MISSISSIPPI LEGISLATURE
2005 Regular Session
To: Public Health and Human Services; Insurance
By: Representative Bentz
AN ACT TO PROVIDE FOR THE REGULATION AND LICENSURE OF HEALTH CARE SERVICE PLANS BY THE DEPARTMENT OF INSURANCE; TO PROVIDE FOR THE PAYMENT OF MEDICAL PROVIDER CLAIMS BY A HEALTH CARE SERVICE PLAN AND THE RESOLUTION OF CLAIMS DISPUTES; TO PROVIDE FOR INTEREST TO ACCRUE IF AN UNCONTESTED MEDICAL PROVIDER CLAIM IS NOT REIMBURSED BY THE PLAN WITHIN A PRESCRIBED TIME PERIOD; TO PROHIBIT A HEALTH CARE SERVICE PLAN FROM ENGAGING IN AN UNFAIR PAYMENT PATTERN IN ITS REIMBURSEMENT OF A MEDICAL PROVIDER; TO AUTHORIZE THE COMMISSIONER OF INSURANCE TO IMPOSE SANCTIONS ON THE PLAN FOR ENGAGING IN AN UNFAIR PAYMENT PATTERN; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The Legislature finds and declares the following:
(a) Health care services must be available to citizens without unnecessary administrative procedures, interruptions or delays.
(b) The billing by providers and the handling of claims by health care service plans are essential components of the health care delivery process and can be made more effective and efficient.
(c) The present system of claims submission by providers and the processing and payment of those claims by health care service plans are complex and are in need of reform in order to facilitate the prompt and efficient submission, processing and payment of claims. Providers and health care service plans both recognize the problems in the current system and that there is an urgent need to resolve these matters.
(d) To ensure that health care service plans and providers do not engage in patterns of unacceptable practices, the Department of Insurance should be authorized to assist in the development of a new and more efficient system of claims submission, processing, and payment.
SECTION 2. Each health care service plan and, if applicable, each specialized health care service plan shall meet the following requirements:
(a) All facilities located in this state including, but not limited to, clinics, hospitals and skilled nursing facilities to be utilized by the plan shall be licensed by the State Board of Health, where licensure is required by law. Facilities not located in this state shall conform to all licensing and other requirements of the jurisdiction in which they are located.
(b) All personnel employed by or under contract to the plan shall be licensed or certified by their respective board or agency, where licensure or certification is required by law.
(c) All equipment required to be licensed or registered by law shall be so licensed or registered and the operating personnel for that equipment shall be licensed or certified as required by law.
(d) The plan shall furnish services in a manner providing continuity of care and ready referral of patients to other providers at times as may be appropriate consistent with good professional practice.
(e) (i) All services shall be readily available at reasonable times to all enrollees. To the extent feasible, the plan shall make all services readily accessible to all enrollees.
(ii) To the extent that telemedicine services are appropriately provided through telemedicine, these services
shall be considered in determining compliance with this act.
(f) The plan shall employ and utilize allied health manpower for the furnishing of services to the extent permitted by law and consistent with good medical practice.
(g) The plan shall have the organizational and administrative capacity to provide services to subscribers and enrollees. The plan shall be able to demonstrate to the department that medical decisions are rendered by qualified medical providers, unhindered by fiscal and administrative management.
(h) (i) All contracts with subscribers and enrollees, including group contracts, and all contracts with providers, and other persons furnishing services, equipment, or facilities to or in connection with the plan, shall be fair, reasonable and consistent with the objectives of this chapter. All contracts with providers shall contain provisions requiring a fast, fair and cost-effective dispute resolution mechanism under which providers may submit disputes to the plan and requiring the plan to inform its providers upon contracting with the plan, or upon change to these provisions, of the procedures for processing and resolving disputes, including the location and telephone number where information regarding disputes may be submitted.
(ii) Each health care service plan shall ensure that a dispute resolution mechanism is accessible to noncontracting providers for the purpose of resolving billing and claims disputes.
(iii) On and after January 1, 2006, each health care service plan shall annually submit a report to the department regarding its dispute resolution mechanism. The report shall include information on the number of providers who utilized the dispute resolution mechanism and a summary of the disposition of those disputes.
