A judge Wednesday took under submission a request for a preliminary injunction brought by an association of health plans challenging the constitutionality of a state bill requiring them as well as insurers to pay for workplace COVID-19 testing retroactive to the beginning of the pandemic.

Los Angeles Superior Court Judge Mitchell Beckloff heard arguments from lawyers representing the California Association of Health Plans, the state Department of Managed Health Care and a third party, America’s Physician Groups, then said he wanted to mull the issues further.

State Senate Bill 510, signed by Gov. Gavin Newsom last Oct. 8, became effective Jan. 1 and requires health plans and health insurers to reimburse both in-network and out-of-network providers for COVID-19 testing and related services without any cost sharing, prior authorization or other utilization management requirements.

The March 4, 2020, date for retroactive payments refers to when Newsom declared a state of emergency for COVID-19.

SB 510 requires insurers to pay for COVID-19 testing of workers in a workplace setting even if they are asymptomatic and have no known exposure. The CAHP challenges SB 510’s retroactivity requirement as unconstitutional.

The CAHP is a trade association representing 45 full-service plans that provide health care coverage to more than 26 million Californians through the individual and group markets. Their petition was brought Nov. 10 against Attorney General Rob Bonta as well as Mary Watanabe, director of the DMHC.

The CAHP’s challenge is limited to the retroactive application of SB 510 prior to Jan. 1 of this year, when it became law. Attorneys for the organization previously asked for a temporary restraining order, arguing that to have a chance at even partial compliance, health plans would have to immediately begin to process claims, costing them hundreds of hours and millions of dollars in unrecoverable costs.

Beckloff denied the TRO request on May 4 and scheduled Wednesday’s hearing on whether a preliminary injunction should be issued until trial of the case.

The judge ruled earlier this month that America’s Physician Group could participate in the litigation until the conclusion. APG maintains its members’ rights could be affected by the outcome of the case.

APG filed its motion to intervene in the litigation on April 20. The group’s lawyers stated in their court papers that the CAHP petition “threatens APG members with significant and non-recompensed financial losses, such as nonpayment of past COVID-19 testing services and demands for return of payments previously made for such testing services.”

APG represents about 180 California-based member-providers, all of whom have a financial stake in the outcome of the CAHP litigation and whose interests cannot be fully protected by the Attorney General’s Office, the APG lawyers argued in their court papers.

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