(As Signed by the Governor - June 2003)
Applicability to ERISA health benefit plans:
The prompt payment language does not regulate, alter or modify ERISA plan benefits or coverage. The contractual arrangement between the physician and the health plan, regardless of the type of benefits and coverage provided by the health plan, is the foundation of the prompt payment language. The legislation regulates claims processing and payment timeframes once the health plan has made a benefit determination. State courts have determined in numerous cases that payment is not preempted by ERISA when challenged by independent third-party providers, such as physicians, hospitals and other providers of health care services.
Prohibits retrospective denials of payment when services have been previously verified:
SB 418 requires upon the request of a physician that health plans inform the physician whether the care that is being proposed will be paid by the health plan and will specify any amounts for which the patient is responsible. The health plan may not deny or reduce payment once verification has been given unless the physician materially misrepresented the services that were provided or substantially failed to provide the services. The health plans may decline to verify if they cannot determine their liability at the time the physician requests verification. When the health plan declines to verify, the physician may make alternative financial arrangements with the patient before care is provided.
Requires health plans to look only to other payers in coordination of payment disputes:
Payment may not be pursued from the physician unless the physician has received primary payments from both the primary payer and the secondary payer. Coordination of payment is an insurance function and disputes should not involve physicians and providers. Health plans have the ability to request other insurance information from the enrollee at both time of enrollment and periodically throughout the policy period giving them the most current, available information.
Requires that eligibility information be readily available 24 hours/day:
Unfortunately, illness and accidents do not follow a nine-to-five schedule. Therefore, many physicians (e.g., emergency room doctors) must treat their patients after normal business hours. Because present regulations do not require health plans to have pre-authorization available after hours, many physicians go unpaid due to retrospective denials.
Gives the Commissioner of Insurance authority to define a clean claim, which cannot be changed by the health plans:
The current statute allows a health plan to "add" to or "change" the data elements that constitute a clean claim. The unilateral addition or change is simply accomplished when the plan notifies the physician 60 days before the new elements go into effect. This forces physicians to comply with multiple clean claim requirements from many different health plans and can dramatically increase the complexity of those requirements. Ultimately, the lack of a uniform set of clean claim data elements significantly minimizes or eliminates the potential benefits the legislature intended in passing House Bill 610 and greatly fosters slow/no pay situations.
Sets standards for requesting attachments or additional documentation for claims processing:
Limits the information that can be requested to clinical documentation that is already a part of the patient's record and specific to the claim. Like the ability to add or change clean claim requirements with 60 days notice, the same notice provision exists regarding attachments the health plans can require from physicians. Again, this provision places needless information burdens upon physicians and lends itself to a health plan's ability to circumvent the legislative intent behind the prompt pay law. SB 418 sets appropriate standards for attachments.
Prohibits plans from avoiding requirements of this statue through contract:
Because of the enormous advantage health plans have over physicians in contractual negotiations, the plans often present "take it or leave it" contracts. Under current law health plans are able to circumvent the prompt pay statute and rules via contractual provisions thereby eradicating the effectiveness of the laws. SB 418 prohibits health plans from contracting around statutory provisions by including language that states certain sections cannot be waived, voided, or nullified by contract.
Penalties: Modifies current statute to allow for graduated penalties. Changes the time frame for claim payment to 30 days for electronic claims and 45 days for paper claims. Penalties are 50 percent of the billed charges during the first 45 days after the end of the claim payment timeframe; 100 percent of billed charges from the 46 th through the 90 th day after the payment timeframe; and after the 90 th day, the penalty will accrue at 18 percent interest per annum until the claim and penalty are paid.
Health plans may by contract require claims be submitted electronically:
Health plans must provide for a waiver process from the requirement for circumstances where no method of transmission is available, for small physician practices or undue hardship. The health plan must have a default method in place to submit claims if there is a system failure or catastrophic event that would interfere with electronic submission.
Overpayments: Limits health plans from recovering an overpayment more than 180 days after the physician received the original payment. The health plan must notify the physician in writing the specific reason for the recovery. Ensures that the health plan will provide the physician with an opportunity to appeal if the physician disagrees with the request for recovery. The health plan may not attempt to recover until all appeal rights are exhausted.
- Prohibits physicians and providers from filing duplicate claims before Day 46.
- Requires physicians and providers to submit claims within 95 days under penalty of forfeiture of payment.
- Requires underpayment/overpayment investigations to be completed by providers and payers within 180 days.
Technical advisory committee: Requires that the Commissioner of Insurance appoint a committee to advise the department on issues related to technical aspects of coding of health care services and claims development, submission, processing, adjudication, and payment, as well as implementation of standardized coding and bundling edits and logic.