Current Status:

Passed

(2024-09-27: Chaptered by Secretary of State - Chapter 763, Statutes of 2024.)

Introduced

In Committee

First Chamber

In Committee

Second Chamber

Enacted

What does this bill do?

The bill requires health insurers and health care service plans, including Medi‑Cal managed care plans, to pay a complete provider claim within 30 calendar days or notify the provider in writing within 30 days that the claim or part of it is contested or denied. It requires contested notices to identify the procedure or revenue codes and the specific information needed to reconsider the claim, makes late payments automatically accrue 15% annual interest (with plans required to include that interest in payments and pay a fee if they fail), and treats an enrollee’s complaint about a delayed or denied payment as a grievance (a formal complaint) under the plan’s grievance process.

Version:

Existing law requires a health insurer or health care service plan, including a specialized health care service plan, to reimburse a claim or portion of a claim no later than 30 working days after receipt of the claim, unless the plan contests or denies the claim, in which case the plan is required to notify the claimant within 30 working days that the claim is contested or denied. Under existing law, if a claim or portion thereof is contested on the basis that a health insurer or health care service plan has not received all information necessary to determine payer liability for the claim or portion thereof and notice has been provided, the health insurer or health care service plan has 30 working days after receipt of the additional information to complete reconsideration of the claim. Existing law extends these timelines to 45 working days for a health care service plan that is a health maintenance organization. Under existing law, if a claim is not reimbursed, contested, or denied pursuant to these timelines, as specified, interest accrues at a rate of 15% per annum for a health care service plan and 10% per annum for a health insurer.

Commencing January 1, 2026, this bill instead would require a health care service plan, including a Medi-Cal managed care plan, or health insurer to reimburse a complete claim or a portion thereof within 30 calendar days after receipt of the claim, or, if a claim or portion thereof does not meet the criteria for a complete claim or portion thereof, to notify the claimant as soon as practicable, but no later than 30 calendar days that the claim or portion thereof is contested or denied. The bill would authorize the departments to issue guidance and regulations related to these provisions. The bill would exempt the guidance and amendments from the Administrative Procedure Act until December 31, 2027.

Existing law requires health care service plans to establish a grievance process, as specified.

This bill would require a complaint made by an enrollee to a health care service plan about a delay or denial of a payment of a claim to be treated as a grievance subject to that grievance process.

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.

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.

Existing law requires health care service plans to establish a grievance process, as specified.

This bill would require a complaint made by an enrollee to a health care service plan about a delay or denial of a payment of a claim to be treated as a grievance subject to that grievance process.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

Commencing January 1, 2026, this bill instead would require a health care service plan plan, including a Medi-Cal managed care plan, or health insurer to reimburse a clean complete claim or a portion thereof within 30 calendar days after receipt of the claim, or, if a claim or portion thereof does not meet the criteria for a clean claim, complete claim or portion thereof, to notify the claimant within as soon as practicable, but no later than 30 calendar days that the claim or portion thereof is contested or denied. The bill would require the Department of Managed Health Care and the Department of Insurance to determine the criteria for a clean claim, as specified, no later than July 31, 2025. The bill would authorize the departments to issue guidance and amend regulations related to these provisions. The bill would exempt the guidance and amendments from the Administrative Procedure Act until December 31, 2027.

Existing law requires health care service plans to establish a grievance process, as specified.

This bill would require a complaint or inquiry made by an enrollee to a health care service plan about a delay or denial of a payment of a claim to be treated as a grievance subject to that grievance process.