(i) Each health care service plan contract shall provide to subscribers and enrollees all of the basic health care services, except that the Insurance Commissioner may, for good cause, by rule or order exempt a plan contract or any class of plan contracts from that requirement. The Insurance Commissioner shall by rule define the scope of each basic health care service which health care service plans shall be required to provide as a minimum for licensure under this chapter. Nothing in this chapter shall prohibit a health care service plan from charging subscribers or enrollees a copayment or a deductible for a basic health care service or from setting forth, by contract, limitations on maximum coverage of basic health care services, provided that the copayments, deductibles, or limitations are reported to, and held unobjectionable by, the Insurance Commissioner and set forth to the subscriber or enrollee.
Nothing in this section shall be construed to permit the Insurance Commissioner to establish the rates charged subscribers and enrollees for contractual health care services.
SECTION 3. A health care service plan, including a specialized health care service plan, shall reimburse claims or any portion of any claim, whether in state or out of state, as soon as practical, but no later than thirty (30) working days after receipt of the claim by the health care service plan, or, if the health care service plan is a health maintenance organization, forty-five (45) working days after receipt of the claim
by the health care service plan, unless the claim or portion thereof is contested by the plan in which case the claimant shall be notified, in writing, that the claim is contested or denied, within thirty (30) working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, forty-five (45) working days after receipt of the claim by the health care service plan. The notice that a claim is being contested shall identify the portion of the claim that is contested and the specific reasons for contesting the claim.
If an uncontested claim is not reimbursed by delivery to the claimants' address of record within the respective thirty (30) or forty-five (45) working days after receipt, interest shall accrue at the rate of fifteen percent (15%) per annum beginning with the first calendar day after the thirty (30) or forty-five (45) working day period. A health care service plan shall
automatically include in its payment of the claim all interest that has accrued pursuant to this section without requiring the claimant to submit a request for the interest amount. Any plan failing to comply with this requirement shall pay the claimant a ten dollar ($10.00) fee.
For the purposes of this section, a claim, or portion thereof, is reasonably contested where the plan has not received the completed claim and all information necessary to determine payer liability for the claim or has not been granted reasonable access to information concerning provider services. Information necessary to determine payer liability for the claim includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, and necessary consents, releases and assignments, a claim on appeal or other information necessary for the plan to determine the medical necessity for the health care services provided.
If a claim or portion thereof is contested on the basis that the plan has not received all information necessary to determine payer liability for the claim or portion thereof and notice has been provided pursuant to this section, then the plan shall have thirty (30) working days or, if the health care service plan is a health maintenance organization, forty-five (45) working days after receipt of this additional information to complete reconsideration of the claim. If a plan has received all of the information necessary to determine payer liability for a contested claim and has not reimbursed a claim it has determined to be payable within thirty (30) working days of the receipt
of that information, or if the plan is a health maintenance
organization, within forty-five (45) working days of receipt of that information, interest shall accrue and be payable at a rate of fifteen percent (15%) per annum beginning with the first calendar day after the thirty (30) or forty-five (45) working day period.
The obligation of the plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations or other contracting entities to pay claims for covered services.
SECTION 4. (1) A health care service plan, including a specialized health care service plan, shall reimburse each complete claim, or portion thereof, whether in state or out of state, as soon as practical, but no later than thirty (30) working days after receipt of the complete claim by the health care service plan, or if, the health care service plan is a health maintenance organization, forty-five (45) working days
after receipt of the complete claim by the health care service plan. However, a plan may contest or deny a claim, or portion thereof, by notifying the claimant, in writing, that the claim is contested or denied, within thirty (30) working days after receipt of the claim by the health care service plan, or if the health care service plan is a health maintenance organization, forty-five (45) working days after receipt of the claim by the health care service plan. The notice that a claim, or portion thereof, is contested shall identify the portion of the claim that is contested, by revenue code, and the specific information
needed from the provider to reconsider the claim. The notice that a claim, or portion thereof, is denied shall identify the portion of the claim that is denied, by revenue code, and the specific reasons for the denial. A plan may delay payment of an uncontested portion of a complete claim for reconsideration of a contested portion of that claim so long as the plan pays those charges specified in subsection (2) of this section.
(2) If a complete claim, or portion thereof, that is neither contested nor denied, is not reimbursed by delivery to the claimant's address of record within the respective thirty (30) or forty-five (45) working days after receipt, the plan shall pay the greater of fifteen dollars ($15.00) per year or interest at the rate of fifteen percent (15%) per annum beginning with
the first calendar day after the thirty (30) or forty-five (45) working day period. A health care service plan shall automatically include the Fifteen Dollars ($15.00) per year or interest due in the payment made to the claimant, without requiring a request therefor.
