REPORT TITLE:
Health Insurance Reimbursement


DESCRIPTION:
Requires health insurers, mutual benefit societies, and health
maintenance organizations to reimburse providers and patients
within a specified time period. (CD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        830
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 2
STATE OF HAWAII                                            C.D. 1
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HEALTH INSURANCE REIMBURSEMENT.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The purpose of this Act is to establish minimum
 
 2 reimbursement requirements for health care insurance and to
 
 3 establish contested claims procedures. 
 
 4      SECTION 2.  Chapter 431, Hawaii Revised Statutes, is amended
 
 5 by adding a new section to article 13 to be appropriately
 
 6 designated and to read as follows:
 
 7      "�431:13-    Reimbursement for health insurance benefits.
 
 8 (a)  This section applies to accident and sickness insurance
 
 9 providers under part I of article 10A of chapter 431, mutual
 
10 benefit societies under article 1 of chapter 432, dental service
 
11 corporations under chapter 423, and health maintenance
 
12 organizations under chapter 432D.
 
13      (b)  Unless shorter payment timeframes are otherwise
 
14 specified in a contract, an entity shall reimburse a claim that
 
15 is not contested or denied not more than thirty calendar days
 
16 after receiving the claim filed in writing, or fifteen calendar
 
17 days after receiving the claim filed electronically, as
 
18 appropriate.
 
19      (c)  If a claim is contested or denied or requires more time
 

 
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 1 for review by an entity, the entity shall notify the health care
 
 2 provider in writing or electronically not more than fifteen
 
 3 calendar days after receiving a claim filed in writing, or not
 
 4 more than seven calendar days after receiving a claim filed
 
 5 electronically, as appropriate.  The notice shall identify the
 
 6 contested portion of the claim and the specific reason for
 
 7 contesting or denying the claim, and may request additional
 
 8 information.
 
 9      (d)  If information received pursuant to a request for
 
10 additional information is satisfactory to warrant paying the
 
11 claim, the claim shall be paid not more than thirty calendar days
 
12 after receiving the additional information in writing, or not
 
13 more than seven calendar days after receiving the additional
 
14 information filed electronically, as appropriate.
 
15      (e)  Payment of a claim under this section shall be
 
16 effective upon the date of the postmark of the mailing of the
 
17 payment, or the date of the electronic transfer of the payment,
 
18 as applicable.
 
19      (f)  Notwithstanding section 478-2 to the contrary, interest
 
20 shall be allowed at a rate of fifteen per cent a year for money
 
21 owed by an entity on payment of a claim exceeding the applicable
 
22 time limitations under this section, as follows:
 
23      (1)  For an uncontested claim:
 

 
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                                     S.B. NO.           S.D. 1
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 1           (A)  Filed in writing, interest from the first calendar
 
 2                day after the thirty-day period in subsection (b);
 
 3                or
 
 4           (B)  Filed electronically, interest from the first
 
 5                calendar day after the fifteen-day period in
 
 6                subsection (b);
 
 7      (2)  For a contested claim filed in writing:
 
 8           (A)  For which notice was provided under subsection
 
 9                (c), interest from the first calendar day thirty
 
10                days after the date the additional information is
 
11                received; or
 
12           (B)  For which notice was not provided within the time
 
13                specified under subsection (c), interest from the
 
14                first calendar day after the claim is received;
 
15           or
 
16      (3)  For a contested claim filed electronically:
 
17           (A)  For which notice was provided under subsection
 
18                (c), interest from the first calendar day fifteen
 
19                days after the additional information is received;
 
20                or
 
21           (B)  For which notice was not provided within the time
 
22                specified under subsection (c), interest from the
 
23                first calendar date after the claim is received.
 

 
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 1      The commissioner may suspend the accrual of interest if the
 
 2 commissioner determines that the entity's failure to pay a claim
 
 3 within the applicable time limitations was the result of a major
 
 4 disaster or of an unanticipated major computer system failure.
 
 5      (g)  Any interest that accrues on delayed clean claims in
 
 6 this section shall be automatically added by the entity to the
 
 7 amount of the unpaid claim due the provider.
 
 8      (h)  In determining the penalties under section 431:13-201
 
 9 for a violation of this section, the commissioner shall consider:
 
10      (1)  The appropriateness of the penalty in relation to the
 
11           financial resources and good faith of the entity;
 
12      (2)  The gravity of the violation;
 
13      (3)  The history of the entity for previous similar
 
14           violations;
 
15      (4)  The economic benefit to be derived by the entity and
 
16           the economic impact upon the health care facility or
 
17           health care provider resulting from the violation; and
 
18      (5)  Any other relevant factors bearing upon the violation.
 
