CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 250

Introduced by Senator Pan

January 25, 2021

An act to amend Section 1371.9 of, and to add Sections 1363.6 and 1371.57 to, the Health and Safety Code, and to amend Section 10112.8 of, and to add Sections 10112.93 and 10123.136 to, the Insurance Code, relating to health care coverage.


LEGISLATIVE COUNSEL'S DIGEST


SB 250, as introduced, Pan. Health care coverage.
(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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer to establish criteria or guidelines that meet specified requirements to be used to determine whether or not to authorize, modify, or deny health care services.
This bill would authorize the Department of Managed Health Care and the Insurance Commissioner, as appropriate, to review a plan’s or insurer’s clinical criteria, guidelines, and utilization management policies to ensure compliance with existing law. If the criteria and guidelines are not in compliance with existing law, the bill would require the Director of the Department of Managed Health Care or the commissioner to issue a corrective action and send the matter to enforcement, if necessary. The bill would require each department, on or before July 1, 2022, to develop a methodology for a plan or insurer to report the number of prospective utilization review requests it denied in the preceding 12 months.
This bill would require a plan or insurer and its delegated entities, on or before January 1, 2023, and annually thereafter, to report, among other things, its average number of denied prospective utilization review requests, as specified. The bill would require, on and after January 1, 2023, a plan or insurer to examine a physician’s record of prospective utilization review requests during the preceding 12 months and grant the physician “deemed approved” status for 2 years, meaning an exemption from the prospective utilization review process, if specified criteria are met. The bill would authorize a plan or insurer to request an audit of a physician’s records after the initial 2 years of a physician’s deemed approved status and every 2 years thereafter, and would specify the audit criteria by which a physician would keep or lose that status. 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 requires a health care service plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017, to provide that an enrollee or insured who receives services at a contracting health facility provided by a noncontracting individual health professional is required to pay no more than the same cost sharing that they would pay for the same covered services received from a contracting individual health professional. Existing law authorizes a noncontracting individual health professional to collect that in-network cost-sharing amount directly from an enrollee or insured.
This bill would, for a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2022, revise those provisions to require a health care service plan or health insurer to reimburse a noncontracting individual health professional the in-network cost-sharing amount and to collect that amount from an enrollee or insured. The bill would prohibit a noncontracting individual health professional from collecting the in-network cost-sharing amount directly from an enrollee or insured.
This bill would, for a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2022, require a plan or insurer to reimburse an individual health professional the full contracted rate, including any cost sharing, for services provided by the individual health professional to an enrollee or insured at a licensed hospital, and would prohibit an individual health professional from collecting the cost-sharing amount from the enrollee or insured. The bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2022, to provide that, for services rendered on or after July 1, 2022, the plan will bill and collect from the enrollee or insured the cost-sharing amounts for services provided by an individual health professional at a licensed hospital. 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 1363.6 is added to the Health and Safety Code, to read:

1363.6.
 (a) The department may review a health care service plan’s clinical criteria, guidelines, and utilization management policies established pursuant to Section 1363.5, 1367.01, or any other provision of this chapter to ensure compliance with this chapter. Upon a finding that the criteria and guidelines are not in compliance with this chapter, the director shall issue a corrective action and, if necessary, send the matter to enforcement.
(b) On or before July 1, 2022, the department shall develop a methodology for a health care service plan and its delegated entities to calculate the average number of denied prospective utilization review requests for each specialty in each geographic region in the preceding 12 months.
(c) On or before January 1, 2023, and annually thereafter, a health care service plan and its delegated entities shall report to the department both of the following:
(1) Its average number of denied prospective utilization review requests for each specialty in each geographic region calculated pursuant to the methodology developed by the department.
(2) Its policies and procedures for determining the average number of denied prospective utilization review requests.
(d) On and after January 1, 2023, a health care service plan and its delegated entities shall examine a physician’s record of prospective utilization review requests during the preceding 12 months and calculate both of the following:
(1) The number of denied prospective utilization review requests the physician did not appeal.
(2) The number of denied prospective utilization review requests the physician appealed with a medical peer review that the physician lost.
(e) If the calculations made pursuant to subdivision (d) are less than two deviations away from the average number of denied prospective utilization review requests for the physician’s specialty and geographic region, the health care service plan shall grant the physician “deemed approved” status for two years. Deemed approved status shall exempt the physician from the plan’s prospective utilization review process for all products the plan maintains.
(f) (1) After the initial two years of a physician’s deemed approved status, and every two years thereafter, the health care service plan may request an audit of 10 percent of a physician’s records, but not to exceed 20 records for all product types combined in a given year. The review shall be held at a time and in a manner that is convenient for the physician.
(2) If the audited records would have been less than two deviations away from the average number of denied prospective utilization review requests for the physician’s specialty and geographic region if prospective utilization review had been conducted, the physician shall retain deemed approved status. If those records would have more than two deviations away from those averages if prospective utilization review had been conducted, the physician shall lose deemed approved status.
(3) If a physician loses deemed approved status as a result of the audit, the physician may appeal the loss through a medical peer review by a peer of the same or a similar specialty.
(4) The department may review and override denials of deemed approved status after an appeal through medical peer review.
(5) Services provided pursuant to this section shall not be rescinded or modified after the provider renders health care service in good faith.
(6) A health care service plan shall not seek reimbursement for treatment that it would have denied if prospective utilization review had been required.
(7) If a health care service plan delegates the responsibility for prospective utilization review to a contracted entity, including, but not limited to, a medical group or independent practice association, then the entity to which that responsibility is delegated shall comply with the requirements of this section.