Existing law creates the Managed Care Administrative Fines and Penalties Fund. This bill would require that an administrative fee assessed upon a health care service plan for a violation of the above-describe provisions related to clean claim reimbursement be deposited into the fund. The bill would require those moneys to be retained in the fund to assist enrollees and providers impacted by a violation, upon appropriation by the Legislature.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would increase that interest accrual rate for a health insurer to 15% per annum. The bill would delete the provisions that extend the timelines for a health maintenance organization. The bill would require a health care service plan or health insurer to reimburse a claim within 15 working days after receipt of the claim, or, if the health care service plan or health insurer contests or denies the claim, to notify the claimant within 15 working days that the claim is contested or denied. Under the bill, if a claim for reimbursement is contested on the basis that the health care service plan or health insurer has not received all information necessary to determine payer liability for the claim and notice has been provided, the health care service plan or health insurer would have 15 working days after receipt of the additional information to complete reconsideration of the claim. The bill would require the departments to develop respective lists for categories of claims that, commencing January 1, 2026, would be required to be paid by a health insurer or health care service plan no later than 5 days after receipt of the claim, as specified. Existing law requires a health care service plan to automatically include in its payment of a claim all interest that has accrued, as specified.This bill would also require a health insurer to automatically include all interest accrued in its payment of a claim. Existing law requires a health care service plan that fails to comply with the requirement to include all interest in its payment of a claim to pay the claimant a $10 fee.This bill would instead require a health insurer or health care service plan that fails to comply with that requirement to pay the claimant a fee of no less than 10% of the interest accrued.

Commencing January 1, 2026, this bill instead would require a health care service plan or health insurer to reimburse a clean claim or a portion thereof within 30 calendar days after receipt of the claim, or, if a claim does not meet the criteria for a clean claim, to notify the claimant within 30 calendar days that the claim is contested or denied. The bill would require the Department of Managed Health Care and the Department of Insurance to determine the criteria for a clean claim, as specified, no later than July 31, 2025. The bill would authorize the departments to issue guidance and amend regulations related to these provisions. The bill would exempt the guidance and amendments from the Administrative Procedure Act until December 31, 2027.

Existing law requires health care service plans to establish a grievance process, as specified.

Existing law creates the Managed Care Administrative Fines and Penalties Fund.

This bill would require that an administrative fee assessed upon a health care service plan for a violation of the above-describe provisions related to clean claim reimbursement be deposited into the fund. The bill would require those moneys to be retained in the fund to assist enrollees and providers impacted by a violation, upon appropriation by the Legislature.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health insurer or health care service plan, including a specialized health care service plan, to reimburse a claim or portion of a claim no later than 30 working days after receipt of the claim, unless the plan contests or denies the claim, in which case the plan is required to notify the claimant within 30 working days that the claim is contested or denied. Under existing law, if a claim or portion thereof is contested on the basis that a health insurer or health care service plan has not received all information necessary to determine payer liability for the claim or portion thereof and notice has been provided, the health insurer or health care service plan has 30 working days after receipt of the additional information to complete reconsideration of the claim. Existing law extends these timelines to 45 working days for a health care service plan that is a health maintenance organization. Under existing law, if a claim is not reimbursed, contested, or denied pursuant to these timelines, as specified, interest accrues at a rate of 15% per annum for a health care service plan and 10% per annum for a health insurer.

This bill would increase that interest accrual rate for a health insurer to 15% per annum. The bill, notwithstanding the above-described timelines, The bill would delete the provisions that extend the timelines for a health maintenance organization. The bill would require a health care service plan or health insurer to reimburse a claim for a small and rural provider, critical access provider, or distressed provider within 10 business within 15 working days after receipt of the claim, or, if the health care service plan or health insurer contests or denies the claim, to notify the claimant within 5 business 15 working days that the claim is contested or denied. Under the bill, if a claim for reimbursement to a small and rural provider, critical access provider, or distressed provider is contested on the basis that the health care service plan or health insurer has not received all information necessary to determine payer liability for the claim and notice has been provided, the health care service plan or health insurer would have 15 business working days after receipt of the additional information to complete reconsideration of the claim. Under the bill, if a claim is not reimbursed, contested, or denied pursuant to these timelines, as specified, interest would accrue at a rate of 15% per annum for health care service plans and health insurers. The bill would require the departments to develop respective lists for categories of claims that, commencing January 1, 2026, would be required to be paid by a health insurer or health care service plan to a small and rural provider, critical access provider, or distressed provider no later than 5 days after receipt of the claim, as specified.

Existing law requires a health care service plan to automatically include in its payment of a claim all interest that has accrued, as specified.

This bill would also require a health insurer to automatically include all interest accrued in its payment of a claim.

Existing law requires a health care service plan that fails to comply with the requirement to include all interest in its payment of a claim to pay the claimant a $10 fee.

