyond 12 months if the circumstances of a case warrant the extension.
(l)The enrollee shall pay no application or processing fees of any kind.
(m)As part of its notification to the enrollee regarding a disposition of the enrollees grievance that denies, modifies, or delays health care services, the plan shall provide the enrollee with a one- or two-page application form approved by the department, and an addressed envelope, which the enrollee may return to initiate an independent medical review. The plan shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the enrollees diagnosis or condition, the nature of the disputed health care service sought by the enrollee, a means to identify the enrollees case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent medical review process may cause the enrollee to forfeit any statutory right to pursue legal action against the plan regarding the disputed health care service.
(2)A statement indicating the enrollees consent to obtain any necessary medical records from the plan, any of its contracting providers, and any out-of-plan provider the enrollee may have consulted on the matter, to be signed by the enrollee.
(3)Notice of the enrollees right to provide information or documentation, either directly or through the enrollees provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the enrollees medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the enrollees medical condition.
(C)Reasonable information supporting the enrollees position that the disputed health care service is or was medically necessary for the enrollees medical condition, including all information provided to the enrollee by the plan or any of its contracting providers, still in the possession of the enrollee, concerning a plan or provider decision regarding disputed health care services, and a copy of any materials the enrollee submitted to the plan, still in the possession of the enrollee, in support of the grievance, as well as any additional material that the enrollee believes is relevant.
(4)A section designed to collect information on the enrollees ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all enrollees get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(n)Upon notice from the department that the health care service plans enrollee has applied for an independent medical review, the plan or its contracting providers shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the plans receipt of the departments notice of a request by an enrollee for an independent review:
(1)(A)A copy of all of the enrollees medical records in the possession of the plan or its contracting providers relevant to each of the following:
(i)The enrollees medical condition.
(ii)The health care services being provided by the plan and its contracting providers for the condition.
(iii)The disputed health care services requested by the enrollee for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the plan or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The plan shall concurrently provide a copy of medical records required by this subparagraph to the enrollee or the enrollees provider, if authorized by the enrollee, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the enrollee by the plan and any of its contracting providers concerning plan and provider decisions regarding the enrollees condition and care, and a copy of any materials the enrollee or the enrollees provider submitted to the plan and to the plans contracting providers in support of the enrollees request for disputed health care services. This documentation shall include the written response to the enrollees grievance, required by paragraph (4) of subdivision (a) of Section 1368. The confidentiality of any enrollee medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the plan or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the plan and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The plan shall concurrently provide a copy of documents required by this paragraph, except for any information found by the director to be legally privileged information, to the enrollee and the enrollees provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the director to be the proprietary information of the plan.
(o)(1)With respect to an enrollee grievance to the department concerning a disputed health care service, coverage decision, or access to care, including complaints about the waiting time for, or distance to, health care services, the department plan shall promptly provide to the enrollee and, to the extent applicable, the enrollees representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the plan concerning the enrollees grievance.
(2)If the department determines that the enrollees grievance concerns a coverage decision, access to care, or both, and the department seeks a nonbinding expert opinion from an independent medical review organization, then the department plan shall provide the enrollee and, to the extent applicable, the enrollees representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.
(3)The department shall provide to the enrollee and, to the extent applicable, the enrollees representative a reasonable opportunity to respond to any communications between the department and the plan and, if applicable, between the department and the independent medical review organization before the enrollees grievance is resolved.
(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the plan, the enrollee, or the representatives of either party without concurrently providing the plan, the enrollee, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the plan, enrollee, or their representatives did not participate and without providing the plan, enrollee, and their representatives a reasonable opportunity to respond.
(5)This subdivision does not alter the timeframes in this article within which an independent medical review is required to be completed.
SEC. 5.Section 10169 of the Insurance Code is amended to read:10169.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a disability insurance contract that has been denied, modified, or delayed by a decision of the insurer, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a group or individual policy of vision- or dental-only coverage, except to the extent that (1) the service involves the practice of medicine, or (2) is provided pursuant to a contract with a disability insurer that covers hospital, medical, or surgical benefits. If an insurer, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the insured, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a disability insurer, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the disability insurance contract. A coverage decision does not encompass a disability insurer or contracting provider decision regarding a disputed health care service.
(d)(1)In the case of an urgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider by telephone, electronically, or both no later than 72 hours from receipt of the grievance.
(2)In the case of a nonurgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider in writing no later than 30 days from receipt of the grievance.
(e)(1)(A)Upon notice from the department to a disability insurer that an insured, including the insureds representative, has submitted a grievance to the department, the insurer shall respond to the insured, the insureds representative, and the department within one of the following timeframes, as appropriate:
(i)Within 24 hours, if directed by the department, regarding an urgent grievance concerning coverage decisions, disputed health care services, or both.
(ii)Within five calendar days regarding a nonurgent grievance concerning coverage decisions, disputed health care services, or both.
(B)Whether or not a grievance is urgent shall be determined by the department consistent with Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, unless the grievance is designated as urgent by the insureds referring or treating provider, in which case the providers designation of urgency shall control.
(2)All insured grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an insured grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the insured request for review shall be treated as a request for the department to review the grievance. All other insured grievances, including grievances involving coverage decisions, remain eligible for review by the department.
(3)In any case in which an insured or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article.
(4)The department shall be the final arbiter when there is a question as to whether an insured grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an insured grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article.
(f)Every disability insurance policy that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an insured with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the insurer, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an insured may designate an agent to act on the insureds behalf. The provider may join with or otherwise assist the insured in seeking an independent medical review, and may advocate on behalf of the insured.
(g)Medicare beneficiaries enrolled in Medicare + Choice products shall not be excluded unless expressly preempted by federal law.
(h)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare Program, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon insureds under this chapter.
(i)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(j)Every disability insurer shall prominently display in every insurer member handbook or relevant informational brochure, in every insurance contract, on insured evidence of coverage forms, on copies of insurer procedures for resolving grievances, on letters of denials issued by either the insurer or its contracting organization, and on all written responses to grievances, information concerning the right of an insured to request an independent medical review when the insured believes that health care services have been improperly denied, modified, or delayed by the insurer, or by one of its contracting providers. The departments telephone number, 1-800-927-4357, and internet website, www.insurance.ca.gov, shall also be displayed.
(k)An insured may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The insureds provider has recommended a health care service as medically necessary, or
(B)The insured has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The insured, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by a contracting provider for the diagnosis or treatment of the medical condition for which the insured seeks independent review. The insurer shall expedite access to a contracting provider upon request of an insured. The contracting provider need not recommend the disputed health care service as a condition for the insured to be eligible for an independent review.
For purposes of this article, the insureds provider may be a noncontracting provider. However, the insurer shall have no liability for payment of services provided by a noncontracting provider, except as provided pursuant to Section 10169.3.
(2)The disputed health care service has been denied, modified, or delayed by the insurer, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The insured has filed a grievance with the insurer or its contracting provider, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The insured shall not be required to participate in the insurers grievance process for more than 30 days. In the case of a grievance that requires expedited review, the insured shall not be required to participate in the insurers grievance process for more than three days.
(l)An insured may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within six months of any of the qualifying periods or events under subdivision (j). The commissioner may extend the application deadline beyond six months if the circumstances of a case warrant the extension.
(m)The insured shall pay no application or processing fees of any kind.
(n)As part of its notification to the insured regarding a disposition of the insureds grievance that denies, modifies, or delays health care services, the insurer shall provide the insured with a one- or two-page application form approved by the department, and an addressed envelope, which the insured may return to initiate an independent medical review. The insurer shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the insureds diagnosis or condition, the nature of the disputed health care service sought by the insured, a means to identify the insureds case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent review process may cause the insured to forfeit any statutory right to pursue legal action against the insurer regarding the disputed health care service.
(2)A statement indicating the insureds consent to obtain any necessary medical records from the insurer, any of its contracting providers, and any noncontracting provider the insured may have consulted on the matter, to be signed by the insured.
(3)Notice of the insureds right to provide information or documentation, either directly or through the insureds provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the insureds medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the insureds medical condition.
(C)Reasonable information supporting the insureds position that the disputed health care service is or was medically necessary for the insureds medical condition, including all information provided to the insured by the insurer or any of its contracting providers, still in the possession of the insured, concerning an insurer or provider decision regarding disputed health care services, and a copy of any materials the insured submitted to the insurer, still in the possession of the insured, in support of the grievance, as well as any additional material that the insured believes is relevant.
(4)A section designed to collect information on the insureds ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all insureds get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(o)Upon notice from the department that the insured has applied for an independent medical review, the insurer or its contracting providers, shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the insurers receipt of the departments notice of a request by an insured for an independent review:
(1)(A)A copy of all of the insureds medical records in the possession of the insurer or its contracting providers relevant to each of the following:
(i)The insureds medical condition.
(ii)The health care services being provided by the insurer and its contracting providers for the condition.
(iii)The disputed health care services requested by the insured for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the insurer or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The insurer shall concurrently provide a copy of medical records required by this subparagraph to the insured or the insureds provider, if authorized by the insured, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the insured by the insurer and any of its contracting providers concerning insurer and provider decisions regarding the insureds condition and care, and a copy of any materials the insured or the insureds provider submitted to the insurer and to the insurers contracting providers in support of the insureds request for disputed health care services. This documentation shall include the written response to the insureds grievance. The confidentiality of any insured medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the insurer or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the insurer and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The insurer shall concurrently provide a copy of documents required by this paragraph, except for any information found by the commissioner to be legally privileged information, to the insured and the insureds provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the commissioner to be the proprietary information of the insurer.
(p)(1)With respect to an insured grievance to the department concerning a disputed health care service or coverage decision, the department insurer shall promptly provide to the insured and, to the extent applicable, the insureds representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the insurer concerning the insureds grievance.
(2)If the department determines that the insureds grievance concerns a coverage decision and the department seeks a nonbinding expert opinion from an independent medical review organization, then the department insurer shall provide the insured and, to the extent applicable, the insureds representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.
(3)The department shall provide to the insured and, to the extent applicable, the insureds representative a reasonable opportunity to respond to any communications between the department and the insurer and, if applicable, between the department and the independent medical review organization before the insureds grievance is adjudicated.
(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the insurer, the insured, or the representatives of either party without concurrently providing the insurer, the insured, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the insurer, insured, or their representatives did not participate and without providing the insurer, insured, and their representatives a reasonable opportunity to respond.
SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)A health care service plan and any entity with which it contracts for services that include utilization review or utilization management functions, that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b)A health care service plan that is subject to this section shall have written policies and procedures establishing the process by which the plan prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to Section 1363.5. These policies and procedures, and a description of the process by which the plan reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, shall be filed with the director for review and approval, and shall be disclosed by the plan to providers and enrollees upon request, and by the plan to the public upon request.
(c)A health care service plan subject to this section, except a plan that meets the requirements of Section 1351.2, shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act, or, if the plan is a specialized health care service plan, a clinical director with California licensure in a clinical area appropriate to the type of care provided by the specialized health care service plan. The medical director or clinical director shall ensure that the process by which the plan reviews and approves, modifies, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, complies with the requirements of this section.
(d)If health plan personnel, or individuals under contract to the plan to review requests by providers, approve the providers request, pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e)An individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may not deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity. The decision of the physician or other health care professional shall be communicated to the provider and the enrollee pursuant to subdivision (h).
(f)The criteria or guidelines used by the health care service plan to determine whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall be consistent with clinical principles and processes. These criteria and guidelines shall be developed pursuant to the requirements of Section 1363.5.
(g)If the health care service plan requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the plan shall request only the information reasonably necessary to make the determination.
(h)In determining whether to approve, modify, or deny requests by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to this section shall meet the following requirements:
(1)Decisions to approve, modify, or deny, based on medical necessity, requests by enrollees or providers prior to, or concurrent with to the provision of health care services to enrollees that do not meet the requirements for the time period for urgent review required by paragraph (2), shall be made communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed five business days from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination. When the review is retrospective, the decision shall be communicated to the individual who received services, or to the individuals designee, within 30 days of the receipt of information that is reasonably necessary to make this determination, and shall be communicated to the provider in a manner that is consistent with current law. For purposes of this section, retrospective reviews shall be for care rendered on or after January 1, 2000.
(2)(A)When the enrollees condition is urgent, such that the enrollee faces an imminent and serious threat to the enrollees health, including, but not limited to, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in paragraph (1), would be detrimental to the enrollees life or health or could jeopardize the enrollees ability to regain maximum function, decisions to approve, modify, or deny requests by enrollees or providers prior to, or concurrent with, to the provision of health care services to enrollees, shall be made communicated to enrollees and providers by telephone, facsimile, or electronically, as well as by mail, in a timely fashion appropriate for the nature of the enrollees condition, not to exceed 72 hours or, if shorter, the period of time required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, after the plans receipt of the information reasonably necessary and requested by the plan to make the determination. A determination of urgency by a referring or treating health care provider shall be binding on the health care service plan. Nothing in this section shall be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management. from the plans receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
(B)(i)When the plan lacks the information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the plan shall notify the enrollee and the provider of the specific information necessary to complete the request. The notification shall be made as soon as possible, but no later than 24 hours after the plans receipt of the request from the enrollee or provider. The enrollee and the provider shall be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information.
(ii)The plan shall notify the enrollee and the provider of the plans decision as soon as possible, but no later than 48 hours after the earlier of the following:
(I)The plans receipt of specified additional information as described in this subparagraph.
(II)The end of the period afforded the enrollee and the provider to submit the specified additional information as described in this subparagraph.
(C)This paragraph shall apply unless a shorter period of time is required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, in which case that period of time shall be binding on the health care service plan. Nothing in this section shall be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management.
(D)A request shall be considered urgent when either of the following conditions are met:
(i)The enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including but not limited to, severe pain or the potential loss of life, limb, or other major bodily function.
(ii)The normal timeframe for the decisionmaking process described in paragraph (1) could be detrimental to the enrollees life or physical or behavioral health, cause severe pain, or jeopardize the enrollees ability either to regain maximum function or to minimize any loss of function.
(E)A determination of urgency by the enrollees health care provider shall be binding on the health care service plan.
(3)Decisions to approve, modify, or deny concurrent care requests for an initially approved, ongoing course of treatment to be provided over a period of time or number of treatments by providers for authorization prior to, or concurrent with, the provision of health care services to enrollees shall be communicated to the requesting enrollee and the provider by telephone, facsimile, or electronically, as well as by mail, within 24 hours of the decision. receipt of the request. Except for concurrent review decisions pertaining to care that is underway, which shall be communicated to the enrollees treating provider within 24 hours, decisions resulting in denial, delay, or modification of all or part of the requested health care service shall be communicated to the enrollee in writing within two business days of the decision. In the case of concurrent review, care care, coverage shall not be discontinued until the enrollees treating provider has been notified of the plans decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(4)Retrospective review decisions shall be communicated to enrollees and providers by mail within 30 days of the receipt of information that is reasonably necessary to make retrospective determinations.
(4)(5)Communications regarding decisions to approve requests by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall specify the specific health care service approved. Responses regarding decisions Decisions to deny, delay, or modify health care services requested by enrollees or providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall be communicated to the enrollee in writing, and to providers initially by telephone or facsimile, except with regard to decisions rendered retrospectively, and then in writing, and shall include a clear and concise explanation of the reasons for the plans decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. Any written communication to a physician or other health care provider of a denial, delay, or modification of a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the enrollee may file a grievance with the plan pursuant to Section 1368, and in the case of Medi-Cal enrollees, shall explain how to request an administrative hearing and aid paid pending under Sections 51014.1 and 51014.2 of Title 22 of the California Code of Regulations.
(5)(6)If the health care service plan fails to make a decision decision, or provide notice of a decision, to approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2), the enrollee shall be automatically entitled to proceed with a grievance pursuant to Section 1368.01. paragraphs (1) through (5), inclusive, the health care service plan shall automatically treat the request for authorization as a grievance consistent with Sections 1368 and 1368.01 and shall immediately provide notice to the enrollee that a grievance has commenced. The notice shall include the enrollees appeal rights under this chapter and the ability of the enrollee to withdraw the grievance if the enrollee so chooses.
(6)(7)If the director determines that a health care service plan has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be deemed an exclusive remedy for the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(i)A health care service plan subject to this section shall maintain telephone access for providers to request authorization for health care services.
(j)A health care service plan subject to this section that reviews requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall establish, as part of the quality assurance program required by Section 1370, a process by which the plans compliance with this section is assessed and evaluated. The process shall include provisions for evaluation of complaints, assessment of trends, implementation of actions to correct identified problems, mechanisms to communicate actions and results to the appropriate health plan employees and contracting providers, and provisions for evaluation of any corrective action plan and measurements of performance.
(k)The director shall review a health care service plans compliance with this section as part of its periodic onsite medical survey of each plan undertaken pursuant to Section 1380, and shall include a discussion of compliance with this section as part of its report issued pursuant to that section.
(l)This section shall not apply to decisions made for the care or treatment of the sick who depend upon prayer or spiritual means for healing in the practice of religion as set forth in subdivision (a) of Section 1270.
(m)This section shall not cause a health care service plan to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.
SEC. 2.Section 1368 of the Health and Safety Code is amended to read:1368.(a)Every plan shall do all of the following:
(1)Establish and maintain a grievance system approved by the department under which enrollees may submit their grievances to the plan. Each system shall provide reasonable procedures in accordance with department regulations that shall ensure adequate consideration of enrollee grievances and rectification when appropriate.
(2)Inform its subscribers and enrollees upon enrollment in the plan and annually thereafter of the procedure for processing and resolving grievances. The information shall include the location and telephone number where grievances may be submitted.
(3)Provide forms for grievances to be given to subscribers and enrollees who wish to register written grievances. The forms used by plans licensed pursuant to Section 1353 shall be approved by the director in advance as to format.
(4)(A)Provide for a written acknowledgment within five calendar days of the receipt of a grievance, except as noted in subparagraph (B). The acknowledgment shall advise the complainant of the following:
(i)That the grievance has been received.
(ii)The date of receipt.
(iii)The name of the plan representative and the telephone number and address of the plan representative who may be contacted about the grievance.
(B)(i)Grievances received by telephone, by facsimile, by email, or online through the plans internet website pursuant to Section 1368.015, that are not coverage disputes, complaints about access to care, including complaints about the waiting time for, or distance to, covered health care services, disputed health care services involving medical necessity, or experimental or investigational treatment and that are resolved by the next business day following receipt are exempt from the requirements of subparagraph (A) and paragraph (5). The plan shall maintain a log of all these grievances. The log shall be periodically reviewed by the plan and shall include the following information for each complaint:
(I)The date of the call.
