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H0833......................................................by STATE AFFAIRS HEALTH INSURANCE - Adds to existing law to provide for the prompt payment of health insurance claims; to define terms; to provide for interest payments; to provide that insurers are not required to accept an assignment of payment; to provide exceptions; and to provide penalties. 03/10 House intro - 1st rdg - to printing 03/11 Rpt prt - to Bus
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-seventh Legislature Second Regular Session - 2004 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 833 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO PROMPT PAYMENT OF CLAIMS; AMENDING TITLE 41, IDAHO CODE, BY THE 3 ADDITION OF A NEW CHAPTER 56, TITLE 41, IDAHO CODE, TO DEFINE TERMS, TO 4 REQUIRE THE PROMPT PAYMENT OF CLAIMS, TO PROVIDE FOR INTEREST PAYMENTS, TO 5 PROVIDE THAT INSURERS ARE NOT REQUIRED TO ACCEPT AN ASSIGNMENT OF PAYMENT, 6 TO PROVIDE EXCEPTIONS AND TO PROVIDE PENALTIES; PROVIDING AN EFFECTIVE 7 DATE AND PROVIDING 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 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 policy or 18 agreement under which a third party payer agrees to reimburse for covered 19 health care services rendered to beneficiaries in accordance with the benefits 20 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, or, in the event of a wire or 25 other electronic funds transfer, upon acceptance by the insurer's bank of a 26 payment order. 27 (3) "Department" means the department of insurance. 28 (4) "Director" means the director of the department of insurance. 29 (5) "Electronic claim" means a claim that is transmitted through the use 30 of electronic media, which includes the internet, extranet, leased lines, 31 dial-up lines, private networks, and those transmissions that are physically 32 moved from one (1) location to another using magnetic tape, disk or compact 33 disk media. The claim shall contain the proper format and code sets in accor- 34 dance with the applicable implementation specifications under 45 CFR 160 et 35 seq., and 45 CFR 162 et seq. 36 (6) "Insurer" means any insurer that sells hospital, medical, long-term 37 care, or vision insurance policies or certificates and managed care organiza- 38 tions. For the purpose of this chapter only, "insurer" also includes a third 39 party administrator who makes payments to beneficiaries, practitioners or 40 facilities on behalf of an insurer and a hospital or professional service cor- 41 poration. 42 (7) "Practitioner or facility" means any physician, hospital or other 2 1 person or facility licensed or otherwise authorized to furnish health care 2 services. 3 (8) "Receipt of claim" means the date the claim is actually received by 4 the insurer from the practitioner or facility or the beneficiary. 5 (9) "Submission of claim" means the date the claim is sent as indicated 6 by the mail stamp on the envelope, by the beneficiary, practitioner or facil- 7 ity, to the insurer or the date an electronic claim is transmitted to an 8 insurer. 9 41-5602. PROMPT PAYMENT OF CLAIMS. (1) Except as otherwise specifically 10 provided in this chapter, an insurer shall process a claim for payment for 11 health care services rendered by a practitioner or facility to a beneficiary 12 in accordance with this section. 13 (2) If a beneficiary, practitioner or facility submits an electronic 14 claim to an insurer within thirty (30) days of the date on which service was 15 delivered, an insurer shall pay or deny the claim not later than thirty (30) 16 days after receipt of the claim. 17 (3) If a beneficiary, practitioner or facility submits a paper claim for 18 payment to an insurer within forty-five (45) days of the date on which service 19 was delivered, an insurer shall pay or deny the claim not later than forty- 20 five (45) days after receipt of the claim. 21 (4) If an insurer denies the claim or needs additional information to 22 process the claim, the insurer shall notify the practitioner or facility and 23 the beneficiary in writing within thirty (30) days of receipt of the claim. 24 The notice shall state why the insurer denied the claim. 25 (5) If the claim was denied because more information was required to 26 process the claim, the notice shall specifically describe all information and 27 supporting documentation needed to evaluate the claim for processing. If the 28 practitioner or facility submits the information and documentation identified 29 by the insurer within thirty (30) days of receipt of the written notice, the 30 insurer shall process and pay the claim within thirty (30) days of receipt of 31 the additional information or, if appropriate, deny the claim. 32 (6) Any claim submitted pursuant to this chapter shall use the current 33 procedural terminology (CPT) code in effect, as published by the American med- 34 ical association, the international classification of disease (ICD) code in 35 effect, as published by the United States department of health and human ser- 36 vices, or the healthcare common procedural coding system (HCPCS) code in 37 effect, as published by the United States centers for medicaid and medicare 38 services (CMS). 