This bill would instead require a health insurer or health care service plan that fails to comply with that requirement to pay the claimant a fee of no less than 10% of the interest accrued.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would increase that interest accrual rate for a health insurer to 15% per annum. The bill, notwithstanding the above-described timelines, would require a health care service plan or health insurer to reimburse a claim for a small and rural provider, critical access provider, or distressed provider within 10 business days after receipt of the claim, or, if the health care service plan or health insurer contests or denies the claim, to notify the claimant within 5 business days that the claim is contested or denied. Under the bill, if a claim for reimbursement to a small and rural provider, critical access provider, or distressed provider is contested on the basis that the health care service plan or health insurer has not received all information necessary to determine payer liability for the claim and notice has been provided, the health care service plan or health insurer would have 15 business days after receipt of the additional information to complete reconsideration of the claim. Under the bill, if a claim is not reimbursed, contested, or denied pursuant to these timelines, as specified, interest would accrue at a rate of 15% per annum for health care service plans and health insurers. The bill would require the departments to develop respective lists for categories of claims that that, commencing January 1, 2026, would be required to be paid by a health insurer or health care service plan to a small and rural provider, critical access provider, or distressed provider no later than 5 days after receipt of the claim, as specified.

Existing law requires a health care service plan to automatically include in its payment of a claim all interest that has accrued, as specified.

This bill would also require a health insurer to automatically include all interest accrued in its payment of a claim.

Existing law requires a health care service plan that fails to comply with the requirement to include all interest in its payment of a claim to pay the claimant a $10 fee.

This bill would instead require a health insurer or health care service plan that fails to comply with that requirement to pay the claimant a fee of no less than 10% of the interest accrued.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would increase that interest accrual rate for a health insurer to 15% per annum. The bill, notwithstanding the above-described timelines, would require a health care service plan or health insurer to reimburse a claim for a small and rural provider, critical access provider, or distressed provider within 10 business days after receipt of the claim, or, if the health care service plan or health insurer contests or denies the claim, to notify the claimant within 5 business days that the claim is contested or denied. Under the bill, if a claim for reimbursement to a small and rural provider, critical access provider, or distressed provider is contested on the basis that the health care service plan or health insurer has not received all information necessary to determine payer liability for the claim and notice has been provided, the health care service plan or health insurer would have 15 business days after receipt of the additional information to complete reconsideration of the claim. Under the bill, if a claim is not reimbursed, contested, or denied pursuant to these timelines, as specified, interest would accrue at a rate of 15% per annum for health care service plans and health insurers. The bill would require the departments to develop respective lists for categories of claims that would be required to be paid by a health insurer or health care service plan to a small and rural provider, critical access provider, or distressed provider no later than 5 days after receipt of the claim, as specified.

Existing law requires a health care service plan to automatically include in its payment of a claim all interest that has accrued, as specified.

This bill would also require a health insurer to automatically include all interest accrued in its payment of a claim.

Existing law requires a health care service plan that fails to comply with the requirement to include all interest in its payment of a claim to pay the claimant a $10 fee.

This bill would instead require a health insurer or health care service plan that fails to comply with that requirement to pay the claimant a fee of no less than 10% of the interest accrued.

This bill would delete the provisions that extend the timelines for a health maintenance organization.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

Version:

The people of the State of California do enact as follows:SECTION 1.Section 1371 of the Health and Safety Code is amended to read:1371.

(a)(1)A health care service plan, including a specialized health care service plan, shall reimburse claims or a portion of a claim, whether in state or out of state, as soon as practicable, but no later than 30 working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the claim by the health care service plan, unless the claim or portion thereof is contested by the plan, in which case the claimant shall be notified, in writing, that the claim is contested or denied, within 30 working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the claim by the health care service plan. The notice that a claim is being contested shall identify the portion of the claim that is contested and the specific reasons for contesting the claim.

(2)If an uncontested claim is not reimbursed by delivery to the claimants address of record within the respective 30 or 45 working days after receipt, interest shall accrue at the rate of 15 percent per annum beginning with the first calendar day after the 30- or 45-working-day period. A health care service plan shall automatically include in its payment of the claim all interest that has accrued pursuant to this section without requiring the claimant to submit a request for the interest amount. A plan failing to comply with this requirement shall pay the claimant a ten dollar ($10) fee.

(3)For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine payer liability for the claim includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the plan to determine the medical necessity for the health care services provided.

