AMENDED IN SENATE AUGUST 20, 2026

AMENDED IN SENATE JULY 2, 2026

AMENDED IN SENATE JUNE 22, 2026

AMENDED IN SENATE JUNE 11, 2026

AMENDED IN ASSEMBLY MAY 18, 2026

AMENDED IN ASSEMBLY APRIL 13, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

93

Introduced by Assembly Member Gipson

February 20, 2026

An act to amend Sections 1371 and 1371.35 of the Health and Safety Code, and to amend Sections 10123.13 and 10123.147 of the Insurance Code, relating to health care coverage.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: yes

LEGISLATIVE COUNSEL’S DIGEST

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance.

Existing law requires a health care service plan or health insurer to reimburse a complete claim or a portion thereof within 30 calendar days after receipt of the claim, or, if a claim or portion thereof does not meet the criteria for a complete claim or the criteria for coverage under the plan or insurance contract, to notify the claimant in writing that the claim or portion thereof is contested or denied as soon as practicable, but no later than 30 calendar days after receipt of the claim by the plan or insurer.

This bill would, commencing May 26, 2028, require a plan or insurer to accept electronic medical records and supporting documentation necessary to process a claim through a standard electronic submission method, as defined, specified, and would prohibit a plan or insurer from denying, pending, or delaying a claim solely because the plan’s or insurer’s systems are unable to accept documentation that otherwise meets the plan’s or insurer’s requirements. The bill would specify that if a state or federal standard is adopted that is specific to file size, number, or other capacity requirements for claims-related supporting documentation submissions, that standard would apply.

Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The people of the State of California do enact as follows:

SECTION 1.

Section 1371 of the Health and Safety Code is amended to read:

1371.

(a) (1) A health care service plan, including a specialized health care service plan, shall reimburse a complete claim or portion thereof, whether in state or out of state, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan. If a claim or portion thereof does not meet the criteria for a complete claim or the criteria for coverage under the plan contract, the claimant shall be notified, in writing, that the claim or portion thereof is contested or denied, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan.

(2) The notice that a claim or portion thereof, is contested shall identify the portion of the claim that is contested, by procedure or revenue code, and the specific information needed from the provider to reconsider the claim, including any defect or impropriety or additional information needed to adjudicate the claim.

(3) The notice that a claim or portion thereof, is denied shall identify the portion of the claim that is denied, by procedure or revenue code, and the specific reasons for the denial including any defect or impropriety.

(4) If a complete claim is not reimbursed by delivery to the claimant’s address of record within 30 calendar days after receipt, interest shall accrue at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. A health care service plan shall automatically include in its payment of the claim all interest that has accrued pursuant to this section without requiring the claimant to submit a request for the interest amount. A plan failing to comply with this requirement shall pay the claimant a fee of the greater of an additional fifteen dollars ($15) or 10 percent of the accrued interest.

(5) For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine payer liability for the claim includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the plan to determine the medical necessity for the health care services provided. A plan may not contest a claim that is consistent with the procedure or revenue codes and services approved by prior authorization with appropriate documentation included on the claim.

(6) If a claim or portion thereof is contested on the basis that the plan has not received all information necessary to determine payer liability for the claim or portion thereof and notice has been provided pursuant to this section, the plan shall have 30 calendar days after receipt of this additional information to complete reconsideration of the claim. If a plan has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim it has determined to be payable within 30 calendar days of the receipt of that information, interest shall accrue and be payable at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period.

(7) (A) Commencing May 26, 2028, a plan shall accept electronic medical records and supporting documentation necessary to process a claim through a standard electronic submission method. method, including establishing a file size limit sufficient to allow submission of typical medical documentation required to adjudicate claims. A plan shall confirm receipt electronically and shall not deny, pend, or delay a claim solely because the plan’s systems are unable to accept documentation that otherwise meets stated requirements.

