2012 -- H 7533

=======

LC01600

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO INSURANCE - NONPROFIT HOSPITAL SERVICE CORPORATIONS

     Introduced By: Representatives Naughton, E Coderre, and Ferri

     Date Introduced: February 15, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 27-19-52 of the General Laws in Chapter 27-19 entitled "Nonprofit

1-2

Hospital Service Corporations" is hereby amended to read as follows:

1-3

     27-19-52. Prompt processing of claims. -- (a) A health care entity or health plan

1-4

operating in the state shall pay all complete claims for covered health care services submitted to

1-5

the health care entity or health plan by a health care provider or by a policyholder within forty

1-6

(40) calendar days following the date of receipt of a complete written claim or within thirty (30)

1-7

calendar days following the date of receipt of a complete electronic claim. Each health plan shall

1-8

establish a written standard defining what constitutes a complete claim and shall distribute this

1-9

standard to all participating providers.

1-10

      (b) If the health care entity or health plan denies or pends a claim, the health care entity

1-11

or health plan shall have thirty (30) calendar days from receipt of the claim to notify in writing

1-12

the health care provider or policyholder of any and all reasons for denying or pending the claim

1-13

and what, if any, additional information is required to process the claim. No health care entity or

1-14

health plan may limit the time period in which additional information may be submitted to

1-15

complete a claim.

1-16

      (c) Any claim that is resubmitted by a health care provider or policyholder shall be

1-17

treated by the health care entity or health plan pursuant to the provisions of subsection (a) of this

1-18

section.

1-19

      (d) A health care entity or health plan which fails to reimburse the health care provider

1-20

or policyholder after receipt by the health care entity or health plan of a complete claim within the

2-1

required timeframes shall pay to the health care provider or the policyholder who submitted the

2-2

claim, in addition to any reimbursement for health care services provided, interest which shall

2-3

accrue at the rate of twelve percent (12%) per annum commencing on the thirty-first (31st) day

2-4

after receipt of a complete electronic claim or on the forty-first (41st) day after receipt of a

2-5

complete written claim, and ending on the date the payment is issued to the health care provider

2-6

or the policyholder.

2-7

     (e) A health care entity or health plan shall be required to pay for health care services

2-8

ordered by a health care provider if: (1) The services are a covered benefit under the insured’s

2-9

health benefit plan; and (2) The services are medically necessary. A claim for treatment for

2-10

medically necessary services may not be denied if a health care provider follows the health care

2-11

insurer’s authorization procedures and receives authorization for a covered service for the

2-12

policyholder or subscriber, unless the provider submitted information to the insurer with the

2-13

willful intention to misinform the insurer.

2-14

     (f) A health care entity or health plan shall not deny payment for a claim for medically

2-15

necessary covered services on the basis of an administrative or technical defect in the claim

2-16

except in the case where the insurer has a reasonable basis, supported by specific information

2-17

available for review, that the claim for health care services rendered was submitted fraudulently.

2-18

     (g) A health care entity or health plan shall have no more than twelve (12) months after

2-19

the original payment was received by the health care provider to recoup a full or partial payment

2-20

for a claim for services rendered, or to adjust a subsequent payment to reflect a recoupment of a

2-21

full or partial payment.

2-22

     (h) A health care entity or health plan shall not recoup payments received by a health care

2-23

provider for services provided to a policy holder or subscriber that the insurer deems ineligible

2-24

for coverage because the policyholder or subscriber was retroactively terminated or retroactively

2-25

disenrolled for services, provided that the health care provider can document that it received

2-26

verification of an individual’s eligibility status following the administrative requirements of the

2-27

insurer at the time service was provided. Claims may also not be recouped for utilization review

2-28

purposes if the services were already deemed medically necessary or the manner in which the

2-29

services were accessed or provided were previously approved by the health care entity or health

2-30

plan.

2-31

      (e) (i) Exceptions to the requirements of this section are as follows:

2-32

      (1) No health care entity or health plan operating in the state shall be in violation of this

2-33

section for a claim submitted by a health care provider or policyholder if:

3-34

      (i) Failure to comply is caused by a directive from a court or federal or state agency;

3-35

      (ii) The health care provider or health plan is in liquidation or rehabilitation or is

3-36

operating in compliance with a court-ordered plan of rehabilitation; or

3-37

      (iii) The health care entity or health plan's compliance is rendered impossible due to

3-38

matters beyond its control that are not caused by it.

