Definitions — Timely reimbursement of health insurance claims
See bold text below:
(a) Definitions. As used in this section:
(1)(A) “Clean claim” means a claim received by a health insurance entity for adjudication that requires no further information, adjustment or alteration by the provider of the services in order to be processed and paid by the health insurer. A claim is clean if it has no defect or impropriety, including any lack of any required substantiating documentation, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this section;
(B) “Clean claim” does not include a duplicate claim;
(C) “Clean claim” does not include any claim submitted more than ninety (90) days after the date of service; and
(D) “Clean claim” includes resubmitted paper claims with previously identified deficiencies corrected;
(2) “Duplicate claim” means an original claim and its duplicate, when the duplicate is filed within thirty (30) days of the original claim;
(3) “Health insurance coverage” means benefits consisting of medical care, provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care, under any policy, certificate or agreement offered by a health insurance entity; provided, that health insurance coverage does not include policies or certificates covering only accident, credit, disability income, long-term care, hospital indemnity, medicare supplement as defined in § 1882(g)(1) of the Social Security Act (42 U.S.C. § 1395ss(g)(1)), specified disease, other limited benefit health insurance, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that are statutorily required to be contained in any liability insurance policy or equivalent self-insurance;
(4) “Health insurance entity” means an entity subject to the insurance laws of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide health insurance coverage, including, but not limited to, an insurance company, a health maintenance organization and a nonprofit hospital and medical service corporation;
(5) “Pay” means that the health insurance entity shall either send the provider cash or a cash equivalent in full satisfaction of the allowed portion of the claim, or give the provider a credit against any outstanding balance owed by that provider to the health insurance entity. Payment shall occur on the date when the cash, cash equivalent or notice of credit is mailed or otherwise sent to the provider; and
(6) “Submitted” means that the provider either mails or otherwise sends a claim to the health insurance entity. Submission shall occur on the date the claim is mailed or otherwise sent to the health insurance entity.
(b) Prompt Payment Standards
(1) (A) Not later than thirty (30) calendar days after the date that a health insurance entity actually receives a claim submitted on paper from a provider, a health insurance entity shall:
(i) If the claim is clean, pay the total covered amount of the claim;
(ii) Pay the portion of the claim that is clean and not in dispute and notify the provider in writing why the remaining portion of the claim will not be paid; or
(iii) Notify the provider in writing of all reasons why the claim is not clean and will not be paid and what substantiating documentation and information is required to adjudicate the claim as clean.
(B) Not later than twenty-one (21) calendar days after receiving a claim by electronic submission, a health insurance entity shall:
(i) If the claim is clean, pay the total covered amount of the claim;
(ii) Pay the portion of the claim that is clean and not in dispute and notify the provider why the remaining portion of the claim will not be paid; or
(iii) Notify the provider of the reason why the claim is not clean and will not be paid and what substantiating documentation or information is required to adjudicate the claim.
(2) No paper claim may be denied upon resubmission for lack of substantiating documentation or information that has been previously provided by the health care provider.
(3) Health insurance entities shall timely provide contracted providers with all necessary information to properly submit a claim.
(4) Any health insurance entity that does not comply with subdivision (b)(1) shall pay one percent (1%) interest per month, accruing from the day after the payment was due, on that amount of the claim that remains unpaid.
(c) Regulatory Oversight.
(1) The commissioner shall ensure, as part of the department’s ongoing regulatory oversight of health insurance entities, that health insurance entities properly process and pay claims in accordance with this section.
(2) If the commissioner finds a health insurance entity has failed during any calendar year to properly process and pay ninety-five percent (95%) of all clean claims received from all providers during that year in accordance with this section, the commissioner may levy an aggregate penalty up to ten thousand dollars ($10,000). If the commissioner finds a health insurance entity has failed during any calendar year to properly process and pay eighty-five percent (85%) of all clean claims received from all providers during that year in accordance with this section, the commissioner may levy an aggregate penalty in an amount of not less than ten thousand dollars ($10,000) nor more than one hundred thousand dollars ($100,000), if reasonable notice in writing is given of the intent to levy the penalty. If the commissioner finds a health insurance entity has failed during any calendar year to properly process and pay sixty percent (60%) of all clean claims received from all providers during that year in accordance with this section, the commissioner may levy an aggregate penalty in an amount of not less than one hundred thousand dollars ($100,000) nor more than two hundred thousand dollars ($200,000). In determining the amount of any fine, the commissioner shall take into account whether the failure to achieve the standards in this section is due to circumstances beyond the health insurance entity’s control and whether the health insurance entity has been in the business of processing claims for two (2) years or less. The health insurance entity may request an administrative hearing contesting the assessment of any administrative penalty imposed by the commissioner within thirty (30) days after receipt of the notice of the assessment.
(3) The commissioner may issue an order directing a health insurance entity or a representative of a health insurance entity to cease and desist from engaging in any act or practice in violation of this section. Within fifteen (15) days after service of the cease and desist order, the respondent may request a hearing on the question of whether acts or practices in violation of this act have occurred.
(4) All hearings under this part shall be conducted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
(5) In the case of any violations of this section, if the commissioner elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued by the commissioner, the commissioner may institute a proceeding to obtain injunctive or other appropriate relief in the chancery court of Davidson County.
(6) Examinations to determine compliance with this section may be conducted by the commissioner’s staff. The commissioner may, if necessary, contract with qualified impartial outside sources to assist in examinations to determine compliance with this section. The expenses of the examinations shall be assessed against health maintenance organizations in accordance with § 56-32-115. For other health insurance entities, the commissioner shall bill the expenses of the examinations to those entities in accordance with § 56-1-413.
(d) Rules and regulations. The commissioner shall adopt rules and regulations to ensure effective compliance with this section.