(1) Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law generally authorizes a health care service plan or disability insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law requires these decisions to be made within 30 days, or less than 72 hours when the enrollee faces an imminent and serious threat to their health. Existing law requires a health care service plan to establish a grievance system to resolve grievances within 30 days, but limits that timeframe to 3 days when the enrollee faces an imminent and serious threat to their health. Existing law requires a plan to provide a written explanation for its grievance decisions, as specified.
This bill would require that utilization review decisions be made within 72 hours from the health care service plan's receipt of the clinical information reasonably necessary to make the determination when the enrollee's condition is urgent. If the plan lacks the information reasonably necessary to make a decision regarding an urgent request, the bill would require the plan to notify the enrollee and provider about the information necessary to complete the request within 24 hours of receiving the request. The bill would require the plan to notify the enrollee and the provider of the decision within a reasonable amount of time, but not later than 48 hours after specified circumstances occur. If a health care service plan fails to make a utilization review decision, or provide notice of a decision, within the specified timelines, the bill would require the health care service plan to treat the request for authorization as a grievance and provide notice with specified information to the enrollee that a grievance has commenced, if the plan has received the information necessary to make a decision.
This bill would require a plan's grievance system to include expedited review of urgent grievances, as specified. The bill would require a plan to communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent, except as specified. If a plan fails to make a utilization review decision within the applicable timelines, the bill would require a grievance to be automatically resolved in favor of the enrollee, except in specified circumstances. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2) Existing law establishes the Independent Medical Review System in the Department of Managed Health Care to review grievances involving a disputed health care service. Existing law authorizes an enrollee to apply to the department for an independent medical review of a decision regarding health care services based in whole or in part on a finding that the disputed services are not medically necessary within 6 months of any specified qualifying periods and authorizes the director to extend that deadline if the circumstances of a case warrant the extension.
This bill would extend the above deadline to 12 months beyond the specified qualifying periods. The bill would require the plan to provide specified correspondence and documents to an enrollee and their representative, if applicable, if the enrollee has submitted a grievance for review under the Independent Medical Review System. The bill would require the department to provide an enrollee and their representative a reasonable opportunity to respond to communications between the department and the plan before the grievance is resolved. The bill would prohibit the department and its independent medical review organization from engaging in ex parte communication with a plan, enrollee, or their representatives during the grievance process, except as specified.
(3) Existing law provides for the regulation of disability insurers, including health insurers, by the Department of Insurance. Existing law requires a disability insurer, including an insurer that delegates utilization review or utilization management functions to medical groups, independent practice associations, or other contracting providers, to comply with specified requirements and limitations on their utilization review or utilization management functions. Existing law requires a decision to approve, modify, or deny a request by a provider before, or concurrent with, the provision of health care services to insureds to be made no more than 5 business days from the insurer's receipt of information necessary to make the determination. If the insured's condition poses an imminent and serious threat to the insured's health, existing law requires the decision to be made within no more than 72 hours. Existing law requires a decision to be communicated to the requesting provider within 24 hours of the decision, but requires a decision resulting in denial, delay, or modification of all or part of the requested health care service to be communicated within 2 business days, except as specified.
This bill would limit the applicability of the above-described provisions to health insurers. The bill would require a decision to approve, modify, or deny a request by a provider before the provision of health care services to be communicated no more than 5 business days from the health insurer's receipt of the request. If the insurer lacks information reasonably necessary to make the decision, the bill would require the insurer to notify the insured and provider within 5 business days from receipt of request and to afford the insured and provider at least 45 days from receipt of that notice to provide the information. If the insured's condition is urgent, as defined, the bill would require a decision to approve, modify, or deny a request by a provider before, or concurrent with, the provision of health care services to be communicated no more than 72 hours from the insurer's receipt of the request. If the insurer lacks information reasonably necessary to make the decision, the bill would require the insurer to notify the insured and provider no later than 24 hours from receipt of request and to afford the insured and provider at least 48 hours from receipt of that notice to provide the information. The bill would require an insurer to communicate a decision to modify or deny a concurrent care request, as specified, within 24 hours from the insurer's receipt of the request. If an insurer fails to provide notice of a decision, the bill would require an insurer to treat the request as a grievance and immediately notify the insured and provider that a grievance has commenced, if the insurer has received the information necessary to make a decision.
(4) Existing law establishes the Independent Medical Review System in the department to review grievances involving a disputed health care service. Existing law requires a disability insurance policy issued, amended, renewed, or delivered on or after January 1, 2000, to provide an insured with the opportunity to seek an independent medical review when health care services have been denied, modified, or delayed if the decision was based in whole or in part on a finding that the proposed health care services are not medically necessary. Existing law authorizes an insured to apply to the department for an independent medical review when specified conditions are met.
If a grievance is filed internally with an insurer, this bill would require an insurer to acknowledge receipt of the grievance within 24 hours of receipt if urgent and 5 calendar days if nonurgent, and then communicate its final grievance determination within 72 hours of receipt if urgent and 30 days if nonurgent. Upon notice from the department to a health insurer that an insured has submitted a complaint to the department, the bill would require an insurer to respond within 24 hours if a complaint is urgent, or within 5 calendar days regarding a nonurgent complaint.
This bill would require the department to determine whether or not a complaint is urgent, as specified, unless the insured's provider has already designated the complaint as urgent. The bill would require the insurer to offer to provide specified correspondence and documents to an insured and their representative, if applicable, if the insured has submitted a complaint or independent medical review case to the department. The bill would require the department to provide an insured and their representative a reasonable opportunity to respond to communications between the department and the insurer before the grievance is resolved. The bill would prohibit an insurer from engaging in ex parte communication with the independent medical review organization deciding a case.
(5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Statutes affected:
AB3260: 1367.01 HSC, 1368 HSC, 1368.01 HSC, 1374.30 HSC, 10123.135 INS
02/16/24 - Introduced: 1367.01 HSC, 1368 HSC, 1368.01 HSC, 1374.30 HSC, 10169 INS
04/01/24 - Amended Assembly: 1367.01 HSC, 1368 HSC, 1368.01 HSC, 1374.30 HSC, 10169 INS
05/16/24 - Amended Assembly: 1367.01 HSC, 1368 HSC, 1368.01 HSC, 1374.30 HSC, 10169 INS
06/13/24 - Amended Senate: 1367.01 HSC, 1368 HSC, 1368.01 HSC, 1374.30 HSC, 10169 INS, 10123.135 INS, 10123.135 INS
06/27/24 - Amended Senate: 1367.01 HSC, 1368 HSC, 1368.01 HSC, 1374.30 HSC, 10123.135 INS
AB 3260: 1367.01 HSC, 1368 HSC, 1368.01 HSC, 1374.30 HSC, 10169 INS