(4)If a claim or portion thereof is contested on the basis that the plan has not received all information necessary to determine payer liability for the claim or portion thereof and notice has been provided pursuant to this section, the plan shall have 30 working days or, if the health care service plan is a health maintenance organization, 45 working days after receipt of this additional information to complete reconsideration of the claim. If a plan has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim it has determined to be payable within 30 working days of the receipt of that information, or if the plan is a health maintenance organization, within 45 working days of receipt of that information, interest shall accrue and be payable at a rate of 15 percent per annum beginning with the first calendar day after the 30- or 45-working-day period.

(b)Notwithstanding any other law, a specialized health care service plan that undertakes solely to arrange for the provision of vision care services may use a statistically reliable method to investigate suspected fraud and to recover overpayments made as a result of fraud only if the specialized health care service plan complies with this subdivision.

(1)A specialized health care service plans statistically reliable method, and how the specialized health care service plan intends to utilize that method to determine recovery of overpayments made as a result of fraud, shall be submitted to, and approved by, the department as elements of the specialized health care service plans antifraud plan established and approved pursuant to Section 1348. The specialized health care service plans utilization of a statistically reliable method shall help protect and promote the interests of enrollees and shall help ensure a stable health care delivery system. The statistically reliable method shall be consistent with direction provided by the International Standards for the Professional Practice of Internal Auditing and the guidance provided by the International Professional Practices Framework guide, which are both produced by the Institute of Internal Auditors.

(2)Pursuant to its antifraud plan established and approved pursuant to Section 1348, a specialized health care service plan shall provide a written notice of suspected fraud to a provider that includes, at a minimum, all of the following:

(A)A clear description of the specialized health care service plans statistically reliable methodology. The description shall include information that ensures that the sample size used to calculate the repayment amount is consistent with the professional guidance provided in the 2009 edition of the American Institute of Certified Public Accountants Audit Sampling Considerations of Circular A-133 Compliance Audits.

(B)A clear description of the universe of claims from which the statistical random sample was drawn and, if different, the universe of claims upon which the statistical analysis was applied to generate the recovery amount.

(C)A clear explanation of how the specialized health care service plans statistically reliable methodology was utilized in the specialized health care service plans findings of suspected fraud.

(D)Notice that a provider may dispute the specialized health care service plans findings within 45 working days from the date of receipt of the notice of suspected fraud.

(E)The following information for each of the claims in the statistical sample that was utilized in the specialized health care service plans findings:

(i)The claim number.

(ii)The name of the patient.

(iii)The date of service.

(iv)The date of payment.

(v)A clear explanation of the basis upon which the specialized health care service plan suspects the claim is fraudulent.

(3)A specialized health care service plan that undertakes solely to arrange for the provision of vision care services may use a statistically reliable method to recover overpayments made as a result of suspected fraud only if the universe of claims upon which the statistical analysis is performed consists only of those claims made between 365 days from the date of payment of the earliest in time claim and the date of payment of the latest in time claim. Notice shall be mailed to the provider no later than 60 days following the date of payment of the latest in time claim.

(4)If the provider contests the specialized health care service plans notice of suspected fraud, the provider, within 45 working days of the date of receipt of the notice of suspected fraud, shall send written notice to the specialized health care service plan stating the basis upon which the provider believes that the claims are not fraudulent. The specialized health care service plan shall receive and process this contested notice of suspected fraud as a provider dispute pursuant to subdivision (a) of this section, paragraph (1) of subdivision (h) of Section 1367, and the regulations promulgated thereunder.

(5)A specialized health care service plan may offset the amount the specialized health care service plan disclosed as overpaid to the provider in an uncontested notice of suspected fraud against the providers current claim submissions only if all of the following requirements are met:

(A)The provider fails to reimburse the specialized health care service plan within 45 working days from the date of receipt by the provider of the notice of suspected fraud.

(B)The specialized health care service plan sends written notice to the provider no less than 10 working days prior to withholding current claim payments in which the specialized health care service plan, at a minimum, states its intent to withhold current claim payments and identifies the claim payments that the specialized health care service plan intends to withhold.

(C)The withheld claim payments do not exceed the amount asserted by the specialized health care service plan to be owed to the specialized health care service plan in its notice of suspected fraud.