(II)The name of the complainant.
(III)The complainants member identification number.
(IV)The nature of the grievance.
(V)The nature of the resolution.
(VI)The name of the plan representative who took the call and resolved the grievance.
(ii)For health plan contracts in the individual, small group, or large group markets, a health care service plans response to grievances subject to Section 1367.24 shall also comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This paragraph shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(5)Provide subscribers and enrollees subscribers, enrollees, and providers with written responses to grievances, with a clear and concise explanation of the reasons for the plans response. For grievances involving the delay, denial, or modification of health care services, the plan response shall describe the criteria used and the clinical reasons for its decision, including all criteria and clinical reasons related to medical necessity. If a plan, or one of its contracting providers, issues a decision delaying, denying, or modifying health care services based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the decision shall clearly specify the provisions in the contract that exclude that coverage.
(A)In the case of an urgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider by telephone, electronically, or both both, as well as by hard copy mailed to their designated mailing address, no later than 72 hours from receipt of the grievance.
(B)In the case of a nonurgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider in writing no later than 30 days from receipt of the grievance. pursuant to the timeframes set forth in Section 1368.01.
(6)For grievances involving the cancellation, rescission, or nonrenewal of a health care service plan contract, the health care service plan shall continue to provide coverage to the enrollee or subscriber under the terms of the health care service plan contract until a final determination of the enrollees or subscribers request for review has been made by the health care service plan or the director pursuant to Section 1365 and this section. This paragraph shall not apply if the health care service plan cancels or fails to renew the enrollees or subscribers health care service plan contract for nonpayment of premiums pursuant to paragraph (1) of subdivision (a) of Section 1365.
(7)Keep in its files all copies of grievances, and the responses thereto, for a period of five years.
(b)(1)(A)After either completing the grievance process described in subdivision (a), or participating in the process for at least 30 days, a subscriber or enrollee may submit the grievance to the department for review. In any case determined by the department to be a case involving an imminent and serious threat to the health of the patient, including, but not limited to, severe pain, the potential loss of life, limb, or major bodily function, cancellations, rescissions, or the nonrenewal of a health care service plan contract, or in any other case when the department determines that an earlier review is warranted, a subscriber or enrollee shall not be required to complete the grievance process or to participate in the process for at least 30 days before submitting a grievance to the department for review.
(B)A grievance may be submitted to the department for review and resolution prior to any arbitration.
(C)Notwithstanding subparagraphs (A) and (B), the department may refer any grievance that does not pertain to compliance with this chapter to the State Department of Public Health, the California Department of Aging, the federal Health Care Financing Administration, or any other appropriate governmental entity for investigation and resolution.
(2)If the subscriber or enrollee is a minor, or is incompetent or incapacitated, the parent, guardian, conservator, relative, or other designee of the subscriber or enrollee, as appropriate, may submit the grievance to the department as the agent of the subscriber or enrollee. Further, a provider may join with, or otherwise assist, a subscriber or enrollee, or the agent, to submit the grievance to the department. In addition, following submission of the grievance to the department, the subscriber or enrollee, or the agent, may authorize the provider to assist, including advocating on behalf of the subscriber or enrollee. For purposes of this section, a relative includes the parent, stepparent, spouse, adult son or daughter, grandparent, brother, sister, uncle, or aunt of the subscriber or enrollee.
(3)The department shall review the written documents submitted with the subscribers or the enrollees request for review, or submitted by the agent on behalf of the subscriber or enrollee. The department may ask for additional information, and may hold an informal meeting with the involved parties, including providers who have joined in submitting the grievance or who are otherwise assisting or advocating on behalf of the subscriber or enrollee. If after reviewing the record, the department concludes that the grievance, in whole or in part, is eligible for review under the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the department shall immediately notify the subscriber or enrollee, or agent, of that option and shall, if requested orally or in writing, assist the subscriber or enrollee in participating in the independent medical review system.
(4)If after reviewing the record of a grievance, the department concludes that a health care service eligible for coverage and payment under a health care service plan contract has been delayed, denied, or modified by a plan, or by one of its contracting providers, in whole or in part due to a determination that the service is not medically necessary, and that determination was not communicated to the enrollee in writing along with a notice of the enrollees potential right to participate in the independent medical review system, as required by this chapter, the director shall, by order, assess administrative penalties. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice of, and the opportunity for, a hearing with regard to the person affected in accordance with Section 1397. The administrative penalties shall not be deemed an exclusive remedy available to the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(5)The department shall send a written notice of the final disposition of the grievance, and the reasons therefor, to the subscriber or enrollee, the agent, to any provider that has joined with or is otherwise assisting the subscriber or enrollee, and to the plan, within 30 calendar days of receipt of the request for review unless the director, in the directors discretion, determines that additional time is reasonably necessary to fully and fairly evaluate the relevant grievance. In any case not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the departments written notice shall include, at a minimum, the following:
(A)A summary of its findings and the reasons why the department found the plan to be, or not to be, in compliance with any applicable laws, regulations, or orders of the director.
(B)A discussion of the departments contact with any medical provider, or any other independent expert relied on by the department, along with a summary of the views and qualifications of that provider or expert.
(C)If the enrollees grievance is sustained in whole or in part, information about any corrective action taken.
(6)In any department review of a grievance involving a disputed health care service, as defined in subdivision (b) of Section 1374.30, that is not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), in which the department finds that the plan has delayed, denied, or modified health care services that are medically necessary, based on the specific medical circumstances of the enrollee, and those services are a covered benefit under the terms and conditions of the health care service plan contract, the departments written notice shall do either of the following:
(A)Order the plan to promptly offer and provide those health care services to the enrollee.
(B)Order the plan to promptly reimburse the enrollee for any reasonable costs associated with urgent care or emergency services, or other extraordinary and compelling health care services, when the department finds that the enrollees decision to secure those services outside of the plan network was reasonable under the circumstances.
The departments order shall be binding on the plan.
(7)Distribution of the written notice shall not be deemed a waiver of any exemption or privilege under existing law, including, but not limited to, Section 7921.505 of the Government Code, for any information in connection with and including the written notice, nor shall any person employed or in any way retained by the department be required to testify as to that information or notice.
(8)The director shall establish and maintain a system of aging of grievances that are pending and unresolved for 30 days or more that shall include a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more.
(9)A subscriber or enrollee, or the agent acting on behalf of a subscriber or enrollee, may also request voluntary mediation with the plan prior to exercising the right to submit a grievance to the department. The use of mediation services shall not preclude the right to submit a grievance to the department upon completion of mediation. In order to initiate mediation, the subscriber or enrollee, or the agent acting on behalf of the subscriber or enrollee, and the plan shall voluntarily agree to mediation. Expenses for mediation shall be borne equally by both sides. The department shall have no administrative or enforcement responsibilities in connection with the voluntary mediation process authorized by this paragraph.
(c)The plans grievance system shall include a system of aging of grievances that are pending and unresolved for 30 days or more. The plan shall provide a quarterly report to the director of grievances pending and unresolved for 30 or more days with separate categories of grievances for Medicare enrollees and Medi-Cal enrollees. The plan shall include with the report a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more. The plan may include the following statement in the quarterly report that is made available to the public by the director:
Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal enrollees each have separate avenues of appeal that are not available to other enrollees. Therefore, grievances pending and unresolved may reflect enrollees pursuing their Medicare or Medi-Cal appeal rights.
If requested by a plan, the director shall include this statement in a written report made available to the public and prepared by the director that describes or compares grievances that are pending and unresolved with the plan for 30 days or more. Additionally, the director shall, if requested by a plan, append to that written report a brief explanation, provided in writing by the plan, of the reasons why grievances described in that written report are pending and unresolved for 30 days or more. The director shall not be required to include a statement or append a brief explanation to a written report that the director is required to prepare under this chapter, including Sections 1380 and 1397.5.
(d)Subject to subparagraph (C) of paragraph (1) of subdivision (b), the grievance or resolution procedures authorized by this section shall be in addition to any other procedures that may be available to any person, and failure to pursue, exhaust, or engage in the procedures described in this section shall not preclude the use of any other remedy provided by law.
(e)This section does not allow the submission to the department of any provider grievance under this section. However, as part of a providers duty to advocate for medically appropriate health care for the providers patients pursuant to Sections 510 and 2056 of the Business and Professions Code, this subdivision does not prohibit a provider from contacting and informing the department about any concerns the provider has regarding compliance with or enforcement of this chapter.
(f)To the extent required by Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations, there shall be an independent external review pursuant to the standards required by the United States Secretary of Health and Human Services of a health care service plans cancellation, rescission, or nonrenewal of an enrollees or subscribers coverage.
SEC. 3.Section 1368.01 of the Health and Safety Code is amended to read:1368.01.(a)The grievance system shall require the plan to resolve grievances and communicate its final determiniations within 30 days, except as provided in subdivision (c).
(b)The grievance system shall include a requirement for expedited plan review of urgent grievances when the enrollee faces an imminent and serious threat to the enrollees physical or behavioral health, including including, but not limited to, severe pain, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in subdivision (a), would could be detrimental to the enrollees life or health physical or behavioral health, cause severe pain, or could jeopardize the enrollees ability to regain maximum function or minimize any loss of function. A determination of urgency by the enrollees referring or treating health care provider shall be binding on the health care service plan. When the plan has notice of a case requiring expedited review, the grievance system shall require the plan to immediately inform enrollees and subscribers in writing of their right to notify the department of the grievance. The grievance system shall also require the plan to provide furnish enrollees, subscribers, health care providers, and the department with a written statement on the disposition no later than 72 hours from receipt of the grievance, except as provided in subdivision (c). Paragraph (4) of subdivision (a) of Section 1368 shall not apply to grievances handled pursuant to this section.
(c)A health care service plan contract in the individual, small group, or large group markets that provides coverage for outpatient prescription drugs shall comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This subdivision shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(d)A health care service plan that fails to comply with the timeframes in this section and or with the notice requirements of subparagraph (A) or (B) of paragraph (5) of subdivision (a) and subdivision (b) of Section 1368 shall automatically resolve the grievance in favor of the enrollee.
SEC. 4.Section 1374.30 of the Health and Safety Code is amended to read:1374.30.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a health care service plan contract that has been denied, modified, or delayed by a decision of the plan, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a specialized health care service plan, except to the extent that the service (1) involves the practice of medicine, or (2) is provided pursuant to a contract with a health care service plan that covers hospital, medical, or surgical benefits. If a plan, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a plan, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the health care service plan contract. A coverage decision does not encompass a plan or contracting provider decision regarding a disputed health care service.
(d)(1)All enrollee grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an enrollee grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the enrollee request for review shall be treated as a request for the department to review the grievance pursuant to subdivision (b) of Section 1368. All other enrollee grievances, including grievances involving coverage decisions, remain eligible for review by the department pursuant to subdivision (b) of Section 1368.
(2)In any case in which an enrollee or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(3)The department shall be the final arbiter when there is a question as to whether an enrollee grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an enrollee grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(e)Every health care service plan contract that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an enrollee with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the plan, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an enrollee may designate an agent to act on the enrollees behalf, as described in paragraph (2) of subdivision (b) of Section 1368. The provider may join with or otherwise assist the enrollee in seeking an independent medical review, and may advocate on behalf of the enrollee.
(f)Medi-Cal beneficiaries enrolled in a health care service plan shall not be excluded from participation. Medicare beneficiaries enrolled in a health care service plan shall not be excluded unless expressly preempted by federal law. Reviews of cases for Medi-Cal enrollees shall be conducted in accordance with statutes and regulations for the Medi-Cal program.
(g)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare and Medi-Cal programs, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon enrollees under this chapter.
(h)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(i)Every health care service plan shall prominently display in every plan member handbook or relevant informational brochure, in every plan contract, on enrollee evidence of coverage forms, on copies of plan procedures for resolving grievances, on letters of denials issued by either the plan or its contracting organization, on the grievance forms required under Section 1368, and on all written responses to grievances, information concerning the right of an enrollee to request an independent medical review in cases where the enrollee believes that health care services have been improperly denied, modified, or delayed by the plan, or by one of its contracting providers.
(j)An enrollee may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The enrollees provider has recommended a health care service as medically necessary, or
(B)The enrollee has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The enrollee, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by an in-plan provider for the diagnosis or treatment of the medical condition for which the enrollee seeks independent review. The plan shall expedite access to an in-plan provider upon request of an enrollee. The in-plan provider need not recommend the disputed health care service as a condition for the enrollee to be eligible for an independent review.
For purposes of this article, the enrollees provider may be an out-of-plan provider. However, the plan shall have no liability for payment of services provided by an out-of-plan provider, except as provided pursuant to subdivision (c) of Section 1374.34.
(2)The disputed health care service has been denied, modified, or delayed by the plan, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The enrollee has filed a grievance with the plan or its contracting provider pursuant to Section 1368, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The enrollee shall not be required to participate in the plans grievance process for more than 30 days. In the case of a grievance that requires expedited review pursuant to Section 1368.01, the enrollee shall not be required to participate in the plans grievance process for more than three days.
(k)An enrollee may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within six 12 months of any of the qualifying periods or events under subdivision (j). The director may extend the application deadline beyond six 12 months if the circumstances of a case warrant the extension.
(l)The enrollee shall pay no application or processing fees of any kind.
(m)As part of its notification to the enrollee regarding a disposition of the enrollees grievance that denies, modifies, or delays health care services, the plan shall provide the enrollee with a one- or two-page application form approved by the department, and an addressed envelope, which the enrollee may return to initiate an independent medical review. The plan shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the enrollees diagnosis or condition, the nature of the disputed health care service sought by the enrollee, a means to identify the enrollees case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent medical review process may cause the enrollee to forfeit any statutory right to pursue legal action against the plan regarding the disputed health care service.
(2)A statement indicating the enrollees consent to obtain any necessary medical records from the plan, any of its contracting providers, and any out-of-plan provider the enrollee may have consulted on the matter, to be signed by the enrollee.
(3)Notice of the enrollees right to provide information or documentation, either directly or through the enrollees provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the enrollees medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the enrollees medical condition.
(C)Reasonable information supporting the enrollees position that the disputed health care service is or was medically necessary for the enrollees medical condition, including all information provided to the enrollee by the plan or any of its contracting providers, still in the possession of the enrollee, concerning a plan or provider decision regarding disputed health care services, and a copy of any materials the enrollee submitted to the plan, still in the possession of the enrollee, in support of the grievance, as well as any additional material that the enrollee believes is relevant.
(4)A section designed to collect information on the enrollees ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all enrollees get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(n)Upon notice from the department that the health care service plans enrollee has applied for an independent medical review, the plan or its contracting providers shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the plans receipt of the departments notice of a request by an enrollee for an independent review:
(1)(A)A copy of all of the enrollees medical records in the possession of the plan or its contracting providers relevant to each of the following:
(i)The enrollees medical condition.
(ii)The health care services being provided by the plan and its contracting providers for the condition.
(iii)The disputed health care services requested by the enrollee for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the plan or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The plan shall concurrently provide a copy of medical records required by this subparagraph to the enrollee or the enrollees provider, if authorized by the enrollee, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the enrollee by the plan and any of its contracting providers concerning plan and provider decisions regarding the enrollees condition and care, and a copy of any materials the enrollee or the enrollees provider submitted to the plan and to the plans contracting providers in support of the enrollees request for disputed health care services. This documentation shall include the written response to the enrollees grievance, required by paragraph (4) of subdivision (a) of Section 1368. The confidentiality of any enrollee medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the plan or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the plan and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The plan shall concurrently provide a copy of documents required by this paragraph, except for any information found by the director to be legally privileged information, to the enrollee and the enrollees provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the director to be the proprietary information of the plan.
(o)(1)With respect to an enrollee grievance to the department concerning a disputed health care service or service, coverage decision, or access to care, including complaints about the waiting time for, or distance to, health care services, the department shall promptly provide to the enrollee and, to the extent applicable, the enrollees representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the plan concerning the enrollees grievance.
(2)If the department determines that the enrollees grievance concerns a coverage decision decision, access to care, or both, and the department seeks a nonbinding expert opinion from an independent medical review organization, then the department shall provide the enrollee and, to the extent applicable, the enrollees representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.
(3)The department shall provide to the enrollee and, to the extent applicable, the enrollees representative a reasonable opportunity to respond to any communications between the department and the plan and, if applicable, between the department and the independent medical review organization before the enrollees grievance is adjudicated. resolved.
(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the plan, the enrollee, or the representatives of either party without concurrently providing the plan, the enrollee, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the plan, enrollee, or their representatives did not participate and without providing the plan, enrollee, and their representatives a reasonable opportunity to respond.
(5)This subdivision does not alter the timeframes in this article within which an independent medical review is required to be completed.
SEC. 5.Section 10169 of the Insurance Code is amended to read:10169.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a disability insurance contract that has been denied, modified, or delayed by a decision of the insurer, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a group or individual policy of vision- or dental-only coverage, except to the extent that (1) the service involves the practice of medicine, or (2) is provided pursuant to a contract with a disability insurer that covers hospital, medical, or surgical benefits. If an insurer, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the insured, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a disability insurer, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the disability insurance contract. A coverage decision does not encompass a disability insurer or contracting provider decision regarding a disputed health care service.
(d)(1)In the case of an urgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider by telephone, electronically, or both no later than 72 hours from receipt of the grievance.
(2)In the case of a nonurgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider in writing no later than 30 days from receipt of the grievance.
(e)(1)(A)Upon notice from the department to a disability insurer that an insured, including the insureds representative, has submitted a grievance to the department, the insurer shall respond to the insured, the insureds representative, and the department within one of the following timeframes, as appropriate:
(i)Within 24 hours, if directed by the department, regarding an urgent grievance concerning coverage decisions, disputed health care services, or both.
(ii)Within five calendar days regarding a nonurgent grievance concerning coverage decisions, disputed health care services, or both.
(B)Whether or not a grievance is urgent shall be determined by the department consistent with Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, unless the grievance is designated as urgent by the insureds referring or treating provider, in which case the providers designation of urgency shall control.
(2)All insured grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an insured grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the insured request for review shall be treated as a request for the department to review the grievance. All other insured grievances, including grievances involving coverage decisions, remain eligible for review by the department.
(3)In any case in which an insured or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article.
