2002 Legislation
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HOUSE BILL NO. 633 – Health insurance claim payments

HOUSE BILL NO. 633

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H0633...........................................................by BUSINESS
HEALTH INSURANCE - CLAIM PAYMENTS - Adds to existing law to govern the
timing of health insurance claim payments; to govern provider billing and
assignment of payments; to provide for the payment of interest; to provide
exceptions; and to provide for enforcement.
                                                                        
02/12    House intro - 1st rdg - to printing
02/13    Rpt prt - to Bus

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  Second Regular Session - 2002
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 633
                                                                        
                                   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 GOVERN TIMING OF CLAIM PAYMENTS, TO GOVERN PROVIDER BILL-
  5        ING, TO GOVERN ASSIGNMENT OF PAYMENTS, TO PROVIDE FOR PAYMENT OF INTEREST,
  6        TO  PROVIDE EXCEPTIONS AND TO PROVIDE FOR ENFORCEMENT; PROVIDING AN EFFEC-
  7        TIVE DATE AND TO PROVIDE FOR APPLICATION.
                                                                        
  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                                  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)  "Clean claim" is as defined by the provisions of the contract between
 22    the insurer and the provider.
 23        (3)  "Date of payment" means the date the payment is sent by  the  insurer
 24    to  the  provider  or to the beneficiary in the event there is no contract for
 25    direct payment by the insurer to the provider.
 26        (4)  "Insurer" means an authorized insurer, as defined in section  41-110,
 27    Idaho  Code,  that  issues health insurance policies to any person within this
 28    state.
 29        (5)  "Provider" means a physician licensed to practice  medicine  pursuant
 30    to Idaho law.
 31        (6)  "Receipt  of  claim" means the date the claim is actually received by
 32    the insurer from the provider or the beneficiary.
                                                                        
 33        41-5602.  TIMING OF CLAIM PAYMENTS. (1)  Unless otherwise provided in this
 34    chapter, an insurer shall process a clean claim for payment  for  health  care
 35    services  rendered by a provider to a beneficiary in accordance with this sec-
 36    tion.
 37        (2)  An insurer shall pay or deny a clean claim not later than  forty-five
 38    (45) days after receipt of the claim.
 39        (3)  If  an  insurer  denies  the claim or needs additional information to
 40    process the claim, the insurer shall notify the provider and  the  beneficiary
 41    in  writing.  The  notice shall state why the insurer denied the claim. If the
                                                                        
                                           2
                                                                        
  1    claim was denied because more information is required to  process  the  claim,
  2    the  notice  shall state that more information or supporting documentation  is
  3    needed to evaluate the claim for processing.
  4        (4)  Insurers and providers shall, in connection with all claims, use  the
  5    most current CPT code in effect, as published by the American medical associa-
  6    tion, the most current ICD-9 code in effect, as published by the United States
  7    department  of  health  and  human services, or the most current HCPCS code in
  8    effect, as published by the United States health  care  financing  administra-
  9    tion.  The  provider  shall  submit  the  claim, either in paper or electronic
 10    format, on the current UB-92 or HCFA-1500 claim form or a successor or equiva-
 11    lent claim form as adopted by the national uniform billing committee (NUBC).
                                                                        
 12        41-5603.  PROVIDER BILLING. (1) The provider shall not send a  bill  to  a
 13    beneficiary until the time period for payment of a clean claim by the insurer,
 14    as  set forth in this section, has expired. The provider shall be permitted to
 15    send a bill to the beneficiary for payment of any applicable copayment,  coin-
 16    surance  or  deductible prior to the expiration of the time period for payment
 17    of a clean claim as set forth in this chapter.
 18        (2)  The provider may send an informational statement to  the  beneficiary
 19    setting  forth the charges for the services rendered. Any such statement shall
 20    include language informing the beneficiary that the provider has submitted the
 21    claim to the beneficiary's insurer for payment and that the beneficiary is not
 22    required to submit payment, except for any applicable  copayment,  coinsurance
 23    or  deductible,  to the provider until the insurer has met the requirements of
 24    this chapter.
                                                                        
