Print Friendly HOUSE BILL NO. 709 – Health insurance, payment of claims
HOUSE BILL NO. 709
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HEALTH INSURANCE - PAYMENT OF CLAIMS - Adds to existing law relating to
insurance to define terms; to require the prompt payment of claims; to
provide for interest payments; to provide exceptions; and to provide
02/16 House intro - 1st rdg - to printing
02/17 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. 709
BY BUSINESS 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 EXCEPTIONS AND TO PROVIDE PENALTIES; PROVIDING AN EFFECTIVE DATE
6 AND PROVIDING APPLICATION.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Title 41, Idaho Code, be, and the same is hereby amended
9 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
10 ter 56, Title 41, Idaho Code, and to read as follows:
11 CHAPTER 56
12 PROMPT PAYMENT OF CLAIMS
13 41-5601. DEFINITIONS. As used in this chapter:
14 (1) "Beneficiary" means a policyholder, subscriber, member, employer or
15 other person who is eligible for benefits under a contract providing hospital,
16 surgical, or medical expense coverage or a managed care organization or other
17 policy or agreement under which a third party payer agrees to reimburse for
18 covered health care services rendered to beneficiaries in accordance with the
19 benefits contract.
20 (2) "Date of payment" means the date the payment is sent as indicated by
21 the mail stamp on the envelope by the insurer to the practitioner or facility
22 or to the beneficiary in the event there is not a contract for direct payment
23 by the insurer to the practitioner or facility, or, in the event of a wire or
24 other electronic funds transfer, upon acceptance by the insurer's bank of a
25 payment order.
26 (3) "Department" means the department of insurance.
27 (4) "Director" means the director of the department of insurance.
28 (5) "Insurer" means any insurer that sells hospital, medical, long-term
29 care, dental or vision insurance policies or certificates, a subscriber con-
30 tract provided by a hospital or professional service corporation and managed
31 care organizations. "Insurer" does not include policies or certificates of
32 insurance for specific disease, hospital confinement indemnity, accident-only,
33 credit, medicare supplement, disability income insurance, student health bene-
34 fits only coverage issued as a supplement to liability insurance, worker's
35 compensation or similar insurance, automobile medical payment insurance or
36 nonrenewable short-term coverage issued for a period of twelve (12) months or
38 (6) "Practitioner or facility" means any physician, hospital or other
39 person or facility licensed or otherwise authorized to furnish health care
41 (7) "Receipt of claim" means the date the claim is actually received by
42 the insurer from the practitioner or facility or the beneficiary.
1 41-5602. PROMPT PAYMENT OF CLAIMS. (1) Except as otherwise specifically
2 provided in this chapter, an insurer shall process a claim for payment for
3 health care services rendered by a practitioner or facility to a beneficiary
4 in accordance with this section.
5 (2) An insurer shall pay or deny a claim not later than thirty (30) days
6 after receipt of the claim.
7 (3) If an insurer denies the claim or needs additional information to
8 process the claim, the insurer shall notify the practitioner or facility and
9 the beneficiary in writing within thirty (30) days of receipt of the claim.
10 The notice shall state why the insurer denied the claim.
11 (4) If the claim was denied because more information was required to
12 process the claim, the notice shall specifically describe all information and
13 supporting documentation needed to evaluate the claim for processing. If the
14 practitioner or facility submits the information and documentation identified
15 by the insurer, the insurer shall process and pay the claim within thirty (30)
16 days of receipt of the additional information or, if appropriate, deny the
18 41-5603. INTEREST PAYMENTS. An insurer that fails to pay a claim in
19 accordance with this chapter shall pay interest at the rate established by
20 section 28-22-104, Idaho Code, on the unpaid amount of a claim that is due and
21 owing. The interest shall accrue from the date the payment was due and shall
22 continue until the date of payment of the claim.
23 41-5604. EXCEPTIONS. (1) The time periods set forth in section 41-5602,
24 Idaho Code, shall not apply to claims that the insurer reasonably believes
25 involve fraud or misrepresentation by the practitioner or facility or the ben-
26 eficiary or to instances where the insurer has not been provided the informa-
27 tion necessary to evaluate the claim after notice has been given requesting
28 additional information by the insurer as required by section 41-5602(4), Idaho
30 (2) The time periods set forth in section 41-5602, Idaho Code, shall not
31 apply to claims that the insurer reasonably believes require the coordination
32 of benefits payable by the insurer with benefits payable by another insurer or
33 payable under federal or state law.
34 (3) An insurer is not required to comply with the time periods set forth
35 in section 41-5602, Idaho Code, if the insurer is in compliance with a con-
36 tract with the practitioner or facility which specifies different payment
38 (4) An insurer is not required to comply with the time periods set forth
39 in section 41-5602, Idaho Code, if failure to comply is due to an act of God,
40 bankruptcy, an act of a governmental authority responding to an act of God or
41 emergency or the result of a strike, walkout or other labor dispute.
42 41-5605. PENALTIES. (1) The director shall enforce the provisions of this
43 chapter and shall review and, if appropriate, investigate complaints received
44 by the department related to noncompliance with the provisions of this chap-
45 ter. If the director determines that the provisions of this chapter have not
46 been met, the director shall notify the insurer of the provisions of this
48 (2) After notice has been given as set forth in subsection (1) of this
49 section, on subsequent complaints if the director determines that an insurer
50 has not made reasonable efforts to comply with the provisions of this chapter,
51 subsequent violations of this chapter which are intentional or so frequent as
52 to indicate a general business practice shall constitute a violation of sec-
1 tion 41-1329, Idaho Code.
2 SECTION 2. This act shall be in full force and effect on and after Janu-
3 ary 1, 2005, and shall apply to those claims with a date of service on and
4 after January 1, 2005.
STATEMENT OF PURPOSE
This bill requires insurance companies that provide health
insurance in Idaho to pay claims for covered services within thirty
days following receipt of a bill or, in the alternative, to specify
what information or documentation is necessary to process a claim.
Once the necessary information or documentation is provided, the
claims then must be paid within thirty days. If an insurance
company has a contract with an insured or 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.
Billing for health care services is complicated under the best of
circumstances. When an insurance company does not pay claims
within a reasonable time it becomes both more costly and more
This bill will have no fiscal 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 709