(4)The department shall be the final arbiter when there is a question as to whether an insured grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an insured grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article.
(f)Every disability insurance policy that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an insured with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the insurer, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an insured may designate an agent to act on the insureds behalf. The provider may join with or otherwise assist the insured in seeking an independent medical review, and may advocate on behalf of the insured.
(g)Medicare beneficiaries enrolled in Medicare + Choice products shall not be excluded unless expressly preempted by federal law.
(h)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare program, Program, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon insureds under this chapter.
(i)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(j)Every disability insurer shall prominently display in every insurer member handbook or relevant informational brochure, in every insurance contract, on insured evidence of coverage forms, on copies of insurer procedures for resolving grievances, on letters of denials issued by either the insurer or its contracting organization, and on all written responses to grievances, information concerning the right of an insured to request an independent medical review when the insured believes that health care services have been improperly denied, modified, or delayed by the insurer, or by one of its contracting providers. The departments telephone number, 1-800-927-4357, and internet website, www.insurance.ca.gov, shall also be displayed.
(k)An insured may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The insureds provider has recommended a health care service as medically necessary, or
(B)The insured has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The insured, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by a contracting provider for the diagnosis or treatment of the medical condition for which the insured seeks independent review. The insurer shall expedite access to a contracting provider upon request of an insured. The contracting provider need not recommend the disputed health care service as a condition for the insured to be eligible for an independent review.
For purposes of this article, the insureds provider may be a noncontracting provider. However, the insurer shall have no liability for payment of services provided by a noncontracting provider, except as provided pursuant to Section 10169.3.
(2)The disputed health care service has been denied, modified, or delayed by the insurer, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The insured has filed a grievance with the insurer or its contracting provider, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The insured shall not be required to participate in the insurers grievance process for more than 30 days. In the case of a grievance that requires expedited review, the insured shall not be required to participate in the insurers grievance process for more than three days.
(l)An insured may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within six months of any of the qualifying periods or events under subdivision (j). The commissioner may extend the application deadline beyond six months if the circumstances of a case warrant the extension.
(m)The insured shall pay no application or processing fees of any kind.
(n)As part of its notification to the insured regarding a disposition of the insureds grievance that denies, modifies, or delays health care services, the insurer shall provide the insured with a one- or two-page application form approved by the department, and an addressed envelope, which the insured may return to initiate an independent medical review. The insurer shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the insureds diagnosis or condition, the nature of the disputed health care service sought by the insured, a means to identify the insureds case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent review process may cause the insured to forfeit any statutory right to pursue legal action against the insurer regarding the disputed health care service.
(2)A statement indicating the insureds consent to obtain any necessary medical records from the insurer, any of its contracting providers, and any noncontracting provider the insured may have consulted on the matter, to be signed by the insured.
(3)Notice of the insureds right to provide information or documentation, either directly or through the insureds provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the insureds medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the insureds medical condition.
(C)Reasonable information supporting the insureds position that the disputed health care service is or was medically necessary for the insureds medical condition, including all information provided to the insured by the insurer or any of its contracting providers, still in the possession of the insured, concerning an insurer or provider decision regarding disputed health care services, and a copy of any materials the insured submitted to the insurer, still in the possession of the insured, in support of the grievance, as well as any additional material that the insured believes is relevant.
(4)A section designed to collect information on the insureds ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all insureds get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(o)Upon notice from the department that the insured has applied for an independent medical review, the insurer or its contracting providers, shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the insurers receipt of the departments notice of a request by an insured for an independent review:
(1)(A)A copy of all of the insureds medical records in the possession of the insurer or its contracting providers relevant to each of the following:
(i)The insureds medical condition.
(ii)The health care services being provided by the insurer and its contracting providers for the condition.
(iii)The disputed health care services requested by the insured for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the insurer or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The insurer shall concurrently provide a copy of medical records required by this subparagraph to the insured or the insureds provider, if authorized by the insured, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the insured by the insurer and any of its contracting providers concerning insurer and provider decisions regarding the insureds condition and care, and a copy of any materials the insured or the insureds provider submitted to the insurer and to the insurers contracting providers in support of the insureds request for disputed health care services. This documentation shall include the written response to the insureds grievance. The confidentiality of any insured medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the insurer or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the insurer and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The insurer shall concurrently provide a copy of documents required by this paragraph, except for any information found by the commissioner to be legally privileged information, to the insured and the insureds provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the commissioner to be the proprietary information of the insurer.
(p)(1)With respect to an insured grievance to the department concerning a disputed health care service or coverage decision, the department shall promptly provide to the insured and, to the extent applicable, the insureds representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the insurer concerning the insureds grievance.
(2)If the department determines that the insureds grievance concerns a coverage decision and the department seeks a nonbinding expert opinion from an independent medical review organization, then the department shall provide the insured and, to the extent applicable, the insureds representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.
(3)The department shall provide to the insured and, to the extent applicable, the insureds representative a reasonable opportunity to respond to any communications between the department and the insurer and, if applicable, between the department and the independent medical review organization before the insureds grievance is adjudicated.
(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the insurer, the insured, or the representatives of either party without concurrently providing the insurer, the insured, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the insurer, insured, or their representatives did not participate and without providing the insurer, insured, and their representatives a reasonable opportunity to respond.
SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)A health care service plan and any entity with which it contracts for services that include utilization review or utilization management functions, that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section.
(b)A health care service plan that is subject to this section shall have written policies and procedures establishing the process by which the plan prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to Section 1363.5. These policies and procedures, and a description of the process by which the plan reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, shall be filed with the director for review and approval, and shall be disclosed by the plan to providers and enrollees upon request, and by the plan to the public upon request.
(c)A health care service plan subject to this section, except a plan that meets the requirements of Section 1351.2, shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act, or, if the plan is a specialized health care service plan, a clinical director with California licensure in a clinical area appropriate to the type of care provided by the specialized health care service plan. The medical director or clinical director shall ensure that the process by which the plan reviews and approves, modifies, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, complies with the requirements of this section.
(d)If health plan personnel, or individuals under contract to the plan to review requests by providers, approve the providers request, pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h).
(e)No An individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may not deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity. The decision of the physician or other health care professional shall be communicated to the provider and the enrollee pursuant to subdivision (h).
(f)The criteria or guidelines used by the health care service plan to determine whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall be consistent with clinical principles and processes. These criteria and guidelines shall be developed pursuant to the requirements of Section 1363.5.
(g)If the health care service plan requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the plan shall request only the information reasonably necessary to make the determination.
(h)In determining whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to this section shall meet the following requirements:
(1)Decisions to approve, modify, or deny, based on medical necessity, requests by providers prior to, or concurrent with the provision of health care services to enrollees that do not meet the requirements for the time period for review required by paragraph (2), shall be made in a timely fashion appropriate for the nature of the enrollees condition, not to exceed five business days from the plans receipt of the information reasonably necessary and requested by the plan to make the determination. In cases where When the review is retrospective, the decision shall be communicated to the individual who received services, or to the individuals designee, within 30 days of the receipt of information that is reasonably necessary to make this determination, and shall be communicated to the provider in a manner that is consistent with current law. For purposes of this section, retrospective reviews shall be for care rendered on or after January 1, 2000.
(2)When the enrollees condition is urgent, such that the enrollee faces an imminent and serious threat to his or her the enrollees health, including, but not limited to, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in paragraph (1), would be detrimental to the enrollees life or health or could jeopardize the enrollees ability to regain maximum function, decisions to approve, modify, or deny requests by providers prior to, or concurrent with, the provision of health care services to enrollees, shall be made in a timely fashion appropriate for the nature of the enrollees condition, not to exceed 72 hours or, if shorter, the period of time required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, after the plans receipt of the information reasonably necessary and requested by the plan to make the determination. A determination of urgency by a referring or treating health care provider shall be binding on the health care service plan. Nothing in this section shall be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management.
(3)Decisions to approve, modify, or deny requests by providers for authorization prior to, or concurrent with, the provision of health care services to enrollees shall be communicated to the requesting provider within 24 hours of the decision. Except for concurrent review decisions pertaining to care that is underway, which shall be communicated to the enrollees treating provider within 24 hours, decisions resulting in denial, delay, or modification of all or part of the requested health care service shall be communicated to the enrollee in writing within two business days of the decision. In the case of concurrent review, care shall not be discontinued until the enrollees treating provider has been notified of the plans decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient.
(4)Communications regarding decisions to approve requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall specify the specific health care service approved. Responses regarding decisions to deny, delay, or modify health care services requested by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall be communicated to the enrollee in writing, and to providers initially by telephone or facsimile, except with regard to decisions rendered retrospectively, and then in writing, and shall include a clear and concise explanation of the reasons for the plans decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. Any written communication to a physician or other health care provider of a denial, delay, or modification of a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the enrollee may file a grievance with the plan pursuant to Section 1368, and in the case of Medi-Cal enrollees, shall explain how to request an administrative hearing and aid paid pending under Sections 51014.1 and 51014.2 of Title 22 of the California Code of Regulations.
(5)If the health care service plan cannot make a decision to approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2) because the plan is not in receipt of all of the information reasonably necessary and requested, or because the plan requires consultation by an expert reviewer, or because the plan has asked that an additional examination or test be performed upon the enrollee, provided the examination or test is reasonable and consistent with good medical practice, the plan shall, immediately upon the expiration of the timeframe specified in paragraph (1) or (2) or as soon as the plan becomes aware that it will not meet the timeframe, whichever occurs first, notify the provider and the enrollee, in writing, that the plan cannot make a decision to approve, modify, or deny the request for authorization within the required timeframe, and specify the information requested but not received, or the expert reviewer to be consulted, or the additional examinations or tests required. The plan shall also notify the provider and enrollee of the anticipated date on which a decision may be rendered. Upon receipt of all information reasonably necessary and requested by the plan, the plan shall approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2), whichever applies.(5)If the health care service plan fails to make a decision to approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2), the enrollee shall be automatically entitled to proceed with a grievance pursuant to Section 1368.01.
(6)If the director determines that a health care service plan has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be deemed an exclusive remedy for the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(i)A health care service plan subject to this section shall maintain telephone access for providers to request authorization for health care services.
(j)A health care service plan subject to this section that reviews requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall establish, as part of the quality assurance program required by Section 1370, a process by which the plans compliance with this section is assessed and evaluated. The process shall include provisions for evaluation of complaints, assessment of trends, implementation of actions to correct identified problems, mechanisms to communicate actions and results to the appropriate health plan employees and contracting providers, and provisions for evaluation of any corrective action plan and measurements of performance.
(k)The director shall review a health care service plans compliance with this section as part of its periodic onsite medical survey of each plan undertaken pursuant to Section 1380, and shall include a discussion of compliance with this section as part of its report issued pursuant to that section.
(l)This section shall not apply to decisions made for the care or treatment of the sick who depend upon prayer or spiritual means for healing in the practice of religion as set forth in subdivision (a) of Section 1270.
(m)Nothing in this This section shall not cause a health care service plan to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure.
SEC. 2.Section 1368 of the Health and Safety Code is amended to read:1368.(a)Every plan shall do all of the following:
(1)Establish and maintain a grievance system approved by the department under which enrollees may submit their grievances to the plan. Each system shall provide reasonable procedures in accordance with department regulations that shall ensure adequate consideration of enrollee grievances and rectification when appropriate.
(2)Inform its subscribers and enrollees upon enrollment in the plan and annually thereafter of the procedure for processing and resolving grievances. The information shall include the location and telephone number where grievances may be submitted.
(3)Provide forms for grievances to be given to subscribers and enrollees who wish to register written grievances. The forms used by plans licensed pursuant to Section 1353 shall be approved by the director in advance as to format.
(4)(A)Provide for a written acknowledgment within five calendar days of the receipt of a grievance, except as noted in subparagraph (B). The acknowledgment shall advise the complainant of the following:
(i)That the grievance has been received.
(ii)The date of receipt.
(iii)The name of the plan representative and the telephone number and address of the plan representative who may be contacted about the grievance.
(B)(i)Grievances received by telephone, by facsimile, by email, or online through the plans internet website pursuant to Section 1368.015, that are not coverage disputes, disputed health care services involving medical necessity, or experimental or investigational treatment and that are resolved by the next business day following receipt are exempt from the requirements of subparagraph (A) and paragraph (5). The plan shall maintain a log of all these grievances. The log shall be periodically reviewed by the plan and shall include the following information for each complaint:
(I)The date of the call.
(II)The name of the complainant.
(III)The complainants member identification number.
(IV)The nature of the grievance.
(V)The nature of the resolution.
(VI)The name of the plan representative who took the call and resolved the grievance.
(ii)For health plan contracts in the individual, small group, or large group markets, a health care service plans response to grievances subject to Section 1367.24 shall also comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This paragraph shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(5)Provide subscribers and enrollees with written responses to grievances, with a clear and concise explanation of the reasons for the plans response. For grievances involving the delay, denial, or modification of health care services, the plan response shall describe the criteria used and the clinical reasons for its decision, including all criteria and clinical reasons related to medical necessity. If a plan, or one of its contracting providers, issues a decision delaying, denying, or modifying health care services based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the decision shall clearly specify the provisions in the contract that exclude that coverage.
(A)In the case of an urgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider by telephone, electronically, or both no later than 72 hours from receipt of the grievance.
(B)In the case of a nonurgent grievance, the health care service plan shall communicate its final determination to the enrollee and the enrollees provider in writing no later than 30 days from receipt of the grievance.
(6)For grievances involving the cancellation, rescission, or nonrenewal of a health care service plan contract, the health care service plan shall continue to provide coverage to the enrollee or subscriber under the terms of the health care service plan contract until a final determination of the enrollees or subscribers request for review has been made by the health care service plan or the director pursuant to Section 1365 and this section. This paragraph shall not apply if the health care service plan cancels or fails to renew the enrollees or subscribers health care service plan contract for nonpayment of premiums pursuant to paragraph (1) of subdivision (a) of Section 1365.
(7)Keep in its files all copies of grievances, and the responses thereto, for a period of five years.
(b)(1)(A)After either completing the grievance process described in subdivision (a), or participating in the process for at least 30 days, a subscriber or enrollee may submit the grievance to the department for review. In any case determined by the department to be a case involving an imminent and serious threat to the health of the patient, including, but not limited to, severe pain, the potential loss of life, limb, or major bodily function, cancellations, rescissions, or the nonrenewal of a health care service plan contract, or in any other case where when the department determines that an earlier review is warranted, a subscriber or enrollee shall not be required to complete the grievance process or to participate in the process for at least 30 days before submitting a grievance to the department for review.
(B)A grievance may be submitted to the department for review and resolution prior to any arbitration.
(C)Notwithstanding subparagraphs (A) and (B), the department may refer any grievance that does not pertain to compliance with this chapter to the State Department of Public Health, the California Department of Aging, the federal Health Care Financing Administration, or any other appropriate governmental entity for investigation and resolution.
(2)If the subscriber or enrollee is a minor, or is incompetent or incapacitated, the parent, guardian, conservator, relative, or other designee of the subscriber or enrollee, as appropriate, may submit the grievance to the department as the agent of the subscriber or enrollee. Further, a provider may join with, or otherwise assist, a subscriber or enrollee, or the agent, to submit the grievance to the department. In addition, following submission of the grievance to the department, the subscriber or enrollee, or the agent, may authorize the provider to assist, including advocating on behalf of the subscriber or enrollee. For purposes of this section, a relative includes the parent, stepparent, spouse, adult son or daughter, grandparent, brother, sister, uncle, or aunt of the subscriber or enrollee.
(3)The department shall review the written documents submitted with the subscribers or the enrollees request for review, or submitted by the agent on behalf of the subscriber or enrollee. The department may ask for additional information, and may hold an informal meeting with the involved parties, including providers who have joined in submitting the grievance or who are otherwise assisting or advocating on behalf of the subscriber or enrollee. If after reviewing the record, the department concludes that the grievance, in whole or in part, is eligible for review under the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the department shall immediately notify the subscriber or enrollee, or agent, of that option and shall, if requested orally or in writing, assist the subscriber or enrollee in participating in the independent medical review system.
(4)If after reviewing the record of a grievance, the department concludes that a health care service eligible for coverage and payment under a health care service plan contract has been delayed, denied, or modified by a plan, or by one of its contracting providers, in whole or in part due to a determination that the service is not medically necessary, and that determination was not communicated to the enrollee in writing along with a notice of the enrollees potential right to participate in the independent medical review system, as required by this chapter, the director shall, by order, assess administrative penalties. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice of, and the opportunity for, a hearing with regard to the person affected in accordance with Section 1397. The administrative penalties shall not be deemed an exclusive remedy available to the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45.
(5)The department shall send a written notice of the final disposition of the grievance, and the reasons therefor, to the subscriber or enrollee, the agent, to any provider that has joined with or is otherwise assisting the subscriber or enrollee, and to the plan, within 30 calendar days of receipt of the request for review unless the director, in the directors discretion, determines that additional time is reasonably necessary to fully and fairly evaluate the relevant grievance. In any case not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), the departments written notice shall include, at a minimum, the following:
(A)A summary of its findings and the reasons why the department found the plan to be, or not to be, in compliance with any applicable laws, regulations, or orders of the director.
(B)A discussion of the departments contact with any medical provider, or any other independent expert relied on by the department, along with a summary of the views and qualifications of that provider or expert.
(C)If the enrollees grievance is sustained in whole or in part, information about any corrective action taken.
(6)In any department review of a grievance involving a disputed health care service, as defined in subdivision (b) of Section 1374.30, that is not eligible for the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30), in which the department finds that the plan has delayed, denied, or modified health care services that are medically necessary, based on the specific medical circumstances of the enrollee, and those services are a covered benefit under the terms and conditions of the health care service plan contract, the departments written notice shall do either of the following:
(A)Order the plan to promptly offer and provide those health care services to the enrollee.
(B)Order the plan to promptly reimburse the enrollee for any reasonable costs associated with urgent care or emergency services, or other extraordinary and compelling health care services, when the department finds that the enrollees decision to secure those services outside of the plan network was reasonable under the circumstances.
The departments order shall be binding on the plan.
(7)Distribution of the written notice shall not be deemed a waiver of any exemption or privilege under existing law, including, but not limited to, Section 7921.505 of the Government Code, for any information in connection with and including the written notice, nor shall any person employed or in any way retained by the department be required to testify as to that information or notice.
(8)The director shall establish and maintain a system of aging of grievances that are pending and unresolved for 30 days or more that shall include a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more.
