H. B. 3105
(By Delegate H. White)
[Introduced February 21, 2003; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact section two, article forty-five,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
compliance by insurers with minimum fair business standards in
the processing and payment of claims for health care services
generally; and eliminating the requirement to pay interest on
an untimely paid claim if the interest calculated is less than
one dollar.
Be it enacted by the Legislature of West Virginia:
That section two, article forty-five, chapter thirty-three of
the code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 45. ETHICS AND FAIRNESS IN INSURER BUSINESS PRACTICES.
§33-45-2. Minimum fair business standards contract provisions
required; processing and payment of health care services; provider claims; commissioner's
jurisdiction.
(a) Every provider contract entered into, amended, extended or
renewed by an insurer on or after the first day of August, two
thousand one, shall contain specific provisions which shall require
the insurer to adhere to and comply with the following minimum fair
business standards in the processing and payment of claims for
health care services:
(1) An insurer shall either pay or deny a clean claim within
forty days of receipt of the claim if submitted manually and within
thirty days of receipt of the claim if submitted electronically,
except in the following circumstances:
(A) Another payor or party is responsible for the claim;
(B) The insurer is coordinating benefits with another payor;
(C) The provider has already been paid for the claim;
(D) The claim was submitted fraudulently; or
(E) There was a material misrepresentation in the claim.
(2) Each insurer shall maintain a written or electronic record
of the date of receipt of a claim. The person submitting the claim
shall be entitled to inspect the record on request and to rely on
that record or on any other relevant evidence as proof of the fact
of receipt of the claim. If an insurer fails to maintain an
electronic or written record of the date a claim is received, the
claim shall be considered received three business days after the claim was submitted based upon the written or electronic record of
the date of submittal by the person submitting the claim.
(3) An insurer shall, within thirty days after receipt of a
claim, request electronically or in writing from the person
submitting the claim any information or documentation that the
insurer reasonably believes will be required to process and pay the
claim or to determine if the claim is a clean claim. The insurer
shall use all reasonable efforts to ask for all desired information
in one request, and shall if necessary, within fifteen days of the
receipt of the information from the first request, only request or
require additional information one additional time if such
additional information could not have been reasonably identified at
the time of the original request or to specifically identify a
material failure to provide the information requested in the
initial request. Upon receipt of the information requested under
this subsection which the insurer reasonably believes will be
required to adjudicate the claim or to determine if the claim is a
clean claim, an insurer shall either pay or deny the claim within
thirty days. No insurer may refuse to pay a claim for health care
services rendered pursuant to a provider contract which are covered
benefits if the insurer fails to timely notify the person
submitting the claim within thirty days of receipt of the claim of
the additional information requested unless such failure was caused
in material part by the person submitting the claims: Provided, That nothing herein shall preclude such an insurer from imposing a
retroactive denial of payment of such a claim if permitted by the
provider contract unless such retroactive denial of payment of the
claim would violate subdivision (7), subsection (a) of this
section. This subsection does not require an insurer to pay a
claim that is not a clean claim except as provided herein.
(4) Interest, at a rate of ten percent per annum, accruing
after the forty-day period provided in subdivision (1), subsection
(a) of this section owing or accruing on any claim under any
provider contract or under any applicable law, shall be paid and
accompanied by an explanation of the assessment on each claim of
interest paid, without necessity of demand, at the time the claim
is paid or within thirty days thereafter: Provided, That no
interest payment shall be required if the calculated interest
payment is less than one dollar.
(5) Every insurer shall establish and implement reasonable
policies to permit any provider with which there is a provider
contract:
(A) To promptly confirm in advance during normal business
hours by a process agreed to between the parties whether the health
care services to be provided are a covered benefit; and
(B) To determine the insurer's requirements applicable to the
provider (or to the type of health care services which the provider
has contracted to deliver under the provider contract) for:
(i) Precertification or authorization of coverage decisions;
(ii) Retroactive reconsideration of a certification or
authorization of coverage decision or retroactive denial of a
previously paid claim;
(iii) Provider-specific payment and reimbursement methodology;
and
(iv) Other provider-specific, applicable claims processing and
payment matters necessary to meet the terms and conditions of the
provider contract, including determining whether a claim is a clean
claim.
(C) Every insurer shall make available to the provider within
twenty business days of receipt of a request, reasonable access
either electronically or otherwise, to all the policies that are
applicable to the particular provider or to particular health care
services identified by the provider. In the event the provision of
the entire policy would violate any applicable copyright law, the
insurer may instead comply with this subsection by timely
delivering to the provider a clear explanation of the policy as it
applies to the provider and to any health care services identified
by the provider.