39 (7) This chapter shall not apply to claims submitted under policies or 40 certificates of insurance for specific disease, hospital confinement indem- 41 nity, accident-only, credit, medicare supplement, disability income insurance, 42 student health benefits only coverage issued as a supplement to liability 43 insurance, worker's compensation or similar insurance, automobile medical pay- 44 ment insurance or nonrenewable short-term coverage issued for a period of 45 twelve (12) months or less. 46 41-5603. INTEREST PAYMENTS. An insurer that fails to pay, request addi- 47 tional information or documentation or deny a claim from a beneficiary, prac- 48 titioner or facility within the time periods established in this chapter shall 49 pay interest at the contract statutory rate pursuant to section 28-22-104, 50 Idaho Code, on the unpaid amount of a claim that is determined to be due and 51 owing. The interest shall accrue from the date payment was due, pursuant to 52 the provisions of this chapter, until the claim is paid. Payment of any inter- 53 est amount of less than four dollars ($4.00) shall not be required. Insurers 3 1 may add any interest due to a future payment to the beneficiary, practitioner 2 or facility. 3 41-5604. ASSIGNMENT. Nothing in this chapter requires an insurer to 4 accept an assignment of payment by the beneficiary to the practitioner or 5 facility. 6 41-5605. EXCEPTIONS. (1) The time periods set forth in section 41-5602, 7 Idaho Code, shall not apply to claims that the insurer reasonably believes 8 involve fraud or misrepresentation by the practitioner or facility or the ben- 9 eficiary or to instances where the insurer has not been provided the informa- 10 tion necessary to evaluate the claim after notice has been given requesting 11 additional information by the insurer as required by section 41-5602(5), Idaho 12 Code. 13 (2) The time periods set forth in section 41-5602, Idaho Code, shall not 14 apply to claims that the insurer reasonably believes require medical records, 15 including accident reports, for the purpose of investigating whether a claim 16 is valid for subrogation, or the coordination of benefits payable by the 17 insurer with benefits payable by another insurer or payable under federal or 18 state law. 19 (3) An insurer is not required to comply with the time periods set forth 20 in section 41-5602, Idaho Code, if the insurer is in compliance with a con- 21 tract with the practitioner or facility which specifies different payment 22 requirements. Payments made within the time periods set forth in section 23 41-5602, Idaho Code, for the purpose of this chapter, shall be deemed to be 24 made in a reasonable and timely manner. 25 (4) An insurer is not required to comply with the periods set forth in 26 section 41-5602, Idaho Code, if the fee or premium entitling a beneficiary to 27 insurance benefits has not been paid in full. 28 (5) An insurer is not required to comply with the time periods set forth 29 in section 41-5602, Idaho Code, if failure to comply is due to an act of God, 30 bankruptcy, an act of a governmental authority responding to an act of God or 31 emergency or the result of a strike, walkout or other labor dispute, or act of 32 terrorism. 33 41-5606. PENALTIES. (1) The director shall enforce the provisions of this 34 chapter and shall review and, if appropriate, investigate complaints received 35 by the department related to noncompliance with the provisions of this chap- 36 ter. 37 (2) If the director determines an insurer has violated the provisions of 38 this chapter, the director may impose an administrative fine not to exceed 39 five thousand dollars ($5,000) based upon an enforcement action. 40 (3) The director shall not suspend or revoke an insurer's certificate of 41 authority for violation of this chapter. 42 (4) No administrative penalty shall be imposed against an insurer under 43 this chapter or any other provision of law for failure to comply with this 44 chapter if, in the calendar year it has paid ninety-five percent (95%) or more 45 of all claims subject to this chapter to or on behalf of beneficiaries within 46 the time periods set forth in section 41-5602, Idaho Code. 47 (5) This section shall not create a private cause of action by or on 48 behalf of a beneficiary or practitioner or facility against an insurer. 49 SECTION 2. This act shall be in full force and effect on and after Janu- 50 ary 1, 2005, and shall apply to those claims with a date of service on and 51 after January 1, 2005.
STATEMENT OF PURPOSE RS 14264 This bill requires insurance companies that provide health insurance to pay a claim for covered services within thirty days following receipt of a bill if the claim is sent electronically or within forty five days if sent by paper. If an insurance company has a contract with a provider which contains different payment requirements, the contractual provisions supercede the requirements of this statute. This statute will apply only when an insurer is not complying with its contract or where there is no contract. This statute will only apply if a provider submits a claim promptly for payment FISCAL IMPACT This bill will have no impact on the General Fund. There will be some costs of enforcement from the Department of Insurance's dedicated accounts which will vary based on the degree of compliance. Contact Name: Idaho Medical Association: Ken McClure 388-1200 Idaho Assn. of Health Plans: Steve Tobiason 342-4545 Blue Cross of Idaho: Julie Taylor 331-7357 STATEMENT OF PURPOSE/FISCAL NOTE H 833