Retroactive Denials Prohibited; Exceptions
I. In this section, “retroactive denial of a previously paid claim” means any attempt by an insurer to retroactively collect payments already made to a health care provider with respect to a claim by requiring repayment of such payments, reducing other payments currently owed to the provider, withholding or setting off against future payments, reducing or affecting the future claim payments to the provider in any other manner.
II. No insurer shall impose on any health care provider any retroactive denial of a previously paid claim or any part thereof unless:
(a) The insurer has provided the reason for the retroactive denial in writing to the health care provider; and
(b) The time which has elapsed since the date of payment of the challenged claim does not exceed 18 months. The retroactive denial of a previously paid claim may be permitted beyond 18 months from the date of payment only for the following reasons:
(1) The claim was submitted fraudulently;
(2) The claim payment was incorrect because the health care provider or the insured was already paid for the health care services identified in the claim;
(3) The health care services identified in the claim were not delivered by the health care provider;
(4) The claim payment was for services covered by Title XVIII, Title XIX, or Title XXI of the Social Security Act;
(5) The claim payment is the subject of an adjustment with a different insurer, administrator, or payor and such adjustment is not affected by a contractual relationship, association, or affiliation involving claims payment, processing, or pricing; or
(6) The claim payment is the subject of legal action.
III. An insurer shall notify a health care provider at least 15 days in advance of the imposition of any retroactive denials of previously paid claims. The health care provider shall have 6 months from the date of notification under this paragraph to determine whether the insured has other appropriate insurance, which was in effect on the date of service. Notwithstanding the contractual terms between the insurer and provider, the insurer shall allow for the submission of a claim that was previously denied by another insurer due to the insured’s transfer or termination of coverage.