(3) For the purposes of this section, a claim, or portion thereof, is reasonably contested if the plan has not received the completed claim. A paper claim from an institutional provider shall be deemed complete upon submission of a legible emergency department report and a completed UB 92 or other format adopted by the National Uniform Billing Committee and reasonable relevant information requested by the plan within thirty (30) working days of receipt of the claim. An electronic claim from an institutional provider shall be deemed complete upon submission of an electronic equivalent to the UB 92 or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within thirty (30) working days of receipt of the claim. However, if the plan requests
a copy of the emergency department report within the thirty (30) working days after receipt of the electronic claim from the institutional provider, the plan may also request additional reasonable relevant information within thirty (30) working days of receipt of the emergency department report, at which time the claim shall be deemed complete. A claim from a professional provider shall be deemed complete upon submission of a completed HCFA 1500 or its electronic equivalent or other format adopted by the National Uniform Billing Committee, and reasonable relevant information requested by the plan within thirty (30) working days of receipt of the claim. The provider shall provide the
plan reasonable relevant information within ten (10) working days of receipt of a written request that is clear and specific regarding the information sought. If, as a result of reviewing the reasonable relevant information, the plan requires further information, the plan shall have an additional fifteen (15) working days after receipt of the reasonable relevant information to request the further information, notwithstanding any time limit to the contrary in this section, at which time the claim shall be deemed complete.
(4) This section shall not apply to claims about which there is evidence of fraud and misrepresentation, to eligibility
determinations, or in instances where the plan has not been granted reasonable access to information under the provider's control. A plan shall specify, in a written notice sent to the provider within the respective thirty (30) or forty-five (45) working days of receipt of the claim, which, if any, of these exceptions applies to a claim.
(5) If a claim or portion thereof is contested on the basis that the plan has not received information reasonably necessary to
determine payer liability for the claim or portion thereof, then the plan shall have thirty (30) working days or, if the health care service plan is a health maintenance organization, forty-five (45) working days after receipt of this additional information to complete reconsideration of the claim. If a claim, or portion thereof, undergoing reconsideration is not reimbursed by delivery to the claimant's address of record within the respective thirty (30) or forty-five (45) working days after receipt of the
additional information, the plan shall pay the greater of Fifteen
Dollars ($15.00) per year or interest at the rate of fifteen percent (15%) per annum beginning with the first calendar day after the thirty (30) or forty-five (45) working day period. A health care service plan shall automatically include the Fifteen Dollars ($15.00) per year or interest due in the payment made to the claimant, without requiring a request therefor.
(6) The obligation of the plan to comply with this section shall not be deemed to be waived when the plan requires its medical groups, independent practice associations, or other contracting entities to pay claims for covered services. This section shall not be construed to prevent a plan from assigning, by a written contract, the responsibility to pay interest and late charges pursuant to this section to medical groups, independent practice associations, or other entities.
(7) A plan shall not delay payment on a claim from a physician or other provider to await the submission of a claim from a hospital or other provider, without citing specific rationale as to why the delay was necessary and providing a monthly update regarding the status of the claim and the plan's actions to resolve the claim, to the provider that submitted the claim.
(8) A health care service plan shall not request or require that a provider waive its rights pursuant to this section.
(9) This section shall not apply to capitated payments.
(10) This section shall apply only to claims for services rendered to a patient who was provided emergency services and care.
(11) This section shall not be construed to affect the rights or obligations of any person pursuant to Section (3) of this act.
(12) This section shall not be construed to affect a written agreement, if any, of a provider to submit bills within a specified time period.
SECTION 5. (1) A health care service plan shall not deny payment of a claim on the basis that the plan, medical group, independent practice association or other contracting entity did not provide authorization for health care services that were provided in a licensed acute care hospital and that were related to services that were previously authorized, if all of the following conditions are met:
(a) It was medically necessary to provide the services at the time.
(b) The services were provided after the plan's normal business hours.
(c) The plan does not maintain a system that provides for the availability of a plan representative or an alternative means of contact through an electronic system, including voicemail or electronic mail, whereby the plan can respond to a request for authorization within thirty (30) minutes of the time that a request was made.