(B) This paragraph does not prohibit a plan from denying, pending, or delaying a claim to the extent authorized under law. This paragraph does not apply during the period in which a plan’s ability to accept electronic medical records and supporting documentation is impacted by circumstances outside the plan’s reasonable control, including power outages, natural disasters, cybersecurity attacks, or similar incidents adversely impacting a plan’s ability to process an electronic submission.

(C) If a state or federal standard is adopted that is specific to file size, number, or other capacity requirements for claims-related supporting documentation submission, that standard shall apply.

(D) For purposes of this paragraph, “electronic submission” means submission through an electronic portal designated by the plan or an electronic submission in accordance with Section 130290 and applicable federal interoperability rules.

(b) Notwithstanding any other law, a specialized health care service plan that undertakes solely to arrange for the provision of vision care services may use a statistically reliable method to investigate suspected fraud and to recover overpayments made as a result of fraud only if the specialized health care service plan complies with this subdivision.

(1) A specialized health care service plan’s statistically reliable method, and how the specialized health care service plan intends to utilize that method to determine recovery of overpayments made as a result of fraud, shall be submitted to, and approved by, the department as elements of the specialized health care service plan’s antifraud plan established and approved pursuant to Section 1348. The specialized health care service plan’s utilization of a statistically reliable method shall help protect and promote the interests of enrollees and shall help ensure a stable health care delivery system. The statistically reliable method shall be consistent with direction provided by the International Standards for the Professional Practice of Internal Auditing and the guidance provided by the International Professional Practices Framework guide, which are both produced by the Institute of Internal Auditors.

(2) Pursuant to its antifraud plan established and approved pursuant to Section 1348, a specialized health care service plan shall provide a written notice of suspected fraud to a provider that includes, at a minimum, all of the following:

(A) A clear description of the specialized health care service plan’s statistically reliable methodology. The description shall include information that ensures that the sample size used to calculate the repayment amount is consistent with the professional guidance provided in the 2009 edition of the American Institute of Certified Public Accountants’ Audit Sampling Considerations of Circular A-133 Compliance Audits.

(B) A clear description of the universe of claims from which the statistical random sample was drawn and, if different, the universe of claims upon which the statistical analysis was applied to generate the recovery amount.

(C) A clear explanation of how the specialized health care service plan’s statistically reliable methodology was utilized in the specialized health care service plan’s findings of suspected fraud.

(D) Notice that a provider may dispute the specialized health care service plan’s findings within 45 working days from the date of receipt of the notice of suspected fraud.

(E) The following information for each of the claims in the statistical sample that was utilized in the specialized health care service plan’s findings:

(i) The claim number.

(ii) The name of the patient.

(iii) The date of service.

(iv) The date of payment.

(v) A clear explanation of the basis upon which the specialized health care service plan suspects the claim is fraudulent.

(3) A specialized health care service plan that undertakes solely to arrange for the provision of vision care services may use a statistically reliable method to recover overpayments made as a result of suspected fraud only if the universe of claims upon which the statistical analysis is performed consists only of those claims made between 365 days from the date of payment of the earliest in time claim and the date of payment of the latest in time claim. Notice shall be mailed to the provider no later than 60 days following the date of payment of the latest in time claim.

(4) If the provider contests the specialized health care service plan’s notice of suspected fraud, the provider, within 45 working days of the date of receipt of the notice of suspected fraud, shall send written notice to the specialized health care service plan stating the basis upon which the provider believes that the claims are not fraudulent. The specialized health care service plan shall receive and process this contested notice of suspected fraud as a provider dispute pursuant to subdivision (a) of this section, paragraph (1) of subdivision (h) of Section 1367, and the regulations promulgated thereunder.

(5) A specialized health care service plan may offset the amount the specialized health care service plan disclosed as overpaid to the provider in an uncontested notice of suspected fraud against the provider’s current claim submissions only if all of the following requirements are met:

(A) The provider fails to reimburse the specialized health care service plan within 45 working days from the date of receipt by the provider of the notice of suspected fraud.

