S0618

	2013 -- S 0618
	=======
	LC01776
	=======
	STATE OF RHODE ISLAND

	IN GENERAL ASSEMBLY

	JANUARY SESSION, A.D. 2013

	____________


	A N A C T
	RELATING TO INSURANCE - ACCIDENT AND SICKNESS INSURANCE POLICIES


	Introduced By: Senators Goldin, Miller, Satchell, Cool Rumsey, and Sosnowski

	Date Introduced: March 06, 2013

	Referred To: Senate Health & Human Services




	It is enacted by the General Assembly as follows:

1-1	SECTION 1. Section 27-18-61 of the General Laws in Chapter 27-18 entitled "Accident
1-2	and Sickness Insurance Policies" is hereby amended to read as follows:
1-3	27-18-61. Prompt processing of claims. -- (a) A health care entity or health plan
1-4	operating in the state shall pay all complete claims for covered health care services submitted to
1-5	the health care entity or health plan by a health care provider or by a policyholder within forty
1-6	(40) calendar days following the date of receipt of a complete written claim or within thirty (30)
1-7	calendar days following the date of receipt of a complete electronic claim. Each health plan shall
1-8	establish a written standard defining what constitutes a complete claim and shall distribute this
1-9	standard to all participating providers.
1-10	(b) If the health care entity or health plan denies or pends a claim, the health care entity
1-11	or health plan shall have thirty (30) calendar days from receipt of the claim to notify in writing
1-12	the health care provider or policyholder of any and all reasons for denying or pending the claim
1-13	and what, if any, additional information is required to process the claim. No health care entity or
1-14	health plan may limit the time period in which additional information may be submitted to
1-15	complete a claim.
1-16	(c) Any claim that is resubmitted by a health care provider or policyholder shall be
1-17	treated by the health care entity or health plan pursuant to the provisions of subsection (a) of this
1-18	section.
1-19	(d) A health care entity or health plan which fails to reimburse the health care provider
1-20	or policyholder after receipt by the health care entity or health plan of a complete claim within the
2-1	required timeframes shall pay to the health care provider or the policyholder who submitted the
2-2	claim, in addition to any reimbursement for health care services provided, interest which shall
2-3	accrue at the rate of twelve percent (12%) per annum commencing on the thirty-first (31st) day
2-4	after receipt of a complete electronic claim or on the forty-first (41st) day after receipt of a
2-5	complete written claim, and ending on the date the payment is issued to the health care provider
2-6	or the policyholder.
2-7	(e)(1) A healthcare entity or health plan shall not deny payment for a claim for medically
2-8	necessary inpatient services resulting from an emergency admission provided by a hospital solely
2-9	on the basis that the hospital did not timely notify such healthcare entity or health plan that the
2-10	services had been provided.
2-11	(2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health
2-12	plan from agreeing to requirements for timely notification that medically necessary inpatient
2-13	services resulting from an emergency admission have been provided and to a reduction in
2-14	payment for failure to timely notify; provided, however that: (i) Any requirement for timely
2-15	notification must provide for a reasonable extension of timeframes for notification for emergency
2-16	services provided on weekends, state, or federal holidays, or during declared state or federally
2-17	declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify
2-18	shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the
2-19	payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in
2-20	payment for failure to timely notify shall not be imposed if the patient's insurance coverage could
2-21	not be determined by the hospital after reasonable efforts at the time the inpatient services were
2-22	provided.
2-23	(f) Except where the parties have developed a mutually agreed upon process for the
2-24	reconciliation of coding disputes that includes a review of submitted medical records to ascertain
2-25	the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which
2-26	payment has been adjusted based on a particular coding to a patient including the assignment of
2-27	diagnosis and procedure, have the opportunity to submit the affected claim with medical records
2-28	supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.
2-29	Upon receipt of such medical records, the healthcare entity or health plan shall review such
2-30	information to ascertain the correct coding for payment and process the claim in accordance with
2-31	the time frames set forth in subsection (a) of this section. In the event the healthcare entity or
2-32	health plan processes the claim consistent with its initial determination, such decision shall be
2-33	accompanied by a detailed statement in plain language of the healthcare entity or health plan
2-34	setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity
3-1	or health plan that increases the payment based on the information submitted by the hospital, but
3-2	fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall
3-3	pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection
3-4	(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare
3-5	entity or health plan shall be deemed an adverse determination if based solely on a coding
3-6	determination. Nothing in this subsection shall apply to those instances in which the insurer or
3-7	organization, or corporation has a reasonable suspicion of fraud or abuse.