(6)This section does not limit or remove a specialized health care service plans obligation to comply with its antifraud plan established pursuant to Section 1348, or to limit or remove the specialized health care service plans obligation to comply with the requirements for claims subject to subdivision (a).

(7)This subdivision does not limit or remove a specialized health care service plans ability to recover overpayments as long as recovery is consistent with applicable law, including subdivision (a) and the regulations promulgated thereunder.

(8)This subdivision does not apply to claims submitted by a physician and surgeon for medical or surgical services that are outside the scope of practice of an optometrist pursuant to the Optometry Practice Act (Chapter 7 (commencing with Section 3000) of Division 2 of the Business and Professions Code).

(c)The obligation of a plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services.

(d)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.

SEC. 2.Section 1371 is added to the Health and Safety Code, to read:1371.

(a)(1)A health care service plan, including a specialized health care service plan, shall reimburse a complete claim or portion thereof, whether in state or out of state, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan. If a claim or portion thereof does not meet the criteria for a complete claim or the criteria for coverage under the plan contract, the claimant shall be notified, in writing, that the claim or portion thereof is contested or denied, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan.

(2)The notice that a claim or portion thereof, is contested shall identify the portion of the claim that is contested, by procedure or revenue code, and the specific information needed from the provider to reconsider the claim, including any defect or impropriety or additional information needed to adjudicate the claim.

(3)The notice that a claim or portion thereof, is denied shall identify the portion of the claim that is denied, by procedure or revenue code, and the specific reasons for the denial including any defect or impropriety.

(4)If a complete claim is not reimbursed by delivery to the claimants address of record within 30 calendar days after receipt, interest shall accrue at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. A health care service plan shall automatically include in its payment of the claim all interest that has accrued pursuant to this section without requiring the claimant to submit a request for the interest amount. A plan failing to comply with this requirement shall pay the claimant a fee of the greater of an additional fifteen dollars ($15) or 10 percent of the accrued interest.

(5)For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine payer liability for the claim includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the plan to determine the medical necessity for the health care services provided. A plan may not contest a claim that is consistent with the procedure or revenue codes and services approved by prior authorization with appropriate documentation included on the claim.

(6)If a claim or portion thereof is contested on the basis that the plan has not received all information necessary to determine payer liability for the claim or portion thereof and notice has been provided pursuant to this section, the plan shall have 30 calendar days after receipt of this additional information to complete reconsideration of the claim. If a plan has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim it has determined to be payable within 30 calendar days of the receipt of that information, interest shall accrue and be payable at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period.

(C)A clear explanation of how the specialized health care service plans statistically reliable methodology was utilized in the specialized health care service plans findings of suspected fraud.

(D)Notice that a provider may dispute the specialized health care service plans findings within 45 working days from the date of receipt of the notice of suspected fraud.

(E)The following information for each of the claims in the statistical sample that was utilized in the specialized health care service plans findings:

(i)The claim number.

(ii)The name of the patient.

(iii)The date of service.

(iv)The date of payment.

(v)A clear explanation of the basis upon which the specialized health care service plan suspects the claim is fraudulent.

(A)The provider fails to reimburse the specialized health care service plan within 45 working days from the date of receipt by the provider of the notice of suspected fraud.

(C)The withheld claim payments do not exceed the amount asserted by the specialized health care service plan to be owed to the specialized health care service plan in its notice of suspected fraud.

(d)The department may issue compliance guidance and amend regulations for consistency with this section. The guidance and amendments shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

(e)This section shall become operative on January 1, 2026.

SEC. 3.Section 1371.34 is added to the Health and Safety Code, to read:1371.34.

(a)A complaint made by an enrollee to a health care service plan about a delay or denial of a payment of a claim shall be treated as a grievance subject to Section 1368 whether or not the enrollee uses the term grievance as part of the complaint. This section does not apply to specialized health care service plans.

(b)This section shall become operative on January 1, 2026.

SEC. 4.Section 1371.35 of the Health and Safety Code is amended to read:1371.35.

