A judge has ruled against an association of health plans whose members challenged 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 during a March 8 nonjury trial from lawyers representing the petitioner — the California Association of Health Plans — as well as the state Department of Managed Health Care and a third party, America’s Physician Groups, then took the case under submission and ruled Monday.
Beckloff said the retroactivity payment provision of the state Health and Safety Code at issue does not violate the takings or due process clauses of the constitution. The judge said the preliminary injunction he issued last July in favor of the CAHP pending the March trial will dissolve when judgment is entered.
State Senate Bill 510, signed by Gov. Gavin Newsom in October 2021, became effective Jan. 1, 2022 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 challenged 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 was limited to the retroactive application of SB 510 prior to Jan. 1, 2022.
CAHP attorneys 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. But Beckloff denied the TRO request in May 2022.
The judge ruled that America’s Physician Group could participate in the litigation until the conclusion. APG maintained its members’ rights could be impacted by the outcome of the case. 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.