3-8	~~(e)~~(g) Exceptions to the requirements of this section are as follows:
3-9	(1) No health care entity or health plan operating in the state shall be in violation of this
3-10	section for a claim submitted by a health care provider or policyholder if:
3-11	(i) Failure to comply is caused by a directive from a court or federal or state agency;
3-12	(ii) The health care entity or health plan is in liquidation or rehabilitation or is operating
3-13	in compliance with a court-ordered plan of rehabilitation; or
3-14	(iii) The health care entity or health plan's compliance is rendered impossible due to
3-15	matters beyond its control that are not caused by it.
3-16	(2) No health care entity or health plan operating in the state shall be in violation of this
3-17	section for any claim: (i) initially submitted more than ninety (90) days after the service is
3-18	rendered, or (ii) resubmitted more than ninety (90) days after the date the health care provider
3-19	received the notice provided for in subsection (b) of this section; provided, this exception shall
3-20	not apply in the event compliance is rendered impossible due to matters beyond the control of the
3-21	health care provider and were not caused by the health care provider.
3-22	(3) No health care entity or health plan operating in the state shall be in violation of this
3-23	section while the claim is pending due to a fraud investigation by a state or federal agency.
3-24	(4) No health care entity or health plan operating in the state shall be obligated under this
3-25	section to pay interest to any health care provider or policyholder for any claim if the director of
3-26	business regulation finds that the entity or plan is in substantial compliance with this section. A
3-27	health care entity or health plan seeking such a finding from the director shall submit any
3-28	documentation that the director shall require. A health care entity or health plan which is found to
3-29	be in substantial compliance with this section shall thereafter submit any documentation that the
3-30	director may require on an annual basis for the director to assess ongoing compliance with this
3-31	section.
3-32	(5) A health care entity or health plan may petition the director for a waiver of the
3-33	provision of this section for a period not to exceed ninety (90) days in the event the health care
3-34	entity or health plan is converting or substantially modifying its claims processing systems.
4-1	~~(f)~~(h) For purposes of this section, the following definitions apply:
4-2	(1) "Claim" means: (i) a bill or invoice for covered services; (ii) a line item of service; or
4-3	(iii) all services for one patient or subscriber within a bill or invoice.
4-4	(2) "Date of receipt" means the date the health care entity or health plan receives the
4-5	claim whether via electronic submission or as a paper claim.
4-6	(3) "Health care entity" means a licensed insurance company or nonprofit hospital or
4-7	medical or dental service corporation or plan or health maintenance organization, or a contractor
4-8	as described in section 23-17.13-2(2), which operates a health plan.
4-9	(4) "Health care provider" means an individual clinician, either in practice independently
4-10	or in a group, who provides health care services, and ~~otherwise referred to as a non-institutional~~
4-11	~~provider~~ any healthcare facility, as defined in section 23-17-2 including any mental health and/or
4-12	substance abuse treatment facility, physician, or other licensed practitioners identified to the
4-13	review agent as having primary responsibility for the care, treatment, and services rendered to a
4-14	patient.
4-15	(5) "Health care services" include, but are not limited to, medical, mental health,
4-16	substance abuse, dental and any other services covered under the terms of the specific health plan.
4-17	(6) "Health plan" means a plan operated by a health care entity that provides for the
4-18	delivery of health care services to persons enrolled in those plans through:
4-19	(i) Arrangements with selected providers to furnish health care services; and/or
4-20	(ii) Financial incentive for persons enrolled in the plan to use the participating providers
4-21	and procedures provided for by the health plan.
4-22	(7) "Medically necessary" means services or supplies that are needed for the diagnosis or
4-23	treatment of a medical condition and meet generally accepted standards of medical practice. For
4-24	these purposes, "generally accepted standards of medical practice" means standards and
4-25	guidelines that include, but are not limited to, InterQual and other supporting information based
4-26	on credible scientific evidence published in peer-reviewed medical literature generally recognized
4-27	by the relevant medical community, physician specialty society recommendations and the views
4-28	of physicians practicing in relevant clinical areas, and any other relevant factors.
4-29	~~(7)~~(8) "Policyholder" means a person covered under a health plan or a representative
4-30	designated by that person.
4-31	~~(8)~~(9) "Substantial compliance" means that the health care entity or health plan is
4-32	processing and paying ninety-five percent (95%) or more of all claims within the time frame
4-33	provided for in subsections (a) and (b) of this section.