(9)A subscriber or enrollee, or the agent acting on behalf of a subscriber or enrollee, may also request voluntary mediation with the plan prior to exercising the right to submit a grievance to the department. The use of mediation services shall not preclude the right to submit a grievance to the department upon completion of mediation. In order to initiate mediation, the subscriber or enrollee, or the agent acting on behalf of the subscriber or enrollee, and the plan shall voluntarily agree to mediation. Expenses for mediation shall be borne equally by both sides. The department shall have no administrative or enforcement responsibilities in connection with the voluntary mediation process authorized by this paragraph.
(c)The plans grievance system shall include a system of aging of grievances that are pending and unresolved for 30 days or more. The plan shall provide a quarterly report to the director of grievances pending and unresolved for 30 or more days with separate categories of grievances for Medicare enrollees and Medi-Cal enrollees. The plan shall include with the report a brief explanation of the reasons each grievance is pending and unresolved for 30 days or more. The plan may include the following statement in the quarterly report that is made available to the public by the director:
Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal enrollees each have separate avenues of appeal that are not available to other enrollees. Therefore, grievances pending and unresolved may reflect enrollees pursuing their Medicare or Medi-Cal appeal rights.
If requested by a plan, the director shall include this statement in a written report made available to the public and prepared by the director that describes or compares grievances that are pending and unresolved with the plan for 30 days or more. Additionally, the director shall, if requested by a plan, append to that written report a brief explanation, provided in writing by the plan, of the reasons why grievances described in that written report are pending and unresolved for 30 days or more. The director shall not be required to include a statement or append a brief explanation to a written report that the director is required to prepare under this chapter, including Sections 1380 and 1397.5.
(d)Subject to subparagraph (C) of paragraph (1) of subdivision (b), the grievance or resolution procedures authorized by this section shall be in addition to any other procedures that may be available to any person, and failure to pursue, exhaust, or engage in the procedures described in this section shall not preclude the use of any other remedy provided by law.
(e)Nothing in this section shall be construed to This section does not allow the submission to the department of any provider grievance under this section. However, as part of a providers duty to advocate for medically appropriate health care for the providers patients pursuant to Sections 510 and 2056 of the Business and Professions Code, nothing in this subdivision shall be construed to this subdivision does not prohibit a provider from contacting and informing the department about any concerns the provider has regarding compliance with or enforcement of this chapter.
(f)To the extent required by Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations, there shall be an independent external review pursuant to the standards required by the United States Secretary of Health and Human Services of a health care service plans cancellation, rescission, or nonrenewal of an enrollees or subscribers coverage.
SEC. 3.Section 1368.01 of the Health and Safety Code is amended to read:1368.01.(a)The grievance system shall require the plan to resolve grievances within 30 days, except as provided in subdivision (c).
(b)The grievance system shall include a requirement for expedited plan review of grievances for cases involving an imminent and serious threat to the health of the patient, including, but not limited to, severe pain, potential loss of life, limb, or major bodily function. urgent grievances when the enrollee faces an imminent and serious threat to the enrollees health, including the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in subdivision (a), would be detrimental to the enrollees life or health or could jeopardize the enrollees ability to regain maximum function. A determination of urgency by the enrollees referring or treating health care provider shall be binding on the health care service plan. When the plan has notice of a case requiring expedited review, the grievance system shall require the plan to immediately inform enrollees and subscribers in writing of their right to notify the department of the grievance. The grievance system shall also require the plan to provide enrollees, subscribers, and the department with a written statement on the disposition or pending status of the grievance no later than three days 72 hours from receipt of the grievance, except as provided in subdivision (c). Paragraph (4) of subdivision (a) of Section 1368 shall not apply to grievances handled pursuant to this section.
(c)A health care service plan contract in the individual, small group, or large group markets that provides coverage for outpatient prescription drugs shall comply with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations. This subdivision shall not apply to Medi-Cal managed care health care service plan contracts or any entity that enters into a contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(d)A health care service plan that fails to comply with the timeframes in this section and with the notice requirements of subparagraph (A) of paragraph (5) of subdivision (a) and subdivision (b) of Section 1368 shall automatically resolve the grievance in favor of the enrollee.
SEC. 4.Section 1374.30 of the Health and Safety Code is amended to read:1374.30.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a health care service plan contract that has been denied, modified, or delayed by a decision of the plan, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a specialized health care service plan, except to the extent that the service (1) involves the practice of medicine, or (2) is provided pursuant to a contract with a health care service plan that covers hospital, medical, or surgical benefits. If a plan, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the enrollee, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a plan, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the health care service plan contract. A coverage decision does not encompass a plan or contracting provider decision regarding a disputed health care service.
(d)(1)All enrollee grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an enrollee grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the enrollee request for review shall be treated as a request for the department to review the grievance pursuant to subdivision (b) of Section 1368. All other enrollee grievances, including grievances involving coverage decisions, remain eligible for review by the department pursuant to subdivision (b) of Section 1368.
(2)In any case in which an enrollee or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(3)The department shall be the final arbiter when there is a question as to whether an enrollee grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an enrollee grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article or pursuant to subdivision (b) of Section 1368.
(e)Every health care service plan contract that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an enrollee with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the plan, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an enrollee may designate an agent to act on his or her the enrollees behalf, as described in paragraph (2) of subdivision (b) of Section 1368. The provider may join with or otherwise assist the enrollee in seeking an independent medical review, and may advocate on behalf of the enrollee.
(f)Medi-Cal beneficiaries enrolled in a health care service plan shall not be excluded from participation. Medicare beneficiaries enrolled in a health care service plan shall not be excluded unless expressly preempted by federal law. Reviews of cases for Medi-Cal enrollees shall be conducted in accordance with statutes and regulations for the Medi-Cal program.
(g)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare and Medi-Cal programs, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon enrollees under this chapter.
(h)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(i)Every health care service plan shall prominently display in every plan member handbook or relevant informational brochure, in every plan contract, on enrollee evidence of coverage forms, on copies of plan procedures for resolving grievances, on letters of denials issued by either the plan or its contracting organization, on the grievance forms required under Section 1368, and on all written responses to grievances, information concerning the right of an enrollee to request an independent medical review in cases where the enrollee believes that health care services have been improperly denied, modified, or delayed by the plan, or by one of its contracting providers.
(j)An enrollee may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The enrollees provider has recommended a health care service as medically necessary, or
(B)The enrollee has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The enrollee, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by an in-plan provider for the diagnosis or treatment of the medical condition for which the enrollee seeks independent review. The plan shall expedite access to an in-plan provider upon request of an enrollee. The in-plan provider need not recommend the disputed health care service as a condition for the enrollee to be eligible for an independent review.
For purposes of this article, the enrollees provider may be an out-of-plan provider. However, the plan shall have no liability for payment of services provided by an out-of-plan provider, except as provided pursuant to subdivision (c) of Section 1374.34.
(2)The disputed health care service has been denied, modified, or delayed by the plan, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The enrollee has filed a grievance with the plan or its contracting provider pursuant to Section 1368, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The enrollee shall not be required to participate in the plans grievance process for more than 30 days. In the case of a grievance that requires expedited review pursuant to Section 1368.01, the enrollee shall not be required to participate in the plans grievance process for more than three days.
(k)An enrollee may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within six months of any of the qualifying periods or events under subdivision (j). The director may extend the application deadline beyond six months if the circumstances of a case warrant the extension.
(l)The enrollee shall pay no application or processing fees of any kind.
(m)As part of its notification to the enrollee regarding a disposition of the enrollees grievance that denies, modifies, or delays health care services, the plan shall provide the enrollee with a one- or two-page application form approved by the department, and an addressed envelope, which the enrollee may return to initiate an independent medical review. The plan shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the enrollees diagnosis or condition, the nature of the disputed health care service sought by the enrollee, a means to identify the enrollees case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent medical review process may cause the enrollee to forfeit any statutory right to pursue legal action against the plan regarding the disputed health care service.
(2)A statement indicating the enrollees consent to obtain any necessary medical records from the plan, any of its contracting providers, and any out-of-plan provider the enrollee may have consulted on the matter, to be signed by the enrollee.
(3)Notice of the enrollees right to provide information or documentation, either directly or through the enrollees provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the enrollees medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the enrollees medical condition.
(C)Reasonable information supporting the enrollees position that the disputed health care service is or was medically necessary for the enrollees medical condition, including all information provided to the enrollee by the plan or any of its contracting providers, still in the possession of the enrollee, concerning a plan or provider decision regarding disputed health care services, and a copy of any materials the enrollee submitted to the plan, still in the possession of the enrollee, in support of the grievance, as well as any additional material that the enrollee believes is relevant.
(4)A section designed to collect information on the enrollees ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all enrollees get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(n)Upon notice from the department that the health care service plans enrollee has applied for an independent medical review, the plan or its contracting providers shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the plans receipt of the departments notice of a request by an enrollee for an independent review:
(1)(A)A copy of all of the enrollees medical records in the possession of the plan or its contracting providers relevant to each of the following:
(i)The enrollees medical condition.
(ii)The health care services being provided by the plan and its contracting providers for the condition.
(iii)The disputed health care services requested by the enrollee for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the plan or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The plan shall concurrently provide a copy of medical records required by this subparagraph to the enrollee or the enrollees provider, if authorized by the enrollee, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the enrollee by the plan and any of its contracting providers concerning plan and provider decisions regarding the enrollees condition and care, and a copy of any materials the enrollee or the enrollees provider submitted to the plan and to the plans contracting providers in support of the enrollees request for disputed health care services. This documentation shall include the written response to the enrollees grievance, required by paragraph (4) of subdivision (a) of Section 1368. The confidentiality of any enrollee medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the plan or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the plan and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The plan shall concurrently provide a copy of documents required by this paragraph, except for any information found by the director to be legally privileged information, to the enrollee and the enrollees provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the director to be the proprietary information of the plan.
(o)This section shall become operative on July 1, 2015.(o)(1)With respect to an enrollee grievance to the department concerning a disputed health care service or coverage decision, the department shall promptly provide to the enrollee and, to the extent applicable, the enrollees representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the plan concerning the enrollees grievance.
(2)If the department determines that the enrollees grievance concerns a coverage decision and the department seeks a nonbinding expert opinion from an independent medical review organization, then the department shall provide the enrollee and, to the extent applicable, the enrollees representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.
(3)The department shall provide to the enrollee and, to the extent applicable, the enrollees representative a reasonable opportunity to respond to any communications between the department and the plan and, if applicable, between the department and the independent medical review organization before the enrollees grievance is adjudicated.
(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the plan, the enrollee, or the representatives of either party without concurrently providing the plan, the enrollee, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the plan, enrollee, or their representatives did not participate and without providing the plan, enrollee, and their representatives a reasonable opportunity to respond.
SEC. 5.Section 10169 of the Insurance Code is amended to read:10169.(a)Commencing January 1, 2001, there is hereby established in the department the Independent Medical Review System.
(b)For the purposes of this chapter, disputed health care service means any health care service eligible for coverage and payment under a disability insurance contract that has been denied, modified, or delayed by a decision of the insurer, or by one of its contracting providers, in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision. A disputed health care service does not include services provided by a group or individual policy of vision- or dental-only coverage, except to the extent that (1) the service involves the practice of medicine, or (2) is provided pursuant to a contract with a disability insurer that covers hospital, medical, or surgical benefits. If an insurer, or one of its contracting providers, issues a decision denying, modifying, or delaying health care services, based in whole or in part on a finding that the proposed health care services are not a covered benefit under the contract that applies to the insured, the statement of decision shall clearly specify the provision in the contract that excludes that coverage.
(c)For the purposes of this chapter, coverage decision means the approval or denial of health care services by a disability insurer, or by one of its contracting entities, substantially based on a finding that the provision of a particular service is included or excluded as a covered benefit under the terms and conditions of the disability insurance contract. A coverage decision does not encompass a disability insurer or contracting provider decision regarding a disputed health care service.
(d)(1)In the case of an urgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider by telephone, electronically, or both no later than 72 hours from receipt of the grievance.
(2)In the case of a nonurgent internal grievance that an insured files with the insurer, the insurer shall communicate its final determination to the insured and the insureds provider in writing no later than 30 days from receipt of the grievance.
(e)(1)(A)Upon notice from the department to a disability insurer that an insured, including the insureds representative, has submitted a grievance to the department, the insurer shall respond to the insured, the insureds representative, and the department within one of the following timeframes, as appropriate:
(i)Within 24 hours, if directed by the department, regarding an urgent grievance concerning coverage decisions, disputed health care services, or both.
(ii)Within five calendar days regarding a nonurgent grievance concerning coverage decisions, disputed health care services, or both.
(B)Whether or not a grievance is urgent shall be determined by the department consistent with Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, unless the grievance is designated as urgent by the insureds referring or treating provider, in which case the providers designation of urgency shall control.
(d)(1)All(2)All insured grievances involving a disputed health care service are eligible for review under the Independent Medical Review System if the requirements of this article are met. If the department finds that an insured grievance involving a disputed health care service does not meet the requirements of this article for review under the Independent Medical Review System, the insured request for review shall be treated as a request for the department to review the grievance. All other insured grievances, including grievances involving coverage decisions, remain eligible for review by the department.
(2)(3)In any case in which an insured or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an independent medical review as provided under this article.
(3)(4)The department shall be the final arbiter when there is a question as to whether an insured grievance is a disputed health care service or a coverage decision. The department shall establish a process to complete an initial screening of an insured grievance. If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to an independent medical review as provided under this article.
(e)(f)Every disability insurance contract policy that is issued, amended, renewed, or delivered in this state on or after January 1, 2000, shall provide an insured with the opportunity to seek an independent medical review whenever health care services have been denied, modified, or delayed by the insurer, or by one of its contracting providers, if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. For purposes of this article, an insured may designate an agent to act on his or her the insureds behalf. The provider may join with or otherwise assist the insured in seeking an independent medical review, and may advocate on behalf of the insured.
(f)(g)Medicare beneficiaries enrolled in Medicare + Choice products shall not be excluded unless expressly preempted by federal law.
(g)(h)The department may seek to integrate the quality of care and consumer protection provisions, including remedies, of the Independent Medical Review System with related dispute resolution procedures of other health care agency programs, including the Medicare program, in a way that minimizes the potential for duplication, conflict, and added costs. Nothing in this subdivision shall be construed to limit any rights conferred upon insureds under this chapter.
(h)(i)The independent medical review process authorized by this article is in addition to any other procedures or remedies that may be available.
(i)(j)Every disability insurer shall prominently display in every insurer member handbook or relevant informational brochure, in every insurance contract, on insured evidence of coverage forms, on copies of insurer procedures for resolving grievances, on letters of denials issued by either the insurer or its contracting organization, and on all written responses to grievances, information concerning the right of an insured to request an independent medical review when the insured believes that health care services have been improperly denied, modified, or delayed by the insurer, or by one of its contracting providers. The departments telephone number, 1-800-927-4357, and Internet Web site, internet website, www.insurance.ca.gov, shall also be displayed.
(j)(k)An insured may apply to the department for an independent medical review when all of the following conditions are met:
(1)(A)The insureds provider has recommended a health care service as medically necessary, or
(B)The insured has received urgent care or emergency services that a provider determined was medically necessary, or
(C)The insured, in the absence of a provider recommendation under subparagraph (A) or the receipt of urgent care or emergency services by a provider under subparagraph (B), has been seen by a contracting provider for the diagnosis or treatment of the medical condition for which the insured seeks independent review. The insurer shall expedite access to a contracting provider upon request of an insured. The contracting provider need not recommend the disputed health care service as a condition for the insured to be eligible for an independent review.
For purposes of this article, the insureds provider may be a noncontracting provider. However, the insurer shall have no liability for payment of services provided by a noncontracting provider, except as provided pursuant to Section 10169.3.
(2)The disputed health care service has been denied, modified, or delayed by the insurer, or by one of its contracting providers, based in whole or in part on a decision that the health care service is not medically necessary.
(3)The insured has filed a grievance with the insurer or its contracting provider, and the disputed decision is upheld or the grievance remains unresolved after 30 days. The insured shall not be required to participate in the insurers grievance process for more than 30 days. In the case of a grievance that requires expedited review, the insured shall not be required to participate in the insurers grievance process for more than three days.
(k)(l)An insured may apply to the department for an independent medical review of a decision to deny, modify, or delay health care services, based in whole or in part on a finding that the disputed health care services are not medically necessary, within six months of any of the qualifying periods or events under subdivision (j). The commissioner may extend the application deadline beyond six months if the circumstances of a case warrant the extension.
(l)(m)The insured shall pay no application or processing fees of any kind.
(m)(n)As part of its notification to the insured regarding a disposition of the insureds grievance that denies, modifies, or delays health care services, the insurer shall provide the insured with a one- or two-page application form approved by the department, and an addressed envelope, which the insured may return to initiate an independent medical review. The insurer shall include on the form any information required by the department to facilitate the completion of the independent medical review, such as the insureds diagnosis or condition, the nature of the disputed health care service sought by the insured, a means to identify the insureds case, and any other material information. The form shall also include the following:
(1)Notice that a decision not to participate in the independent review process may cause the insured to forfeit any statutory right to pursue legal action against the insurer regarding the disputed health care service.
(2)A statement indicating the insureds consent to obtain any necessary medical records from the insurer, any of its contracting providers, and any noncontracting provider the insured may have consulted on the matter, to be signed by the insured.
(3)Notice of the insureds right to provide information or documentation, either directly or through the insureds provider, regarding any of the following:
(A)A provider recommendation indicating that the disputed health care service is medically necessary for the insureds medical condition.
(B)Medical information or justification that a disputed health care service, on an urgent care or emergency basis, was medically necessary for the insureds medical condition.
(C)Reasonable information supporting the insureds position that the disputed health care service is or was medically necessary for the insureds medical condition, including all information provided to the insured by the insurer or any of its contracting providers, still in the possession of the insured, concerning an insurer or provider decision regarding disputed health care services, and a copy of any materials the insured submitted to the insurer, still in the possession of the insured, in support of the grievance, as well as any additional material that the insured believes is relevant.
(4)A section designed to collect information on the insureds ethnicity, race, and primary language spoken that includes both of the following:
(A)A statement of intent indicating that the information is used for statistics only, in order to ensure that all insureds get the best care possible.
(B)A statement indicating that providing this information is optional and will not affect the independent medical review process in any way.