 25        41-5604.  ASSIGNMENT. Nothing in  this  section  requires  an  insurer  to
 26    accept an assignment of payment by the beneficiary to a provider.
                                                                        
 27        41-5605.  INTEREST  PAYMENTS.  An  insurer  that fails to pay a claim to a
 28    provider within the time periods established in this chapter shall pay  inter-
 29    est  at the contract statutory rate pursuant to section 28-22-104, Idaho Code,
 30    on the unpaid amount of a claim that is due  and  owing.  The  interest  shall
 31    accrue from the date payment was due, pursuant to the provisions of this chap-
 32    ter, until the claim is processed. Payment of any interest amount of less than
 33    five dollars ($5.00) shall not be required.
                                                                        
 34        41-5606.  EXCEPTIONS. The time periods set forth in this chapter shall not
 35    apply  to claims for which there is evidence of fraud, or misrepresentation by
 36    a provider or beneficiary, or to instances where  the  insurer  has  not  been
 37    granted  reasonable access to the information under the provider's control. An
 38    insurer is not required to comply with the time  periods  set  forth  in  this
 39    chapter  if  the failure to comply is due to an act of God, bankruptcy, an act
 40    of a governmental authority responding to an act of God or emergency,  or  the
 41    result of a strike, walkout or other labor dispute.
                                                                        
 42        41-5607.  ENFORCEMENT.  The  director of the department of insurance shall
 43    enforce the provisions of this chapter. The director shall review and investi-
 44    gate all complaints received by the department related to noncompliance by  an
 45    insurer  or  provider with the provisions of this chapter. The department will
 46    resolve complaints pursuant to the Idaho administrative procedure act, chapter
 47    52, title 67, Idaho Code. The director may impose an administrative  fine  not
 48    to  exceed  five hundred dollars ($500) for a single violation of this chapter
 49    and not to exceed five thousand dollars ($5,000) in the aggregate for multiple
 50    violations of this chapter. The director shall deduct any interest paid by  an
                                                                        
                                           3
                                                                        
  1    insurer  pursuant to section 41-5605, Idaho Code, from any administrative fine
  2    that is imposed upon an insurer. The director shall  not  suspend,  revoke  or
  3    refuse  to  continue  an insurer's certificate of authority for a violation of
  4    this chapter. The director shall not suspend,  revoke  or  otherwise  limit  a
  5    physician's  license to practice medicine for a violation of this chapter. Any
  6    administrative fine imposed by the director pursuant to this chapter shall  be
  7    deposited in the account for the individual high-risk reinsurance pool created
  8    in section 41-5502, Idaho Code.
                                                                        
  9        SECTION  2.  This  act  shall be in full force and effect for those claims
 10    with a date of service by a provider on and after July 1, 2003.

Statement of Purpose / Fiscal Impact


                    STATEMENT OF PURPOSE
                        RS 12064C1

	This legislation requires prompt payment by health insurance 
carriers of claims submitted by contracting physicians.

	It allows contracting physicians to send the patient an 
informational statement setting forth the fees for services, but 
prohibits the physician from seeking immediate payment except for 
applicable coinsurance, deductibles and co-payments.

	It requires a health insurance carrier to pay the provider 
the statutory contract rate of interest for claims not paid within 
the proper time frame. It provides the Department of Insurance 
authority to impose administrative fines on either health insurance 
carriers or physicians for violation of this provision.


                      FISCAL IMPACT



	There may be a fiscal impact to the Department of Insurance 
for the cost of any enforcement actions.




Contact
Name:
       Steve Tobiason, Idaho Association of Health Plans 342-4545
       Lyn Darrington 333-7818



STATEMENT OF PURPOSE/FISCAL NOTE		H 633