5-34	~~(g)~~(i) Any provision in a contract between a health care entity or a health plan and a
5-35	health care provider which is inconsistent with this section shall be void and of no force and
5-36	effect.
5-37	SECTION 2. Section 27-19-52 of the General Laws in Chapter 27-19 entitled "Nonprofit
5-38	Hospital Service Corporations" is hereby amended to read as follows:
5-39	27-19-52. Prompt processing of claims. -- (a) A health care entity or health plan
5-40	operating in the state shall pay all complete claims for covered health care services submitted to
5-41	the health care entity or health plan by a health care provider or by a policyholder within forty
5-42	(40) calendar days following the date of receipt of a complete written claim or within thirty (30)
5-43	calendar days following the date of receipt of a complete electronic claim. Each health plan shall
5-44	establish a written standard defining what constitutes a complete claim and shall distribute this
5-45	standard to all participating providers.
5-46	(b) If the health care entity or health plan denies or pends a claim, the health care entity
5-47	or health plan shall have thirty (30) calendar days from receipt of the claim to notify in writing
5-48	the health care provider or policyholder of any and all reasons for denying or pending the claim
5-49	and what, if any, additional information is required to process the claim. No health care entity or
5-50	health plan may limit the time period in which additional information may be submitted to
5-51	complete a claim.
5-52	(c) Any claim that is resubmitted by a health care provider or policyholder shall be
5-53	treated by the health care entity or health plan pursuant to the provisions of subsection (a) of this
5-54	section.
5-55	(d) A health care entity or health plan which fails to reimburse the health care provider
5-56	or policyholder after receipt by the health care entity or health plan of a complete claim within the
5-57	required timeframes shall pay to the health care provider or the policyholder who submitted the
5-58	claim, in addition to any reimbursement for health care services provided, interest which shall
5-59	accrue at the rate of twelve percent (12%) per annum commencing on the thirty-first (31st) day
5-60	after receipt of a complete electronic claim or on the forty-first (41st) day after receipt of a
5-61	complete written claim, and ending on the date the payment is issued to the health care provider
5-62	or the policyholder.
5-63	(e)(1) A healthcare entity or health plan shall not deny payment for a claim for medically
5-64	necessary inpatient services resulting from an emergency admission provided by a hospital solely
5-65	on the basis that the hospital did not timely notify such healthcare entity or health plan that the
5-66	services had been provided.
5-67	(2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health
5-68	plan from agreeing to requirements for timely notification that medically necessary inpatient
6-1	services resulting from an emergency admission have been provided and to a reduction in
6-2	payment for failure to timely notify; provided, however that: (i) Any requirement for timely
6-3	notification must provide for a reasonable extension of timeframes for notification for emergency
6-4	services provided on weekends, state, or federal holidays, or during declared state or federally
6-5	declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify
6-6	shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the
6-7	payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in
6-8	payment for failure to timely notify shall not be imposed if the patient's insurance coverage could
6-9	not be determined by the hospital after reasonable efforts at the time the inpatient services were
6-10	provided.
6-11	(f) Except where the parties have developed a mutually agreed upon process for the
6-12	reconciliation of coding disputes that includes a review of submitted medical records to ascertain
6-13	the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which
6-14	payment has been adjusted based on a particular coding to a patient including the assignment of
6-15	diagnosis and procedure, have the opportunity to submit the affected claim with medical records
6-16	supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.
6-17	Upon receipt of such medical records, the healthcare entity or health plan shall review such
6-18	information to ascertain the correct coding for payment and process the claim in accordance with
6-19	the time frames set forth in subsection (a) of this section. In the event the healthcare entity or
6-20	health plan processes the claim consistent with its initial determination, such decision shall be
6-21	accompanied by a detailed statement in plain language of the healthcare entity or health plan
6-22	setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity
6-23	or health plan that increases the payment based on the information submitted by the hospital, but
6-24	fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall
6-25	pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection
6-26	(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare
6-27	entity or health plan shall be deemed an adverse determination if based solely on a coding
6-28	determination. Nothing in this subsection shall apply to those instances in which the insurer or
6-29	organization, or corporation has a reasonable suspicion of fraud or abuse.
6-30	~~(e)~~(g) Exceptions to the requirements of this section are as follows:
6-31	(1) No health care entity or health plan operating in the state shall be in violation of this
6-32	section for a claim submitted by a health care provider or policyholder if:
6-33	(i) Failure to comply is caused by a directive from a court or federal or state agency;
7-34	(ii) The health care provider or health plan is in liquidation or rehabilitation or is
7-35	operating in compliance with a court-ordered plan of rehabilitation; or
7-36	(iii) The health care entity or health plan's compliance is rendered impossible due to
7-37	matters beyond its control that are not caused by it.
