Report Title:

Health Insurance; Reimbursement

 

Description:

Defines "clean claim"; establishes reimbursement reports to satisfy the notice to provider requirement; requires entities to make available an electronic system to produce verification of eligibility; requires a report to Insurance Commissioner on claims unpaid or contested with reasons for the contested claims. Establishes full parity in health coverage benefits for mental health and substance abuse treatment for minors under age 18. (SD1)

 

HOUSE OF REPRESENTATIVES

H.B. NO.

202

TWENTY-FIRST LEGISLATURE, 2001

H.D. 1

STATE OF HAWAII

S.D. 1


 

A BILL FOR AN ACT

 

relating to health insurance.

 

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

PART I.

SECTION 1. Section 431:13-108, Hawaii Revised Statutes, is amended as follows:

"[[]431:13-108[]] Reimbursement for health insurance benefits. (a) This section applies to accident and sickness insurance providers under part I of article 10A of chapter 431, mutual benefit societies under article 1 of chapter 432, dental service corporations under chapter 423, and health maintenance organizations under chapter 432D.

(b) Unless shorter payment timeframes are otherwise specified in a contract, an entity shall reimburse a [claim that is not contested or denied] a clean claim not more than thirty calendar days after receiving claim filed in writing, or fifteen calendar days after receiving the claim filed electronically, as appropriate.

(c) If a claim is contested or denied or requires more time for review by an entity, the entity shall notify the health care provider in writing or electronically not more than fifteen calendar days after receiving a claim filed in writing, or not more than seven calendar days after receiving a claim filed electronically, as appropriate. The notice shall identify the contested portion of the claim and the specific reason for contesting or denying the claim, and may request additional information. This requirement shall not apply where an entity provides the foregoing information in reimbursement reports issued to providers.

(d) Each entity shall make available a system that provides verification of enrollee eligibility under plans offered by the entity.

[(d)] (e) If information received pursuant to a request for additional information is satisfactory to warrant paying the claim, the claim shall be paid not more than thirty calendar days after receiving the additional information in writing, or not more than seven calendar days after receiving the additional information filed electronically, as appropriate.

[(e)] (f) Payment of a claim under this section shall be effective upon the date of the postmark of the mailing of the payment, or the date of the electronic transfer of the payment, as applicable.

[(f)] (g) Notwithstanding section 478-2 to the contrary, interest shall be allowed at a rate of fifteen per cent a year for money owed by an entity on payment of a claim exceeding the applicable time limitations under this section, as follows:

(1) For an uncontested claim:

(A) Filed in writing, interest from the first calendar day after the thirty-day period in subsection (b); or

(B) Filed electronically, interest from the first calendar day after the fifteen-day period in subsection (b);

(2) For a contested claim filed in writing:

(A) [For which notice was provided under subsection (c), interest] Interest shall be paid from the first calendar day thirty days after the date the additional information is received; or

(B) [For which notice was not provided within the time specified under subsection (c), interest] Interest shall be paid from the first calendar day after the claim is received; or

(3) For a contested claim filed electronically[:

(A) For which notice was provided under subsection (c), interest], interest shall be paid from the first calendar day fifteen days after the additional information is received[; or

(B) For which notice was not provided within the time specified under subsection (c), interest from the first calendar day after the claim is received].

The commissioner may suspend the accrual of interest if the commissioner determines that the entity's failure to pay a claim within the applicable time limitations was the result of a major disaster or of an unanticipated major computer system failure.

[(g)] (h) Any interest that accrues on delayed clean claims in this section shall be automatically added by the entity to the amount of the unpaid claim due the provider.

[(h)] (i) In determining the penalties under section 431:13-201 for a violation of this section, the commissioner shall consider:

(1) The appropriateness of the penalty in relation to the financial resources and good faith of the entity;

(2) The gravity of the violation;

(3) The history of the entity for previous similar violations;

(4) The economic benefit to be derived by the entity and the economic impact upon the health care facility or health care provider resulting from the violation; and

(5) Any other relevant factors bearing upon the violation.

(j) Entities shall submit a quarterly report to the commissioner for the purpose of monitoring compliance with this section. The report shall include the total number of unpaid claims and the reasons for contesting the claims. The format for this report shall be developed by the commissioner.

[(i)] (k) As used in this section:

"Claim" means any claim, bill, or request for payment for all or any portion of health care services provided by a health care provider of services submitted by an individual or pursuant to a contract or agreement with an entity[.] using the entity's standard claim form with all required fields completed with correct and complete information.

"Clean claim" means a claim where the following conditions are met:

(1) The claim is for a covered health care service provided by an eligible health care provider to a covered person under the contract;

(2) The claim has no material defect or impropriety;

(3) There is no dispute regarding the amount claimed; and

(4) The entity has no reason to believe that the claim was submitted fraudulently.