(a) A health care service plan, including a specialized health care service plan, shall reimburse each complete claim, or portion thereof, whether in state or out of state, as soon as practical, but no later than 30 working days after receipt of the complete claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the complete claim by the health care service plan. However, a plan may contest or deny a claim, or portion thereof, by notifying the claimant, in writing, that the claim is contested or denied, within 30 working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, 45 working days after receipt of the claim by the health care service plan. The notice that a claim, or portion thereof, is contested shall identify the portion of the claim that is contested, by revenue code, and the specific information needed from the provider to reconsider the claim. The notice that a claim, or portion thereof, is denied shall identify the portion of the claim that is denied, by revenue code, and the specific reasons for the denial. A plan may delay payment of an uncontested portion of a complete claim for reconsideration of a contested portion of that claim so long as the plan pays those charges specified in subdivision (b).

(b) If a complete claim, or portion thereof, that is neither contested nor denied, is not reimbursed by delivery to the claimants address of record within the respective 30 or 45 working days after receipt, the plan shall pay the greater of fifteen dollars ($15) per year or interest at the rate of 15 percent per annum beginning with the first calendar day after the 30- or 45-working-day period. A health care service plan shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the claimant, without requiring a request therefor.

(c) For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 working days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 working days of receipt of the claim. However, if the plan requests a copy of the emergency department report within the 30 working days after receipt of the electronic claim from the institutional provider, the plan may also request additional reasonable relevant information within 30 working days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 working days of receipt of the claim. The provider shall provide the plan reasonable relevant information within 10 working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the plan requires further information, the plan shall have an additional 15 working days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete.

(d) This section shall not apply to claims about which there is evidence of fraud and misrepresentation, to eligibility determinations, or in instances where the plan has not been granted reasonable access to information under the providers control. A plan shall specify, in a written notice sent to the provider within the respective 30- or 45-working days of receipt of the claim, which, if any, of these exceptions applies to a claim.

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

(f) The obligation of the plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services. This section shall not be construed to prevent a plan from assigning, by a written contract, the responsibility to pay interest and late charges pursuant to this section to medical groups, independent practice associations, or other entities.

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

(h) A health care service plan shall not request or require that a provider waive its rights pursuant to this section.

(i) This section shall not apply to capitated payments.

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

(k) This section shall not be construed to affect the rights or obligations of any person pursuant to Section 1371.

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

(m) This section shall remain in effect only until January 1, 2026, and as of that date is repealed.

SEC. 5.Section 1371.35 is added to the Health and Safety Code, to read:1371.35.

(a)(1)A health care service plan, including a specialized health care service plan, shall reimburse a complete claim or portion thereof, whether in state or out of state, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan. If a claim or portion thereof does not meet the criteria for a complete claim or the criteria for coverage under the plan contract, a health care service plan shall notify the claimant, in writing, that the claim or portion thereof is contested or denied, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan.

(b)If a claim, or portion thereof, is not reimbursed by delivery to the claimants address of record within 30 calendar days after receipt, the plan shall pay interest at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. A health care service plan shall automatically include all interest that has accrued pursuant to this section in the payment made to the claimant, without requiring a request therefor. A plan failing to comply with this requirement shall pay the claimant the greater of an additional fifteen dollars ($15) or a fee of 10 percent of the accrued interest.

(c)For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 calendar days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 calendar days of receipt of the claim. However, if the plan requests a copy of the emergency department report within the 30 calendar days after receipt of the electronic claim from the institutional provider, the plan may also request additional reasonable relevant information within 30 calendar days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 calendar days of receipt of the claim. The provider shall provide the plan reasonable relevant information within 10 working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the plan requires further information, the plan shall have an additional 15 calendar days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete.

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

(e)If a claim or portion thereof is contested on the basis that the plan has not received information reasonably necessary to determine payer liability for the claim or portion thereof, then the plan shall have 30 calendar days after receipt of this additional information to complete reconsideration of the claim. If a claim, or portion thereof, undergoing reconsideration is not reimbursed by delivery to the claimants address of record within 30 calendar days after receipt of the additional information, the plan shall pay interest at the rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. A health care service plan shall automatically include the interest due in the payment made to the claimant, without requiring a request therefor.

(f)The obligation of the plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services. This section shall not be construed to prevent a plan from assigning, by a written contract, the responsibility to pay interest and late charges pursuant to this section to medical groups, independent practice associations, or other entities.