7-38	(2) No health care entity or health plan operating in the state shall be in violation of this
7-39	section for any claim: (i) initially submitted more than ninety (90) days after the service is
7-40	rendered, or (ii) resubmitted more than ninety (90) days after the date the health care provider
7-41	received the notice provided for in section 27-18-61(b); provided, this exception shall not apply
7-42	in the event compliance is rendered impossible due to matters beyond the control of the health
7-43	care provider and were not caused by the health care provider.
7-44	(3) No health care entity or health plan operating in the state shall be in violation of this
7-45	section while the claim is pending due to a fraud investigation by a state or federal agency.
7-46	(4) No health care entity or health plan operating in the state shall be obligated under this
7-47	section to pay interest to any health care provider or policyholder for any claim if the director of
7-48	the department of business regulation finds that the entity or plan is in substantial compliance
7-49	with this section. A health care entity or health plan seeking such a finding from the director shall
7-50	submit any documentation that the director shall require. A health care entity or health plan which
7-51	is found to be in substantial compliance with this section shall after this submit any
7-52	documentation that the director may require on an annual basis for the director to assess ongoing
7-53	compliance with this section.
7-54	(5) A health care entity or health plan may petition the director for a waiver of the
7-55	provision of this section for a period not to exceed ninety (90) days in the event the health care
7-56	entity or health plan is converting or substantially modifying its claims processing systems.
7-57	~~(f)~~(h) For purposes of this section, the following definitions apply:
7-58	(1) "Claim" means:
7-59	(i) A bill or invoice for covered services;
7-60	(ii) A line item of service; or
7-61	(iii) All services for one patient or subscriber within a bill or invoice.
7-62	(2) "Date of receipt" means the date the health care entity or health plan receives the
7-63	claim whether via electronic submission or has a paper claim.
7-64	(3) "Health care entity" means a licensed insurance company or nonprofit hospital or
7-65	medical or dental service corporation or plan or health maintenance organization, or a contractor
7-66	as described in section 23-17.13-2(2), that operates a health plan.
7-67	(4) "Health care provider" means an individual clinician, either in practice independently
7-68	or in a group, who provides health care services, and ~~referred to as a non-institutional provider~~
8-1	any healthcare facility, as defined in section 23-17-2 including any mental health and/or
8-2	substance abuse treatment facility, physician, or other licensed practitioners identified to the
8-3	review agent as having primary responsibility for the care, treatment, and services rendered to a
8-4	patient.
8-5	(5) "Health care services" include, but are not limited to, medical, mental health,
8-6	substance abuse, dental and any other services covered under the terms of the specific health plan.
8-7	(6) "Health plan" means a plan operated by a health care entity that provides for the
8-8	delivery of health care services to persons enrolled in those plans through:
8-9	(i) Arrangements with selected providers to furnish health care services; and/or
8-10	(ii) Financial incentive for persons enrolled in the plan to use the participating providers
8-11	and procedures provided for by the health plan.
8-12	(7) "Medically necessary" means services or supplies that are needed for the diagnosis or
8-13	treatment of a medical condition and meet generally accepted standards of medical practice. For
8-14	these purposes, "generally accepted standards of medical practice" means standards and
8-15	guidelines that include, but are not limited to, InterQual and other supporting information based
8-16	on credible scientific evidence published in peer-reviewed medical literature generally recognized
8-17	by the relevant medical community, physician specialty society recommendations and the views
8-18	of physicians practicing in relevant clinical areas, and any other relevant factors.
8-19	~~(7)~~(8) "Policyholder" means a person covered under a health plan or a representative
8-20	designated by that person.
8-21	~~(8)~~(9) "Substantial compliance" means that the health care entity or health plan is
8-22	processing and paying ninety-five percent (95%) or more of all claims within the time frame
8-23	provided for in section 27-18-61(a) and (b).
8-24	~~(g)~~(i) Any provision in a contract between a health care entity or a health plan and a
8-25	health care provider which is inconsistent with this section shall be void and of no force and
8-26	effect.
