Print Friendly HOUSE BILL NO. 632 – Health insurance claims, prmpt pmt
HOUSE BILL NO. 632
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HEALTH INSURANCE CLAIMS - PAYMENT - Adds to existing law to require prompt
payment of health care insurance claims; to provide for payment of a
practitioner or facility; and to provide for implementation and penalties.
02/12 House intro - 1st rdg - to printing
02/13 Rpt prt - to Bus
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 632
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO PROMPT PAYMENT OF HEALTH CARE INSURANCE CLAIMS; AMENDING TITLE 41,
3 IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 56, TITLE 41, IDAHO CODE, TO
4 DEFINE TERMS, TO REQUIRE PROMPT PAYMENT OF CLAIMS, TO GOVERN PAYMENT OF A
5 PRACTITIONER OR FACILITY, TO GOVERN ASSIGNMENT OF BENEFITS, TO PROVIDE FOR
6 PAYMENT OF INTEREST, TO PROVIDE EXCEPTIONS AND TO PROVIDE PENALTIES FOR
7 VIOLATIONS; AND PROVIDING AN EFFECTIVE DATE.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Title 41, Idaho Code, be, and the same is hereby amended
10 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
11 ter 56, Title 41, Idaho Code, and to read as follows:
12 CHAPTER 56
13 PROMPT PAYMENT OF CLAIMS
14 41-5601. DEFINITIONS. As used in this chapter:
15 (1) "Beneficiary" means a policyholder, subscriber, member, employer or
16 other person who is eligible for benefits under a contract providing hospital,
17 surgical, or medical expense coverage or a managed care organization or other
18 policy or agreement under which a third party payor agrees to reimburse for
19 covered health care services rendered to beneficiaries in accordance with the
20 benefits contract.
21 (2) "Date of payment" means the date the payment is sent as indicated by
22 the mail stamp on the envelope by the insurer to the practitioner or facility
23 or to the beneficiary in the event there is not a contract for direct payment
24 by the insurer to the practitioner or facility.
25 (3) "Department" means the department of insurance.
26 (4) "Director" means the director of the department of insurance.
27 (5) "Insurer" means an authorized insurer, as defined by section 41-110,
28 Idaho Code, to issue health insurance policies to any person within this
30 (6) "Practitioner or facility" means any physician, hospital or other
31 person or facility licensed or otherwise authorized to furnish health care
33 (7) "Receipt of claim" means the date the claim is actually received by
34 the insurer from the practitioner or facility or the beneficiary.
35 41-5602. PROMPT PAYMENT OF CLAIMS. (1) Except as otherwise specifically
36 provided in this chapter, an insurer shall process a claim for payment for
37 health care services rendered by a practitioner or facility to a beneficiary
38 in accordance with this section.
39 (2) An insurer shall pay or deny a claim not later than thirty (30)
40 days after receipt of the claim.
41 (3) If an insurer denies the claim or needs additional information to
1 process the claim, the insurer shall notify the practitioner or facility and
2 the beneficiary in writing within thirty (30) days of receipt of the claim.
3 The notice shall state why the insurer denied the claim.
4 (4) If the claim was denied because more information is required to proc-
5 ess the claim, the notice shall specifically describe all information and sup-
6 porting documentation needed to evaluate the claim for processing. If the
7 practitioner or facility submits the information and documentation identified
8 by the insurer, the insurer shall process and pay the claim within thirty (30)
9 days of receipt of the additional information or, if appropriate, deny the
11 (5) Insurers, practitioners and facilities shall comply with section
12 41-286, Idaho Code, the uniform health claim act and its implementing rules.