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

(h)A health care service plan shall not request or require that a provider waive its rights pursuant to this section.

(i)This section shall not apply to capitated payments.

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

(k)This section shall not be construed to affect the rights or obligations of any person pursuant to Section 1371.

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

(m)The department may issue compliance guidance and amend regulations for consistency with this section. The guidance and amendments shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

(n)This section shall become operative on January 1, 2026.

SEC. 6.Section 10123.13 of the Insurance Code is amended to read:10123.13.

(a)Every insurer issuing group or individual policies of health insurance that cover hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse claims or any portion of any claim, whether in state or out of state, for those expenses as soon as practical, but no later than 30 working days after receipt of the claim by the insurer unless the claim or portion thereof is contested by the insurer, in which case the claimant shall be notified, in writing, that the claim is contested or denied, within 30 working days after receipt of the claim by the insurer. The notice that a claim is being contested or denied shall identify the portion of the claim that is contested or denied and the specific reasons including for each reason the factual and legal basis known at that time by the insurer for contesting or denying the claim. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or the legal basis for its reason for contesting or denying the claim. The insurer shall provide a copy of the notice to each insured who received services pursuant to the claim that was contested or denied and to the insureds health care provider that provided the services at issue. The notice shall advise the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that the insurer contested or denied, and the notice shall include the address, internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. The notice to the insured may also be included on the explanation of benefits.

(b)If an uncontested claim is not reimbursed by delivery to the claimants address of record within 30 working days after receipt, interest shall accrue and shall be payable at the rate of 10 percent per annum beginning with the first calendar day after the 30-working-day period.

(c)For purposes of this section, a claim, or portion thereof, is reasonably contested when the insurer has not received a completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine liability for the claims includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the insurer to determine the medical necessity for the health care services provided to the claimant. If an insurer has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim determined to be payable within 30 working days of receipt of that information, interest shall accrue and be payable at a rate of 10 percent per annum beginning with the first calendar day after the 30-working-day period.

(d)The obligation of the insurer to comply with this section shall not be deemed to be waived when the insurer requires its contracting entities to pay claims for covered services.

(e)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.

SEC. 7.Section 10123.13 is added to the Insurance Code, to read:10123.13.

(a)Every insurer issuing group or individual policies of health insurance that cover hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse a complete claim or portion thereof, whether in state or out of state, for those expenses as soon as practicable, but no later than 30 calendar days after receipt of the claim by the insurer, in which case the claimant shall be notified, in writing, that the claim is contested or denied, within 30 calendar days after receipt of the claim by the insurer. The notice that a claim is being contested or denied shall identify the portion of the claim that is contested or denied and the specific reasons including for each reason the factual and legal basis known at that time by the insurer for contesting or denying the claim. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or the legal basis for its reason for contesting or denying the claim. The insurer shall provide a copy of the notice to each insured who received services pursuant to the claim that was contested or denied and to the insureds health care provider that provided the services at issue. The notice shall advise the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that the insurer contested or denied, and the notice shall include the address, internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. The notice to the insured may also be included on the explanation of benefits.

(b)If an uncontested claim is not reimbursed by delivery to the claimants address of record within 30 calendar days after receipt, interest shall accrue at the rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. An insurer shall automatically include in its payment of the claim all interest that has accrued pursuant to this section without requiring the claimant to submit a request for the interest amount. An insurer failing to comply with this requirement shall pay the claimant a fee of the greater an additional of fifteen dollars ($15) or 10 percent of the accrued interest.

(c)(1)For purposes of this section, a claim, or portion thereof, is reasonably contested when the insurer has not received a completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine liability for the claims includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the insurer to determine the medical necessity for the health care services provided to the claimant. An insurer may not contest a complete claim that is consistent with an approved prior authorization request if the prior authorization approval has been provided in the appropriate field on the claim.

(2)If an insurer has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim determined to be payable within 30 calendar days of receipt of that information, interest shall accrue and be payable at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period.

(d)The obligation of the insurer to comply with this section shall not be deemed to be waived when the insurer requires its contracting entities to pay claims for covered services.