SEC. 2.

 Section 1371.57 is added to the Health and Safety Code, to read:

1371.57.
 (a) (1)A health care service plan shall reimburse an individual health professional the full contracted rate, including any cost sharing, for services provided by the individual health professional to an enrollee at a licensed hospital.
(2) Reimbursement of claims by a health care service plan to an individual health professional, including reimbursement of the portion of a claim that constitutes cost sharing, for services provided by the individual health professional to an enrollee at a licensed hospital shall be made in accordance with this chapter, including Section 1371.
(b) (1) An individual health professional shall not bill or collect from an enrollee cost-sharing amounts for services provided by an individual health professional to the enrollee at a licensed hospital.
(2) If an individual health professional has received payment from an enrollee for the cost-sharing amount for services provided by the individual health professional to the enrollee at a licensed hospital, the individual health professional shall refund the payment to the enrollee within 30 calendar days after receiving payment from the enrollee.
(c) (1) For services rendered on or after July 1, 2022, the plan shall bill and collect from the enrollee the cost-sharing amounts for services provided by an individual health professional to the enrollee at a licensed hospital.
(2) A health care service plan or its contracting entity, including a medical group or independent practice association, may advance to collections only the cost-sharing amount that the enrollee has failed to pay for services provided by an individual health professional to the enrollee at a licensed hospital, as determined by the plan.
(3) A health care service plan or an entity acting on its behalf, including an assignee of the debt, shall not report adverse information to a consumer credit reporting agency, or commence a civil action against an enrollee, regarding cost-sharing amounts owed by the enrollee for services provided by an individual health professional to the enrollee at a licensed hospital for a minimum of 150 calendar days after the initial billing.
(4) A health care service plan or an entity acting on its behalf, including an assignee of the debt, shall not use wage garnishment or a lien on a primary residence to collect unpaid cost-sharing amounts for services provided by an individual health professional to an enrollee at a licensed hospital.
(5) This section does not limit or restrict the rights or obligations of an enrollee pursuant to this chapter, including those in Section 1365.
(d) For purposes of this section:
(1) “Cost sharing” has the same meaning as in paragraph (2) of subdivision (g) of Section 1371.9.
(2) “Individual health professional” has the same meaning as in paragraph (3) of subdivision (g) of Section 1371.9.
(e) If a health care service plan delegates payment, billing, or collection functions to a contracted entity, including a medical group or independent practice association, the delegated entity shall comply with this section.
(f) This section shall only apply to health care service plan contract issued, amended, or renewed on or after January 1, 2022.

SEC. 3.

 Section 1371.9 of the Health and Safety Code is amended to read:

1371.9.
 (a) (1) Except as provided in subdivision (c), a health care service plan contract issued, amended, or renewed on or after July 1, 2017, shall provide that if an enrollee receives covered services from a contracting health facility at which, or as a result of which, the enrollee receives services provided by a noncontracting individual health professional, the enrollee shall pay no more than the same cost sharing that the enrollee would pay for the same covered services received from a contracting individual health professional. This amount shall be referred to as the “in-network cost-sharing amount.”
(2) A health care service plan contract issued, amended, or renewed on or after January 1, 2022, shall reimburse a noncontracting individual health professional the in-network cost-sharing amount for services provided by the noncontracting individual health professional to an enrollee at a contracting health facility.