8-27	SECTION 3. Section 27-20-47 of the General Laws in Chapter 27-20 entitled "Nonprofit
8-28	Medical Service Corporations" is hereby amended to read as follows:
8-29	27-20-47. Prompt processing of claims. -- (a) A health care entity or health plan
8-30	operating in the state shall pay all complete claims for covered health care services submitted to
8-31	the health care entity or health plan by a health care provider or by a policyholder within forty
8-32	(40) calendar days following the date of receipt of a complete written claim or within thirty (30)
8-33	calendar days following the date of receipt of a complete electronic claim. Each health plan shall
8-34	establish a written standard defining what constitutes a complete claim and shall distribute the
9-1	standard to all participating providers.
9-2	(b) If the health care entity or health plan denies or pends a claim, the health care entity
9-3	or health plan shall have thirty (30) calendar days from receipt of the claim to notify in writing
9-4	the health care provider or policyholder of any and all reasons for denying or pending the claim
9-5	and what, if any, additional information is required to process the claim. No health care entity or
9-6	health plan may limit the time period in which additional information may be submitted to
9-7	complete a claim.
9-8	(c) Any claim that is resubmitted by a health care provider or policyholder shall be
9-9	treated by the health care entity or health plan pursuant to the provisions of subsection (a) of this
9-10	section.
9-11	(d) A health care entity or health plan which fails to reimburse the health care provider
9-12	or policyholder after receipt by the health care entity or health plan of a complete claim within the
9-13	required timeframes shall pay to the health care provider or the policyholder who submitted the
9-14	claim, in addition to any reimbursement for health care services provided, interest which shall
9-15	accrue at the rate of twelve percent (12%) per annum commencing on the thirty-first (31st) day
9-16	after receipt of a complete electronic claim or on the forty-first (41st) day after receipt of a
9-17	complete written claim, and ending on the date the payment is issued to the health care provider
9-18	or the policyholder.
9-19	(e)(1) A healthcare entity or health plan shall not deny payment for a claim for medically
9-20	necessary inpatient services resulting from an emergency admission provided by a hospital solely
9-21	on the basis that the hospital did not timely notify such healthcare entity or health plan that the
9-22	services had been provided.
9-23	(2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health
9-24	plan from agreeing to requirements for timely notification that medically necessary inpatient
9-25	services resulting from an emergency admission have been provided and to a reduction in
9-26	payment for failure to timely notify; provided, however that: (i) Any requirement for timely
9-27	notification must provide for a reasonable extension of timeframes for notification for emergency
9-28	services provided on weekends, state, or federal holidays, or during declared state or federally
9-29	declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify
9-30	shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the
9-31	payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in
9-32	payment for failure to timely notify shall not be imposed if the patient's insurance coverage could
9-33	not be determined by the hospital after reasonable efforts at the time the inpatient services were
9-34	provided.
10-1	(f) Except where the parties have developed a mutually agreed upon process for the
10-2	reconciliation of coding disputes that includes a review of submitted medical records to ascertain
10-3	the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which
10-4	payment has been adjusted based on a particular coding to a patient including the assignment of
10-5	diagnosis and procedure, have the opportunity to submit the affected claim with medical records
10-6	supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.
10-7	Upon receipt of such medical records, the healthcare entity or health plan shall review such
10-8	information to ascertain the correct coding for payment and process the claim in accordance with
10-9	the time frames set forth in subsection (a) of this section. In the event the healthcare entity or
10-10	health plan processes the claim consistent with its initial determination, such decision shall be
10-11	accompanied by a detailed statement in plain language of the healthcare entity or health plan
10-12	setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity
10-13	or health plan that increases the payment based on the information submitted by the hospital, but
10-14	fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall
10-15	pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection
10-16	(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare
10-17	entity or health plan shall be deemed an adverse determination if based solely on a coding
10-18	determination. Nothing in this subsection shall apply to those instances in which the insurer or
10-19	organization, or corporation has a reasonable suspicion of fraud or abuse.
10-20	~~(e)~~(g) Exceptions to the requirements of this section are as follows:
10-21	(1) No health care entity or health plan operating in the state shall be in violation of this
10-22	section for a claim submitted by a health care provider or policyholder if:
10-23	(i) Failure to comply is caused by a directive from a court or federal or state agency;
10-24	(ii) The health care entity or health plan is in liquidation or rehabilitation or is operating
10-25	in compliance with a court-ordered plan of rehabilitation; or
10-26	(iii) The health care entity or health plan's compliance is rendered impossible due to
10-27	matters beyond its control that are not caused by it.