(n)(o)Upon notice from the department that the insured has applied for an independent medical review, the insurer or its contracting providers, shall provide to the independent medical review organization designated by the department a copy of all of the following documents within three business days of the insurers receipt of the departments notice of a request by an insured for an independent review:
(1)(A)A copy of all of the insureds medical records in the possession of the insurer or its contracting providers relevant to each of the following:
(i)The insureds medical condition.
(ii)The health care services being provided by the insurer and its contracting providers for the condition.
(iii)The disputed health care services requested by the insured for the condition.
(B)Any newly developed or discovered relevant medical records in the possession of the insurer or its contracting providers after the initial documents are provided to the independent medical review organization shall be forwarded immediately to the independent medical review organization. The insurer shall concurrently provide a copy of medical records required by this subparagraph to the insured or the insureds provider, if authorized by the insured, unless the offer of medical records is declined or otherwise prohibited by law. The confidentiality of all medical record information shall be maintained pursuant to applicable state and federal laws.
(2)A copy of all information provided to the insured by the insurer and any of its contracting providers concerning insurer and provider decisions regarding the insureds condition and care, and a copy of any materials the insured or the insureds provider submitted to the insurer and to the insurers contracting providers in support of the insureds request for disputed health care services. This documentation shall include the written response to the insureds grievance. The confidentiality of any insured medical information shall be maintained pursuant to applicable state and federal laws.
(3)A copy of any other relevant documents or information used by the insurer or its contracting providers in determining whether disputed health care services should have been provided, and any statements by the insurer and its contracting providers explaining the reasons for the decision to deny, modify, or delay disputed health care services on the basis of medical necessity. The insurer shall concurrently provide a copy of documents required by this paragraph, except for any information found by the commissioner to be legally privileged information, to the insured and the insureds provider. The department and the independent medical review organization shall maintain the confidentiality of any information found by the commissioner to be the proprietary information of the insurer.
(o)This section shall become operative on January 1, 2017.(p)(1)With respect to an insured grievance to the department concerning a disputed health care service or coverage decision, the department shall promptly provide to the insured and, to the extent applicable, the insureds representative unredacted copies of all correspondence, including ongoing correspondence, between the department and the insurer concerning the insureds grievance.
(2)If the department determines that the insureds grievance concerns a coverage decision and the department seeks a nonbinding expert opinion from an independent medical review organization, then the department shall provide the insured and, to the extent applicable, the insureds representative with an unredacted copy of the nonbinding expert opinion by the independent medical review organization.
(3)The department shall provide to the insured and, to the extent applicable, the insureds representative a reasonable opportunity to respond to any communications between the department and the insurer and, if applicable, between the department and the independent medical review organization before the insureds grievance is adjudicated.
(4)The department, including its independent medical review organization, shall not engage in ex parte communication with the insurer, the insured, or the representatives of either party without concurrently providing the insurer, the insured, and, to the extent applicable, their respective representatives unredacted copies of all communications in which the insurer, insured, or their representatives did not participate and without providing the insurer, insured, and their representatives a reasonable opportunity to respond.
SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
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Date
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Status
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| Aug 15, 2024 | In committee: Held under submission. |
| Aug 5, 2024 | In committee: Referred to suspense file. |
| Jun 27, 2024 | Read second time and amended. Re-referred to Com. on APPR. |
| Jun 26, 2024 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (June 26). |
| Jun 13, 2024 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on HEALTH. |
| May 29, 2024 | Referred to Com. on HEALTH. |
| May 22, 2024 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 21, 2024 | Read third time. Passed. Ordered to the Senate. (Ayes 57. Noes 1. Page 5390.) |
| May 20, 2024 | Read second time. Ordered to third reading. |
| May 16, 2024 | Read second time and amended. Ordered returned to second reading. |
| May 16, 2024 | From committee: Amend, and do pass as amended. (Ayes 11. Noes 2.) (May 16). |
| May 16, 2024 | Assembly Rule 63 suspended. |
| May 8, 2024 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Apr 17, 2024 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 13. Noes 1.) (April 16). Re-referred to Com. on APPR. |
| Apr 2, 2024 | Re-referred to Com. on HEALTH. |
| Apr 1, 2024 | From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended. |
| Mar 25, 2024 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Mar 11, 2024 | Referred to Com. on HEALTH. |
| Feb 17, 2024 | From printer. May be heard in committee March 18. |
| Feb 16, 2024 | Read first time. To print. |
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Date
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Description
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Location
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Votes
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| Aug 5, 2024 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Jun 26, 2024 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Health |
Passed |
|
| May 21, 2024 | AB 3260 Pellerin Assembly Third Reading | Assembly Floor |
Passed |
|
| May 16, 2024 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 16, 2024 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Health |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| America'S Health Insurance Plans | * Against | Jun 26, 2024 |
| Asian American and Pacific Islanders for Civic Empowerment | ** Support | |
| Asian Americans Advancing Justice | * Support | Jun 26, 2024 |
| Association Of California Life And Health Insurance Companies | * Against | Jun 26, 2024 |
| Broad of Supervisors of Santa Clara County | * Support | Apr 16, 2024 |
| Buen Vecino | ** Support | |
| California Academy of Child and Adolescent Psychiatry | * Support | Apr 16, 2024 |
| California Academy Of Family Physicians | * Support | Jun 26, 2024 |
| California Alliance For Retired Americans | * Support | Jun 26, 2024 |
| California Association Of Health Plans | * Against | Jun 26, 2024 |
| California Association of Public Hospitals | * Support | Jun 26, 2024 |
| California Associations of Marriage and Family Therapists | * Support | Jun 26, 2024 |
| California Federation of Teachers, AFL-CIO | ** Support | |
| California Hospital Association | * Support | Jun 26, 2024 |
| California Labor Federation | * Support | Apr 16, 2024 |
| California Life Sciences | * Support | Jun 26, 2024 |
| California Nurses Association | ** Support | |
| California OneCare | ** Support | |
| California Orthopedic Association | * Support | Jun 26, 2024 |
| California Pan Ethnic Health Network | * Support | Apr 16, 2024 |
| California Psychological Association | * Support | Jun 26, 2024 |
| California State Association of Psychiatrists | * Support | Apr 16, 2024 |
| California State Association of Pyschiatrists | * Support | Jun 26, 2024 |
| California Youth Empowerment Network | ** Support | |
| Capital Advocacy | * Support | Apr 16, 2024 |
| Corrine McIntosh Sako LMFT | * Support | Jun 26, 2024 |
| Courage California | ** Support | |
| Equality California | * Support | Apr 16, 2024 |
| Hand in Hand: The Domestic Employers Network | ** Support | |
| Health Access California | * Support | Jun 26, 2024 |
| Health Care for All California | ** Support | |
| Healthcare Action Committee | ** Support | |
| LMFT | * Support | Apr 16, 2024 |
| Local Health Plans Of California | * Against | Jun 26, 2024 |
| Mental Health America of California | * Support | Apr 16, 2024 |
| National Union Of Healthcare Workers | * Support | Jun 26, 2024 |
| Physicians Association of California | * Support | Jun 26, 2024 |
| Planned Parenthood Affiliates | * Support | Apr 16, 2024 |
| Steinberg Institute | * Support | Jun 26, 2024 |
| The Kennedy Forum | * Support | Jun 26, 2024 |
| The Western Center on Law and Poverty | * Support | Jun 26, 2024 |
| UNITE-HERE, AFL-CIO | ** Support |
SENATE COMMITTEE ON
Senator Anna Caballero, Chair
2023 - 2024 Regular Session
AB 3260 (Pellerin) - Health care coverage: reviews and grievances
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
AB 3260 would make changes to the review and grievance process for health coverage.
Fiscal Impact:
- The Department of Managed Health Care (DMHC) estimates costs to be approximately $10,727,000 in 2024-25, $29,016,000 in 2025-26, $32,046,000 in 2026-27, $33,254,000 in 2027-28, $33,382,000 in 2028-29, and $32,097,000 in 2029-30 and annually thereafter for state administration (Managed Care Fund).
- The California Department of Insurance (CDI) estimates costs of $1,199,153 in 2024-25, $3,027,000 in 2025-26, $2,237,000 in 2026-27 and $2,370,000 in 2027-28 and ongoing thereafter for state administration (Insurance Fund).
Background:
The DMHC regulates health plans under the Knox-Keene Act and the CDI regulates health insurance. Current law requires a health plan or insurer to have written policies and procedures establishing the process by which the plan/insurer reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees or insureds. These policies and procedures must ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. Current law requires a health plan or insurer to make decisions to approve, modify, or deny, based on medical necessity within five business days from the plan or insurer’s receipt of information reasonably necessary and requested by the plan or insurer to make the determination. Current law requires such a decision within 72 hours of the plan or insurer’s receipt of information if the enrollee or insured faces an imminent and serious threat to their health, which includes the potential loss of life, limb, or other major bodily function or the normal timeframe for decision making would be detrimental to the enrollee or insured’s life or health or could jeopardize their ability to regain maximum function, unless a shorter period is required under federal law.
Current law requires every health plan to establish and maintain a grievance system under which enrollees submit their grievance to the plan; inform its enrollees upon enrollment and annually thereafter of the grievance procedure; provide forms for enrollees who wish to file written grievances; provide written acknowledgement within five days of receipt of a grievance except for grievances that are received by phone, fax, email or online, that are resolved by the next business day and that are not coverage disputes, disputed health care services involving medical necessity or experimental treatment. Current law requires health plans to resolve grievances within 30 days and to expedite the review of grievances for cases involving an imminent and serious threat to the health of the patient, including severe pain, potential loss of life, limb, or major bodily function.
Current law establishes, in DMHC and CDI, the Independent Medical Review (IMR) System which reviews disputed health care services that a plan, or one of its contracting entities, or insurer determines is not medically necessary. Enrollees and insureds may apply for IMR when all of the following conditions are met:
- The provider has recommended a health care service as medically necessary; or, the enrollee or insured has received urgent care or emergency services that a provider determined was medically necessary; or, has been seen by an in-plan provider for the diagnosis or treatment of the medical condition;
- The disputed health care service has been denied, modified, or delayed by the plan, or by one of its contracting providers, or insurer based on a decision that it is not medically necessary; and,
- The enrollee or insured has filed a grievance with the plan, provider, or insurer and the decision was upheld or remains unresolved after 30 days; a grievance requiring expedited review may go to IMR after three days of the grievance process.
Proposed Law:
Specific provisions of the bill would:
- Require, when the enrollee’s condition is urgent, as defined, health plan decisions to approve, modify, or deny requests by providers prior to the provision of health care services to enrollees, to be communicated to enrollees and providers, as specified, not to exceed 72 hours from the health plan’s receipt of the clinical information reasonably necessary and requested by the health plan to make the determination.
- Require, when the health plan lacks the information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the health plan to notify the enrollee and the provider of the specific information necessary to complete the request; require the notification to be made as soon as possible, but no later than 24 hours after the health plan’s receipt of the request from the provider; and require that the enrollee and the provider be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information; and require the health plan to notify the enrollee and the provider of the health plan’s decision as soon as possible, but no later than 48 hours after receipt of information, as specified.
- Require a health plan, in the case of an urgent grievance, to communicate its final determination to the enrollee and the enrollee’s provider, as specified, no later than 72 hours from receipt of the grievance; and require in the case of a nonurgent grievance, the health plan to communicate its final determination to the enrollee and the enrollee’s provider within 30 days, as specified.
- Provide that a health plan enrollee may apply to DMHC for an independent medical review within 12 months, rather than 6 months, of any of the qualifying periods or events.
- Impose additional requirements regarding communications and correspondence between the DMHC and the health plan related to enrollee grievances, as specified.
- Require that if a health insurer lacks information reasonably necessary to make a decision to approve, modify, or deny a nonurgent prior authorization request, the health insurer must notify the insured and provider of the specific information necessary to complete the request in writing in a timely fashion appropriate for the nature of the insured’s condition, not to exceed five business days from the insurer’s receipt of the request; and provide that the insured and provider be afforded at least 45 calendar days from receipt of the notice to provide the specified information.
- Require that if a health insurer lacks information reasonably necessary to make a decision to approve, modify, or deny an urgent request, the health insurer must notify the insured and provider of the specific information necessary to complete the request; require the notification to be made no later than 24 hours after the insurer’s receipt of the request from the insured or provider; provide that the insured and the provider be afforded not less than 48 hours, to provide the specified information; and require the health insurer to notify the insured and provider of the health insurer’s decision as soon as possible, but no later than 48 hours after receipt of information, as specified.
- Require a health insurer, in the case of an urgent grievance, to communicate its final determination to the insured and the insured’s provider, as specified, no later than 72 hours from receipt of the grievance; and require a health insurer, in the case of a nonurgent grievance, to communicate its final determination to the insured and the insured’s provider in writing within 30 calendar days of receipt.
- Require that, if a health plan or health insurer fails to provide notice of a decision to approve, modify, or deny the request for authorization within required timeframes, the health plan or health insurer must automatically treat the request for authorization as a grievance and must immediately provide notice to the enrollee/insured that a grievance has commenced.
- Require that a health plan or health insurer that fails to comply with required timeframes or notice requirements for grievances must automatically resolve the grievance in favor of the enrollee/insured, except as provided.
- Require a health insurer to respond to the CDI within five calendar days of the department’s notice of receiving a nonurgent complaint, and within 24 hours of notice if a complaint is urgent; and provide that the failure of a health insurer to timely provide requested initial or additional information would result in the CDI resolving the complaint in favor of the insured.
- Require that with respect to a complaint, an independent medical review case, or a combination thereof to the CDI involving a disputed health care service or coverage decision, a health insurer must promptly offer to provide the insured and the insured’s authorized representative, as applicable, with unredacted copies of all written correspondence, as specified.
- Require the CDI be the final arbiter of fact and to issue binding orders on health insurers concerning all consumer complaints that do not involve disputed health care services; and require CDI to resolve complaints that do not concern disputed health care services within 10 calendar days or less if urgent, or within 30 calendar days or less if nonurgent.
- Require, under specified circumstances, the CDI to assess administrative penalties and civil penalties.
-- END --
SENATE COMMITTEE ON HEALTH
Senator Richard Roth, Chair
BILL NO: AB 3260
AUTHOR: | Pellerin | ||
VERSION: | June 13, 2024 | ||
HEARING DATE: | June 26, 2024 | ||
CONSULTANT: | Jen Flory | ||
SUBJECT: Health care coverage: reviews and grievances
SUMMARY:
Makes various changes to the prior authorization, grievance, and independent medical review (IMR) processes for commercial health care coverage, including tightening the timeline for reviewing missing documents during the prior authorization process, making a provider’s determination of urgency binding on the plan or insurer, automating the filing of a grievance when authorization timelines are not met, automating approvals of services when the grievance timeline is not met, eliminating exemptions from the grievance process, and requiring additional documentation to be shared with the enrollee or insured after an IMR is filed.
Existing law:
- Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health and other insurers. [HSC §1340, et seq. and INS §106, et seq.]
- Requires a health plan or insurer to have written policies and procedures establishing the process by which the plan reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees or insureds. Requires these policies and procedures to ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. [HSC §1367.01 and INS §10123.135]
- Requires a health plan or insurer to make decisions to approve, modify, or deny, based on medical necessity within five business days from the plan or insurer’s receipt of information reasonably necessary and requested by the plan or insurer to make the determination. Requires such a decision within 72 hours of the plan or insurer’s receipt of information if the enrollee or insured faces an imminent and serious threat to their health, which includes the potential loss of life, limb, or other major bodily function or the normal timeframe for decision making would be detrimental to the enrollee or insured’s life or health or could jeopardize their ability to regain maximum function, unless a shorter period is required under federal law. [HSC §1367.01 and INS §10123.135]
- Requires decisions made by the health plan or insurer to be communicated to the requesting provider within 24 hours of the decision. Requires decisions resulting in the denial, delay, or modification of a requested health care service to be communicated to the enrollee within two business days of the decision, unless the decision is pertaining to care that is underway, in which case it is required to be communicated to the enrollee’s treating provider within 24 hours. Prohibits care that is already underway from being discontinued until the treating provider has been notified of the decision and a care plan has been agreed upon by the treating provider that is appropriate for the needs of the patient. [HSC §1367.01 and INS §10123.135]
- Requires decisions made by the health plan or insurer to specify the specific health care services approved and to be communicated to the enrollee in writing and to providers initially by telephone or fax and then in writing, and to include a clear and concise explanation of the reason for the decision, a description of the criteria or guidelines used, and the clinical reason for the decisions regarding medical necessity. Requires any written communication to a provider that denies, delays, or modifies a request to include the name and telephone number of the health care professional responsible for the denial, delay, or modification, and requires the telephone number to be a direct number or extension that allows the provider to easily contact the health care professional responsible. Also requires responses to include information as to how enrollees may file a grievance with the plan or insureds may file an appeal with the insurer or seek a department review. [HSC §1367.01 and INS §10123.135]
- Suspends the timeline in 4) above if the plan or insurer cannot make a decision to approve, modify, or deny the request for authorization if the plan or insurer is not in receipt of all information reasonably necessary and requested or because an expert consultation is required or an additional exam or test is to be performed upon the enrollee or insured so long as that exam or test is reasonable and consistent with good medical practice. Immediately upon the expiration of the timeframe in 4) above or as soon as the plan or insurer becomes aware that they cannot meet the timeframe, requires the plan or insurer to notify the provider and enrollee or insured in writing that a decision cannot be made within the required timeframe, specify the information that is lacking, and when a decision is anticipated. Once the information is received, requires the plan or insurer to approve, modify, or deny the request within the timeframes in 4) above. [HSC §1367.01 and INS §10123.135]
- Requires every plan to establish and maintain a grievance system under which enrollees submit their grievance to the plan; inform its enrollees upon enrollment and annually thereafter of the grievance procedure; provide forms for enrollees who wish to file written grievances; provide written acknowledgement within five days of receipt of a grievance except for grievances that are received by phone, fax, email or online, that are resolved by the next business day and that are not coverage disputes, disputed health care services involving medical necessity or experimental treatment. Requires grievances that require a written response to contain a clear and concise explanation for the plan’s response and for delays, denials, or modifications, the criteria used and the clinical reasons for its decisions. Requires decisions based on services that are not covered benefits to include the contract provision that excludes the coverage. [HSC §1368]
- Requires plans to resolve grievances within 30 days. Requires plans to expedite the plan review of grievances for cases involving an imminent and serious threat to the health of the patient, including severe pain, potential loss of life, limb, or major bodily function. Requires the plan to immediately inform enrollees with expedited grievances of their right to notify DMHC of the grievance. Requires the plan to provide enrollees and DMHC with a written statement on the disposition or pending status within three days from the receipt of the grievance. [HSC §1368.01]
- Establishes, in DMHC and CDI, the Independent Medical Review (IMR) System which reviews disputed health care services that a plan, or one of its contracting entities, or insurer determines is not medically necessary. Permits enrollees and insureds to apply for IMR when all of the following conditions are met:
- The provider has recommended a health care service as medically necessary; or, the enrollee or insured has received urgent care or emergency services that a provider determined was medically necessary; or, has been seen by an in-plan provider for the diagnosis or treatment of the medical condition;
- The disputed health care service has been denied, modified, or delayed by the plan, or by one of its contracting providers, or insurer based on a decision that it is not medically necessary; and,
- The enrollee or insured has filed a grievance with the plan, provider, or insurer and the decision was upheld or remains unresolved after 30 days. Permits a grievance requiring expedited review to go to IMR after three days of the grievance process. [HSC §1374.30 and INS §10169]
- Requires CDI or DMHC to expeditiously review IMR requests and immediately notify the insured or enrollee if the request has been approved, in whole or in part, and, if not, the reasons for the denial. Requires the insurer or plan to promptly issue a notification to the insured or enrollee, after submitting all of the required material to the IMR organization, including an annotated list of documents submitted and offer the insured or enrollee the opportunity to request copies of those documents. Requires any request for IMR not approved by CDI or DMHC to be treated as an immediate request for CDI or DMHC to review the grievance. [HSC §1374.31 and INS §10169.1]
- Requires, upon receipt of information and documents related to a case, the IMR medical professional reviewer or reviewers to promptly review all pertinent medical and provider reports, or any other information provided. Requires, if reviewers request information from any of the parties, a copy of the request and the response to be provided to all of the parties. [HSC §1374.33 and INS §10169.3]
This bill:
Prior authorization provisions
- Modifies the 72-hour timeframe for a plan or insurer to make decisions regarding urgent requests based on medical necessity when a plan or insurer needs additional information. Requires the plan/insurer to specify the information needed within 24 hours of an urgent request, and to allow the provider and the enrollee at least 48 hours to provide the information. Requires the plan/insurer to notify the provider and enrollee within 48 hours of the receipt of additional information or the end of the period afforded to the enrollee or the provider to submit the additional information, whichever is earlier.