(2)

(3) An enrollee shall not owe the noncontracting individual health professional more than the in-network cost-sharing amount for services subject to this section. At the time of payment by the plan to the noncontracting individual health professional, the plan shall inform the enrollee and the noncontracting individual health professional of the in-network cost-sharing amount owed by the enrollee.

(3)

(4) A noncontracting individual health professional shall not bill or collect any the in-network cost-sharing amount from the enrollee for services subject to this section except for the in-network cost-sharing amount. section. Any communication from the noncontracting individual health professional to the enrollee prior to before the receipt of information about the in-network cost-sharing amount pursuant to paragraph (2) shall include a notice in 12-point bold type stating that the communication is not a bill and informing the enrollee that the enrollee shall not pay the health care service plan until he or she is informed by his or her the health care service plan of any applicable cost sharing.

(4)

(5) (A) If the noncontracting individual health professional has received more than payment of the in-network cost-sharing amount from the enrollee for services subject to this section, the noncontracting individual health professional shall refund any overpayment the payment to the enrollee within 30 calendar days after receiving payment from the enrollee.
(B) If the noncontracting individual health professional does not refund any overpayment the payment to the enrollee within 30 calendar days after being informed of the enrollee’s in-network cost-sharing amount, days, interest shall accrue at the rate of 15 percent per annum beginning with the date payment was received from the enrollee.
(C) A noncontracting individual health professional shall automatically include in his or her the refund to the enrollee all interest that has accrued pursuant to this section without requiring the enrollee to submit a request for the interest amount.
(b) Except for services subject to subdivision (c), the following shall apply:
(1) Any cost sharing paid by the enrollee for the services subject to this section shall count toward the limit on annual out-of-pocket expenses established under Section 1367.006.
(2) Cost sharing arising from services subject to this section shall be counted toward any deductible in the same manner as cost sharing would be attributed to a contracting individual health professional.
(3) The cost sharing paid by the enrollee pursuant to this section shall satisfy the enrollee’s obligation to pay cost sharing for the health service and shall constitute “applicable cost sharing owed by the enrollee.”
(c) For services subject to this section, if an enrollee has a health care service plan that includes coverage for out-of-network benefits, a noncontracting individual health professional may bill or collect from the enrollee the out-of-network cost sharing, if applicable, only when the enrollee consents in writing and that written consent demonstrates satisfaction of all the following criteria:
(1) At least 24 hours in advance of care, the enrollee shall consent in writing to receive services from the identified noncontracting individual health professional.
(2) The consent shall be obtained by the noncontracting individual health professional in a document that is separate from the document used to obtain the consent for any other part of the care or procedure. The consent shall not be obtained by the facility or any representative of the facility. The consent shall not be obtained at the time of admission or at any time when the enrollee is being prepared for surgery or any other procedure.
(3) At the time consent is provided, the noncontracting individual health professional shall give the enrollee a written estimate of the enrollee’s total out-of-pocket cost of care. The written estimate shall be based on the professional’s billed charges for the service to be provided. The noncontracting individual health professional shall not attempt to collect more than the estimated amount without receiving separate written consent from the enrollee or the enrollee’s authorized representative, unless circumstances arise during delivery of services that were unforeseeable at the time the estimate was given that would require the provider to change the estimate.
(4) The consent shall advise the enrollee that he or she they may elect to seek care from a contracted provider or may contact the enrollee’s health care service plan in order to arrange to receive the health service from a contracted provider for lower out-of-pocket costs.
(5) The consent and estimate shall be provided to the enrollee in the language spoken by the enrollee, if the language is a Medi-Cal threshold language, as defined in subdivision (d) of Section 128552.
(6) The consent shall also advise the enrollee that any costs incurred as a result of the enrollee’s use of the out-of-network benefit shall be in addition to in-network cost-sharing amounts and may not count toward the annual out-of-pocket maximum on in-network benefits or a deductible, if any, for in-network benefits.
(d) A noncontracting individual health professional who fails to comply with the requirements of subdivision (c) has not obtained written consent for purposes of this section. Under those circumstances, subdivisions (a) and (b) shall apply and subdivision (c) shall not apply.
(e) (1) A noncontracting individual health professional may advance to collections only the in-network cost-sharing amount, as determined by the plan pursuant to subdivision (a) or the out-of-network cost-sharing amount owed pursuant to subdivision (c), (c) that the enrollee has failed to pay.
(2) The noncontracting individual health professional, or any entity acting on his or her their behalf, including any assignee of the debt, shall not report adverse information to a consumer credit reporting agency or commence civil action against the enrollee for a minimum of 150 days after the initial billing regarding amounts owed by the enrollee under subdivision (a) or (c).
(3) With respect to an enrollee, the noncontracting individual health professional, or any entity acting on his or her their behalf, including any assignee of the debt, shall not use wage garnishments or liens on primary residences as a means of collecting unpaid bills under this section.
(f) (1) A health care service plan contract issued, amended, or renewed on or after January 1, 2022, shall provide that, for services rendered on or after July 1, 2022, the plan shall bill and collect from the enrollee the in-network cost-sharing amounts for services provided by a noncontracting individual health professional to the enrollee at a contracting health facility.
(2) A health care service plan may advance to collections only the in-network cost-sharing amount that the enrollee has failed to pay for services provided by a noncontracting individual health professional to the enrollee at a contracting health facility, as determined by the plan.
(3) A health care service plan or an entity acting on its behalf, including an assignee of the debt, shall not report adverse information to a consumer credit reporting agency, or commence a civil action against an enrollee, regarding in-network cost-sharing amounts owed by the enrollee for services provided by a noncontracting individual health professional to the enrollee at a contracting health facility for a minimum of 150 calendar days after the initial billing.
(4) A health care service plan or an entity acting on its behalf, including an assignee of the debt, shall not use wage garnishment or a lien on a primary residence to collect unpaid in-network cost-sharing amounts for services provided by a noncontracting individual health professional to an enrollee at a contracting health facility.

