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H.B. 165 Enrolled

             1     

HEALTH REFORM - ADMINISTRATIVE

             2     
SIMPLIFICATION

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Merlynn T. Newbold

             6     
Senate Sponsor: Gregory S. Bell

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Health Code and the Insurance Code to provide standards for the
             11      exchange of information between health care providers, health care insurers, and
             12      patients regarding payment for services.
             13      Highlighted Provisions:
             14          This bill:
             15          .    amends the timing of the requirement that a hospital sends an itemized bill to a
             16      patient;
             17          .    creates a systemwide, broad based demonstration project between health care
             18      payers and health care providers for innovating the payment and delivery of health
             19      care in the state;
             20          .    establishes a committee to study and develop a more efficient coordination of
             21      benefits process;
             22          .    requires health benefit plans to issue to enrollees a printed card containing health
             23      plan information;
             24          .    requires an insurer to provide access to information sufficient for a health care
             25      provider to determine the compensation or payment terms for health care services;
             26          .    requires the Insurance Department to convene a group of providers and payers to
             27      establish standards for the electronic exchange of health plan information using
             28      card swipe technology which is compatible with national electronic standards;
             29          .    prohibits an insurer from requiring less than one business day's notice of an


             30      emergency in-patient hospital admission; and
             31          .    amends the period of time in which an insurer can recover an amount paid to a
             32      health care provider when the insurer determines the payment was incorrect.
             33      Monies Appropriated in this Bill:
             34          None
             35      Other Special Clauses:
             36          This bill provides an effective date.
             37      Utah Code Sections Affected:
             38      AMENDS:
             39          26-21-20, as last amended by Laws of Utah 2000, Chapter 86
             40          31A-22-619, as last amended by Laws of Utah 2001, Chapter 116
             41          31A-26-301.6, as last amended by Laws of Utah 2007, Chapter 307
             42          63I-2-231, as renumbered and amended by Laws of Utah 2008, Chapter 382
             43      ENACTS:
             44          31A-22-614.6, Utah Code Annotated 1953
             45          31A-22-619.5, Utah Code Annotated 1953
             46          31A-22-636, Utah Code Annotated 1953
             47          31A-22-637, Utah Code Annotated 1953
             48     
             49      Be it enacted by the Legislature of the state of Utah:
             50          Section 1. Section 26-21-20 is amended to read:
             51           26-21-20. Requirement for hospitals to provide statements of itemized charges to
             52      patients.
             53          (1) For purposes of this section, "hospital" includes:
             54          (a) an ambulatory surgical facility;
             55          (b) a general acute hospital; and
             56          (c) a specialty hospital.
             57          [(1) Each hospital, as defined in Section 26-21-2 ,]


             58          (2) A hospital shall provide a statement of itemized charges to any patient receiving
             59      medical care or other services from that hospital.
             60          [(2)] (3) (a) The statement shall be provided to the patient or [his] the patient's
             61      personal representative or agent at the hospital's expense, personally, by mail, or by verifiable
             62      electronic delivery [at the time any statement is provided to any person or entity for billing
             63      purposes.] after the hospital receives an explanation of benefits from a third party payer which
             64      indicates the patient's remaining responsibility for the hospital charges.
             65          (b) If the statement is not provided to a third party, it shall be provided to the patient
             66      as soon as possible and practicable.
             67          [(3)] (4) The statement required by this section:
             68          (a) shall itemize each of the charges actually provided by the hospital to the patient[.];
             69          (b) (i) shall include the words in bold "THIS IS THE BALANCE DUE AFTER
             70      PAYMENT FROM YOUR HEALTH INSURER"; or
             71          (ii) shall include other appropriate language if the statement is sent to the patient
             72      under Subsection (3)(b); and
             73          [(4) The statement] (c) may not include charges of physicians who bill separately.
             74          (5) The requirements of this section do not apply to patients who receive services from
             75      a hospital under Title XIX of the Social Security Act.
             76          [(6) A statement of charges to be paid by a third party and related information
             77      provided to a patient pursuant to this section]
             78          (6) Nothing in this section prohibits a hospital from sending an itemized billing
             79      statement to a patient before the hospital has received an explanation of benefits from an
             80      insurer. If a hospital provides a statement of itemized charges to a patient prior to receiving
             81      the explanation of benefits from an insurer, the itemized statement shall be marked in bold:
             82      "DUPLICATE: DO NOT PAY" or other appropriate language.
             83          Section 2. Section 31A-22-614.6 is enacted to read:
             84          31A-22-614.6. Health care delivery and payment reform demonstration projects.
             85          (1) The Legislature finds that:


             86          (a) current health care delivery and payment systems do not provide systemwide
             87      aligned incentives for the appropriate delivery of health care;
             88          (b) some health care providers and health care payers have developed ideas for health
             89      care delivery and payment system reform, but lack the critical number of patient lives and
             90      payer involvement to accomplish systemwide reform; and
             91          (c) there is a compelling state interest to encourage as many health care providers and
             92      health care payers to join together and coordinate efforts at systemwide health care delivery
             93      and payment reform.
             94          (2) (a) The Office of Consumer Health Services within the Governor's Office of
             95      Economic Development shall convene meetings of health care providers and health care
             96      payers through a neutral, non-biased entity that can demonstrate it has the support of a broad
             97      base of the participants in this process for the purpose of coordinating broad based
             98      demonstration projects for health care delivery and payment reform.
             99          (b) (i) The speaker of the House of Representatives may appoint a person who is a
             100      member of the House of Representatives, or from the Office of Legislative Research and
             101      General Counsel, to attend the meetings convened under Subsection (2)(a).
             102          (ii) The president of the Senate may appoint a person who is a senator, or from the
             103      Office of Legislative Research and General Counsel, to attend the meetings convened under
             104      Subsection (2)(a).
             105          (c) Participation in the coordination efforts by health care providers and health care
             106      payers is voluntary, but is encouraged.
             107          (3) The commissioner and the Office of Consumer Health Services shall facilitate
             108      coordinated broad based demonstration projects for health care delivery and payment reform
             109      between various health care providers and health care payers who elect to participate in the
             110      demonstration projects by:
             111          (a) consulting with health care providers and health care payers who elect to join
             112      together in a broad based reform demonstration project; and
             113          (b) adopting administrative rules in accordance with Title 63G, Chapter 3, Utah


             114      Administrative Rulemaking Act, as necessary to implement the demonstration project.
             115          (4) The Office of Consumer Health Services and the commissioner shall report to the
             116      Health Reform Task Force by October 2009, and to the Legislature's Business and Labor
             117      Interim Committee every October thereafter regarding the progress towards coordination of
             118      broad based health care system payment and delivery reform.
             119          Section 3. Section 31A-22-619 is amended to read:
             120           31A-22-619. Coordination of benefits.
             121          (1) The commissioner shall:
             122          (a) convene a group of health insurers and health care providers for the purpose of
             123      making recommendations to the Legislature regarding an efficient method of coordination of
             124      benefits to increase the timeliness and accuracy of coordination of benefits;
             125          (b) report to the Legislature's Health Reform Task Force before November 15, 2009
             126      regarding legislation to enact the recommendations developed under Subsection (1)(a); and
             127          (c) adopt rules concerning the coordination of benefits between accident and health
             128      insurance policies.
             129          (2) Rules adopted by the commissioner under Subsection (1):
             130          (a) may not prohibit coordination of benefits with individual accident and health
             131      insurance policies; and
             132          (b) shall apply equally to all accident and health insurance policies without regard to
             133      whether the policies are group or individual policies.
             134          Section 4. Section 31A-22-619.5 is enacted to read:
             135          31A-22-619.5. Coordination of benefits.
             136          (1) When a carrier is coordinating benefits for an insured between two or more
             137      accident and health insurance policies, a carrier shall determine the order of payment of
             138      benefits in the following order of priority:
             139          (a) the benefits of the plan of the subscriber whose birthday month and day is earlier
             140      in the calendar year are determined before those of a subscriber whose birthday falls later in
             141      the year;


