(a) The prepaid health plan shall be liable for all in-area and out-of-area emergency services which are required by the contract and rendered by a nonprepaid health plan provider. Payment for such services shall include treatment of emergency conditions and shall continue until such time as the enrollee may be transferred to any provider of the prepaid health plan.

(b) Where a dispute arises between the prepaid health plan and the nonprepaid health plan provider as to the liability of the prepaid health plan for such services, the nonprepaid health plan provider may submit the matter to the director for determination in the form of a claim documenting as fully as reasonably possible the nature of the emergency, the necessity for the treatment rendered, the appropriateness of the length of stay for inpatient care, the reason the patient could not have been transferred to a provider of the prepaid health plan, and including any response by the prepaid health plan to the claim which resulted in the dispute. The director shall, by regulation, provide for resolution of the dispute in a timely fashion and in a manner guaranteeing the procedural due process requirements of the provisions of Chapter 5 (commencing with Section 11500), Part 1, Division 3, Title 2 of the Government Code, except that the department shall use its own hearing officers. The hearing officer may be assisted by a physician. To the extent feasible, the director shall consolidate the claims of the nonprepaid health plan provider against the prepaid health plan.

In no event, shall the prepaid health plan or the nonprepaid health plan provider bill the enrollee for services which are or have been the subject of review by the director pursuant to this section.

(c) If the director determines that the prepaid health plan is liable for the emergency service, the plan shall reimburse the nonprepaid health plan provider within 30 days. If the prepaid health plan fails to reimburse the nonprepaid health plan provider within 30 days, the director shall arrange to set off the amount of the unpaid claim or claims from no fewer than two future capitation payments owed to the prepaid health plan by the department and the department shall forward such setoff or setoffs to the nonprepaid health plan provider. In making such arrangements to set off, the director shall consult with the affected prepaid health plan in an attempt to minimize the impact of such setoff or setoffs on cash flow. When the claim of the nonprepaid health plan provider is satisfied by setoff or setoffs, the director shall satisfy the claim only with the funds of the prepaid health plan and shall in no event use state funds to satisfy such a claim.

(d) Nothing in this section shall preclude prepaid health plans and nonprepaid health plan providers from entering into voluntary agreements to settle disputed claims for services by means of binding arbitration or by other means acceptable to both parties.

(Amended by Stats. 1977, Ch. 1121.)