(f)

(g) For purposes of this section and Sections 1371.30 and 1371.31, the following definitions shall apply:
(1) “Contracting health facility” means a health facility that is contracted with the enrollee’s health care service plan to provide services under the enrollee’s plan contract. A contracting health care facility includes, but is not limited to, the following providers:
(A) A licensed hospital.
(B) An ambulatory surgery or other outpatient setting, as described in subdivision (a), (d), (e), (g), or (h) of Section 1248.1.
(C) A laboratory.
(D) A radiology or imaging center.
(2) “Cost sharing” includes any copayment, coinsurance, or deductible, or any other form of cost sharing paid by the enrollee other than premium or share of premium.
(3) “Individual health professional” means a physician and surgeon or other professional who is licensed by this state to deliver or furnish health care services. For this purpose, an “individual health professional” shall not include a dentist, licensed pursuant to the Dental Practice Act (Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code).
(4) “In-network cost-sharing amount” means an amount no more than the same cost sharing the enrollee would pay for the same covered service received from a contracting health professional. The in-network cost-sharing amount with respect to an enrollee with coinsurance shall be based on the amount paid by the plan pursuant to paragraph (1) of subdivision (a) of Section 1371.31.
(5) “Noncontracting individual health professional” means a physician and surgeon or other professional who is licensed by the state to deliver or furnish health care services and who is not contracted with the enrollee’s health care service product. For this purpose, a “noncontracting individual health professional” shall not include a dentist, licensed pursuant to the Dental Practice Act (Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code). Application of this definition is not precluded by a noncontracting individual health professional’s affiliation with a group.

(g)

(h) This section shall not be construed to does not require a health care service plan to cover services not required by law or by the terms and conditions of the health care service plan contract.

(h)

(i) This section shall not be construed to does not exempt a plan or provider from the requirements under Section 1371.4 or 1373.96, nor abrogate the holding in Prospect Medical Group, Inc. v. Northridge Emergency Medical Group (2009) 45 Cal.4th 497.
(j) This section does not limit or restrict the rights or obligations of an enrollee pursuant to this chapter, including those in Section 1365.

(i)

(k) If a health care service plan delegates payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, the delegated entity shall comply with this section.

(j)

(l) This section shall not apply to a Medi-Cal managed health care service plan or any other 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), and Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.

(k)

(m) This section shall not apply to emergency services and care, as defined in Section 1317.1.

SEC. 4.

