2013 -- S 0618

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LC01776

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO INSURANCE - ACCIDENT AND SICKNESS INSURANCE POLICIES

     

     

     Introduced By: Senators Goldin, Miller, Satchell, Cool Rumsey, and Sosnowski

     Date Introduced: March 06, 2013

     Referred To: Senate Health & Human Services

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 27-18-61 of the General Laws in Chapter 27-18 entitled "Accident

1-2

and Sickness Insurance Policies" is hereby amended to read as follows:

1-3

     27-18-61. 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)(1) A healthcare entity or health plan shall not deny payment for a claim for medically

2-8

necessary inpatient services resulting from an emergency admission provided by a hospital solely

2-9

on the basis that the hospital did not timely notify such healthcare entity or health plan that the

2-10

services had been provided.

2-11

     (2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health

2-12

plan from agreeing to requirements for timely notification that medically necessary inpatient

2-13

services resulting from an emergency admission have been provided and to a reduction in

2-14

payment for failure to timely notify; provided, however that: (i) Any requirement for timely

2-15

notification must provide for a reasonable extension of timeframes for notification for emergency

2-16

services provided on weekends, state, or federal holidays, or during declared state or federally

2-17

declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify

2-18

shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the

2-19

payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in

2-20

payment for failure to timely notify shall not be imposed if the patient's insurance coverage could

2-21

not be determined by the hospital after reasonable efforts at the time the inpatient services were

2-22

provided.

2-23

     (f) Except where the parties have developed a mutually agreed upon process for the

2-24

reconciliation of coding disputes that includes a review of submitted medical records to ascertain

2-25

the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which

2-26

payment has been adjusted based on a particular coding to a patient including the assignment of

2-27

diagnosis and procedure, have the opportunity to submit the affected claim with medical records

2-28

supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.

2-29

Upon receipt of such medical records, the healthcare entity or health plan shall review such

2-30

information to ascertain the correct coding for payment and process the claim in accordance with

2-31

the time frames set forth in subsection (a) of this section. In the event the healthcare entity or

2-32

health plan processes the claim consistent with its initial determination, such decision shall be

2-33

accompanied by a detailed statement in plain language of the healthcare entity or health plan

2-34

setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity

3-1

or health plan that increases the payment based on the information submitted by the hospital, but

3-2

fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall

3-3

pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection

3-4

(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare

3-5

entity or health plan shall be deemed an adverse determination if based solely on a coding

3-6

determination. Nothing in this subsection shall apply to those instances in which the insurer or

3-7

organization, or corporation has a reasonable suspicion of fraud or abuse.

3-8

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

3-9

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

3-10

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

3-11

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

3-12

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

3-13

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

3-14

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

3-15

matters beyond its control that are not caused by it.

3-16

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

3-17

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

3-18

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

3-19

received the notice provided for in subsection (b) of this section; provided, this exception shall

3-20

not apply in the event compliance is rendered impossible due to matters beyond the control of the

3-21

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

3-22

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

3-23

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

3-24

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

3-25

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

3-26

business regulation finds that the entity or plan is in substantial compliance with this section. A

3-27

health care entity or health plan seeking such a finding from the director shall submit any

3-28

documentation that the director shall require. A health care entity or health plan which is found to

3-29

be in substantial compliance with this section shall thereafter submit any documentation that the

3-30

director may require on an annual basis for the director to assess ongoing compliance with this

3-31

section.

3-32

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

3-33

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

3-34

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

4-1

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

4-2

      (1) "Claim" means: (i) a bill or invoice for covered services; (ii) a line item of service; or

4-3

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

4-4

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

4-5

claim whether via electronic submission or as a paper claim.

4-6

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

4-7

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

4-8

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

4-9

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

4-10

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

4-11

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

4-12

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

4-13

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

4-14

patient.

4-15

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

4-16

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

4-17

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

4-18

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

4-19

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

4-20

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

4-21

and procedures provided for by the health plan.

4-22

     (7) "Medically necessary" means services or supplies that are needed for the diagnosis or

4-23

treatment of a medical condition and meet generally accepted standards of medical practice. For

4-24

these purposes, "generally accepted standards of medical practice" means standards and

4-25

guidelines that include, but are not limited to, InterQual and other supporting information based

4-26

on credible scientific evidence published in peer-reviewed medical literature generally recognized

4-27

by the relevant medical community, physician specialty society recommendations and the views

4-28

of physicians practicing in relevant clinical areas, and any other relevant factors.

4-29

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

4-30

designated by that person.