(B) The specialized health care service plan sends written notice to the provider no less than 10 working days prior to withholding current claim payments in which the specialized health care service plan, at a minimum, states its intent to withhold current claim payments and identifies the claim payments that the specialized health care service plan intends to withhold.

(C) The withheld claim payments do not exceed the amount asserted by the specialized health care service plan to be owed to the specialized health care service plan in its notice of suspected fraud.

(6) This section does not limit or remove a specialized health care service plan’s obligation to comply with its antifraud plan established pursuant to Section 1348, or to limit or remove the specialized health care service plan’s obligation to comply with the requirements for claims subject to subdivision (a).

(7) This subdivision does not limit or remove a specialized health care service plan’s ability to recover overpayments as long as recovery is consistent with applicable law, including subdivision (a) and the regulations promulgated thereunder.

(8) This subdivision does not apply to claims submitted by a physician and surgeon for medical or surgical services that are outside the scope of practice of an optometrist pursuant to the Optometry Practice Act (Chapter 7 (commencing with Section 3000) of Division 2 of the Business and Professions Code).

(c) The obligation of a plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services.

(d) The department may issue compliance guidance and amend regulations for consistency with this section. The guidance and amendments shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

SEC. 2.

Section 1371.35 of the Health and Safety Code is amended to read:

1371.35.

(a) (1) A health care service plan, including a specialized health care service plan, shall reimburse a complete claim or portion thereof, whether in state or out of state, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan. If a claim or portion thereof does not meet the criteria for a complete claim or the criteria for coverage under the plan contract, a health care service plan shall notify the claimant, in writing, that the claim or portion thereof is contested or denied, as soon as practicable, but no later than 30 calendar days after receipt of the claim by the health care service plan.

(2) The notice that a claim or portion thereof, is contested shall identify the portion of the claim that is contested, by procedure or revenue code, and the specific information needed from the provider to reconsider the claim, including any defect or impropriety or additional information needed to adjudicate the claim.

(3) The notice that a claim or portion thereof, is denied shall identify the portion of the claim that is denied, by procedure or revenue code, and the specific reasons for the denial, including any defect or impropriety.

(b) If a claim, or portion thereof, is not reimbursed by delivery to the claimant’s address of record within 30 calendar days after receipt, the plan shall pay interest at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. A health care service plan shall automatically include all interest that has accrued pursuant to this section in the payment made to the claimant, without requiring a request therefor. A plan failing to comply with this requirement shall pay the claimant the greater of an additional fifteen dollars ($15) or a fee of 10 percent of the accrued interest.

(c) For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 calendar days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 calendar days of receipt of the claim. However, if the plan requests a copy of the emergency department report within the 30 calendar days after receipt of the electronic claim from the institutional provider, the plan may also request additional reasonable relevant information within 30 calendar days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within 30 calendar days of receipt of the claim. The provider shall provide the plan reasonable relevant information within 10 working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the plan requires further information, the plan shall have an additional 15 calendar days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete.

(d) This section shall not apply to claims about which there is evidence of fraud and misrepresentation, to eligibility determinations, or in instances where the plan has not been granted reasonable access to information under the provider’s control. A plan shall specify, in a written notice sent to the provider within 30 calendar days of receipt of the claim, which, if any, of these exceptions applies to a claim.

(e) If a claim or portion thereof is contested on the basis that the plan has not received information reasonably necessary to determine payer liability for the claim or portion thereof, then the plan shall have 30 calendar days after receipt of this additional information to complete reconsideration of the claim. If a claim, or portion thereof, undergoing reconsideration is not reimbursed by delivery to the claimant’s address of record within 30 calendar days after receipt of the additional information, the plan shall pay interest at the rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. A health care service plan shall automatically include the interest due in the payment made to the claimant, without requiring a request therefor.