 Section 10112.8 of the Insurance Code is amended to read:

10112.8.
 (a) (1) Except as provided in subdivision (c), a health insurance policy issued, amended, or renewed on or after July 1, 2017, that provides benefits through contracts with providers at alternative rates of payment pursuant to Section 10133, shall provide that if an insured receives covered services from a contracting health facility at which, or as a result of which, the insured receives services provided by a noncontracting individual health professional, the insured shall pay no more than the same cost sharing that the insured would pay for the same covered services received from a contracting individual health professional. This amount shall be referred to as the “in-network cost-sharing amount.”
(2) A health insurer shall reimburse a noncontracting individual health professional the in-network cost-sharing amount for services provided by the noncontracting individual health professional to an insured at a contracting health facility.

(2)

(3) Except as provided in subdivision (c), an insured shall not owe the noncontracting individual health professional more than the in-network cost-sharing amount for services subject to this section. At the time of payment by the insurer to the noncontracting individual health professional, the insurer shall inform the insured and the noncontracting individual health professional of the in-network cost-sharing amount owed by the insured.

(3)

(4) A noncontracting individual health professional shall not bill or collect any the in-network cost-sharing amount from the insured for services subject to this section except the in-network cost-sharing amount. section. Any communication from the noncontracting individual health professional to the insured prior to before the receipt of information about the in-network cost-sharing amount pursuant to paragraph (2) shall include a notice in 12-point bold type stating that the communication is not a bill and informing the insured that the insured shall not pay the health insurer until he or she is informed by his or her the insurer of any applicable cost sharing.

(4)

(5) (A) If the noncontracting individual health professional has received more than payment of the in-network cost-sharing amount payment from the insured for services subject to this section, the noncontracting individual health professional shall refund any overpayment the payment to the insured within 30 calendar days after receiving payment from the insured.
(B) If the noncontracting individual health professional does not refund any overpayment the payment to the insured within 30 calendar days after being informed of the insured’s in-network cost-sharing amount, days, interest shall accrue at the rate of 15 percent per annum beginning with the date payment was received from the insured.
(C) A noncontracting individual health professional shall automatically include in his or her the refund to the insured all interest that has accrued pursuant to this section without requiring the insured to submit a request for the interest amount.
(b) Except for services subject to subdivision (c), the following shall apply:
(1) Any cost sharing paid by the insured for the services subject to this section shall count toward the limit on annual out-of-pocket expenses established under Section 10112.28.
(2) Cost sharing arising from services subject to this section shall be counted toward any deductible in the same manner as cost sharing would be attributed to a contracting individual health professional.
(3) The cost sharing paid by the insured pursuant to this section shall satisfy the insured’s obligation to pay cost sharing for the health service and shall constitute “applicable cost sharing owed by the insured.”
(c) For services subject to this section, if an insured has an insurance contract that includes coverage for out-of-network benefits, a noncontracting individual health professional may bill or collect from the insured the out-of-network cost sharing, if applicable, only when the insured consents in writing and that written consent demonstrates satisfaction of all the following criteria:
(1) At least 24 hours in advance of care, the insured shall consent in writing to receive services from the identified noncontracting individual health professional.
(2) The consent shall be obtained by the noncontracting individual health professional in a document that is separate from the document used to obtain the consent for any other part of the care or procedure. The consent shall not be obtained by the facility or any representative of the facility. The consent shall not be obtained at the time of admission or at any time when the enrollee is being prepared for surgery or any other procedure.
(3) At the time consent is provided the noncontracting individual health professional shall give the insured a written estimate of the insured’s total out-of-pocket cost of care. The written estimate shall be based on the professional’s billed charges for the service to be provided. The noncontracting individual health professional shall not attempt to collect more than the estimated amount without receiving separate written consent from the insured or the insured’s authorized representative, unless circumstances arise during delivery of services that were unforeseeable at the time the estimate was given that would require the provider to change the estimate.
(4) The consent shall advise the insured that he or she they may elect to seek care from a contracted provider or may contact the insured’s insurer in order to arrange to receive the health service from a contracted provider for lower out-of-pocket costs.
(5) The consent and estimate shall be provided to the insured in the language spoken by the insured, if the language is a Medi-Cal threshold language, as defined in subdivision (d) of Section 128552 of the Health and Safety Code.
(6) The consent shall also advise the insured that any costs incurred as a result of the insured’s use of the out-of-network benefit shall be in addition to in-network cost-sharing amounts and may not count toward the annual out-of-pocket maximum on in-network benefits or a deductible, if any, for in-network benefits.
(d) A noncontracting individual health professional who fails to comply with provisions of this subdivision has not obtained written consent for purposes of this section. Under those circumstances, subdivisions (a) and (b) shall apply and subdivision (c) shall not apply.
(e) (1) A noncontracting individual health professional may advance to collections only the in-network cost-sharing amount, as determined by the insurer pursuant to subdivision (a) or the out-of-network cost-sharing amount owed pursuant to subdivision (c), (c) that the insured has failed to pay.
(2) The noncontracting individual health professional, or any entity acting on his or her their behalf, including any assignee of the debt, shall not report adverse information to a consumer credit reporting agency or commence civil action against the insured for a minimum of 150 days after the initial billing regarding amounts owed by the insured under subdivision (a) or (c).
(3) With respect to an insured, a noncontracting individual health professional, or any entity acting on his or her their behalf, including any assignee of the debt, shall not use wage garnishments or liens on primary residences as a means of collecting unpaid bills under this section.
(f) (1) A health insurance policy issued, amended, or renewed on or after January 1, 2022, shall provide that, for services rendered on or after July 1, 2022, the insurer shall bill and collect from the insured the in-network cost-sharing amounts for services provided by a noncontracting individual health professional to the insured at a contracting health facility.
(2) A health insurer may advance to collections only the in-network cost-sharing amount that the insured has failed to pay for services provided by a noncontracting individual health professional to the insured at a contracting health facility, as determined by the insurer.
(3) A health insurer or an entity acting on its behalf, including an assignee of the debt, shall not report adverse information to a consumer credit reporting agency, or commence a civil action against an insured, regarding in-network cost-sharing amounts owed by the insured for services provided by a noncontracting individual health professional to the insured at a contracting health facility for a minimum of 150 calendar days after the initial billing.
(4) A health insurer or an entity acting on its behalf, including an assignee of the debt, shall not use wage garnishment or a lien on a primary residence to collect unpaid in-network cost-sharing amounts for services provided by a noncontracting individual health professional to an insured at a contracting health facility.