- Makes a determination of urgency by an enrollee or insured’s provider to be binding on the health plan or insurer. Adds severe pain to the list of considerations for a determination of urgency.
- Requires a plan or insurer to automatically treat a request for authorization as a grievance if a decision is not made or noticed within the required timeframes. Requires the plan or insurer to send a notice that a grievance has commenced that includes the enrollee or insured’s appeal rights and right to withdraw the grievance.
- Makes the following changes to existing law pertaining to prior authorization for insurers:
- Amends the existing statute regarding an insurer’s review of medical necessity to apply only to health insurance policies rather than disability insurance policies;
- Allows an insured, in addition to a provider, to request a review of medical necessity;
- Changes the time to respond to nonurgent requests based on medical necessity from five business days to seven calendar days; and,
- Requires, when the insurer needs additional information for requests that are not urgent, to specify the information needed within seven calendar days from the receipt of the request and to give the provider and the insured 45 days from the receipt of the notice to provide the specified information.
Internal grievance provisions
- Adds complaints about access to care, including complaints about the waiting time for, or distance to, covered health care services, as issues that cannot be exempted from the grievance requirements regarding written acknowledgement of receipt and written response.
- Requires plans and insurers to send written responses to grievances to providers in addition to enrollees and insureds.
- Requires plans and insurers to communicate its final determination regarding urgent grievances by telephone, electronically, or both, in addition to mailing a hard copy within 72 hours from the receipt of the grievance.
- Specifies that health plans and insurers must communicate its final determination regarding a nonurgent grievance within 30 days.
- Specifies that urgent grievances include imminent or serious threat to the enrollee or insured’s physical or behavioral health.
- Makes a determination of urgency by an enrollee or insured’s provider to be binding on the health plan or insurer.
- Requires health plans and insurers that fail to comply with the grievance or notice resolution timeframes to automatically resolve the grievance in favor of the enrollee or insured.
- For insurers only, additionally codifies the grievance process which was not previously in statute either mirroring the DMHC provisions or referring to federal law and regulation for portions of the process that are not in statute.
- For insurers only, exempts insurance policies that cover only dental or vision benefits or Medicare supplemental insurance.
- Authorizes CDI to enforce the grievance provisions, including the ability to assess civil penalties for violations and allowing insurers to appeal such assessments. Exempts CDI from adopting regulations for the grievance process.
External reviews by DMHC
- Allows enrollees an additional six months to file for an IMR, for a total of 12 months.
- Requires the plan to promptly provide to the enrollee or insured, and to the extent applicable, their representative, unredacted copies of all correspondence, including ongoing correspondence, between the DMHC and the plan concerning the grievance when an enrollee files a grievance with DMHC concerning a disputed health care service, coverage decision, or access to care, including complaints about the waiting time for or distance to health care services.
- Requires the plan to provide the enrollee, and their representative, an unredacted copy of the nonbinding expert opinion by an IMR organization if DMHC sought such an opinion regarding a coverage decision or an access to care issue.
- Requires DMHC to provide to the enrollee and their representative a reasonable opportunity to respond to any communications between the DMHC and the plan and, if applicable, between DMHC and the IMR organization before the grievance is resolved.
- Prohibits DMHC from engaging in ex parte communication with the plan, the enrollee, or the representatives of either party without concurrently providing the other party and their representatives with unredacted copies of all communications in which the other party or representatives did not participate and without providing a reasonable opportunity for the party and their representatives to respond.
- Specifies that the requirements in 16)-19) do not alter the timeframes for resolving IMRs.
External reviews by CDI
- Adds a new section not previously in statute governing complaints submitted to CDI in relation to health insurance coverage, including requests for an IMR.
- Requires a health insurer, within five days of receiving notice from CDI that a complaint has been filed, or within 24 hours of notice if the complaint is urgent, to provide CDI with the following: a written response to the complaint, a copy of the insurer’s response to any grievances, a complete and legible copy of all medical records used in resolving the complaint, a copy of the insured’s policy with applicable portions underlined, and any other relevant information. Provides that failure of the insurer to provide such information will result in the complaint being resolved in favor of the insured.
- Requires an insurer to provide to the insured all correspondence provided to CDI with respect to a complaint, IMR, or combination thereof.
- Prohibits a health insurer from engaging in ex parte communication with an IMR organization deciding a case.
- Requires CDI to provide an insured with a reasonable opportunity to respond to any communications between CDI and an IMR organization or insurer before the insured’s complaint or IMR case is resolved.
- Makes CDI the final arbiter of fact on consumer complaints not involving disputed health care services and requires CDI to issue binding orders on health insurers for these complaints within 10 calendar days if urgent and 30 calendar days if not. Makes CDI the arbiter of what is urgent unless the provider has already designated as urgent, in which case, the provider’s designation controls.
- For complaints not eligible for IMR, allows CDI to:
- Order the health insurer to promptly offer and provide those items or services to the insured;
- Order the insurer to hold the insured harmless for any amounts exceeding in-network cost sharing for out-of-network services provided due to application of timely access and network adequacy standards in existing law; and,
- Order the insurer to promptly reimburse the insured for any additional costs CDI deems reasonable for urgent care or emergency services if CDI finds that the insured’s decision to obtain those services out-of-network was reasonable under the circumstances.
- Authorizes CDI to assess administrative penalties if CDI determines that the service received by an insured was not eligible for coverage because it was determined not medically necessary by the insurer but that determination was not communicated in writing to the insured along with notice of their right to seek an IMR.
- Authorizes CDI to enforce these external review provisions, including the ability to assess civil penalties for violations and allowing insurers to appeal such assessments. Exempts CDI from adopting regulations for the external review process.
FISCAL EFFECT:
According to the Assembly Appropriations Committee, annual costs of an unknown amount, possibly in the low millions to low tens of millions of dollars, in fiscal year 2024-25 and ongoing (Managed Care Fund). DMHC's costs would be incurred by different offices across DMHC to do the following: draft memoranda and promulgate regulations; conduct IMRs and other expert medical reviews; revise survey methodology and develop tools to assess health plan compliance; review health plan filings of utilization management and other documents; address enforcement referrals and an estimated 20 referrals annually from the Office of Plan Monitoring; engage expert witness, court reporting services and trial-related costs; modernize the Consumer Complaint System; provide administrative support services; and provide administrative support.
Annual costs of an unknown amount, possibly in the low hundreds of thousands of dollars or less to CDI in FY 2024-25 and ongoing (Insurance Fund).
PRIOR VOTES:
Assembly Floor: | 57 - 1 |
Assembly Appropriations Committee: | 11 - 2 |
Assembly Health Committee: | 13 - 1 |
COMMENTS:
- Author’s statement. According to the author, health plans do not consistently decide or provide proper notice of their decisions concerning claims within the time and manner specified by law, leading consumers to bear the financial cost of prescribed care while waiting for their health plans to respond. Sometimes, they are forced to forgo treatment altogether. California consumers lack sufficient transparency and due process in the DMHC and CDI complaint processes, resulting in regulatory reviews that are one-sided and based on information that is marred by inaccuracies, omissions, and misrepresentations. This bill sets forth internal claims and grievance procedures to improve transparency and provide due process for consumers filing regulatory complaints concerning denied health care services, coverage disputes, and access to care. This bill will trigger an automatic grievance on behalf of consumers if their health plans or insurers fail to respond to their claims within the time period and in the manner required by law. This bill requires health plans and insurers to automatically resolve grievances in favor of consumers if they do not resolve them within the legally required timeframe.
- Prior authorization. Prior authorization is a form of utilization review or utilization management. Utilization review can occur prospectively, retrospectively, or concurrently and a plan or insurer can approve, modify, delay or deny in whole or in part a request based on its medical necessity. California law requires written policies and procedures that are consistent with criteria or guidelines that are supported by clinical principles and processes. These policies and procedures must be filed with regulators, and disclosed, upon request, to providers, plans, and enrollees or insureds. There are timelines in the law for plans and insurers to respond to requests once any requested medical information that is reasonably necessary to make the determination is provided. California also has a standardized form for prior authorization submissions. If a health plan or insurer fails to respond to the prior authorization request within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed form, the request is deemed granted. This bill does not change these timelines but does specify new timelines when plans or insurers request additional information and requires plans and insurers to process requests for authorization as grievances when they fail to adhere to the required timelines. It also makes the provider, rather than the plan, the one who determines whether a request is urgent.
- Internal grievances. Regulations promulgated by DMHC require a health plan to respond to grievances within five calendar days of receipt, and require the plan’s resolution, containing a written response to the grievance, to be sent to the complainant within 30 calendar days of receipt. Grievances received over the telephone that are not coverage disputes, disputed health care services involving medical necessity, or experimental or investigational treatment, and that are resolved by the close of the next business day, are exempt from the requirement to send a written acknowledgment and response. This bill provides that complaints about access to care, including complaints about wait time or distance to a provider are not exempt from the formal grievance process requiring a response in writing. The internal grievance process for health insurers is not currently in statute. This bill would codify the timelines and refer to federal rules for the rest of the process for health insurance products.
- IMR Process. An enrollee or insured can apply for an IMR when they have filed a grievance with the plan, provider or insurer and the decision was upheld or remains unresolved after 30 days. A grievance requiring expedited review can go to IMR after three days of the grievance process. Enrollees and insureds can apply for an IMR when a) the provider has recommended a health care service as medically necessary; b) the enrollee or insured has received urgent care or emergency services that a provider determined was medically necessary; c) the enrollee has received experimental or investigational treatment for a serious condition; or, d) the enrollee or insured has been seen by an in-plan provider for the diagnosis or treatment of the medical condition and the disputed health care service has been denied, modified, or delayed by the plan or insurer or by one of its contracting providers, based on a decision that it is not medically necessary. IMR is free to the enrollee or insured, and in most cases decided within 30 days of IMR qualification and receipt of all required documentation. For more urgent situations, an expedited IMR can be requested and is usually decided within seven days after the supporting documentation is provided. An IMR can take longer if all of the medical records needed are not provided in a timely manner. According to the most recent DMHC data from 2022, in approximately 68% of IMR cases at the DMHC, the health plan’s denial of service was reversed by the health plan or overturned by the IMR organization and the enrollee received authorization for the requested service or treatment. Broken down by IMR type, approximately 40% of IMRs for experimental or investigational treatment were reversed or overturned, 72% of IMRs on whether an item or service is medically necessary were reversed or overturned, and 91% of disputes involving emergency services were reversed or overturned. If the IMR decision is in favor of the enrollee, the health plan must authorize the service or treatment within five business days. Both health plans and insurers must comply with the IMR requirements.
- Federal law. Under 42 U.S.C. §300gg-19, a group health plan and a health insurance issuer offering group or individual health insurance coverage is required to implement an effective appeals process for appeals of coverage determinations and claims, including an internal claims appeal process with notices in a culturally and linguistically appropriate manner, of available internal and external appeals process. The law and regulations establish processes and timelines for internal and external reviews. For example, urgent care claims notification of the plan's benefit determination (whether adverse or not) are required as soon as possible, taking into account the medical exigencies, but not later than 72 hours after the receipt of the claim. The regulations require the plan or issuer to defer to the attending provider for a claim involving urgent care, as specified. These regulations also reference other federal regulations regarding employment benefits under the Employee Retirement Income Security Act of 1974 (ERISA) that pertain to claims procedures. The ERISA regulations on claims procedures include provisions on urgent care claims for group health plans, which specify how health plans should handle urgent authorization requests when a plan needs more information to make a decision. This bill aligns the medical necessity decisions with those timelines to give more specificity for how the timeline is affected once the information is received.
- Related legislation. SB 294 (Wiener) establishes automated grievance and IMR processes when a health plan or insurer modifies, delays, or dienes an authorization request for coverage of treatment for mental health or substance use disorders for an enrollee or insured up to age 26. SB 294 is set for hearing on June 26, 2024 in the Assembly Appropriations Committee.
- Prior legislation. SB 238 (Wiener of 2023) requires a health plan or a disability insurer that modifies, delays, or denies a mental health or substance use disorder service based on medical necessity, to submit within 24 hours the decision to the IMR System, without requiring the enrollee or insured to file a grievance, for an enrollee or insured up to 26 years of age. SB 238 was held on the Assembly Appropriations Committee suspense file.
- Support. This bill is supported by a number of labor and consumer organizations, providers, and hospitals. Sponsors the National Union of Healthcare Workers (NUHW) write that this bill addresses two key problems they have identified in pursuing grievances and complaints regarding timely and appropriate behavioral health care, noting that these changes would ultimately benefit all consumers in securing the care they need: 1) the untimely resolution of consumer claims and grievances by plans and insurers under existing state law, and 2) insufficient transparency and due process, as well as a pervasive practice of ex parte communication with regards to regulatory complaints and IMRs. With regards to the first issue, NUHW identifies several areas where California law differs from federal law, particularly in whether a claim is deemed “urgent.” With regards to the second issue, NUHW states that while the departments communicate with the plans and insurers during the complaint process, they do not communicate with the consumers or share the information they receive from the plans or insurers which allow plans and insurers to influence the outcomes of the investigations.
- Opposition. The California Association of Health Plans, the Association of California Life and Health Insurance Companies, and America’s Health Insurance Plans write that the bill unfairly grants enrollees and insureds or their representatives access to confidential communication while limiting plan and insurer access to the same information; unnecessarily extends the timelines for IMRs from an already generous six to 12 months; creates potential conflicts of interest by requiring health plans and insurers to send written grievance responses to providers, who may not be known or may be the subject of the grievance; and no longer exempts issues that do not require physician or grievance committee review from the formal grievance process.
The Local Health Plans of California write that the bill imposes a 24-hour review process for missing information within the existing 72-hour standard for urgent prior authorization requests. They state this turnaround time is unreasonable and will result in plans having to preemptively deny requests to meet the required timelines rather than permitting the flexibility needed to obtain the required documentation. They also write that the bill does not acknowledge existing federal Medicaid rules and DHCS guidance on authorization timelines.
- Policy Comments. This bill both tightens the timelines for prior authorizations and grievances at the same time that it provides for resolutions that would be automatically triggered, even where the plan or insurer is not in receipt of all information necessary to make a decision. Additionally, DMHC has expressed concerns to the committee about allowing providers to make the determination of whether a request for authorization or grievance is urgent as providers may abuse the process. While these additional consumer protections are not unreasonable in theory, some guardrails are needed to ensure that when plans and insurers do not have the necessary information to act, they are not faulted; to ensure that enrollees and insureds are not given services that have not been reviewed when review is warranted; or to allow plans and insurers to appeal to their regulator when providers are marking requests as urgent that are not.
Additionally, this bill codifies into the Insurance Code, portions of the grievance and complaint process that were not previously in statute in order to add the same protections on the insurance side that are being added on the health plan side. More attention is likely needed to ensure that the health insurance and health plan processes align to the extent possible and to ensure that all parts of the health insurance processes are codified rather than just the ones at issue for this bill. Finally, in adding these sections to the Insurance Code, CDI has been given overly broad enforcement authority and has been inappropriately exempted from ever adopting regulations.
SUPPORT AND OPPOSITION:
Support: National Union of Healthcare Workers (sponsor)
Asian Americans and Pacific Islanders for Civic Empowerment
Buen Vecino
California Academy of Child and Adolescent Psychiatry
California Academy of Family Physicians
California Alliance for Retired Americans
California Association of Marriage and Family Therapists
California Association of Public Hospitals and Health Systems
California Federation of Teachers
California Hospital Association
California Labor Federation
California Life Sciences
California Nurses Association
California OneCare
California Orthopedic Association
California Pan-Ethnic Health Network
California State Association of Psychiatrists
California Youth Empowerment Network
County of Santa Clara
Courage California
Equality California
Hand in Hand: the Domestic Employers Network
Health Access California
Health Care for All -- California
Mental Health America of California
Physician Association of California
Steinberg Institute
UNITE HERE
Western Center on Law & Poverty, Inc.
