CMA is sponsoring a key piece of legislation that would strengthen a physician’s right to sue a health plan when the plan fails to make fair and timely payment for care provided to its enrollees. Specifically, the bill would make it easier for a physician to sue health plans that fail to follow the payment and claims-processing provisions of the Knox-Keene Act, which regulates health plans in California.

The bill would also provide physicians with a legal remedy when a health plan delegates its payment responsibility to an IPA or other contracting agent that subsequently becomes insolvent when the plan knew, or should have known, that the intermediary was financially unstable.

“For years, physicians and their patients have been plagued by contract, billing, and claims problems inflicted by health plans, despite a number of laws to ensure appropriate and prompt payment,” said CMA President Robert Hertzka, M.D. “The failure to be paid promptly and fairly has caused many physicians to drop out of managed care altogether, disrupting the ability of patients to get high-quality care throughout California.”

Despite California’s new payor abuse regulations, and the passage in the past few years of statutes that penalize health plans for unfair payment practices, the problems persist. CMA officials said the bill (SB 1569) would give physicians a very effective tool to combat unfair health plan practices.

Despite vigorous opposition from the health plan lobby, the bill recently cleared the Assembly Judiciary Committee 8 to 3 and now heads to the Assembly floor. CMA is asking physicians to write, fax, or e-mail their Assembly members and urge them to vote yes on the bill.