Court lifts injunction on retroactive enforcement of CMA-sponsored law requiring reimbursement for COVID-19 services

9/5/2023 5:53:28 PM   

A Los Angeles County Superior Court lifted a preliminary injunction on the retroactive enforcement of Senate Bill 510’s requirement that health plans and insurers reimburse health care providers for certain COVID-19 claims that predated the effective date of the law. This action removes any legal grounds for plans not to comply with all provisions of the law, including its retroactive application to pre-2022 claims.

Sponsored by the California Medical Association (CMA) and authored by Senator Richard Pan, M.D., SB 510 requires health plans and insurers to reimburse providers for specified COVID-19 testing, immunization and related services. The law also prohibits health plans and insurers from shifting the financial risk for COVID-19 testing, vaccine administration and related services to contracted providers, unless both parties have negotiated and agreed to a new contractual provision. Though the law took effect January 1, 2022, it applied retroactively to claims dating back to March 4, 2020, the beginning of California’s public health emergency for COVID-19.

The California Association of Health Plans (CAHP) filed a lawsuit in November 2021 challenging the law’s retroactive application on constitutional grounds. CAHP obtained a preliminary injunction on the law’s retroactivity on July 5, 2022. The injunction temporarily prohibited the enforcement of the law with respect to pre-2022 claims, pending resolution of the lawsuit.

On May 15, 2023, the court ruled in favor of the law, upholding the validity of SB 510’s retroactive provisions. Following the ruling, on June 27, 2023, the court formally issued an order dissolving the preliminary injunction, lifting the previous court order that had prevented the retroactive enforcement of SB 510.

SB 510 is now fully in effect, including its retroactive provisions requiring health plan/insurer reimbursement of claims for COVID-19 testing, immunization, and related services performed between March 4, 2020, and December 31, 2021. Health plans and insurers no longer have a legal basis to refuse to comply fully with current state law. CMA has asked the California Department of Managed Health Care to issue guidance directing health plans to pay the retroactive claims with interest.

CAHP has filed a notice of appeal indicating its intent to appeal the trial court’s ruling. That, however, does not affect the status of the current law being in full effect and fully enforceable. Barring subsequent action by a court of appeal, SB 510 (codified, in relevant part, at Health and Safety Code section 1342.2 and Insurance Code section 10110.7) remains the law, and health plans and insurers are now legally obligated to comply with all its requirements.

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