13 41-5603. PRACTITIONER OR FACILITY BILLING FOR SERVICES. (1) A practitio-
14 ner or facility may bill a beneficiary at the time of service or thereafter
15 for a noncovered service or for estimated copayments, coinsurance or
17 (2) If a practitioner or facility has a contract with the insurer or if
18 the practitioner or facility expects the insurer to pay the practitioner or
19 facility directly (as opposed to paying the beneficiary), the practitioner or
20 facility shall not send a bill to a beneficiary until the time period for pay-
21 ment of a claim by the insurer, as set forth in this chapter, has expired;
22 provided however, that unless a contract provision is to the contrary, a prac-
23 titioner or facility may bill the beneficiary at the time of service or there-
24 after for the service rendered if:
25 (a) The practitioner or facility reasonably believes the beneficiary is a
26 credit risk; or
27 (b) The beneficiary's eligibility has not been confirmed before health
28 care services are rendered.
29 41-5604. ASSIGNMENT OF BENEFITS. Nothing in this chapter shall be inter-
30 preted to require an insurer to accept an assignment of benefits by the bene-
31 ficiary to a practitioner or facility.
32 41-5605. INTEREST PAYMENTS. An insurer that fails to pay a claim in
33 accordance with this chapter shall pay interest at the rate established by
34 section 28-22-104, Idaho Code, on the unpaid amount of a claim that is due and
35 owing. The interest shall accrue from the date the payment was due and shall
36 continue until the date of payment of the claim.
37 41-5606. EXCEPTIONS. (1) The time periods set forth in section 41-5602,
38 Idaho Code, shall not apply to claims that the insurer reasonably believes
39 involve fraud or misrepresentation by the practitioner or facility or the ben-
40 eficiary or to instances where the insurer has not been provided the informa-
41 tion necessary to evaluate the claim after notice has been given requesting
42 additional information by the insurer as required by subsection (4) of section
43 41-5602, Idaho Code.
44 (2) An insurer is not required to comply with the time periods set forth
45 in section 41-5602, Idaho Code, if failure to comply is due to an act of God,
46 bankruptcy, an act of a governmental authority responding to an act of God or
47 emergency or the result of a strike, walkout or other labor dispute.
48 41-5607. PENALTIES. (1) The director shall enforce the provisions of this
49 chapter. The director shall review and, if appropriate, investigate complaints
50 received by the department related to noncompliance with the provisions of
1 this chapter. If the director determines that the provisions of this chapter
2 have not been met, the director shall notify the practitioner or facility or
3 insurer of the provisions of this chapter.
4 (2) If a practitioner or facility or insurer has been notified as set
5 forth in subsection (1) of this section, on subsequent complaints, the direc-
6 tor may impose an administrative penalty not to exceed five hundred dollars
7 ($500) for violation of this chapter. In cases of multiple violations of this
8 chapter by an insurer, the director may impose an administrative penalty, the
9 total of which shall not exceed ten thousand dollars ($10,000).
10 (3) In cases of repeated, persistent, egregious violations in which the
11 director determines that an insurer has not made reasonable efforts to comply
12 with the provisions of this chapter, the director may limit, suspend, revoke
13 or refuse to continue an insurer's certificate of authority.
14 (4) Any administrative fine imposed by the director shall be deposited in
15 the account for the individual high-risk reinsurance pool created in section
16 41-5502, Idaho Code.
17 SECTION 2. This act shall be in full force and effect for those claims
18 with a date of service on and after January 1, 2003.
STATEMENT OF PURPOSE
This bill requires insurance companies who provide health
insurance in Idaho to either pay claims for covered services within
thirty days following receipt of a bill or specify what information
or documentation is necessary to process a claim. It also prohibits
physicians, hospitals and other health care providers from billing
a patient whose insurance company pays providers directly until
the prompt payment period has expired.
Billing for health care services is complicated under the
best of circumstances. When patients are billed for covered
services their insurance company has not paid within a reasonable
period of time, sorting through multiple, conflicting billing
statements and explanations of benefits becomes unnecessarily
difficult. Hopefully this legislation will remove much of that
This bill will have no impact on the General Fund. There
will be some costs of enforcement from the Department of Insurance
dedicated accounts which will vary based on the degree of
Contact: Ken McClure
STATEMENT OF PURPOSE/FISCAL NOTE H 632