Department of Managed Health Care Publishes Notice of Rulemaking on Transfer of Enrollees

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By Yusra Serhan

On September 17, 2021, the Department of Managed Health Care (DMHC) published notice of its intent to adopt section 1300.67.02, Title 28 of the CCR to permanently adopt the emergency regulation that became effective on January 15, 2021. [see 26:2 CRLR 19–20]. According to the initial statement of reasons, the proposed regulation is the Department’s effort to permanently adopt, without change, the emergency regulatory action. The text of the regulation explains the requirement for health plans to transfer enrollees from hospitals that are highly impacted by patients with COVID-19 to those with available capacity. The initial statement of reasons further states that “[t]his regulation is necessary and will benefit California by allowing health plans the ability to transfer patients from one facility to another facility to ensure hospitals are able to handle the influx of patients and ensure enrollees are able to receive access to medically necessary services in a timely manner.”

Notably, the proposed regulation makes the following changes: mandates that the enrollee’s health plan cannot require prior authorization or prior notice that would delay or prevent the transfer of the enrollee; requires that the health plan cover the medically necessary costs of moving the enrollee between the transferring facility and the receiving facility; provides that the health plan reimburse the receiving facility for the medically necessary services provided to the enrollee for the first 72 hours that they are treated; and after the first 72 hours, the health plan must continue to reimburse the receiving facility for all medically necessary services provided to the enrollee under specified conditions.

The proposed regulation further specifies that if the health plan does not have a contract with the receiving facility, the health plan must reimburse the receiving facility for the “reasonable and customary value” of the services the enrollee receives at the receiving facility and defines what this term means. Finally, an enrollee transferred pursuant to a covered public health order must not be liable for more than the cost the enrollee would have incurred if the enrollee had remained in a contracting health facility. These last changes amount to financial protections for plan participants/consumers.

As of this writing, no public hearing is currently scheduled regarding this regulation. Written public comment can be submitted to the Office of Legal Services, regulations@dmhc.ca.gov by 5:00 p.m. on November 2, 2021. All comments should identify the action by using the Department’s rulemaking title and control number, Transfer of Enrollees Pursuant to a Public Health Order, Control No. 2021–TRFR.

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