"Clean claim" shall not include:

(1) Claims for payment of expenses incurred during a time when premiums are delinquent;

(2) Claims that are submitted fraudulently or based upon material misrepresentations;

(3) Medicaid and Medigap claims; or

(4) Claims that require a coordination of benefits, subrogation, pre-existing condition investigations, or involve third-party liability.

"Contest", "contesting", or "contested" means the circumstances under which an entity was not provided with, or did not have reasonable access to, sufficient information needed to determine payment liability or basis for payment of the claim.

"Deny", "denying", or "denied" means the assertion by an entity that it has no liability to pay a claim based upon eligibility of the patient, coverage of a service, medical necessity of a service, liability of another payer, or other grounds.

"Entity" means accident and sickness insurance providers under part I of article 10A of chapter 431, mutual benefit societies under article 1 of chapter 432, dental service corporations under chapter 423, and health maintenance organizations under chapter 432D.

"Health care facility" shall have the same meaning as in section 327D-2.

"Health care provider" means a Hawaii health care facility, physician, nurse, or any other provider of health care services covered by an entity."

SECTION 2. Act 99, Session Laws of Hawaii 1999, is amended by amending section 5 to read as follows:

"SECTION 5. This Act shall take effect on July 1, 2000[, and shall be repealed on July 1, 2002; provided that section 478-8(b), Hawaii Revised Statutes, shall be reenacted in the form in which it read on June 30, 2000]."

PART II.

SECTION 3. Section 431M-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Benefits for minors" means insurance coverage for mental illness and alcohol and drug dependence treatment or services for all individuals below eighteen years of age with any mental health condition or disorder that falls under any of the diagnostic categories listed in the Diagnostic and Statistical Manual of the American Psychiatric Association, as periodically revised, or in the Mental Disorders Section of the International Classification of Disease, as periodically revised."

SECTION 4. Section 431M-3, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) All alcohol dependence, drug dependence, or mental illness treatment or services as set forth in this chapter shall be subject to peer review procedures as a condition of payment or reimbursement, to assure that reimbursement is limited to appropriate utilization under criteria incorporated into insurance policies or health or service plan contracts either directly or by reference[.]; provided that benefits for minors shall not be subject to this section but governed by the managed care provision set forth in 431M-4(d). Review may involve prior approval, concurrent review of the continuation of treatment, post-treatment review or any combination of these. However, if prior approval is required, provision shall be made to allow for payment of urgent or emergency admissions, subject to subsequent review."

SECTION 5. Section 431M-4, Hawaii Revised Statutes, is amended to read as follows:

"431M-4 Mental illness, alcohol and drug dependence benefits[.]; benefits for minors. (a) The covered benefit under this chapter shall not be less than thirty days of in-hospital services per year. Each day of in-hospital services may be exchanged for two days of nonhospital residential services, two days of partial hospitalization services, or two days of day treatment services. Visits to a physician, psychologist, clinical social worker, or advanced practice registered nurse with a psychiatric or mental health specialty or subspecialty shall not be less than thirty visits per year to hospital or nonhospital facilities or to mental health outpatient facilities for day treatment or partial hospitalization services. Each day of in-hospital services may also be exchanged for two outpatient visits under this chapter; provided that the patient's condition is such that the outpatient services would reasonably preclude hospitalization. The total covered benefit for outpatient services in subsections (b) and (c) shall not be less than twenty-four visits per year; provided that coverage of twelve of the twenty-four outpatient visits shall apply only to the services under subsection (c). The other covered benefits under this chapter shall apply to any of the services in subsection (b) or (c). In the case of alcohol and drug dependence benefits, the insurance policy may limit the number of treatment episodes but may not limit the number to less than two treatment episodes per lifetime. Nothing in this section shall be construed to limit serious mental illness benefits.

(b) Alcohol and drug dependence benefits shall be as follows:

(1) Detoxification services as a covered benefit under this chapter shall be provided either in a hospital or in a nonhospital facility which has a written affiliation agreement with a hospital for emergency, medical, and mental health support services. The following services shall be covered under detoxification services:

(A) Room and board;

(B) Diagnostic x-rays;

(C) Laboratory testing; and

(D) Drugs, equipment use, special therapies, and supplies.