Oppose: America's Health Insurance Plans
Association of California Life & Health Insurance Companies
California Association of Health Plans
Local Health Plans of California
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 3260
Author:(Pellerin)
As Amended Ver:May 16, 2024
Majority vote
SUMMARY
Requires a determination of urgency by a health care provider, with respect to a decision to approve a health care service for prior authorization, to be binding on the health plan. Entitles an enrollee to automatically proceed with a grievance, if the health plan fails to make a decision to approve, modify, or deny the request for authorization within the specified timeframes in existing law. Makes a determination of urgency by an enrollee's health care provider to be binding on a health plan, for grievances. Requires the health plan/insurer to provide specified correspondence and documents to an enrollee/insured if the enrollee/insured has submitted a grievance concerning a disputed health care service or coverage decision to the Department of Managed Health Care (DMHC) or the California Department of Insurance (CDI) or if the DMHC/CDI seeks a nonbinding expert opinion from an independent medical review (IMR) organization. Includes ongoing correspondence between the DMHC/CDI and the health plan/insurer concerning the grievance. Requires DMHC/CDI to provide the enrollee/insured a reasonable opportunity to respond to any communications between the DMHC/CDI and the health plan/insurer. Prohibits the DMHC/CDI, including its IMR organization, from engaging in ex parte communication with the health plan/insurer, the enrollee/insured, or the representatives of either party, without concurrently providing the health plan/insurer, the enrollee/insured, and, to the extent applicable, their respective representatives unredacted copies of all communications, as specified.
Major Provisions
COMMENTS
Existing consumer protections. In California, consumers have many health care rights, including the right to know why a plan denies a service or treatment, and the right to file a grievance if the consumer disagrees. Health plans are required to have grievance and appeals systems to assist consumers in resolving these issues. A health plan's grievance program informs consumers of their full grievance and appeal rights and the protections afforded to them under the law, including the right to pursue an IMR or file a complaint with the DMHC if they are dissatisfied with their health plan’s decision. A robust grievance program also allows health plans to track and trend grievances for the purpose of uncovering systemic problems, thereby providing the opportunity for quality improvement.
Grievance and appeals under California law. According to the author, this bill (as introduced) addresses two problems: 1) the untimely adjudication of consumer claims and grievances by health plans and disability insurers as required by existing law; and, 2) a lack of transparency and due process, as well as ex parte communication, with regard to regulatory complaints and IMR. Recent amendments delete the provision allowing enrollees to submit requests for prior authorization to a health plan and require a health plan, instead of the DMHC, to provide an enrollee with documents submitted by the health plan during an appeal. In most circumstances, enrollees are required to file a grievance regarding each issue/request with a health plan and participate in the process for 30 days before submitting a complaint to the DMHC. Exceptions to this requirement include when there is an immediate threat to an enrollee's health or the request was denied as experimental/investigational. California law requires an expedited plan review of an imminent and serious threat to the health of the patient, including, but not limited to, severed pain, potential loss of life, limb, or major bodily function. Existing law also requires the health plan to provide enrollees, subscribers, and DMHC with a written statement on the disposition or status of the grievance no later than three days from receipt of the grievance.
If an enrollee's health plan denies, changes, or delays a request for medical services, denies payment for emergency treatment or refuses to cover experimental or investigational treatment for a serious medical condition, an enrollee can apply for an IMR. Before filing an IMR with the regulator, enrollees are first required to file a grievance with the health plan (absent an emergency). Once an enrollee has participated in the 30-day process with the health plan, if the issue has not been resolved or an enrollee is not satisfied with the decision, an enrollee can proceed with filing an IMR with the DMHC. According to the DMHC, if an enrollee's health problem is urgent, an IMR is usually decided within seven days after DMHC receives the supporting documentation from the enrollee, the doctor, and the health plan. This is an expedited IMR. A health problem is urgent if it is a serious and immediate threat to an enrollee's health. The enrollee must send DMHC written documentation that the enrollee's health problem is urgent.
If the enrollee's health problem is not urgent, an IMR is usually decided within 45 days after receipt of the supporting documentation from the enrollee, the doctor, and the health plan. An IMR can take longer if DMHC does not receive all of the medical records needed from the enrollee or treating doctor. The health plan is required to get copies of an enrollee's medical records from doctors who are in the network.
According to the Author
Health plans do not consistently decide or provide proper notice of their decisions concerning claims, such as prior authorization based on medical necessity and/or access to care and grievances within the time and manner specified by law, leading consumers to bear the financial cost of prescribed care while waiting for their health plans to respond. Sometimes, they are forced to forgo treatment altogether. Additionally, there are no internal claims and grievance procedures for health plans regulated by the CDI. California consumers do not have sufficient transparency and due process in the DMHC and CDI complaint processes, resulting in regulatory reviews that are one-sided and based on information that is often marred by inaccuracies, omissions, and misrepresentations. The author states that this bill sets forth internal claims and grievance procedures to improve transparency and provide due process for consumers filing regulatory complaints concerning denied health care services, coverage disputes, and access to care. This bill also clarifies consumers' rights to file grievances concerning a lack of access to care and allows consumers to file grievances immediately if their health plans or disability insurers fail to respond to their claims within the time period and in the manner required by existing law. Furthermore, this bill requires health plans and disability insurers to automatically resolve grievances in favor of the consumer if they do not respond within the legally required timeframe. The author concludes that this bill will improve transparency and provide due process for consumers filing regulatory complaints concerning denied health care services, coverage disputes, and access to care.
Arguments in Support
The National Union of Healthcare Workers (NUHW), sponsor of this bill, writes that this bill is motivated specifically by the shortcomings that NUHW members have encountered in advancing consumers' rights to due process and transparency when pursuing grievances and complaints regarding delays and denials of access to behavioral healthcare. Strengthening consumers' rights to timely resolution of their grievances and complaints made with plans and regulators, and to due process and transparency when pursuing these grievances and complaints, will result not only in resolving health plan violations more quickly and fairly, but in fewer improper denials of coverage and improper treatment limitations in the first place. NUHW states that more consumers will get the care for which they, their employers, and taxpayers have paid, and avoid needless cost for treatment of serious conditions that result from care delayed or denied. Barriers to self-assertion of patients' rights are most harmful to communities of color, recent immigrants, low-income Californians, and other residents of medically underserved areas who suffer from lack of access to care. NUHW concludes that these communities stand to benefit the most from lifting those barriers.
Arguments in Opposition
The California Association of Health Plans, the Association of California Life and Health Insurance Companies, and America's Health Insurance Plans, write that this bill limits health plans/insurers ability to conduct exemptions to grievances as unnecessary, would complicate the authorization process, and would add no value to the enrollee. This bill also creates potential conflict of interest by requiring health plans to send written responses of grievances to providers when the treating provider may actually be the subject of the grievance. The Local Health Plans of California (LHPC) contend that this bill requires extremely tight timelines within the existing 72-hour standard for urgent prior authorization requests. This bill removes a managed care plans' ability to extend the timeline if they are not in receipt of all the necessary information required for approval. This bill requires plans to notify a provider within 24 hours if more information is required for authorization and LHPC states that this turnaround time is unreasonable and may be insufficient to allow a reviewer to determine that a request is inadequate and what additional information is required. This will likely result in plans having to preemptively deny requests to meet defined timelines instead of permitting the flexibility needed to obtain the required documentation. LHPC writes that the repercussions will not only include the inflation of plan denial rates but will also create an undue burden on providers by necessitating a higher volume of authorization resubmissions.
FISCAL COMMENTS
According to the Assembly Appropriations Committee, annual costs of an unknown amount, possibly in the low millions to low tens of millions of dollars, in fiscal year (FY) 2024-25 and ongoing (Managed Care Fund). DMHC's costs would be incurred by different offices across DMHC to do the following: draft memoranda and promulgate regulations; conduct IMRs and other expert medical reviews; revise survey methodology and develop tools to assess health plan compliance; review health plan filings of utilization management and other documents; address enforcement referrals and an estimated 20 referrals annually from the Office of Plan Monitoring; engage expert witness, court reporting services and trial-related costs; modernize the Consumer Complaint System; provide administrative support services; and provide administrative support.
Annual costs of an unknown amount, possibly in the low hundreds of thousands of dollars or less to CDI in FY 2024-25 and ongoing (Insurance Fund).
VOTES
ASM HEALTH: 13-1-2
YES: Bonta, Aguiar-Curry, Arambula, Wendy Carrillo, Flora, Haney, Jones-Sawyer, Maienschein, McCarty, Rodriguez, Santiago, Schiavo, Weber
NO: Joe Patterson
ABS, ABST OR NV: Waldron, Sanchez
ASM APPROPRIATIONS: 11-2-2
YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua
NO: Sanchez, Dixon
ABS, ABST OR NV: Jim Patterson, Ta
UPDATED
VERSION: May 16, 2024
CONSULTANT: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0003351
Date of Hearing: May 8, 2024
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
ABPCA Bill Id:AB 3260
Author:(Pellerin) – As Amended Ver:April 1, 2024
Policy Committee: | Health | Vote: | 13 - 1 |
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Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill revises health plan requirements to expand the authority of consumers and health care providers in the prior authorization (PA) process and adds requirements for a health plan’s timely response and communications regarding a PA request in urgent and non-urgent circumstances. This bill also revises requirements in grievance processes for health plans and health insurance, and extends the timeframe in which an enrollee or insured may ask the Department of Managed Health Care (DMHC) or the California Department of Insurance (CDI) for independent medical review (IMR).
Specifically, this bill:
Health Plan Utilization Review
- Allows an enrollee to make a PA request to a health plan based on medical necessity. Requires urgent requests be communicated to enrollees or providers by various means for urgent requests, in a timely fashion appropriate for the nature of the enrollee’s condition and within 72 hours of the plan’s receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
- Requires a health plan, when it lacks information necessary to make a decision to approve, modify, or deny an urgent request, to notify the enrollee and the provider of the specific information needed to complete the request as soon as possible, but no later than 24 hours after the plan’s receipt of the request, and allows the enrollee and provider at least 48 hours to provide the requested information.
- Requires the plan to notify the enrollee and the provider of the plan’s decision as soon as possible, but no later than 48 hours after the earlier of receipt of specified additional information or the end of the period afforded the enrollee and the provider to submit the specified additional information.
- Defines a request as urgent when the enrollee faces an imminent and serious threat to their health, or the normal timeframe for the decisionmaking process could be harmful, as specified.
- Requires a determination of urgency by an enrollee’s health care provider be binding on the health plan or insurer.
- Requires a health plan, if it fails to provide notice of a decision regarding a request for PA within specified timeframes, to automatically treat a request for authorization as a grievance and immediately provide notice to the enrollee that a grievance has commenced.
Health Plan Grievance and Appeals
- Requires the final determination of urgent complaints about access to care be communicated to the enrollee and provider by telephone no later than 72 hours from receipt of the grievance.
- Entitles an enrollee to automatically proceed with a grievance if the health plan fails to make a decision concerning a request for PA within the specified timeframes in existing law.
- Requires the health plan to communicate its final determination to the enrollee and the enrollee’s provider by telephone, electronically, or both, as well as by hard copy mailed to their designated mailing address, no later than 72 hours from receipt of the urgent grievance, or in writing no later than 30 days from receipt of a nonurgent grievance.
- Amends expedited plan requests for urgent grievances when the enrollee faces an imminent and serious threat to their physical or behavioral health, or the normal timeframe for the decisionmaking process could be detrimental to the enrollee’s life or health.
- Requires a determination of urgency by the enrollee’s health care provider to be binding on the health plan.
- Requires a health plan that fails to comply with the timeframes and the notice requirements to automatically resolve the grievance in favor of the enrollee or insured.
- Authorizes the DMHC director to extend the IMR application deadline beyond 12 months (existing law specifies six months).
Health Insurer Grievance
- Requires an insurer, in the case of an urgent internal grievance, to communicate its final determination to the insured and health care provider no later than 72 hours from receipt of the grievance, or in writing no later than 30 days from receipt of the grievance in the case of a nonurgent internal grievance.
- Authorizes CDI to determine whether a grievance is urgent, as specified, unless the grievance is designated as urgent by the referring or treating provider, in which case the provider’s designation of urgency controls.
Enrollee/Insured Communications
- Requires DMHC or CDI to promptly provide to the enrollee or insured unredacted copies of all correspondence, including ongoing correspondence, between DMHC or CDI and the plan or insurer concerning the enrollee or insured’s grievance concerning a disputed health care service or coverage decision, or, for health plans, access to care.
- Requires the DMHC or CDI to provide the enrollee or insured with an unredacted copy of a nonbinding expert opinion by the IMR organization, if one is consulted, and the grievance concerns a coverage decision, access to care, or both.
- Requires the DMHC or CDI to provide to the enrollee or insured a reasonable opportunity to respond to any communications between the DMHC or CDI and the plan or insurer and, if applicable, between the DMHC or CDI and the IMR organization before the grievance is resolved.
- Prohibits the DMHC or CDI, including its IMR organization, from engaging in ex parte communication with the plan or insurer, the enrollee or insured, or representatives of either party, without concurrently providing all parties unredacted copies of all communications.
FISCAL EFFECT:
DMHC estimates the total cost of this bill to be approximately $19.7 million in fiscal year (FY) 2024-25, $34.7 million in FY 2025-26, $35.5 million in FY 2026-27 and FY 2027-28, and $33.0 million in FY 2028-29 and annually thereafter (Managed Care Fund). DMHC’s costs would be incurred by different offices across the department to do the following: draft memoranda and promulgate regulations; conduct IMRs and other expert medical reviews; revise survey methodology and develop tools to assess health plan compliance; review health plan filings of utilization management and other documents; address enforcement referrals and an estimated 20 referrals annually from the Office of Plan Monitoring; engage expert witness, court reporting services and trial-related costs; modernize the Consumer Complaint System; provide administrative support services; and provide administrative support.
DMHC notes that generally, a $1 million increase to the MCF could result in a 2-cent increase per enrollee on assessments to full-service health plans and a 1-cent increase per enrollee to specialized health plans. To the extent this and other bills result in additional assessments on health plans, consumers could face higher premiums.
CDI estimates it will need two positions at costs of $163,000 in FY 2024-25, $294,000 FY 2025-26, $245,000 in FY 2026-27, and $238,000 in FY 2027-28 and ongoing (Insurance Fund).
COMMENTS:
- Purpose. This bill is sponsored by the National Union of Healthcare Workers (NUHW). According to the author:
Health plans do not consistently decide or provide proper notice of their decisions concerning claims, such as prior authorization based on medical necessity and/or access to care and grievances within the time and manner specified by law, leading consumers to bear the financial cost of prescribed care while waiting for their health plans to respond. Sometimes, they are forced to forgo treatment altogether. Additionally, there are no internal claims and grievance procedures for health plans regulated by the CDI. California consumers do not have sufficient transparency and due process in the DMHC and CDI complaint processes, resulting in regulatory reviews that are one-sided and based on information that is often marred by inaccuracies, omissions, and misrepresentations. This bill sets forth internal claims and grievance procedures to improve transparency and provide due process for consumers filing regulatory complaints concerning denied health care services, coverage disputes, and access to care. This bill also clarifies consumers’ rights to file grievances concerning a lack of access to care and allows consumers to file grievances immediately if their health plans or disability insurers fail to respond to their claims within the time period and in the manner required by existing law. Furthermore, this bill requires health plans and disability insurers to automatically resolve grievances in favor of the consumer if they do not respond within the legally required timeframe. This bill will improve transparency and provide due process for consumers filing regulatory complaints concerning denied health care services, coverage disputes, and access to care.
- Related Legislation.
- AB 3221 (Pellerin) requires the records, books, and papers of a health plan and other specified entities to be open to inspection by the DMHC director, including through electronic means. AB 3221 is pending on the Assembly floor.
- SB 294 (Wiener) requires a health plan or insurer that upholds its decision to modify, delay, or deny a health care service in response to a grievance or has a grievance that is otherwise pending or unresolved upon expiration of the relevant timeframe, to automatically submit a decision regarding a disputed health care service to the IMR System if the decision is related to a behavioral health condition for an enrollee or insured up to 26 years of age, among other provisions. SB 294 was amended to include the provisions of SB 238 (Wiener, below) after it was held in this committee and is pending in Assembly Health Committee.
- SB 238 (Wiener) is substantially similar to SB 294 (Wiener). SB 238 was held in this committee.
- Prior Legislation. SB 858 (Wiener), Chapter 985, Statutes of 2022, increases the base amount of a civil penalty from $2,500 per violation to not more than $25,000 per violation, adjusts and increases civil and administrative penalties, as specified, and authorizes the DMHC director to impose a corrective action plan under certain circumstances.
Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081
Date of Hearing: April 16, 2024
ASSEMBLY COMMITTEE ON HEALTH
Mia Bonta, Chair
ABPCA Bill Id:AB 3260
Author:((Pellerin) – As Amended Ver:April 1, 2024
SUBJECT: Health care coverage: reviews and grievances.
SUMMARY: Requires a determination of urgency by a health care provider, with respect to a decision to approve a health care service for prior authorization, to be binding on the health plan. Entitles an enrollee to automatically proceed with a grievance, if the health plan fails to make a decision to approve, modify, or deny the request for authorization within the specified timeframes in existing law. Makes a determination of urgency by an enrollee’s health care provider to be binding on a plan or insurer, for grievances. Requires the Department of Managed Health Care (DMHC) or California Department of Insurance (CDI) to provide specified correspondence and documents to an enrollee or insured if the enrollee or insured has submitted a grievance for review under the Independent Medical Review (IMR) System. Specifically, this bill:
Health Plan Utilization Review
- Expands existing law to allow an enrollee to make a prior authorization request to a health plan based on medical necessity. Specifies that urgent requests be communicated to enrollees or providers by telephone, facsimile, or electronically, as well as mail for urgent requests, in a timely fashion appropriate for the nature of the enrollee’s condition and not to exceed 72 hours from the plan’s receipt of the clinical information reasonably necessary and requested by the plan to make the determination.
- Requires the plan to notify the enrollee and the provider of the specific information necessary to complete the request, when the plan lacks the information reasonably necessary to make a decision to approve, modify, or deny an urgent request. Requires the notification to be made as soon as possible, but no later than 24 hours after the plan’s receipt of the request from the enrollee or provider. Affords the enrollee and the provider a reasonable amount of time, taking into account the circumstances, but not less than 48 hours, to provide the specified information.
- Requires the plan to notify the enrollee and the provider of the plan’s decision as soon as possible, but no later than 48 hours after the earlier of the following:
- The plan’s receipt of specified additional information; or,
- The end of the period afforded the enrollee and the provider to submit the specified additional information.
