Lowenthal bill would prevent insurers from backing out of paying claims

Insurers would find it more difficult to avoid paying pre-authorized workers compensation claims under a bill introduced Monday by Assemblymember Bonnie Lowenthal (D-Long Beach).
Assembly Bill 361 would close a loophole in state law that allows insurance companies to withhold payment even after they provided authorization for a particular treatment.
“This isn’t overly complicated,” said Lowenthal. “If you say you’re going to pay for something, you should for pay it.”
Under California’s workers compensation system, most doctors obtain prior authorization before beginning treatment. In many cases, however, insurers end up denying payment for the very treatment they had previously authorized.
“That’s just wrong,” said Lowenthal. “If an insurance company tells a doctor they’re going to pay for services, and the doctor provides the service, the company shouldn’t be able to come back later and say they changed their mind.”
Lowenthal said if healthcare providers can’t rely on the preauthorization system, “there is little reason for having such a system in the first place.”
Group health plans and health insurers already are prohibited from denying reimbursement for medically necessary care after it is authorized. In 2007, a state law was adopted to prohibit a health plan or health insurer from rescinding or modifying an authorization for services after the services are rendered, but that law does not apply to workers compensation insurance. AB 361 would make it clear that the state expects the same kind of dependability from insurers whether they are providing typical healthcare coverage, or workers compensation insurance.

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