(2) This section shall not apply to investigational or
experimental therapies, or other noncovered services.
SECTION 6. (1) A health care service plan is prohibited from engaging in an unfair payment pattern, as defined in this section.
(2) Consistent with Section 8(1) of this act, the
Insurance Commissioner may investigate a health care service plan to determine whether it has engaged in an unfair payment pattern.
(3) An "unfair payment pattern," as used in this section, means any of the following:
(a) Engaging in a demonstrable and unjust pattern, as defined by the department, of reviewing or processing complete and accurate claims that results in payment delays.
(b) Engaging in a demonstrable and unjust pattern, as defined by the department, of reducing the amount of payment or denying complete and accurate claims.
(c) Failing on a repeated basis to pay the uncontested portions of a claim within the time frames specified in Section 3 or 4 of this act.
(d) Failing on a repeated basis to automatically include the interest due on claims under Section 3 of this act.
(4) (a) Upon a final determination by the Insurance Commissioner that a health care service plan has engaged in an unfair payment pattern, the Insurance Commissioner may:
(i) Impose monetary penalties as permitted under this chapter.
(ii) Require the health care service plan for a period of three (3) years from the date of the Insurance Commissioner's determination, or for a shorter period prescribed by the Insurance Commissioner, to pay complete and accurate
claims from the provider within a shorter period of time than that
required by Section 3 of this act. The provisions of this subparagraph shall not become operative until January 1, 2006.
(iii) Include a claim for costs incurred by the department in any administrative or judicial action, including investigative expenses and the cost to monitor compliance by the plan.
(b) For any overpayment made by a health care service plan while subject to the provisions of this section, the provider shall remain liable to the plan for repayment.
(5) The enforcement remedies provided in this section are not exclusive and shall not limit or preclude the use of any otherwise available criminal, civil or administrative remedy.
(6) The penalties set forth in this section shall not preclude, suspend, affect or impact any other duty, right, responsibility or obligation under a statute or under a contract between a health care service plan and a provider.
(7) A health care service plan may not delegate any statutory liability under this section.
(8) For the purposes of this section, "complete and accurate claim" has the same meaning as that provided in the regulations adopted by the department under Section 7(1) of this act.
(9) On or before December 31, 2006, the Department of Insurance shall report to the Legislature and the Governor information regarding the development of the definition of "unjust pattern" as used in this section. This report shall include, but not be limited to, a
description of the process used and a list of the parties involved in the department's development of this definition as well as
recommendations for statutory adoption.
(10) The Department of Insurance shall make available upon request and on its website, information regarding actions taken under this section, including a description of the activities that were the basis for the action.
SECTION 7. (1) The Department of Insurance shall, on or before July 1, 2006, adopt regulations that ensure that plans have adopted a dispute resolution mechanism pursuant to paragraph (h) of Section 2 of this act. The regulations shall require that any dispute resolution mechanism of a plan is fair, fast and cost effective for contracting and noncontracting providers and define the term "complete and accurate claim, including attachments and supplemental information or documentation."
(2) On or before December 31, 2006, the department shall report to the Governor and the Legislature its recommendations for any additional statutory requirements relating to plan and provider dispute resolution mechanisms.
SECTION 8. (1) Providers may report to the Department of Insurance instances in which the provider believes a plan is engaging in an unfair payment pattern.
(2) Plans may report to the Department of Insurance instances in which the plan believes a provider is engaging in an
unfair billing pattern.
(a) "Unfair billing pattern" means engaging in a demonstrable and unjust pattern of unbundling of claims, upcoding of claims or other demonstrable and unjustified billing patterns, as defined by the Department of Insurance.
(b) The Department of Insurance shall convene appropriate state agencies to make recommendations by July 1, 2006, to the Legislature and the Governor for the purpose of developing a system for responding to unfair billing patterns as defined in this section. This system shall include a process by which information is made available to the public regarding actions taken against providers for unfair billing patterns and the activities that were the basis for the action.
(3) On or before December 31, 2006, the department shall report to the Legislature and the Governor information regarding the development of the definition of "unfair billing pattern" as used in this section. This report shall include, but not be limited to, a description of the process used and a list of the parties involved in the department's development of this definition as well as recommendations for statutory adoption.
SECTION 9. This act shall take effect and be in force from and after July 1, 2005.