19      (i)  As used in this section:
 
20      "Claim" means any claim, bill, or request for payment for
 
21 all or any portion of health care services provided by a health
 
22 care provider of services submitted by an individual or pursuant
 
23 to a contract or agreement with an entity.
 

 
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 1      "Contest", "contesting", or "contested" means the
 
 2 circumstances under which an entity was not provided with, or did
 
 3 not have reasonable access to, sufficient information needed to
 
 4 determine payment liability or basis for payment of the claim.
 
 5      "Deny", "denying", or "denied" means the assertion by an
 
 6 entity that it has no liability to pay a claim based upon
 
 7 eligibility of the patient, coverage of a service, medical
 
 8 necessity of a service, liability of another payer, or other
 
 9 grounds.
 
10      "Entity" means accident and sickness insurance providers
 
11 under part I of article 10A of chapter 431, mutual benefit
 
12 societies under article I of chapter 432, dental service
 
13 corporations under chapter 423, and health maintenance
 
14 organizations under chapter 432D.
 
15      "Health care facility" shall have the same meaning as in
 
16 section 327D-2.
 
17      "Health care provider" means a Hawaii health care facility,
 
18 physician, nurse, or any other provider of health care services
 
19 covered by an entity."
 
20      SECTION 3.  Section 478-8, Hawaii Revised Statutes, is
 
21 amended by amending subsection (b) to read as follows:
 
22      "(b)  The provisions of this chapter (except for this
 
23 section and section 478-3) shall not apply to any:
 

 
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 1      (1)  Indebtedness [which] that is secured by a first
 
 2           mortgage lien on real property, and is agreed to or
 
 3           incurred after May 30, 1980; [or]
 
 4      (2)  Consumer credit agreement of sale made after May 30,
 
 5           1980, under which a vendor agrees to sell real property
 
 6           to a vendee but retains legal title to the real
 
 7           property and in which the rate of interest or the
 
 8           manner in which such rate shall be determined is
 
 9           clearly stated.  As used in this paragraph, [agreement
 
10           of sale] "agreement of sale" includes subagreement of
 
11           sale or other subsequent subagreement of sale made on
 
12           or after June 18, 1982.  Notwithstanding the first
 
13           sentence of this paragraph, with respect to any
 
14           consumer credit agreement of sale made on or after
 
15           July 1, 1985, upon extension at maturity or
 
16           renegotiation thereof, the maximum rate of interest
 
17           charged thereafter shall not be more than the greater
 
18           of the rate of interest payable under the agreement of
 
19           sale immediately prior to such maturity or
 
20           renegotiation or four percentage points above the
 
21           highest weekly average yield on United States Treasury
 
22           securities adjusted to a constant maturity of three
 
23           years, as made available by the Federal Reserve Board
 

 
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 1           within sixty days prior to the time of extension or
 
 2           renegotiation; [or]
 
 3      (3)  Indebtedness [which] that is secured by a purchase-
 
 4           money junior mortgage lien on real property that is
 
 5           agreed to and incurred after June 18, 1982; provided
 
 6           that purchase-money junior mortgage lien means a
 
 7           mortgage that is subordinate in lien priority to an
 
 8           existing mortgage on the same real property [which]
 
 9           that is given to the seller as part of the buyer's
 
10           consideration for the purchase of real property and
 
11           delivered at the same time that the real property is
 
12           transferred as a simultaneous part of the transaction;
 
13           [or]
 
14      (4)  [Any transaction] Transaction for the sale of goods,
 
15           services, or both, by a seller in the business of
 
16           selling such goods or services, if the transaction is
 
17           subject to chapter 476 or the rate of interest charged
 
18           by the seller in the transaction does not exceed
 
19           eighteen per cent a year; provided that this paragraph
 
20           shall not apply to any transaction regulated by chapter
 
21           412 or 431 or to any transaction for the sale of
 
22           financial services.  This paragraph shall not be deemed
 
23           to limit any seller's right to charge interest under
 

 
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                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        C.D. 1

 
 1           section 478-2[.]; or
 
 2      (5)  Payment of any claim under section 431:13-    ."
 
 3      SECTION 4.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 5.  This Act shall take effect on July 1, 2000, and
 
 6 shall be repealed on July 1, 2002; provided that section
 
 7 478-8(b), Hawaii Revised Statutes, shall be reenacted in the form
 
 8 in which it read on June 30, 2000.