2014 -- S 2535

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LC004560

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

____________

A N   A C T

RELATING TO INSURANCE

     

     Introduced By: Senator Gayle L.Goldin

     Date Introduced: February 27, 2014

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

standard to all participating providers.

10

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

11

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

12

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

13

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

14

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

15

complete a claim.

16

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

17

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

18

section.

19

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

 

1

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

2

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

3

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

4

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

5

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

6

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

7

or the policyholder.

8

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

9

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

10

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

11

services had been provided.

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

provided.

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004560 - Page 2 of 16

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

matters beyond its control that are not caused by it.

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

section.

33

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

34

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

 

LC004560 - Page 3 of 16

1

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

2

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

3

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

4

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

5

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

6

claim whether via electronic submission or as a paper claim.

7

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

8

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

9

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

10

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

11

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

12

provider any health care facility, as defined in § 23-18-1.1 including any mental health and/or

13

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

14

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

15

patient.

16

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

17

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

18

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

19

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

20

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

21

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

22

and procedures provided for by the health plan.

23

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

24

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

25

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

26

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

27

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

28

by the relevant medical community, Physician Specialty Society recommendations and the views

29

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

30

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

31

designated by that person.

32

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

33

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

34

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

 

LC004560 - Page 4 of 16

1

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

2

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

3

effect.

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

standard to all participating providers.

13

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

14

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

15

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

16

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

17

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

18

complete a claim.

19

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

20

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

21

section.

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

or the policyholder.

30

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

31

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

32

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

33

services had been provided.

34

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

 

LC004560 - Page 5 of 16

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

provided.

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004560 - Page 6 of 16

1

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

2

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

3

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

4

matters beyond its control that are not caused by it.

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

compliance with this section.

21

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

22

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

23

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

24

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

25

      (1) "Claim" means:

26

      (i) A bill or invoice for covered services;

27

      (ii) A line item of service; or

28

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

29

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

30

claim whether via electronic submission or has a paper claim.

31

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

32

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

33

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

34

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

 

LC004560 - Page 7 of 16

1

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

2

any health care facility, as defined in § 27-19-1 including any mental health and/or substance

3

abuse treatment facility, physician, or other licensed practitioners identified to the review agent as

4

having primary responsibility for the care, treatment, and services rendered to a patient.

5

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

6

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

7

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

8

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

9

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

10

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

11

and procedures provided for by the health plan.

12

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

13

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

14

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

15

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

16

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

17

by the relevant medical community, Physician Specialty Society recommendations and the views

18

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

19

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

20

designated by that person.

21

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

22

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

23

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

24

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

25

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

26

effect.

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004560 - Page 8 of 16

1

standard to all participating providers.

2

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

3

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

4

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

5

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

6

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

7

complete a claim.

8

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

9

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

10

section.

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

or the policyholder.

19

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

20

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

21

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

22

services had been provided.

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

provided.

 

LC004560 - Page 9 of 16

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

matters beyond its control that are not caused by it.

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004560 - Page 10 of 16

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

compliance with this section.

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

claim whether via electronic submission or has a paper claim.

18

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

19

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

20

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

21

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

22

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

23

any health care facility, as defined in § 27-20-1 including any mental health and/or substance

24

abuse treatment facility, physician, or other licensed practitioners identified to the review agent as

25

having primary responsibility for the care, treatment, and services rendered to a patient.

26

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

27

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

28

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

29

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

30

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

31

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

32

and procedures provided for by the health plan.

33

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

34

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

 

LC004560 - Page 11 of 16

1

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

2

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

3

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

4

by the relevant medical community, Physician Specialty Society recommendations and the views

5

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

6

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

7

designated by that person.

8

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

9

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

10

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

11

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

12

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

13

effect.

14

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

15

Maintenance Organizations" is hereby amended to read as follows:

16

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

17

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

18

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

19

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

20

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

21

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

22

standard to all participating providers.

23

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

24

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

25

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

26

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

27

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

28

complete a claim.

29

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

30

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

31

section.

32

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

33

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

34

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

 

LC004560 - Page 12 of 16

1

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

2

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

3

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

4

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

5

or the policyholder.

6

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

7

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

8

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

9

services had been provided.

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

shall not exceed the lesser of two thousand dollars or twelve percent (12%) of the payment

18

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

19

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

20

determined by the hospital after reasonable efforts at the time the inpatient services were

21

provided.

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004560 - Page 13 of 16

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

section.

31

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

32

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

33

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

34

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

 

LC004560 - Page 14 of 16

1

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

2

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

3

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

4

claim whether via electronic submission or as a paper claim.

5

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

6

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

7

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

8

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

9

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

10

health care facility, as defined in § 27-41-2 including any mental health and/or substance abuse

11

treatment facility, physician, or other licensed practitioners identified to the review agent as

12

having primary responsibility for the care, treatment, and services rendered to a patient.

13

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

14

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

15

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

16

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

17

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

18

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

19

and procedures provided for by the health plan.

20

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

21

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

22

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

23

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

24

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

25

by the relevant medical community, Physician Specialty Society recommendations and the views

26

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

27

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

28

designated by that person.

29

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

30

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

31

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

32

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

33

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

34

effect.

 

LC004560 - Page 15 of 16

1

     SECTION 5. This act shall take effect upon passage.

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LC004560 - Page 16 of 16

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE

***

1

     This act would address the resolution of disputes which occur between health care

2

providers and health insurance companies regarding notification requirements prior to treatment

3

and disputes regarding the nature, cost and justification for services provided, a more specific

4

framework for dispute resolution is created.

5

     This act would take effect upon passage.

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LC004560 - Page 17 of 16