(f)

(g) For purposes of this section and Sections 10112.81 and 10112.82, the following definitions shall apply:
(1) “Contracting health facility” means a health facility that is contracted with the insured’s health insurer to provide services under the insured’s policy. A contracting health care facility includes, but is not limited to, the following providers:
(A) A licensed hospital.
(B) An ambulatory surgery or other outpatient setting, as described in subdivision (a), (d), (e), (g), or (h) of Section 1248.1 of the Health and Safety Code.
(C) A laboratory.
(D) A radiology or imaging center.
(2) “Cost sharing” includes any copayment, coinsurance, or deductible, or any other form of cost sharing paid by the insured other than premium or share of premium.
(3) “Individual health professional” means a physician and surgeon or other professional who is licensed by the state to deliver or furnish health care services. For this purpose, an “individual health professional” shall not include a dentist, licensed pursuant to the Dental Practice Act (Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code).
(4) “In-network cost-sharing amount” means an amount no more than the same cost sharing the insured would pay for the same covered service received from a contracting health professional. The in-network cost-sharing amount with respect to an insured with coinsurance shall be based on the amount paid by the insurer pursuant to paragraph (1) of subdivision (a) of Section 10112.82.
(5) “Noncontracting individual health professional” means a physician and surgeon or other professional who is licensed by the state to deliver or furnish health care services and who is not contracted with the insured’s health insurance product. For this purpose, a “noncontracting individual health professional” shall not include a dentist, licensed pursuant to the Dental Practice Act (Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code). Application of this definition is not precluded by a noncontracting individual health professional’s affiliation with a group.

(g)

(h) This section shall not be construed to does not require an insurer to cover services not required by law or by the terms and conditions of the health insurance policy.
(i) This section does not limit or restrict the rights or obligations of an insured pursuant to this chapter, including those in Section 10273.4.

(h)

(j) If a health insurer delegates payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, the delegated entity shall comply with this section.

(i)

(k) This section shall does not apply to emergency services and care, as defined in Section 1317.1 of the Health and Safety Code.

SEC. 5.