4-31

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

4-32

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

4-33

provided for in subsections (a) and (b) of this section.

5-34

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

5-35

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

5-36

effect.

5-37

     SECTION 2. Section 27-19-52 of the General Laws in Chapter 27-19 entitled "Nonprofit

5-38

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

5-39

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

5-40

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

5-41

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

5-42

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

5-43

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

5-44

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

5-45

standard to all participating providers.

5-46

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

5-47

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

5-48

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

5-49

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

5-50

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

5-51

complete a claim.

5-52

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

5-53

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

5-54

section.

5-55

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

5-56

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

5-57

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

5-58

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

5-59

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

5-60

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

5-61

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

5-62

or the policyholder.

5-63

     (e)(1) A healthcare entity or health plan shall not deny payment for a claim for medically

5-64

necessary inpatient services resulting from an emergency admission provided by a hospital solely

5-65

on the basis that the hospital did not timely notify such healthcare entity or health plan that the

5-66

services had been provided.

5-67

     (2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health

5-68

plan from agreeing to requirements for timely notification that medically necessary inpatient

6-1

services resulting from an emergency admission have been provided and to a reduction in

6-2

payment for failure to timely notify; provided, however that: (i) Any requirement for timely

6-3

notification must provide for a reasonable extension of timeframes for notification for emergency

6-4

services provided on weekends, state, or federal holidays, or during declared state or federally

6-5

declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify

6-6

shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the

6-7

payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in

6-8

payment for failure to timely notify shall not be imposed if the patient's insurance coverage could

6-9

not be determined by the hospital after reasonable efforts at the time the inpatient services were

6-10

provided.

6-11

     (f) Except where the parties have developed a mutually agreed upon process for the

6-12

reconciliation of coding disputes that includes a review of submitted medical records to ascertain

6-13

the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which

6-14

payment has been adjusted based on a particular coding to a patient including the assignment of

6-15

diagnosis and procedure, have the opportunity to submit the affected claim with medical records

6-16

supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.

6-17

Upon receipt of such medical records, the healthcare entity or health plan shall review such

6-18

information to ascertain the correct coding for payment and process the claim in accordance with

6-19

the time frames set forth in subsection (a) of this section. In the event the healthcare entity or

6-20

health plan processes the claim consistent with its initial determination, such decision shall be

6-21

accompanied by a detailed statement in plain language of the healthcare entity or health plan

6-22

setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity

6-23

or health plan that increases the payment based on the information submitted by the hospital, but

6-24

fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall

6-25

pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection

6-26

(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare

6-27

entity or health plan shall be deemed an adverse determination if based solely on a coding

6-28

determination. Nothing in this subsection shall apply to those instances in which the insurer or

6-29

organization, or corporation has a reasonable suspicion of fraud or abuse.

6-30

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

6-31

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

6-32

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

6-33

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

7-34

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

7-35

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

7-36

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

7-37

matters beyond its control that are not caused by it.

7-38

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

7-39

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

7-40

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

7-41

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

7-42

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

7-43

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

7-44

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

7-45

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

7-46

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

7-47

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

7-48

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

7-49

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

7-50

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

7-51

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

7-52

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

7-53

compliance with this section.

7-54

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

7-55

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

7-56

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

7-57

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

7-58

      (1) "Claim" means:

7-59

      (i) A bill or invoice for covered services;

7-60

      (ii) A line item of service; or

7-61

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

7-62

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

7-63

claim whether via electronic submission or has a paper claim.

7-64

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

7-65

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

7-66

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

7-67

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

7-68

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

8-1

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

8-2

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

8-3

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

8-4

patient.

8-5

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

8-6

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

8-7

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

8-8

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

8-9

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

8-10

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

8-11

and procedures provided for by the health plan.

8-12

     (7) "Medically necessary" means services or supplies that are needed for the diagnosis or

8-13

treatment of a medical condition and meet generally accepted standards of medical practice. For

8-14

these purposes, "generally accepted standards of medical practice" means standards and

8-15

guidelines that include, but are not limited to, InterQual and other supporting information based

8-16

on credible scientific evidence published in peer-reviewed medical literature generally recognized

8-17

by the relevant medical community, physician specialty society recommendations and the views

8-18

of physicians practicing in relevant clinical areas, and any other relevant factors.

8-19

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

8-20

designated by that person.

8-21

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

8-22

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

8-23

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

8-24

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

8-25

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

8-26

effect.