10-28	(2) No health care entity or health plan operating in the state shall be in violation of this
10-29	section for any claim: (i) initially submitted more than ninety (90) days after the service is
10-30	rendered, or (ii) resubmitted more than ninety (90) days after the date the health care provider
10-31	received the notice provided for in section 27-18-61(b); provided, this exception shall not apply
10-32	in the event compliance is rendered impossible due to matters beyond the control of the health
10-33	care provider and were not caused by the health care provider.
11-34	(3) No health care entity or health plan operating in the state shall be in violation of this
11-35	section while the claim is pending due to a fraud investigation by a state or federal agency.
11-36	(4) No health care entity or health plan operating in the state shall be obligated under this
11-37	section to pay interest to any health care provider or policyholder for any claim if the director of
11-38	the department of business regulation finds that the entity or plan is in substantial compliance
11-39	with this section. A health care entity or health plan seeking such a finding from the director shall
11-40	submit any documentation that the director shall require. A health care entity or health plan which
11-41	is found to be in substantial compliance with this section shall after this submit any
11-42	documentation that the director may require on an annual basis for the director to assess ongoing
11-43	compliance with this section.
11-44	(5) A health care entity or health plan may petition the director for a waiver of the
11-45	provision of this section for a period not to exceed ninety (90) days in the event the health care
11-46	entity or health plan is converting or substantially modifying its claims processing systems.
11-47	~~(f)~~(h) For purposes of this section, the following definitions apply:
11-48	(1) "Claim" means: (i) a bill or invoice for covered services; (ii) a line item of service; or
11-49	(iii) all services for one patient or subscriber within a bill or invoice.
11-50	(2) "Date of receipt" means the date the health care entity or health plan receives the
11-51	claim whether via electronic submission or has a paper claim.
11-52	(3) "Health care entity" means a licensed insurance company or nonprofit hospital or
11-53	medical or dental service corporation or plan or health maintenance organization, or a contractor
11-54	as described in section 23-17.13-2(2), that operates a health plan.
11-55	(4) "Health care provider" means an individual clinician, either in practice independently
11-56	or in a group, who provides health care services, and ~~referred to as a non-institutional provider~~
11-57	any healthcare facility, as defined in section 23-17-2 including any mental health and/or
11-58	substance abuse treatment facility, physician, or other licensed practitioners identified to the
11-59	review agent as having primary responsibility for the care, treatment, and services rendered to a
11-60	patient.
11-61	(5) "Health care services" include, but are not limited to, medical, mental health,
11-62	substance abuse, dental and any other services covered under the terms of the specific health plan.
11-63	(6) "Health plan" means a plan operated by a health care entity that provides for the
11-64	delivery of health care services to persons enrolled in the plan through:
11-65	(i) Arrangements with selected providers to furnish health care services; and/or
11-66	(ii) Financial incentive for persons enrolled in the plan to use the participating providers
11-67	and procedures provided for by the health plan.
12-68	(7) "Medically necessary" means services or supplies that are needed for the diagnosis or
12-69	treatment of a medical condition and meet generally accepted standards of medical practice. For
12-70	these purposes, "generally accepted standards of medical practice" means standards and
12-71	guidelines that include, but are not limited to, InterQual and other supporting information based
12-72	on credible scientific evidence published in peer-reviewed medical literature generally recognized
12-73	by the relevant medical community, physician specialty society recommendations and the views
12-74	of physicians practicing in relevant clinical areas, and any other relevant factors.
12-75	~~(7)~~(8) "Policyholder" means a person covered under a health plan or a representative
12-76	designated by that person.
12-77	~~(8)~~(9) "Substantial compliance" means that the health care entity or health plan is
12-78	processing and paying ninety-five percent (95%) or more of all claims within the time frame
12-79	provided for in section 27-18-61(a) and (b).
12-80	~~(g)~~(f) Any provision in a contract between a health care entity or a health plan and a
12-81	health care provider which is inconsistent with this section shall be void and of no force and
12-82	effect.
12-83	SECTION 4. Section 27-41-64 of the General Laws in Chapter 27-41 entitled "Health
12-84	Maintenance Organizations" is hereby amended to read as follows:
12-85	27-41-64. Prompt processing of claims. -- (a) A health care entity or health plan
12-86	operating in the state shall pay all complete claims for covered health care services submitted to
12-87	the health care entity or health plan by a health care provider or by a policyholder within forty
12-88	(40) calendar days following the date of receipt of a complete written claim or within thirty (30)
12-89	calendar days following the date of receipt of a complete electronic claim. Each health plan shall
12-90	establish a written standard defining what constitutes a complete claim and shall distribute this
12-91	standard to all participating providers.