(f) (1) Commencing May 26, 2028, a plan shall accept electronic medical records and supporting documentation necessary to process a claim through standard electronic submission methods. A plan shall maintain reasonable minimum technical standards, including a file size limit sufficient to allow submission of typical medical documentation required to adjudicate claims. methods, including establishing a file size limit sufficient to allow submission of typical medical documentation required to adjudicate claims. A plan shall confirm receipt electronically and shall not deny, pend, or delay a claim solely because the plan’s systems are unable to accept documentation that otherwise meets stated requirements.

(2) This subdivision does not prohibit a plan from denying, pending, or delaying a claim to the extent authorized under law. This subdivision does not apply during the period in which a plan’s ability to accept electronic medical records and supporting documentation is impacted by circumstances outside the plan’s reasonable control, including power outages, natural disasters, cybersecurity attacks, or similar incidents adversely impacting a plan’s ability to process an electronic submission.

(3) If a state or federal standard is adopted that is specific to file size, number, or other capacity requirements for claims-related supporting documentation submission, that standard shall apply.

(4) For purposes of this subdivision, “electronic submission” means submission through an electronic portal designated by the plan or an electronic submission in accordance with Section 130290 and applicable federal interoperability rules.

(g) The obligation of the plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services. This section shall not be construed to prevent a plan from assigning, by a written contract, the responsibility to pay interest and late charges pursuant to this section to medical groups, independent practice associations, or other entities.

(h) A plan shall not delay payment on a claim from a physician or other provider to await the submission of a claim from a hospital or other provider, without citing specific rationale as to why the delay was necessary and providing a monthly update regarding the status of the claim and the plan’s actions to resolve the claim, to the provider that submitted the claim.

(i) A health care service plan shall not request or require that a provider waive its rights pursuant to this section.

(j) This section shall not apply to capitated payments.

(k) This section shall apply only to claims for services rendered to a patient who was provided emergency services and care as defined in Section 1317.1 in the United States on or after September 1, 1999.

(l) This section shall not be construed to affect the rights or obligations of any person pursuant to Section 1371.

(m) This section shall not be construed to affect a written agreement, if any, of a provider to submit bills within a specified time period.

(n) The department may issue compliance guidance and amend regulations for consistency with this section. The guidance and amendments shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

SEC. 3.

Section 10123.13 of the Insurance Code is amended to read:

10123.13.

(a) Every insurer issuing group or individual policies of health insurance that cover hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse a complete claim or portion thereof, whether in state or out of state, for those expenses as soon as practicable, but no later than 30 calendar days after receipt of the claim by the insurer, unless the insurer is contesting or denying the claim or a portion thereof, in which case the claimant shall be notified, in writing, that the claim is contested or denied, within 30 calendar days after receipt of the claim by the insurer. The notice that a claim is being contested or denied shall identify the portion of the claim that is contested or denied and the specific reasons including for each reason the factual and legal basis known at that time by the insurer for contesting or denying the claim. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or the legal basis for its reason for contesting or denying the claim. The insurer shall provide a copy of the notice to each insured who received services pursuant to the claim that was contested or denied and to the insured’s health care provider that provided the services at issue. The notice shall advise the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that the insurer contested or denied, and the notice shall include the address, internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. The notice to the insured may also be included on the explanation of benefits.

(b) If an uncontested claim is not reimbursed by delivery to the claimant’s address of record within 30 calendar days after receipt, interest shall accrue at the rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. An insurer shall automatically include in its payment of the claim all interest that has accrued pursuant to this section without requiring the claimant to submit a request for the interest amount. An insurer failing to comply with this requirement shall pay the claimant a fee of the greater of an additional fifteen dollars ($15) or 10 percent of the accrued interest.

(c) (1) For purposes of this section, a claim, or portion thereof, is reasonably contested when the insurer has not received a completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine liability for the claims includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the insurer to determine the medical necessity for the health care services provided to the claimant. An insurer may not contest a complete claim that is consistent with an approved prior authorization request if the prior authorization approval has been provided in the appropriate field on the claim.