 Section 10112.93 is added to the Insurance Code, to read:

10112.93.
 (a) (1)A health insurer shall reimburse an individual health professional the full contracted rate, including any cost sharing, for services provided by the individual health professional to an insured at a licensed hospital.
(2) Reimbursement of claims by a health insurer to an individual health professional, including reimbursement of the portion of a claim that constitutes cost sharing, for services provided by the individual health professional to an insured at a licensed hospital shall be made in accordance with this chapter, including Section 10123.13.
(b) (1) An individual health professional shall not bill or collect from an insured cost-sharing amounts for services provided by an individual health professional to the insured at a licensed hospital.
(2) If an individual health professional has received payment from an insured for the cost-sharing amount for services provided by the individual health professional to the insured at a licensed hospital, the individual health professional shall refund the overpayment to the insured within 30 calendar days after receiving payment from the insured.
(c) (1) For services rendered on or after July 1, 2023, the insurer shall bill and collect from the insured the cost-sharing amounts for services provided by an individual health professional to the enrollee at a licensed hospital.
(2) A health insurer or its contracting entity, including a medical group or independent practice association, may advance to collections only the cost-sharing amount that the insured has failed to pay for services provided by an individual health professional to the insured at a licensed hospital, as determined by the plan.
(3) A health insurer or an entity acting on its behalf, including an assignee of the debt, shall not report adverse information to a consumer credit reporting agency, or commence a civil action against an insured, regarding cost-sharing amounts owed by the insured for services provided by an individual health professional to the insured at a licensed hospital for a minimum of 150 calendar days after the initial billing.
(4) A health insurer or an entity acting on its behalf, including an assignee of the debt, shall not use wage garnishment or a lien on a primary residence to collect unpaid cost-sharing amounts for services provided by an individual health professional to an insured at a licensed hospital.
(5) This section does not limit or restrict the rights or obligations of an insured pursuant to this chapter, including those in Section 10273.4.
(d) For purposes of this section:
(1) “Cost sharing” has the same meaning as in paragraph (2) of subdivision (g) of Section 10112.8.
(2) “Individual health professional” has the same meaning as in paragraph (3) of subdivision (g) of Section 10112.8.
(e) If a health insurer delegates payment, billing, or collection functions to a contracted entity, including a medical group or independent practice association, the delegated entity shall comply with this section.
(f) This section shall only apply to a health insurance policy issued, amended, or renewed on or after January 1, 2022.

SEC. 6.

 Section 10123.136 is added to the Insurance Code, to read:

10123.136.
 (a) The commissioner may review a health insurer’s clinical criteria, guidelines, and utilization management policies established pursuant to Section 10123.135 or any other provision of this chapter to ensure compliance with this chapter. Upon a finding that the criteria and guidelines are not in compliance with this chapter, the commissioner shall issue a corrective action and, if necessary, send the matter to enforcement.
(b) On or before July 1, 2022, the department shall develop a methodology for a health insurer to calculate the average number of denied prospective utilization review requests for each specialty in each geographic region in the preceding 12 months.
(c) On or before January 1, 2023, and annually thereafter, a health insurer shall report to the department both of the following:
(1) Its average number of denied prospective utilization review requests for each specialty in each geographic region calculated pursuant to the methodology developed by the department.
(2) Its policies and procedures for determining the average number of denied prospective utilization review requests.
(d) On and after January 1, 2023, a health insurer shall examine a physician’s record of prospective utilization review requests during the preceding 12 months and calculate both of the following:
(1) The number of denied prospective utilization review requests the physician did not appeal.
(2) The number of denied prospective utilization review requests the physician appealed with a medical peer review that the physician lost.
(e) If the calculations made pursuant to subdivision (d) are less than two deviations away from the average number of denied prospective utilization review requests for the physician’s specialty and geographic region, the health insurer shall grant the physician “deemed approved” status for two years. Deemed approved status shall exempt the physician from the insurer’s prospective utilization review process for all products the insurer maintains.
(f) (1) After the initial two years of a physician’s deemed approved status, and every two years thereafter, the health insurer may request an audit of 10 percent of a physician’s records, but not to exceed 20 records for all product types combined in a given year. The review shall be held at a time and in a manner that is convenient for the physician.
(2) If the audited records would have been less than two deviations away from the average number of denied prospective utilization review requests for the physician’s specialty and geographic region if prospective utilization review had been conducted, the physician shall retain deemed approved status. If those records would have more than two deviations away from those averages if prospective utilization review had been conducted, the physician shall lose deemed approved status.
(3) If a physician loses deemed approved status as a result of the audit, the physician may appeal the loss through a medical peer review by a peer of the same or a similar specialty.
(4) The department may review and override denials of deemed approved status after an appeal through medical peer review.
(5) Services provided pursuant to this section shall not be rescinded or modified after the provider renders health care service in good faith.
(6) A health insurer shall not seek reimbursement for treatment that it would have denied if prospective utilization review had been required.

SEC. 7.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.