3-39

      (2) No health care entity or health plan operating in the state shall be in violation of this

3-40

section for any claim: (i) initially submitted more than ninety (90) days after the service is

3-41

rendered, or (ii) resubmitted more than ninety (90) days after the date the health care provider

3-42

received the notice provided for in section 27-18-61(b); provided, this exception shall not apply

3-43

in the event compliance is rendered impossible due to matters beyond the control of the health

3-44

care provider and were not caused by the health care provider.

3-45

      (3) No health care entity or health plan operating in the state shall be in violation of this

3-46

section while the claim is pending due to a fraud investigation by a state or federal agency.

3-47

      (4) No health care entity or health plan operating in the state shall be obligated under this

3-48

section to pay interest to any health care provider or policyholder for any claim if the director of

3-49

the department of business regulation finds that the entity or plan is in substantial compliance

3-50

with this section. A health care entity or health plan seeking such a finding from the director shall

3-51

submit any documentation that the director shall require. A health care entity or health plan which

3-52

is found to be in substantial compliance with this section shall after this submit any

3-53

documentation that the director may require on an annual basis for the director to assess ongoing

3-54

compliance with this section.

3-55

      (5) A health care entity or health plan may petition the director for a waiver of the

3-56

provision of this section for a period not to exceed ninety (90) days in the event the health care

3-57

entity or health plan is converting or substantially modifying its claims processing systems.

3-58

      (j) For purposes of this section, the following definitions apply:

3-59

      (1) "Claim" means:

3-60

      (i) A bill or invoice for covered services;

3-61

      (ii) A line item of service; or

3-62

      (iii) All services for one patient or subscriber within a bill or invoice.

3-63

      (2) "Date of receipt" means the date the health care entity or health plan receives the

3-64

claim whether via electronic submission or has a paper claim.

3-65

      (3) "Health care entity" means a licensed insurance company or nonprofit hospital or

3-66

medical or dental service corporation or plan or health maintenance organization, or a contractor

3-67

as described in section 23-17.13-2(2), that operates a health plan.

4-68

      (4) "Health care provider" means an individual clinician, either in practice independently

4-69

or in a group, who provides health care services, and referred to as a non-institutional provider.

4-70

any health care facility, as defined in section 23-17-2, including any mental health and/or

4-71

substance abuse treatment facility, physician or other licensed practitioners identified to the

4-72

review agent as having primary responsibility for the care, treatment and services rendered to a

4-73

patient.

4-74

      (5) "Health care services" include, but are not limited to, medical, mental health,

4-75

substance abuse, dental and any other services covered under the terms of the specific health plan.

4-76

      (6) "Health plan" means a plan operated by a health care entity that provides for the

4-77

delivery of health care services to persons enrolled in those plans through:

4-78

      (i) Arrangements with selected providers to furnish health care services; and/or

4-79

      (ii) Financial incentive for persons enrolled in the plan to use the participating providers

4-80

and procedures provided for by the health plan.

4-81

      (7) "Policyholder" means a person covered under a health plan or a representative

4-82

designated by that person.

4-83

      (8) "Substantial compliance" means that the health care entity or health plan is

4-84

processing and paying ninety-five percent (95%) or more of all claims within the time frame

4-85

provided for in section 27-18-61(a) and (b).

4-86

      (k) Any provision in a contract between a health care entity or a health plan and a health

4-87

care provider which is inconsistent with this section shall be void and of no force and effect.

4-88

     SECTION 2. This act shall take effect upon passage.

=======

LC01600

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE - NONPROFIT HOSPITAL SERVICE CORPORATIONS

***

5-1

     This act would set forth the circumstances and procedures whereby all health care entities

5-2

and health plans would be required to pay for health care services if the services are covered

5-3

under the insurance plan or the services are medically necessary.

5-4

     This act would take effect upon passage.

=======

LC01600

=======