(6) Every insurer shall pay a clean claim if the insurer has
previously authorized the health care service or has advised the
provider or enrollee in advance of the provision of health care
services that the health care services are medically necessary and a covered benefit, unless:
(A) The documentation for the claim provided by the person
submitting the claim clearly fails to support the claim as
originally authorized; or
(B) The insurer's refusal is because:
(i) Another payor or party is responsible for the payment;
(ii) The provider has already been paid for the health care
services identified on the claim;
(iii) The claim was submitted fraudulently or the
authorization was based in whole or material part on erroneous
information provided to the insurer by the provider, enrollee, or
other person not related to the insurer;
(iv) The person receiving the health care services was not
eligible to receive them on the date of service and the insurer did
not know, and with the exercise of reasonable care could not have
known, of the person's eligibility status;
(v) There is a dispute regarding the amount of charges
submitted; or
(vi) The service provided was not a covered benefit and the
insurer did not know, and with the exercise of reasonable care
could not have known, at the time of the certification that the
service was not covered.
(7) A previously paid claim may be retroactively denied only
in accordance with this subdivision.
(A) No insurance company may retroactively deny a previously
paid claim unless:
(i) The claim was submitted fraudulently;
(ii) The claim contained material misrepresentations;
(iii) The claim payment was incorrect because the provider was
already paid for the health care services identified on the claim
or the health care services were not delivered by the provider;
(iv) The provider was not entitled to reimbursement;
(v) The service provided was not covered by the health benefit
plan; or
(vi) The insured was not eligible for reimbursement.
(B) A provider to whom a previously paid claim has been denied
by a health plan in accordance with this section shall, upon
receipt of notice of retroactive denial by the plan, notify the
health plan within forty days of the provider's intent to pay or
demand written explanation of the reasons for the denial.
(i) Upon receipt of explanation for retroactive denial, the
provider shall reimburse the plan within thirty days for allowing
an offset against future payments or provide written notice of
dispute.
(ii) Disputes shall be resolved between the parties within
thirty days of receipt of notice of dispute. The parties may agree
to a process to resolve the disputes in a provider contract.
(iii) Upon resolution of dispute, the provider shall pay any amount due or provide written authorization for an offset against
future payments.
(C) A health plan may retroactively deny a claim only for the
reasons set forth in subparagraphs (iii), (iv), (v) and (vi),
paragraph (A) of this subdivision (7) for a period of one year from
the date the claim was originally paid. There shall be no time
limitations for retroactively denying a claim for the reasons set
forth in subparagraphs (i) and (ii) above.
(8) No provider contract may fail to include or attach at the
time it is presented to the provider for execution:
(A) The fee schedule, reimbursement policy or statement as to
the manner in which claims will be calculated and paid which is
applicable to the provider or to the range of health care services
reasonably expected to be delivered by that type of provider on a
routine basis; and
(B) All material addenda, schedules and exhibits thereto
applicable to the provider or to the range of health care services
reasonably expected to be delivered by that type of provider under
the provider contract.
(9) No amendment to any provider contract or to any addenda,
schedule or exhibit, or new addenda, schedule, exhibit, applicable
to the provider to the extent that any of them involve payment or
delivery of care by the provider, or to the range of health care
services reasonably expected to be delivered by that type of provider, is effective as to the provider, unless the provider has
been provided with the applicable portion of the proposed
amendment, or of the proposed new addenda, schedule or exhibit, and
has failed to notify the insurer within twenty business days of
receipt of the documentation of the provider's intention to
terminate the provider contract at the earliest date thereafter
permitted under the provider contract.
(10) In the event that the insurer's provision of a policy
required to be provided under subdivision (8) or (9) of this
subsection would violate any applicable copyright law, the insurer
may instead comply with this section by providing a clear, written
explanation of the policy as it applies to the provider.
(11) The insurer shall complete a credential check of any new
provider and accept or reject the provider within four months
following the submission of the provider's completed application:
Provided, That time frame may be extended for an additional three
months because of delays in primary source verification. The
insurer shall make available to providers a list of all information
required to be included in the application. A provider who is
permitted by the insurer to provide services and who provides
services during the credentialing period shall be paid for the
services if the provider's application is approved.
(b) Without limiting the foregoing, in the processing of any
payment of claims for health care services rendered by providers under provider contracts and in performing under its provider
contracts, every insurer subject to regulation by this article
shall adhere to and comply with the minimum fair business standards
required under subsection (a) of this section. The commissioner
has jurisdiction to determine if an insurer has violated the
standards set forth in subsection (a) of this section by failing to
include the requisite provisions in its provider contracts. The
commissioner has jurisdiction to determine if the insurer has
failed to implement the minimum fair business standards set out in
subdivisions (1) and (2), subsection (a) of this section in the
performance of its provider contracts.
(c) No insurer is in violation of this section if its failure
to comply with this section is caused in material part by the
person submitting the claim or if the insurer's compliance is
rendered impossible due to matters beyond the insurer's reasonable
control, such as an act of God, insurrection, strike, fire, or
power outages, which are not caused in material part by the
insurer.
NOTE: The purpose of this bill is to eliminate the interest
payment on any untimely provider paid claims for health care
services if the amount of interest is less than one dollar.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.