12-92	(b) If the health care entity or health plan denies or pends a claim, the health care entity
12-93	or health plan shall have thirty (30) calendar days from receipt of the claim to notify in writing
12-94	the health care provider or policyholder of any and all reasons for denying or pending the claim
12-95	and what, if any, additional information is required to process the claim. No health care entity or
12-96	health plan may limit the time period in which additional information may be submitted to
12-97	complete a claim.
12-98	(c) Any claim that is resubmitted by a health care provider or policyholder shall be
12-99	treated by the health care entity or health plan pursuant to the provisions of subsection (a) of this
12-100	section.
12-101	(d) A health care entity or health plan which fails to reimburse the health care provider
12-102	or policyholder after receipt by the health care entity or health plan of a complete claim within the
13-1	required timeframes shall pay to the health care provider or the policyholder who submitted the
13-2	claim, in addition to any reimbursement for health care services provided, interest which shall
13-3	accrue at the rate of twelve percent (12%) per annum commencing on the thirty-first (31st) day
13-4	after receipt of a complete electronic claim or on the forty-first (41st) day after receipt of a
13-5	complete written claim, and ending on the date the payment is issued to the health care provider
13-6	or the policyholder.
13-7	(e) (1) A healthcare entity or health plan shall not deny payment for a claim for
13-8	medically necessary inpatient services resulting from an emergency admission provided by a
13-9	hospital solely on the basis that the hospital did not timely notify such healthcare entity or health
13-10	plan that the services had been provided.
13-11	(2) Nothing in this subsection shall preclude a hospital and a healthcare entity or health
13-12	plan from agreeing to requirements for timely notification that medically necessary inpatient
13-13	services resulting from an emergency admission have been provided and to a reduction in
13-14	payment for failure to timely notify; provided, however that: (i) Any requirement for timely
13-15	notification must provide for a reasonable extension of timeframes for notification for emergency
13-16	services provided on weekends, state, or federal holidays, or during declared state or federally
13-17	declared states of emergency; (ii) Any agreed to reduction in payment for failure to timely notify
13-18	shall not exceed the lesser of two thousand dollars ($2,000) or twelve percent (12%) of the
13-19	payment amount otherwise due for the services provided, and (iii) Any agreed to reduction in
13-20	payment for failure to timely notify shall not be imposed if the patient's insurance coverage could
13-21	not be determined by the hospital after reasonable efforts at the time the inpatient services were
13-22	provided.
13-23	(f) Except where the parties have developed a mutually agreed upon process for the
13-24	reconciliation of coding disputes that includes a review of submitted medical records to ascertain
13-25	the correct coding for payment, a hospital shall, upon receipt of payment of a claim for which
13-26	payment has been adjusted based on a particular coding to a patient including the assignment of
13-27	diagnosis and procedure, have the opportunity to submit the affected claim with medical records
13-28	supporting the hospital's initial coding of the claim within thirty (30) days of receipt of payment.
13-29	Upon receipt of such medical records, the healthcare entity or health plan shall review such
13-30	information to ascertain the correct coding for payment and process the claim in accordance with
13-31	the time frames set forth in subsection (a) of this section. In the event the healthcare entity or
13-32	health plan processes the claim consistent with its initial determination, such decision shall be
13-33	accompanied by a detailed statement in plain language of the healthcare entity or health plan
13-34	setting forth the specific reasons why the initial adjustment was appropriate. A healthcare entity
14-1	or health plan that increases the payment based on the information submitted by the hospital, but
14-2	fails to do so in accordance with the timeframes set forth in subsection (a) of this section, shall
14-3	pay to the hospital interest on the amount of such increase at the rate set pursuant to subsection
14-4	(d) of this section. Neither the initial or subsequent processing of the claim by the healthcare
14-5	entity or health plan shall be deemed an adverse determination if based solely on a coding
14-6	determination. Nothing in this subsection shall apply to those instances in which the insurer or
14-7	organization, or corporation has a reasonable suspicion of fraud or abuse.
14-8	~~(e)~~(g) Exceptions to the requirements of this section are as follows:
14-9	(1) No health care entity or health plan operating in the state shall be in violation of this
14-10	section for a claim submitted by a health care provider or policyholder if:
14-11	(i) Failure to comply is caused by a directive from a court or federal or state agency;
14-12	(ii) The health care entity or health plan is in liquidation or rehabilitation or is operating
14-13	in compliance with a court-ordered plan of rehabilitation; or
14-14	(iii) The health care entity or health plan's compliance is rendered impossible due to
14-15	matters beyond its control, which are not caused by it.
