California Physician

California’s unfair payment practices law requires Knox-Keene licensed health plans to request refunds on overpaid claims to physicians in writing within one year of the original payment dates. Such notices must clearly identify the claim, including patient name, date of service, and amount the plan believes was overpaid, and state the plan’s case for overpayment.

To contest an overpayment notice, physicians must notify the plan in writing within 30 days of receipt and explain why they believe the claim was not overpaid. The plan must then process the contested notice of overpayment through its official provider dispute process. (The law also requires that health plans fully and regularly disclose to contracting physicians the rules for filing provider disputes. For more information, see Payor Abuse Rule #1, “Fee Schedule Disclosure,” in the April 1 issue of CMA Alert.)

If the overpayment is uncontested, the physician must reimburse the plan within 30 days of the receipt of the overpayment notice. A plan may not, however, offset uncontested overpayments against a physician’s current claims, unless the physician’s contract specifically authorizes the plan to do so.

Under the new unfair payment practices regulations, the California Department of Managed Health Care (DMHC) is authorized to penalize health plans and their contracting medical groups/IPAs that submit improper overpayment notices or engage in other unfair payment practices.

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 are also available online.

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.

Previous Payor Abuse Rules:

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.