New California Law Could Speed up Timeframe for Insurance Companies to Authorize Procedures
If you’ve ever had to get prior authorization from your health plan before having a procedure done, you know firsthand the stress and anxiety that comes with waiting around for the insurance company to make a decision on your case, hoping the authorization comes through and in a timely manner.
As introduced, Assembly Bill 3260 (AB3260) would require health plans to expedite reviews of requests when the patient’s doctor says the matter is urgent. The bill would also make the doctor’s urgency determination binding on the insurance company.
AB 3260 has passed the California Assembly and is working its way through the Senate, although amendments along the way removed the language making the physician’s determination of urgency binding. However, that feature could possibly get added back in a conference committee as the bill continues its long march toward becoming a law.
Read more below about AB 3260 and its potential to provide patients with more timely access to medical care. If your health insurance plan is unreasonably delaying your medical care or has improperly denied your request for treatment, contact Gianelli & Morris to speak with an experienced and successful California bad faith insurance lawyer.
Bill Would Speed up Utilization Review in Urgent Cases
Utilization review is a process used by insurance companies to approve, change, delay or deny requests for health care services. Under current law, utilization review must be conducted by a licensed physician or healthcare professional who is competent to evaluate clinical issues.
Currently, UR decisions based on medical necessity must be made within five days, but if the enrollee faces an imminent and serious health threat, the decision must be made within 72 hours. AB3260 significantly alters this provision in situations where the insurance company declares it needs additional information before it can make its determination. If this bill becomes law, insurers must specify the information needed within 24 hours of receiving an urgent request, and they must give the provider and enrollee at least 48 hours to provide the information. The insurer then has 48 hours to let the provider and enrollee know they have received the information.
Who decides whether a request is “urgent”? According to the law, the policyholder’s doctor makes that determination. AB3260 would make that determination binding on the health plan. It appears this provision has been removed in a Senate amendment, which would be a shame as this is a powerful protection for enrollees dealing with serious medical issues.
The bill would also add “severe pain” as a factor the doctor can rely on in determining that the situation is urgent.
Once a decision is made, the health plan must communicate its decision to the healthcare provider within 24 hours. If the decision involves a delay, denial or modification of the requested service, the insurer must communicate its decision to the enrollee within two business days of the decision, or within 24 hours if it pertains to care that is underway. Decisions must be in writing and provide a “clear and concise” explanation of the reason for the decision.
Imposes Strict Timelines for Grievances, With Consequences on Insurers That Fail to Comply
Insurance companies must have a grievance system in place to resolve grievances within 30 days, or within three days in the case of an imminent and serious health threat. If the insurer fails to abide by the timelines required by law for making a decision on prior authorization, AB 3260 requires the insurance company to automatically treat a request for authorization as a grievance. Furthermore, if the insurance company fails to meet the applicable grievance timeline, the grievance is automatically resolved in favor of the enrollee, except for cases when the plan did not have clinical information reasonably necessary and requested, or when the services requested are experimental or investigational.
Hospitals Urge Legislature to Pass AB3260
The California Hospital Association supports AB 3260. In a letter of support to Senator Richard Roth, Chair of the Senate Health Committee, the CHA called the measure “sensible prior authorization reform,” stating, “California’s hospitals see firsthand the devastating impact on patients when their health care is delayed or denied. Health plans’ prior authorization process often impedes timely access to medically necessary care, prolonging patients’ suffering and compromising their health outcomes. Prior authorization also takes physicians and other providers away from patients’ bedsides, forcing them to instead focus on time-consuming communication and appeals.”
So Where Does AB3260 Stand?
AB 3260 was introduced to the California Assembly on February 16 of this year. It received its third reading in the Assembly and passed that house on May 21. It had its second reading in the Senate and was amended there on June 27th, when it was re-referred to the Senate Appropriations Committee.
The Senate amendments removed language that would make the determination of urgency by the enrollee’s healthcare provider binding on the insurance company.
Since the bill was amended in the Senate, it would have to go back to the Assembly for agreement or a conference report to hash out differences between the two houses before it could be sent to the Governor. Changes can be made in a conference committee, which could include reintroducing language that was taken out by the Senate committee. If both the Assembly and the Senate adopt the conference report, the bill heads to the Governor for his signature.
California Insurance Claim Denied in Bad Faith? Contact Gianelli & Morris Today!
At Gianelli & Morris, we stay on top of legal developments in California insurance law from the legislature to the courtroom, and our firm has even been instrumental in shaping the law through landmark litigation over the years. If you feel that your health insurance claim or request for services was unreasonably denied or delayed, call Gianelli & Morris at 213-489-1600 for a free consultation to discuss your case.