(e)(1)The department may issue guidance and regulations relating to this section. The guidance and regulations shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

(2)After January 1, 2028, the department may issue regulations relating to this section subject to the rulemaking provisions of the Administrative Procedure Act ((Chapter 3.5 commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2030.

(f)This section shall become operative on January 1, 2026.

SEC. 8.Section 10123.147 of the Insurance Code is amended to read:10123.147.

(a)Every insurer issuing group or individual policies of health insurance that cover hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse each complete claim, or portion thereof, whether in state or out of state, as soon as practical, but no later than 30 working days after receipt of the complete claim by the insurer. However, an insurer may contest or deny a claim, or portion thereof, by notifying the claimant, in writing, that the claim is contested or denied, within 30 working days after receipt of the complete claim by the insurer. The notice that a claim, or portion thereof, is contested shall identify the portion of the claim that is contested, by revenue code, and the specific information needed from the provider to reconsider the claim. The notice that a claim, or portion thereof, is denied shall identify the portion of the claim that is denied, by revenue code, and the specific reasons for the denial, including the factual and legal basis known at that time by the insurer for each reason. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or legal basis for its reason to deny the claim. The insurer shall provide a copy of the notice required by this subdivision to each insured who received services pursuant to the claim that was contested or denied and to the insureds health care provider that provided the services at issue. The notice required by this subdivision shall include a statement advising the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that was contested or denied by the insurer and the address, internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. An insurer may delay payment of an uncontested portion of a complete claim for reconsideration of a contested portion of that claim so long as the insurer pays those charges specified in subdivision (b).

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

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

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

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

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

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

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

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

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

(k)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.

SEC. 9.Section 10123.147 is added to the Insurance Code, to read:10123.147.

(a)Every insurer issuing group or individual policies of health insurance that cover hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse a complete claim or portion thereof, whether in state or out of state, as soon as practicable, but no later than 30 calendar days after receipt of the complete claim by the insurer. However, an insurer may contest or deny a claim, or portion thereof, by notifying the claimant, in writing, that the claim is contested or denied, within 30 calendar days after receipt of the claim by the insurer. The notice that a claim, or portion thereof, is contested shall identify the portion of the claim that is contested, by procedure or revenue code, and the specific information needed from the provider to reconsider the claim. The notice that a claim, or portion thereof, is denied shall identify the portion of the claim that is denied, by procedure or revenue code, and the specific reasons for the denial, including the factual and legal basis known at that time by the insurer for each reason. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or legal basis for its reason to deny the claim. The insurer shall provide a copy of the notice required by this subdivision to each insured who received services pursuant to the claim that was contested or denied and to the insureds health care provider that provided the services at issue. The notice required by this subdivision shall include a statement advising the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that was contested or denied by the insurer and the address, internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. An insurer may delay payment of an uncontested portion of a complete claim for reconsideration of a contested portion of that claim so long as the insurer pays those charges specified in subdivision (b).

(b)If a complete claim or portion thereof that is neither contested nor denied is not reimbursed by delivery to the claimants address of record within the 30 calendar days after receipt, the insurer shall pay the greater of fifteen dollars ($15) per year or a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. An insurer shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the claimant, without requiring a request therefor. An insurer failing to comply with this requirement shall pay the claimant the greater of an additional fifteen dollars ($15) or a fee of 10 percent of the accrued interest.

(c)For the purposes of this section, a claim or portion thereof, is reasonably contested if the insurer has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 calendar days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 calendar days of receipt of the claim. However, if the insurer requests a copy of the emergency department report within the 30 calendar days after receipt of the electronic claim from the institutional provider, the insurer may also request additional reasonable relevant information within 30 calendar days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 calendar days of receipt of the claim. The provider shall provide the insurer reasonable relevant information within 10 working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the insurer requires further information, the insurer shall have an additional 15 calendar days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete.

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

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

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

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

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

(k)(1)The department may issue guidance and regulations relating to this section. The guidance and regulations shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

(l)This section shall become operative on January 1, 2026.

SEC. 10.Section 14093.08 is added to the Welfare and Institutions Code, to read:14093.08.

Sections 1371 and 1371.35 of the Health and Safety Code apply to Medi-Cal managed care plan contracts entered into with the State Department of Health Care Services pursuant to this chapter or Chapter 8 (commencing with Section 14200).

SEC. 11.

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.