2014 -- H 7492

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LC004187

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

     Introduced By: Representative Charlene Lima

     Date Introduced: February 13, 2014

     Referred To: House Health, Education & Welfare

     It is enacted by the General Assembly as follows:

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

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

     27-18-61. Prompt processing of claims. -- (a) A health care entity or health plan

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

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

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

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

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

standard to all participating providers.

      (b)(1) If the health care entity or health plan denies or pends a claim, the health care

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

writing send a notice, certified mail, return receipt required, to the health care provider or and the

policyholder of any and all reasons for denying or pending the claim and what, if any, additional

information is required to process the claim. No health care entity or health plan may limit the

time period in which additional information may be submitted to complete a claim.

     (2) Each and every claim denied or pended by the healthcare entity or health plan shall be

reviewed by a medical specialist in the same field of medicine as the healthcare provider

submitting the claim. The letters sent certified mail, return receipt requested, shall contain the

name of the medical specialist reviewing the claim and his/her experience in that field of

medicine in addition to the information set forth in subsection (b)(1) of this section.

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

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

section.

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

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

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

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

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

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

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

or the policyholder.

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

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

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

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

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

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

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

matters beyond its control that are not caused by it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

section.

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

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

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

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

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

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

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

claim whether via electronic submission or as a paper claim.

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

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

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

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

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

provider.

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

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

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

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

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

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

and procedures provided for by the health plan.

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

designated by that person.

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

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

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

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

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

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

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     This act would require a healthcare entity or health plan operating in this state who denies

or pends a claim to notify both the healthcare provider and the policy holder by a notice sent

certified mail, return receipt requested, of the denial or pending of the claim. The healthcare

entity or health plan is required to have any denial or pending of the claim reviewed by a medical

specialist in the same field of medicine as the healthcare provider and the name and experience of

the medical specialist would be included in the notice of denial or pending of the claim.

     This act would take effect upon passage.

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