Judge denies TRO to health plans group over SB 510

A judge this week denied a request by the California Association of Health Plans for a temporary restraining order while it challenges the constitutionality of a state bill requiring health plans and insurers to pay for workplace COVID-19 testing performed retroactively to March 4, 2020 and to do so by July 1.

Los Angeles Superior Court Judge Mitchell Beckloff instead scheduled a June 24 hearing on whether a preliminary injunction should be issued.

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 California Department of Managed Health Care.

Attorneys for the organization asked for an emergency hearing on their TRO request, 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.

“Without a TRO, health plans would have no choice but to start processing claims to avoid interest and penalties on at least some claims,” the CAHP attorneys stated in their court papers.

State Senate Bill 510, signed by Gov. Gavin Newsom on 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.

“It strips health plans of vested contractual rights without any valid social justification — in violation of both the contracts clause and the due process clause — and imposes criminal penalties for past conduct,” the CAHP lawyers argue in their court papers.

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