Judge allows physician group to intervene in challenge to SB 510

A trade association of physician groups can intervene in a petition challenging the constitutionality of a state bill requiring health plans and insurers to pay for workplace COVID-19 testing retroactive to the beginning of the pandemic, a judge ruled Friday.

State Senate Bill 510, signed by Gov. Gavin Newsom on Oct. 8, 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 petition challenging SB 510’s retroactivity requirement as unconstitutional was brought the California Association of Health Plans (CAHP). Los Angeles Superior Court Judge Mitchell L. Beckloff’s ruling clears the way for America’s Physician Group (APG) to participate in the litigation until the conclusion. APG maintains its members’ rights could be affected by the outcome of the case.

“The court finds APG has satisfied the requirements necessary for the court to permit it to intervene,” Beckloff wrote. “Given the arguments by the parties and the facts, the court finds allowing APG to intervene is appropriate.”

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.

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 set a hearing for June 24 on whether a preliminary injunction should be issued.

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 is the state’s largest trade association, representing 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 AGP lawyers argued in their court papers.

In his ruling, Beckloff rejected the CAHP attorneys’ arguments that the case will be delayed if APG is allowed to intervene because APG will need to conduct extensive discovery. Trial of the case is not scheduled until next Jan. 11, 2023, and if the preliminary injunction is granted, the CAHP will obtain an order maintaining the status quo until judgment, according to Beckloff.

Previous related stories:

Judge denies TRO to health plans group over SB 510

Insurance companies dispute retroactive part of COVID testing bill

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