California Law Blocks Workers’ Comp Payment Rescission

By | October 14, 2009

Among the bills signed into California law by Gov. Arnold Schwarzenegger this week was a bill that prohibits workers’ compensation insurance companies from refusing to pay for services they authorized previously.

The new law prevents insurers from modifying or rescinding the authorization of medical services after the services are rendered. It requires insurers to pay the bill for all services that were authorized.

The bill’s author, Assemblywoman Bonnie Lowenthal, D-Long Beach, said the bill was requested by the California Chiropractic Association, which said that many of its members had trouble collecting for some service authorized and rendered.

Some proponents asserted that previously authorized claims were denied when it was discovered that the doctor rendering service was not on the correct “preferred provider” panel.

The Association of California Insurance Companies opposed the bill. It said the law would force companies to pay for unwanted services, and handcuff them in attempts to manage medical claims.

“This bill says insurers have to mean what they say,” Lowenthal said in a statement. “They have to keep their word.”

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