(2) If an insurer has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim determined to be payable within 30 calendar days of receipt of that information, interest shall accrue and be payable at a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period.

(d) (1) Commencing May 26, 2028, an insurer shall accept electronic medical records and supporting documentation necessary to process a claim through standard electronic submission methods. An insurer shall maintain reasonable minimum technical standards, including a file size limit sufficient to allow submission of typical medical documentation required to adjudicate claims. methods, including establishing a file size limit sufficient to allow submission of typical medical documentation required to adjudicate claims. An insurer shall confirm receipt electronically and shall not deny, pend, or delay a claim solely because the insurer’s systems are unable to accept documentation that otherwise meets stated requirements.

(2) This subdivision does not prohibit an insurer from denying, pending, or delaying a claim to the extent authorized under law. This subdivision does not apply during the period in which an insurer’s ability to accept electronic medical records and supporting documentation is impacted by circumstances outside the insurer’s reasonable control, including power outages, natural disasters, cybersecurity attacks, or similar incidents adversely impacting an insurer’s ability to process an electronic submission.

(3) If a state or federal standard is adopted that is specific to file size, number, or other capacity requirements for claims-related supporting documentation submission, that standard shall apply.

(4) For purposes of this subdivision, “electronic submission” means submission through an electronic portal designated by the insurer or an electronic submission in accordance with Section 130290 of the Health and Safety Code and applicable federal interoperability rules.

(e) The obligation of the insurer to comply with this section shall not be deemed to be waived when the insurer requires its contracting entities to pay claims for covered services.

(f) (1) The department may issue guidance and regulations relating to this section. The guidance and regulations shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

(2) After January 1, 2028, the department may issue regulations relating to this section subject to the rulemaking provisions of the Administrative Procedure Act ((Chapter 3.5 commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2030.

SEC. 4.

Section 10123.147 of the Insurance Code is amended to read:

10123.147.

(a) Every insurer issuing group or individual policies of health insurance that cover hospital, medical, or surgical expenses, including those telehealth services covered by the insurer as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, shall reimburse a complete claim or portion thereof, whether in state or out of state, as soon as practicable, but no later than 30 calendar days after receipt of the complete claim by the insurer. However, an insurer may contest or deny a claim, or portion thereof, by notifying the claimant, in writing, that the claim is contested or denied, within 30 calendar days after receipt of the claim by the insurer. The notice that a claim, or portion thereof, is contested shall identify the portion of the claim that is contested, by procedure or revenue code, and the specific information needed from the provider to reconsider the claim. The notice that a claim, or portion thereof, is denied shall identify the portion of the claim that is denied, by procedure or revenue code, and the specific reasons for the denial, including the factual and legal basis known at that time by the insurer for each reason. If the reason is based solely on facts or solely on law, the insurer is required to provide only the factual or legal basis for its reason to deny the claim. The insurer shall provide a copy of the notice required by this subdivision to each insured who received services pursuant to the claim that was contested or denied and to the insured’s health care provider that provided the services at issue. The notice required by this subdivision shall include a statement advising the provider who submitted the claim on behalf of the insured or pursuant to a contract for alternative rates of payment and the insured that either may seek review by the department of a claim that was contested or denied by the insurer and the address, internet website address, and telephone number of the unit within the department that performs this review function. The notice to the provider may be included on either the explanation of benefits or remittance advice and shall also contain a statement advising the provider of its right to enter into the dispute resolution process described in Section 10123.137. An insurer may delay payment of an uncontested portion of a complete claim for reconsideration of a contested portion of that claim so long as the insurer pays those charges specified in subdivision (b).

(b) If a complete claim or portion thereof that is neither contested nor denied is not reimbursed by delivery to the claimant’s address of record within the 30 calendar days after receipt, the insurer shall pay the greater of fifteen dollars ($15) per year or a rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. An insurer shall automatically include the fifteen dollars ($15) per year or interest due in the payment made to the claimant, without requiring a request therefor. An insurer failing to comply with this requirement shall pay the claimant the greater of an additional fifteen dollars ($15) or a fee of 10 percent of the accrued interest.

