California Physician

Payor Abuse Rule #3: Health Plans Cannot
Rescind Authorization After Service Is Rendered
[Posted 04/15/04]

Did you know that California law prohibits a health plan from preauthorizing treatment of a plan enrollee and then rescinding or modifying that authorization after the physician provides the service? California’s new unfair payment practices regulations, which apply to all Knox-Keene licensed health plans, authorize the California Department of Managed Health Care (DMHC) to penalize plans that engage in such unfair payment practices.

To demonstrate to DMHC that a violation has occurred, CMA recommends that physicians keep a record of all preauthorizations. If the plan issues a written preauthorization, keep a copy in the patient’s chart. For authorization provided by telephone, physicians should record details of the conversation in the patient’s chart, including the name and title of the person they spoke with, the procedure(s) authorized, and the date.

It is important for physicians to report unfair health plan payment practices to DMHC, so that the department can act against plans that fail to comply with the new regulations. Provider complaint forms are available in the Unfair Payment Practices Resource Center.

Please contact CMA’s Center for Economic Services at 888/401-5911 before filing a complaint so that our reimbursement specialists can guide you through the complaint-submission process and advise you on the supporting documentation DMHC will require to substantiate an unfair payment practice complaint. Please also fax a copy of your complete complaint to CMA’s Center for Economic Services at 916/551-2027. This will allow CMA reimbursement specialists to monitor DMHC enforcement.

To further help physicians, CMA has developed the interactive “Payor Abuse Matters—React Now” CD-ROM. The CD is free to members ($100 for nonmembers). A printed version is available to members for $25 ($125 for nonmembers). To order, contact your local county medical society or call CMA’s publications line, 800/882-1262. Order forms can also be downloaded by clicking here.

For more information on unfair payment practices, see ON-CALL document #1051, “Physician Complaints/Unfair Payment Practices.” ON-CALL documents are free to members at CMA’s members-only website. Nonmembers can purchase ON-CALL documents for $2 per page at CMA’s online bookstore.

TO ORDER THE PAYOR ABUSE CD-ROM: Call your county medical society or CMA’s publications line, 800/882-1262.

TO REPORT AN UNFAIR PAYMENT PRACTICE or for help with other reimbursement related issues: Call CMA’s reimbursement help line, 888/401-5911, or e-mail awetzel@cmanet.org.