14-16	(2) No health care entity or health plan operating in the state shall be in violation of this
14-17	section for any claim: (i) initially submitted more than ninety (90) days after the service is
14-18	rendered, or (ii) resubmitted more than ninety (90) days after the date the health care provider
14-19	received the notice provided for in section 27-18-61(b); provided, this exception shall not apply
14-20	in the event compliance is rendered impossible due to matters beyond the control of the health
14-21	care provider and were not caused by the health care provider.
14-22	(3) No health care entity or health plan operating in the state shall be in violation of this
14-23	section while the claim is pending due to a fraud investigation by a state or federal agency.
14-24	(4) No health care entity or health plan operating in the state shall be obligated under this
14-25	section to pay interest to any health care provider or policyholder for any claim if the director of
14-26	the department of business regulation finds that the entity or plan is in substantial compliance
14-27	with this section. A health care entity or health plan seeking that finding from the director shall
14-28	submit any documentation that the director shall require. A health care entity or health plan which
14-29	is found to be in substantial compliance with this section shall submit any documentation the
14-30	director may require on an annual basis for the director to assess ongoing compliance with this
14-31	section.
14-32	(5) A health care entity or health plan may petition the director for a waiver of the
14-33	provision of this section for a period not to exceed ninety (90) days in the event the health care
14-34	entity or health plan is converting or substantially modifying its claims processing systems.
15-1	~~(f)~~(h) For purposes of this section, the following definitions apply:
15-2	(1) "Claim" means: (i) a bill or invoice for covered services; (ii) a line item of service; or
15-3	(iii) all services for one patient or subscriber within a bill or invoice.
15-4	(2) "Date of receipt" means the date the health care entity or health plan receives the
15-5	claim whether via electronic submission or as a paper claim.
15-6	(3) "Health care entity" means a licensed insurance company or nonprofit hospital or
15-7	medical or dental service corporation or plan or health maintenance organization, or a contractor
15-8	as described in section 23-17.13-2(2) that operates a health plan.
15-9	(4) "Health care provider" means an individual clinician, either in practice independently
15-10	or in a group, who provides health care services, and is ~~referred to as a non-institutional provider~~
15-11	any healthcare facility, as defined in section 23-17-2 including any mental health and/or
15-12	substance abuse treatment facility, physician, or other licensed practitioners identified to the
15-13	review agent as having primary responsibility for the care, treatment, and services rendered to a
15-14	patient.
15-15	(5) "Health care services" include, but are not limited to, medical, mental health,
15-16	substance abuse, dental and any other services covered under the terms of the specific health plan.
15-17	(6) "Health plan" means a plan operated by a health care entity that provides for the
15-18	delivery of health care services to persons enrolled in the plan through:
15-19	(i) Arrangements with selected providers to furnish health care services; and/or
15-20	(ii) Financial incentive for persons enrolled in the plan to use the participating providers
15-21	and procedures provided for by the health plan.
15-22	(7) ) "Medically necessary" means services or supplies that are needed for the diagnosis
15-23	or treatment of a medical condition and meet generally accepted standards of medical practice.
15-24	For these purposes, "generally accepted standards of medical practice" means standards and
15-25	guidelines that include, but are not limited to, InterQual and other supporting information based
15-26	on credible scientific evidence published in peer-reviewed medical literature generally recognized
15-27	by the relevant medical community, physician specialty society recommendations and the views
15-28	of physicians practicing in relevant clinical areas, and any other relevant factors.
15-29	~~(7)~~(8) "Policyholder" means a person covered under a health plan or a representative
15-30	designated by that person.
15-31	~~(8)~~(9) "Substantial compliance" means that the health care entity or health plan is
15-32	processing and paying ninety-five percent (95%) or more of all claims within the time frame
15-33	provided for in section 27-18-61(a) and (b).
16-34	~~(g)~~(i) Any provision in a contract between a health care entity or a health plan and a
16-35	health care provider which is inconsistent with this section shall be void and of no force and
16-36	effect.
16-37	SECTION 5. This act shall take effect upon passage.

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	LC01776
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	EXPLANATION
	BY THE LEGISLATIVE COUNCIL
	OF
	A N A C T
	RELATING TO INSURANCE - ACCIDENT AND SICKNESS INSURANCE POLICIES
	***

17-1	This act would revise the processing of health insurance claims relating to timely
17-2	notification, coding disputes, mental health and/or substance abuse treatment as well as defining
17-3	medically necessary services.
17-4	This act would take effect upon passage.

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	LC01776
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S0618