(c) For the purposes of this section, a claim or portion thereof, is reasonably contested if the insurer has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 calendar days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 calendar days of receipt of the claim. However, if the insurer requests a copy of the emergency department report within the 30 calendar days after receipt of the electronic claim from the institutional provider, the insurer may also request additional reasonable relevant information within 30 calendar days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the insurer within 30 calendar days of receipt of the claim. The provider shall provide the insurer reasonable relevant information within 10 working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the insurer requires further information, the insurer shall have an additional 15 calendar days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete.

(d) This section shall not apply to claims about which there is evidence of fraud and misrepresentation, to eligibility determinations, or in instances where the insurer has not been granted reasonable access to information under the provider’s control. An insurer shall specify, in a written notice to the provider within 30 calendar days of receipt of the claim, which, if any, of these exceptions applies to a claim.

(e) If a claim or portion thereof is contested on the basis that the insurer has not received information reasonably necessary to determine payer liability for the claim or portion thereof, then the insurer shall have 30 calendar days after receipt of this additional information to complete reconsideration of the claim. If a claim, or portion thereof, undergoing reconsideration is not reimbursed by delivery to the claimant’s address of record within the 30 calendar days after receipt of the additional information, the insurer shall pay interest at the rate of 15 percent per annum beginning with the first calendar day after the 30-calendar-day period. An insurer shall automatically include interest due in the payment made to the claimant, without requiring a request therefor.

(f) (1) Commencing May 26, 2028, an insurer shall accept electronic medical records and supporting documentation necessary to process a claim through standard electronic submission methods. An insurer shall maintain reasonable minimum technical standards, including a file size limit sufficient to allow submission of typical medical documentation required to adjudicate claims. methods, including establishing a file size limit sufficient to allow submission of typical medical documentation required to adjudicate claims. An insurer shall confirm receipt electronically and shall not deny, pend, or delay a claim solely because the insurer’s systems are unable to accept documentation that otherwise meets stated requirements.

(2) This subdivision does not prohibit an insurer from denying, pending, or delaying a claim to the extent authorized under law. This subdivision does not apply during the period in which an insurer’s ability to accept electronic medical records and supporting documentation is impacted by circumstances outside the insurer’s reasonable control, including power outages, natural disasters, cybersecurity attacks, or similar incidents adversely impacting an insurer’s ability to process an electronic submission.

(3) If a state or federal standard is adopted that is specific to file size, number, or other capacity requirements for claims-related supporting documentation submission, that standard shall apply.

(4) For purposes of this subdivision, “electronic submission” means submission through an electronic portal designated by the insurer or an electronic submission in accordance with Section 130290 of the Health and Safety Code and applicable federal interoperability rules.

(g) An insurer shall not delay payment on a claim from a physician or other provider to await the submission of a claim from a hospital or other provider, without citing specific rationale as to why the delay was necessary and providing a monthly update regarding the status of the claim and the insurer’s actions to resolve the claim, to the provider that submitted the claim.

(h) An insurer shall not request or require that a provider waive its rights pursuant to this section.

(i) This section shall apply only to claims for services rendered to a patient who was provided emergency services and care as defined in Section 1317.1 of the Health and Safety Code in the United States on or after September 1, 1999.

(j) This section shall not be construed to affect the rights or obligations of any person pursuant to Section 10123.13.

(k) This section shall not be construed to affect a written agreement, if any, of a provider to submit bills within a specified time period.

(l) (1) The department may issue guidance and regulations relating to this section. The guidance and regulations shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2027.

(2) After January 1, 2028, the department may issue regulations relating to this section subject to the rulemaking provisions of the Administrative Procedure Act ((Chapter 3.5 commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2030.

SEC. 5.

No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.