California Regulators Order Waiver of Cost Sharing in Response to Coronavirus

Keenan Briefings


California Regulators Order Waiver of Cost Sharing in Response to Coronavirus

March 09, 2020

The California Department of Insurance (CDI) and Department of Managed Health Care (DMHC) have issued bulletins to health insurers, and commercial and full-service Medi-Cal health care service plans, requiring waiver of patient cost sharing provisions for medically necessary screening for Coronavirus (designated as COVID-19). The two state agencies took this action to ensure that cost does not create a barrier for healthcare consumers as the infection spreads.

Health plans and insurers were directed to implement the following measures:

  1. Immediately reduce cost-sharing (including, but not limited to, co-pays, deductibles, or coinsurance) to zero for all medically necessary screening and testing for COVID-19, including hospital, emergency department, urgent care, and provider office visits where the purpose of the visit is to be screened and/or tested for COVID-19.
  2. Notify, as expeditiously as possible, contracted providers that the plan is waiving cost-sharing as described above.
  3. Ensure the advice nurse line and customer service representatives are adequately informed that the plan is waiving cost-sharing as described above and clearly communicate this to participants seeking medically necessary screening and testing for COVID-19.
  4. Inform the call center staff to advise participants to call their provider’s office or advice nurse line for instructions about how best to access care for screening and treatment of COVID-19 prior to in-person visits to a clinic or emergency department.
  5. Prominently display on the plan’s public website a statement that the plan is waiving cost-sharing for medically necessary screening and testing for COVID-19, as well as guidance on how to access care as described above.

The DMHC and CDI reiterated existing California laws that help assure patients receive timely care, including:

  • Covering all medically necessary emergency care without prior authorization, whether that care is provided by an in-network or out-of-network provider. (Health and Safety Code section 1371.4 and Insurance Code section 10112.7).
  • Complying with the utilization review timeframes for approving requests for urgent and non-urgent services, as required by Health and Safety Code section 1367.01 and Insurance Code section 10123.135. Plans are strongly encouraged to waive prior authorization requests for services related to COVID-19; at a minimum, plans are encouraged to respond to such requests more quickly than the timeframes required by law.
  • Ensuring the plan’s provider networks are adequate to handle an increase in the need for health care services, including offering access to out-of-network services where appropriate and required, as more COVID-19 cases emerge in California.
  • Ensuring enrollees are not liable for unlawful balance bills from providers, including balance bills related to testing for COVID-19.
  • Ensuring plans have 24-hour access to a person with the authority to authorize services and ensuring the DMHC has contact information for that person, as required by Health and Safety Code section 1371.4 and California Code of Regulations, sections 1300.67.2.2 and 1300.68.01.

Insurers and healthcare service plans were also encouraged to act proactively to ensure enrollees can access all medically necessary screening and testing for COVID-19, taking the following steps:

  • Work with contracted providers to use telehealth services to deliver care when medically appropriate, to limit enrollees’ exposure to others who may be infected with COVID-19, and to increase the capacity of the plans’ contracted providers.
  • In the event of a shortage of any particular prescription drug, plans should waive prior authorization and/or step therapy requirements if the enrollee’s prescribing provider recommends the enrollee take a different drug to treat the enrollee’s condition.

The CDI and DMHC COVID-19 provisions are effective immediately and will continue until further notice. The agencies will provide further guidance when necessary, and consumers with concerns or complaints should contact the CDI or DMHC, as applicable:

California Department of Insurance:

California Department of Managed Health Care:

Self-Funded Plans

The bulletins issued by the CDI and DMHC apply only to fully insured health plans regulated by those two agencies. They are not requirements for self-funded plans. While self-funded plan sponsors may wish to waive cost sharing for COVID-19 screening/testing to their participants, careful consideration should be given as to whether their plans can administer such waivers in coordination with their provider networks.

Please contact your Keenan Account Manager for questions regarding this Briefing.

Keenan & Associates is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.