- Considers the request to be urgent when either of the following conditions are met:
- The enrollee faces an imminent and serious threat to the enrollee’s physical or behavioral health, including but not limited to, severe pain or the potential loss of life, limb, or other major bodily function; or,
- The normal timeframe for the decisionmaking process (not to exceed five business days) could be detrimental to the enrollee’s life or physical or behavioral health, cause severe pain, or jeopardize the enrollee’s ability either to regain maximum function or to minimize any loss of function.
- Requires a determination of urgency by an enrollee’s health care provider to be binding on the health plan or insurer.
- Requires a health plan to automatically treat the request for authorization as a grievance and immediately provide notice to the enrollee that a grievance has commenced if a health plan fails to make a decision, or provide notice of a decision to approve, modify, or deny the request for prior authorization within specified timeframes in existing law.
Health Plan Grievance and Appeals
- Requires the final determination of urgent complaints about access to care, including complaints about the waiting time for, or distance to, covered health care services that are resolved by the next business day to be communicated to the enrollee and provider by telephone, electronically, or both, as well as by hard copy mailed, no later than 72 hours from receipt of the grievance.
- Entitles an enrollee to automatically proceed with a grievance, if the health plan fails to make a decision to approve, modify, or deny the request for authorization within the specified timeframes in existing law.
- Requires the health plan to communicate its final determination to the enrollee and the enrollee’s provider by telephone, electronically, or both, as well as by hard copy mailed to their designated mailing address, no later than 72 hours from receipt of the urgent grievance.
- Requires the health plan to communicate its final determination to the enrollee and the enrollee’s provider in writing no later than 30 days from receipt of the grievance in the case of a nonurgent grievance.
- Amends expedited plan requests for urgent grievances when the enrollee faces an imminent and serious threat to the enrollee’s physical or behavioral health, including but not limited to, severe pain, or the normal timeframe for the decisionmaking process could be detrimental to the enrollee’s life or physical or behavioral health, cause severe pain, or jeopardize the enrollee’s ability to regain maximum function or minimize any loss of function. Requires a determination of urgency by the enrollee’s health care provider to be binding on the health plan.
- Requires the health plan to furnish enrollees, insureds, subscribers, health care providers, and the DMHC with a written statement on the disposition no later than 72 hours (rather than three days in existing law).
- Requires a health plan that fails to comply with the timeframes and with the notice requirements to automatically resolve the grievance in favor of the enrollee or insured.
- Authorizes the DMHC Director to extend the IMR application deadline beyond 12 months (existing law specifies six months).
Health Insurer Grievance
- Requires the insurer to communicate its final determination to the insured and the insured’s provider by telephone, electronically, or both no later than 72 hours from receipt of the grievance, in the case of an urgent internal grievance that an insured files with the insurer.
- Requires the insurer to communicate its final determination to the insured and the insured’s provider in writing no later than 30 days from receipt of the grievance in the case of a nonurgent internal grievance that an insured files with the insurer.
- Requires the insurer to, upon notice from CDI to a disability insurer that an insured, including the insured’s representative, has submitted a grievance to CDI, respond to the insured, the insured’s representative, and CDI within one of the following timeframes, as appropriate:
- Within 24 hours, if directed by CDI, regarding an urgent grievance concerning coverage decisions, disputed health care services, or both; or,
- Within five calendar days regarding a nonurgent grievance concerning coverage decisions, disputed health care services, or both.
- Authorizes CDI to determine whether or not a grievance is urgent, as specified, unless the grievance is designated as urgent by the insured’s referring or treating provider, in which case the provider’s designation of urgency controls.
Enrollee/Insured Communications
- Requires the DMHC or CDI to promptly provide to the enrollee or insured and, to the extent applicable, the enrollee or insured’s representative unredacted copies of all correspondence, including ongoing correspondence, between the DMHC or CDI and the plan or insurer concerning the enrollee or insured’s grievance with respect to an enrollee or insured grievance to the DMHC or CDI concerning a disputed health care service or coverage decision, or access to care, including complaints about the waiting time for, or distance to, health care services (italics only apply to health plans).
- Requires the DMHC or CDI to provide the enrollee or insured and, to the extent applicable, the enrollee or insured’s representative with an unredacted copy of the nonbinding expert opinion by the IMR organization if the DMHC or CDI determines that the enrollee or insured’s grievance concerns a coverage decision, access to care, or both, and the DMHC or CDI seeks a nonbinding expert opinion from an IMR organization.
- Requires the DMHC or CDI to provide to the enrollee or insured and, to the extent applicable, the enrollee or insured’s representative a reasonable opportunity to respond to any communications between the DMHC or CDI and the plan or insurer and, if applicable, between the DMHC or CDI and the IMR organization before the enrollee or insured’s grievance is adjudicated (is resolved).
- Prohibits the DMHC or CDI, including its IMR organization, from engaging in ex parte communication with the plan or insurer, the enrollee or insured, or the representatives of either party without concurrently providing the plan or insurer, the enrollee or insured, and, to the extent applicable, their respective representatives unredacted copies of all communications, as specified.
EXISTING LAW:
- Establishes the DMHC to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 and CDI to regulate health insurers. [Health and Safety Code (HSC) §1340, et seq., and Insurance Code (INS) §106, et seq.]
- Requires the criteria or guidelines used by health plans and insurers, or any entities with which plans or insurers contract for utilization review or utilization management functions, to determine whether to authorize, modify, or deny health care services to:
- Be developed with involvement from actively practicing health care providers;
- Be consistent with sound clinical principles and processes;
- Be evaluated, and updated if necessary, at least annually;
- If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the enrollee or insured in that specified case; and,
- Be available to the public upon request. [HSC §1363.5 and INS §10123.135]
- Authorizes a health plan to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Requires these decisions to be made within 30 days, or less than 72 hours when the enrollee faces an imminent and serious threat to their health. [HSC §1371]
- Requires every health plan to establish and maintain a grievance system approved by DMHC under which enrollees may submit grievances to the plan. Requires a plan’s response to also comply with federal requirements. Requires, in regulations, that a plan’s grievance system be established in writing and provide for procedures that will receive, review and resolve grievances within 30 calendar days of receipt by the plan, or any provider or entity with delegated authority to administer and resolve the plan’s grievance system. Defines grievance as a written or oral expression of dissatisfaction regarding the plan and/or provider. [HSC §1368 and 28 California Code of Regulation §1300.62]
- Requires reviews, for purposes of IMR, to determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee or insured and any of the following:
- Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service;
- Nationally recognized professional standards;
- Expert opinion;
- Generally accepted standards of medical practice; or,
- Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. [HSC §1374.33 and INS §10169.3]
- Requires health plans and disability insurers to provide an external, IMR to examine the insurer’s or plan’s coverage decisions regarding experimental or investigational therapies for an individual with a life-threatening or seriously debilitating condition, as specified. Defines “life-threatening” as either or both of the following:
- Diseases or conditions where the likelihood of death is high unless the course of the disease is interrupted;
- Diseases or conditions with potentially fatal outcomes, where the end point of clinical intervention is survival.
Defines “seriously debilitating” as diseases or conditions that cause major irreversible morbidity. [HSC §1370.4 and INS §10145.3]
FISCAL EFFECT: Unknown. This bill has not yet been analyzed by a fiscal committee.
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, health plans do not consistently decide or provide proper notice of their decisions concerning claims, such as prior authorization based on medical necessity and/or access to care and grievances within the time and manner specified by law, leading consumers to bear the financial cost of prescribed care while waiting for their health plans to respond. Sometimes, they are forced to forgo treatment altogether. Additionally, there are no internal claims and grievance procedures for health plans regulated by the CDI. California consumers do not have sufficient transparency and due process in the DMHC and CDI complaint processes, resulting in regulatory reviews that are one-sided and based on information that is often marred by inaccuracies, omissions, and misrepresentations. The author states that this bill sets forth internal claims and grievance procedures to improve transparency and provide due process for consumers filing regulatory complaints concerning denied health care services, coverage disputes, and access to care. This bill also clarifies consumers’ rights to file grievances concerning a lack of access to care and allows consumers to file grievances immediately if their health plans or disability insurers fail to respond to their claims within the time period and in the manner required by existing law. Furthermore, this bill requires health plans and disability insurers to automatically resolve grievances in favor of the consumer if they do not respond within the legally required timeframe. The author concludes that this bill will improve transparency and provide due process for consumers filing regulatory complaints concerning denied health care services, coverage disputes, and access to care.
- BACKGROUND. The DMHC Help Center assists consumers with understanding their health care rights and benefits, and helps to resolve complaints and coverage issues between health plan enrollees and health plans. In 2022, the DMHC Help Center assisted 128,405 health care consumers, and handled 12,266 complaints and 3,240 IMRs. Approximately 68% of consumers who submitted an IMR request to the DMHC Help Center received the service or treatment they requested.
- Existing consumer protections. In California, consumers have many health care rights, including the right to know why a plan denies a service or treatment, and the right to file a grievance if the consumer disagrees. Health plans are required to have grievance and appeals systems to assist consumers in resolving these issues. A health plan’s grievance program informs consumers of their full grievance and appeal rights and the protections afforded to them under the law, including the right to pursue an IMR or file a complaint with the DMHC if they are dissatisfied with their health plan’s decision. A robust grievance program also allows health plans to track and trend grievances for the purpose of uncovering systemic problems, thereby providing the opportunity for quality improvement.
- Grievance and appeals under California law. According to the author, this bill addresses two problems: i) the untimely adjudication of consumer claims and grievances by health plans and disability insurers as required by existing law; and, ii) a lack of transparency and due process, as well as ex parte communication, with regard to regulatory complaints and IMR. In most circumstances, enrollees are required to file a grievance regarding each issue/request with a health plan and participate in the process for 30 days before submitting a complaint to the DMHC. Exceptions to this requirement include when there is an immediate threat to an enrollee’s health or the request was denied as experimental/investigational. California law requires an expedited plan review of an imminent and serious threat to the health of the patient, including, but not limited to, severed pain, potential loss of life, limb, or major bodily function. Existing law also requires the health plan to provide enrollees, subscribers, and DMHC with a written statement on the disposition or status of the grievance no later than three days from receipt of the grievance.
If an enrollee’s health plan denies, changes, or delays a request for medical services, denies payment for emergency treatment or refuses to cover experimental or investigational treatment for a serious medical condition, an enrollee can apply for an IMR. Before filing an IMR with the regulator, enrollees are first required to file a grievance with the health plan (absent an emergency). Once an enrollee has participated in the 30-day process with the health plan, if the issue has not been resolved or an enrollee is not satisfied with the decision, an enrollee can proceed with filing an IMR with the DMHC. According to the DMHC, if an enrollee’s health problem is urgent, an IMR is usually decided within seven days after DMHC receives the supporting documentation from the enrollee, the doctor, and the health plan. This is an expedited IMR. A health problem is urgent if it is a serious and immediate threat to an enrollee’s health. The enrollee must send DMHC written documentation that the enrollee’s health problem is urgent. California law
If the enrollee’s health problem is not urgent, an IMR is usually decided within 45 days after receipt of the supporting documentation from the enrollee, the doctor, and the health plan. An IMR can take longer if DMHC does not receive all of the medical records needed from the enrollee or treating doctor. The health plan is required to get copies of an enrollee’s medical records from doctors who are in the network. This bill requires DMHC to provide enrollees unredacted copies of all correspondence between the DMHC and the plan regarding the enrollee’s grievance.
- SUPPORT. The National Union of Healthcare Workers (NUHW), sponsor of this bill, writes that this bill is motivated specifically by the shortcomings that NUHW members have encountered in advancing consumers’ rights to due process and transparency when pursuing grievances and complaints regarding delays and denials of access to behavioral healthcare. Strengthening consumers’ rights to timely resolution of their grievances and complaints made with plans and regulators, and to due process and transparency when pursuing these grievances and complaints, will result not only in resolving health plan violations more quickly and fairly, but in fewer improper denials of coverage and improper treatment limitations in the first place. NUHW states that more consumers will get the care for which they, their employers, and taxpayers have paid, and avoid needless cost for treatment of serious conditions that result from care delayed or denied. Barriers to self-assertion of patients’ rights are most harmful to communities of color, recent immigrants, low-income Californians, and other residents of medically underserved areas who suffer from lack of access to care. NUHW concludes that these communities stand to benefit the most from lifting those barriers.
The Steinberg Institute writes that this bill proposes essential reforms to empower consumers and protect their rights. By prohibiting health plans from overriding healthcare providers' urgency determinations and setting clear timelines for responding to consumers' claims and grievances, this bill will allow patients to access lifesaving care in a timely manner. This bill mandates that grievances be automatically resolved in favor of the consumer if a response is not provided within specified timeframes - 72 hours for urgent cases and 30 days for non-urgent cases. Additionally, it aims to align the state's "urgent care claims" definition with federal standards, enhancing clarity and consistency in the process. This bill's provisions to improve transparency and due process in regulatory complaint processes will ensure consumers have a fair chance when disputes arise.
- OPPOSITION. The California Association of Health Plans, the Association of California Life and Health Insurance Companies, and America’s Health Insurance Plans (collectively “opposition”), write that in the HMO model, generally providers are responsible for submitting authorization requests. This is a critical component to ensure that the requested service is clinically appropriate for the enrollee. Requiring the provider to submit the authorization request ensures that a clinical evaluation has been conducted. Additionally, allowing enrollees to submit authorization requests does not consider that they are unlikely to have the records needed to make a medical necessity review. All of this will complicate and delay the authorization process. The opposition also write that this bill limits health plans/insurers ability to conduct exemptions to grievances as unnecessary, would complicate the authorization process, and would add no value to the enrollee. This bill also creates potential conflict of interest by requiring health plans to send written responses of grievances to providers when the treating provider may actually be the subject of the grievance. The opposition concludes that this bill unfairly grants enrollees access to confidential communication while limiting health plan access to the same information.
- RELATED LEGISLATION.
- AB 3221 (Pellerin) requires the records, books, and papers of a health plan and other specified entities to be open to inspection by the DMHC Director, including through electronic means. AB 3221 is pending in Assembly Health Committee.
- SB 294 (Wiener), beginning July 1, 2025, requires a health plan or a disability insurer that upholds its decision to modify, delay, or deny a health care service in response to a grievance or has a grievance that is otherwise pending or unresolved upon expiration of the relevant timeframe to automatically submit within 24 hours a decision regarding a disputed health care service to the IMR System, as well as the information that informed its decision, if the decision is to deny, modify, or delay specified services relating to mental health or substance use disorder conditions for an enrollee or insured up to 26 years of age. Requires a health plan or disability insurer, within 24 hours after submitting its decision to the IMR System to provide notice to the appropriate department, the enrollee or insured or their representative, if any, and the enrollee’s or insured’s provider. SB 294 was amended to include the provisions of SB 238 (Wiener) of 2023 after it was held in the Assembly Appropriations Committee. SB 294 is pending in the Assembly.
- PREVIOUS LEGISLATION.
- SB 238 (Wiener) of 2023 is substantially similar to SB 294 (Wiener). SB 238 was held in Assembly Appropriations Committee.
- SB 858 (Wiener), Chapter 985, Statutes of 2022, increases the base amount of a civil penalty from $2,500 per violation to not more than $25,000 per violation, and authorizes a lower, proportionate penalty for specialized dental and vision health plans under DMHC’s disciplinary authority. Adjusts the civil penalty base amount beginning January 1, 2028, and every 5 years thereafter, as specified. Doubles the minimum and maximum amounts of the civil and administrative penalties, and, beginning January 1, 2028, and every five years thereafter, adjusts these civil and administrative penalties, as specified. Authorizes the DMHC Director to impose a corrective action plan under certain circumstances.
- SB 221 (Wiener), Chapter 724, Statutes of 2021, codifies existing timely access to care standards for health plans and insurers, applies these requirements to Medi-Cal Managed Care plans, and adds a standard for non-urgent follow-up appointments for nonphysician mental health care or substance use disorder providers that is within 10 business days of the prior appointment.
- SB 855 (Wiener), Chapter 151, Statutes of 2020, revises and recasts California’s Mental Health Parity provisions, and requires a health plan contract or disability insurance policy issued, amended, or renewed on or after January 1, 2021, to provide coverage for medically necessary treatment of mental health and substance use disorder, as defined, under the same terms and conditions applied to other medical conditions and prohibits a health plan or disability insurer from limiting benefits or coverage for mental health and substance use disorder to short-term or acute treatment. Specifies that if services for the medically necessary treatment of a mental health and substance use disorder are not available in network within the geographic and timely access standards in existing law, the health plan or insurer is required to arrange coverage to ensure the delivery of medically necessary out of network services and any medically necessary follow up services, as specified.
- COMMENTS.
- Inconsistency between the DMHC and CDI. As this bill moves forward, the author should consider making changes to the grievance and appeals process to ensure that both regulators are applying consumer protections consistently for California consumers.
- Health information exchange. According to California’s Health and Human Services Agency (CHHSA), California’s sharing of health care data is a voluntary patchwork that limits the health care ecosystem from making material advances in equity and quality, and functionally inhibits patient access to personalized, longitudinal health records. CHHSA’s Data Exchange Framework which requires the exchange of health information among health information among health care entities and government agencies in California is the first step to better coordinate health care. Through these efforts, the exchange of an enrollee’s health care data, including information submitted as part of a grievance, should be closer to reality.
REGISTERED SUPPORT / OPPOSITION:
Support
National Union of Healthcare Workers (NUHW) (sponsor)
Asian Americans and Pacific Islanders for Civic Empowerment
Buen Vecino
California Association of Marriage and Family Therapists
California Federation of Teachers Afl-cio
California Labor Federation, Afl-cio
California Life Sciences
California Nurses Association
California Onecare
California Orthopedic Association
California State Association of Psychiatrists (CSAP)
California Youth Empowerment Network
County of Santa Clara
Courage California
Equality California
Hand in Hand: the Domestic Employers Network
Health Access California
Health Care for All - California
Healthcare Action Committee
Mental Health America of California
Steinberg Institute
The Kennedy Forum
Unite-here, Afl-cio
Opposition
America's Health Insurance Plans (AHIP)
Association of California Life & Health Insurance Companies
California Association of Health Plans
Local Health Plans of California
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097
Discussed in Hearing
1MIN
Senate Standing Committee on Appropriations
15MIN
Senate Standing Committee on Health
4MIN
Assembly Floor
18MIN
Assembly Standing Committee on Health
Bill Author