Detoxification services shall be included as part of the covered in-hospital services, but shall not be included in the treatment episode limitation, as specified in subsection (a);

(2) Alcohol or drug dependence treatment through in-hospital, nonhospital residential, or day treatment substance abuse services as a covered benefit under this chapter shall be provided in a hospital or nonhospital facility. Before a person qualifies to receive benefits under this subsection, a physician, psychologist, clinical social worker, or advanced practice registered nurse certified pursuant to chapter 321 shall determine that the person suffers from alcohol or drug dependence, or both. The substance abuse services covered under this paragraph shall include those services which are required for licensure and accreditation, and shall be included as part of the covered in-hospital services as specified in subsection (a). Excluded from alcohol or drug dependence treatment under this subsection are detoxification services and educational programs to which drinking or drugged drivers are referred by the judicial system, and services performed by mutual self-help groups; and

(3) Alcohol or drug dependence outpatient services as a covered benefit under this chapter shall be provided under an individualized treatment plan approved by a physician, psychologist, clinical social worker, or advanced practice registered nurse certified pursuant to chapter 321 and must be reasonably expected to produce remission of the patient's condition. An individualized treatment plan approved by a clinical social worker or an advanced practice registered nurse for a patient already under the care or treatment of a physician or psychologist shall be done in consultation with the physician or psychologist. Services covered under this paragraph shall be included as part of the covered outpatient services as specified in subsection (a).

(c) Mental illness benefits.

(1) Covered benefits for mental health services set forth in this subsection shall be limited to coverage for diagnosis and treatment of mental disorders. All mental health services shall be provided under an individualized treatment plan approved by a physician, psychologist, clinical social worker, or advanced practice registered nurse with a psychiatric or mental health specialty or subspecialty and must be reasonably expected to improve the patient's condition. An individualized treatment plan approved by a clinical social worker or an advanced practice registered nurse with a psychiatric or mental health specialty or subspecialty for a patient already under the care or treatment of a physician or psychologist shall be done in consultation with the physician or psychologist;

(2) In-hospital and nonhospital residential mental health services as a covered benefit under this chapter shall be provided in a hospital or a nonhospital residential facility. The services to be covered shall include those services required for licensure and accreditation, and shall be included as part of the covered in-hospital services as specified in subsection (a);

(3) Mental health partial hospitalization as a covered benefit under this chapter shall be provided by a hospital or a mental health outpatient facility. The services to be covered under this paragraph shall include those services required for licensure and accreditation and shall be included as part of the covered in-hospital services as specified in subsection (a); and

(4) Mental health outpatient services shall be a covered benefit under this chapter and shall be included as part of the covered outpatient services as specified in subsection (a).

(d) Benefits for minors.

(1) All policies and contracts providing coverage as required under section 431M-2 shall provide covered benefits for all minors, except for those individuals receiving mental illness benefits from the State under the Felix Consent Decree Civ. No. 93-00367-DAE (1994), as specified in this subsection. Coverage for minors shall be under the same terms and conditions as coverage provided for other illnesses and diseases. Coverage offered pursuant to this subsection shall not impose limits such as day or visit limits, amount limits such as lifetime or annual plan payment limits, deductibles, copayments, out-of-pocket limits, coinsurance, or other cost-sharing requirements for diagnosis or treatment of mental illnesses or alcohol and drug dependence that are not imposed for other illnesses and diseases.

(2) All benefits for minors shall be subject to nationally recognized standards of care treatment guidelines that shall be used by providers rendering treatment and services under this subsection."

SECTION 6. Section 431M-5, Hawaii Revised Statutes, is amended to read as follows:

"431M-5 Nondiscrimination in deductibles, copayment plans, and other limitations on payment. (a) Deductible or copayment plans may be applied to benefits paid to or on behalf of patients during the course of treatment as described in section 431M-4, but in any case the proportion of deductibles or copayments shall be not greater than those applied to comparable physical illnesses generally requiring a comparable level of care in each policy.

(b) Notwithstanding subsection (a), health maintenance organizations may establish reasonable provisions for enrollee cost-sharing so long as the amount the enrollee is required to pay does not exceed the amount of copayment and deductible customarily required by insurance policies which are subject to the provisions of this chapter for this type and level of service. Nothing in this chapter prevents health maintenance organizations from establishing durational limits which are actuarially equivalent to the benefits required by this chapter. Health maintenance organizations may limit the receipt of covered services by enrollees to services provided by or upon referral by providers associated with the health maintenance organization.

(c) A health insurance plan shall not impose rates, terms, or conditions including service limits and financial requirements, on serious mental illness benefits, if similar rates, terms, or conditions are not applied to services for other medical or surgical conditions. This chapter shall not apply to individual contracts; provided further that this chapter shall not apply to QUEST medical plans under the department of human services until July 1, 2002[.] except as provided in subsection (d).

(d) A health insurance plan shall not impose rates, terms, or conditions including service limits and financial requirements, on benefits for minors if similar rates, terms, or conditions are not applied to services for other medical or surgical conditions. This chapter shall not apply to individual contracts; provided that benefits for minors shall be provided under QUEST medical plans under the department of human services."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.