8-27

     SECTION 3. Section 27-20-47 of the General Laws in Chapter 27-20 entitled "Nonprofit

8-28

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

8-29

     27-20-47. Prompt processing of claims. -- (a) A health care entity or health plan

8-30

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

8-31

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

8-32

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

8-33

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

8-34

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

9-1

standard to all participating providers.

9-2

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

9-3

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

9-4

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

9-5

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

9-6

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

9-7

complete a claim.

9-8

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

9-9

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

9-10

section.

9-11

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

9-12

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

9-13

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

9-14

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

9-15

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

9-16

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

9-17

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

9-18

or the policyholder.

9-19

     (e)(1) A healthcare entity or health plan shall not deny payment for a claim for medically

9-20

necessary inpatient services resulting from an emergency admission provided by a hospital solely

9-21

on the basis that the hospital did not timely notify such healthcare entity or health plan that the

9-22

services had been provided.

9-23

     (2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health

9-24

plan from agreeing to requirements for timely notification that medically necessary inpatient

9-25

services resulting from an emergency admission have been provided and to a reduction in

9-26

payment for failure to timely notify; provided, however that: (i) Any requirement for timely

9-27

notification must provide for a reasonable extension of timeframes for notification for emergency

9-28

services provided on weekends, state, or federal holidays, or during declared state or federally

9-29

declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify

9-30

shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the

9-31

payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in

9-32

payment for failure to timely notify shall not be imposed if the patient's insurance coverage could

9-33

not be determined by the hospital after reasonable efforts at the time the inpatient services were

9-34

provided.

10-1

     (f) Except where the parties have developed a mutually agreed upon process for the

10-2

reconciliation of coding disputes that includes a review of submitted medical records to ascertain

10-3

the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which

10-4

payment has been adjusted based on a particular coding to a patient including the assignment of

10-5

diagnosis and procedure, have the opportunity to submit the affected claim with medical records

10-6

supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.

10-7

Upon receipt of such medical records, the healthcare entity or health plan shall review such

10-8

information to ascertain the correct coding for payment and process the claim in accordance with

10-9

the time frames set forth in subsection (a) of this section. In the event the healthcare entity or

10-10

health plan processes the claim consistent with its initial determination, such decision shall be

10-11

accompanied by a detailed statement in plain language of the healthcare entity or health plan

10-12

setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity

10-13

or health plan that increases the payment based on the information submitted by the hospital, but

10-14

fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall

10-15

pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection

10-16

(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare

10-17

entity or health plan shall be deemed an adverse determination if based solely on a coding

10-18

determination. Nothing in this subsection shall apply to those instances in which the insurer or

10-19

organization, or corporation has a reasonable suspicion of fraud or abuse.

10-20

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

10-21

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

10-22

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

10-23

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

10-24

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

10-25

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

10-26

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

10-27

matters beyond its control that are not caused by it.

10-28

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

10-29

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

10-30

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

10-31

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

10-32

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

10-33

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

11-34

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

11-35

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

11-36

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

11-37

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

11-38

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

11-39

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

11-40

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

11-41

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

11-42

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

11-43

compliance with this section.

11-44

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

11-45

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

11-46

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

11-47

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

11-48

      (1) "Claim" means: (i) a bill or invoice for covered services; (ii) a line item of service; or

11-49

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

11-50

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

11-51

claim whether via electronic submission or has a paper claim.

11-52

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

11-53

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

11-54

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

11-55

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

11-56

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

11-57

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

11-58

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

11-59

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

11-60

patient.

11-61

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

11-62

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

11-63

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

11-64

delivery of health care services to persons enrolled in the plan through:

11-65

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

11-66

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

11-67

and procedures provided for by the health plan.

12-68

     (7) "Medically necessary" means services or supplies that are needed for the diagnosis or

12-69

treatment of a medical condition and meet generally accepted standards of medical practice. For

12-70

these purposes, "generally accepted standards of medical practice" means standards and

12-71

guidelines that include, but are not limited to, InterQual and other supporting information based

12-72

on credible scientific evidence published in peer-reviewed medical literature generally recognized

12-73

by the relevant medical community, physician specialty society recommendations and the views

12-74

of physicians practicing in relevant clinical areas, and any other relevant factors.

12-75

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

12-76

designated by that person.

12-77

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

12-78

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

12-79

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

12-80

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

12-81

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

12-82

effect.

12-83

     SECTION 4. Section 27-41-64 of the General Laws in Chapter 27-41 entitled "Health

12-84

Maintenance Organizations" is hereby amended to read as follows:

12-85

     27-41-64. Prompt processing of claims. -- (a) A health care entity or health plan

12-86

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

12-87

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

12-88

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

12-89

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

12-90

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

12-91

standard to all participating providers.

