Assemblymember Aguiar-Curry Bill to Punish Deadbeat Health Plans Signed by Governor

Friday, September 7, 2018

AB 2674, by Assemblymember Cecilia Aguiar-Curry (D-Winters) was signed into law today by Governor Jerry Brown. The new law will require the Department of Managed Health Care (DMHC) to annually review complaints filed by providers who believe a health care service plan is engaging in an “unfair payment pattern.”

Said Aguiar-Curry, “When a health plan underpays or refuses to pay doctors, dentists, clinics and hospitals for their work, this raises the costs of the healthcare system overall. And in small cities and towns like those in my Assembly District, they’re not the kind of health care providers who can afford to float multi-billion-dollar, multinational corporations.”

Under existing law, the Department of Managed Health Care (DMHC) administers and evaluates healthcare laws and regulations according to the Knox-Keene Health Care Service Plan Act of 1975. This set of laws was created to regulate California’s health care service plans, and declares that a willful violation of the act is a crime. DMHC is responsible for addressing provider complaints of payment abuses engaged in by health care service plans. However, the department is only able to audit a health plan approximately every three years.

AB 2674 will deter health care service plans from purposefully underpaying providers in order to increase profits by increasing the opportunities for DMHC to discover dishonest business behavior. If the department does identify a violation or a pattern of improper activity, the corrective action upon that finding will result in the provider being repaid for the amount they are owed with interest. The bill will greatly enhance DMHC's discretion to determine if and when a health care service plan has engaged in a pattern or practice of violating the Knox Keene Act. Health plans who profit from taking advantage of the system for corporate gains will become easier targets.

“If we’re going to meet our goal of health care for all, cutting unnecessary or wasteful costs out of the system is crucial,” said the Assemblymember.  “Efforts like this are a critical step to affordability for those who have access to health care, but more importantly are absolutely essential to our State’s efforts to expand our system to make health care universally accessible.  We must strip the system of cynical attempts to make money at the expense of those who struggle to provide a healthy life for themselves, their families and their employees.”

Signing AB 2674 into law ensures that health plans will think twice before intentionally breaking the law.

Aguiar-Curry represents the 4th Assembly District, which includes all of Lake and Napa Counties, parts of Colusa, Solano and Sonoma Counties, and all of Yolo County except West Sacramento.

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