12-92

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

12-93

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

12-94

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

12-95

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

12-96

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

12-97

complete a claim.

12-98

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

12-99

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

12-100

section.

12-101

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

12-102

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

13-1

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

13-2

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

13-3

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

13-4

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

13-5

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

13-6

or the policyholder.

13-7

      (e) (1) A healthcare entity or health plan shall not deny payment for a claim for

13-8

medically necessary inpatient services resulting from an emergency admission provided by a

13-9

hospital solely on the basis that the hospital did not timely notify such healthcare entity or health

13-10

plan that the services had been provided.

13-11

     (2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health

13-12

plan from agreeing to requirements for timely notification that medically necessary inpatient

13-13

services resulting from an emergency admission have been provided and to a reduction in

13-14

payment for failure to timely notify; provided, however that: (i) Any requirement for timely

13-15

notification must provide for a reasonable extension of timeframes for notification for emergency

13-16

services provided on weekends, state, or federal holidays, or during declared state or federally

13-17

declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify

13-18

shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the

13-19

payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in

13-20

payment for failure to timely notify shall not be imposed if the patient's insurance coverage could

13-21

not be determined by the hospital after reasonable efforts at the time the inpatient services were

13-22

provided.

13-23

     (f) Except where the parties have developed a mutually agreed upon process for the

13-24

reconciliation of coding disputes that includes a review of submitted medical records to ascertain

13-25

the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which

13-26

payment has been adjusted based on a particular coding to a patient including the assignment of

13-27

diagnosis and procedure, have the opportunity to submit the affected claim with medical records

13-28

supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.

13-29

Upon receipt of such medical records, the healthcare entity or health plan shall review such

13-30

information to ascertain the correct coding for payment and process the claim in accordance with

13-31

the time frames set forth in subsection (a) of this section. In the event the healthcare entity or

13-32

health plan processes the claim consistent with its initial determination, such decision shall be

13-33

accompanied by a detailed statement in plain language of the healthcare entity or health plan

13-34

setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity

14-1

or health plan that increases the payment based on the information submitted by the hospital, but

14-2

fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall

14-3

pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection

14-4

(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare

14-5

entity or health plan shall be deemed an adverse determination if based solely on a coding

14-6

determination. Nothing in this subsection shall apply to those instances in which the insurer or

14-7

organization, or corporation has a reasonable suspicion of fraud or abuse.

14-8

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

14-9

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

14-10

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

14-11

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

14-12

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

14-13

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

14-14

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

14-15

matters beyond its control, which are not caused by it.

14-16

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

14-17

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

14-18

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

14-19

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

14-20

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

14-21

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

14-22

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

14-23

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

14-24

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

14-25

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

14-26

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

14-27

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

14-28

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

14-29

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

14-30

director may require on an annual basis for the director to assess ongoing compliance with this

14-31

section.

14-32

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

14-33

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

14-34

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

15-1

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

15-2

      (1) "Claim" means: (i) a bill or invoice for covered services; (ii) a line item of service; or

15-3

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

15-4

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

15-5

claim whether via electronic submission or as a paper claim.

15-6

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

15-7

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

15-8

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

15-9

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

15-10

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

15-11

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

15-12

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

15-13

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

15-14

patient.

15-15

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

15-16

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

15-17

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

15-18

delivery of health care services to persons enrolled in the plan through:

15-19

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

15-20

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

15-21

and procedures provided for by the health plan.

15-22

      (7) ) "Medically necessary" means services or supplies that are needed for the diagnosis

15-23

or treatment of a medical condition and meet generally accepted standards of medical practice.

15-24

For these purposes, "generally accepted standards of medical practice" means standards and

15-25

guidelines that include, but are not limited to, InterQual and other supporting information based

15-26

on credible scientific evidence published in peer-reviewed medical literature generally recognized

15-27

by the relevant medical community, physician specialty society recommendations and the views

15-28

of physicians practicing in relevant clinical areas, and any other relevant factors.

15-29

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

15-30

designated by that person.

15-31

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

15-32

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

15-33

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

16-34

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

16-35

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

16-36

effect.

16-37

     SECTION 5. This act shall take effect upon passage.

     

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LC01776

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE - ACCIDENT AND SICKNESS INSURANCE POLICIES

***

17-1

     This act would revise the processing of health insurance claims relating to timely

17-2

notification, coding disputes, mental health and/or substance abuse treatment as well as defining

17-3

medically necessary services.

17-4

     This act would take effect upon passage.

     

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LC01776

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S0618