             142          (b) if both subscribers have the same birthday month and day under Subsection (1)(a),
             143      the benefits of the subscriber whose first name on the policy appears first in alphabetical order
             144      shall be determined first; and
             145          (c) if the priority of determining payment cannot be made under Subsection (1)(a) or
             146      (b), each carrier shall pay its pro-rata share of a claim.
             147          (2) (a) Except as permitted in Subsection (2)(b), a carrier shall not consider the
             148      following for underwriting or risk adjusting purposes:
             149          (i) an applicant's birth month or day; or
             150          (ii) the applicant's name.
             151          (b) Subsection (2)(a) does not prohibit underwriting or risk adjustment based on the
             152      age of the applicant.
             153          (3) Notwithstanding the provisions of Subsections (1) and (2), an accident and health
             154      insurance policy's cost sharing requirements are the subscriber's responsibility.
             155          Section 5. Section 31A-22-636 is enacted to read:
             156          31A-22-636. Standardized health benefit plan cards.
             157          (1) As used in this section, "insurer" means:
             158          (a) an insurer governed by this part as described in Section 31A-22-600 ;
             159          (b) a health maintenance organization governed by Chapter 8, Health Maintenance
             160      Organizations and Limited Health Benefit Plans;
             161          (c) a third party administrator; and
             162          (d) notwithstanding Subsection 31A-1-103 (3)(f) and Section 31A-22-600 , a health,
             163      medical, or conversion policy offered under Title 49, Chapter 20, Public Employees' Benefit
             164      and Insurance Program Act.
             165          (2) In accordance with Subsection (3), an insurer must use and issue a health benefit
             166      plan information card for the insurer's enrollees upon the purchase or renewal of, or enrollment
             167      in, a health benefit plan on or after July 1, 2010.
             168          (3) The health benefit plan card shall include:
             169          (a) the covered person's name;


             170          (b) the name of the carrier and the carrier network name;
             171          (c) the contact information for the carrier or health benefit plan administrator;
             172          (d) general information regarding copayments and deductibles; and
             173          (e) an indication of whether the health benefit plan is regulated by the state.
             174          (4) (a) The commissioner shall work with the Department of Health, the Health Data
             175      Authority, health care providers groups, and with state and national organizations that are
             176      developing uniform standards for the electronic exchange of health insurance claims or
             177      uniform standards for the electronic exchange of clinical health records.
             178          (b) When the commissioner determines that the groups described in Subsection (4)(a)
             179      have reached a consensus regarding the electronic technology and standards necessary to
             180      electronically exchange insurance enrollment and coverage information, the commissioner
             181      shall begin the rulemaking process under Title 63G, Chapter 3, Utah Administrative
             182      Rulemaking Act, to adopt standardized electronic interchange technology.
             183          (c) After rules are adopted under Subsection (4)(a), health care providers and their
             184      licensing boards under Title 58, Occupations and Professions, and health facilities licensed
             185      under Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, shall work
             186      together to implement the adoption of card swipe technology.
             187          Section 6. Section 31A-22-637 is enacted to read:
             188          31A-22-637. Health care provider payment information -- Notice of admissions.
             189          (1) For purposes of this section, "insurer" is as defined in Section 31A-22-636 .
             190          (2) (a) An insurer shall provide its health care providers who are under contract with
             191      the insurer access to current information necessary for the health care provider to determine:
             192          (i) the effect of procedure codes on payment or compensation before a claim is
             193      submitted for a procedure;
             194          (ii) the plans and carrier networks that the health care provider is subject to as part of
             195      the contract with the carrier; and
             196          (iii) in accordance with Subsection 31A-26-301.6 (10)(f), the specific rate and terms
             197      under which the provider will be paid for health care services.


             198          (b) The information required by Subsection (2)(a) may be provided through a website,
             199      and if requested by the health care provider, notice of the updated website shall be provided by
             200      the carrier.
             201          (3) (a) An insurer shall not require a health care provider by contract, reimbursement
             202      procedure, or otherwise to notify the insurer of a hospital in-patient emergency admission
             203      within a period of time that is less than one business day of the hospital in-patient admission,
             204      if compliance with the notification requirement would result in notification by the health care
             205      provider on a weekend or federal holiday.
             206          (b) Subsection (3)(a) does not prohibit the applicability or administration of other
             207      contract provisions between an insurer and a health care provider that require
             208      pre-authorization for scheduled in-patient admissions.
             209          Section 7. Section 31A-26-301.6 is amended to read:
             210           31A-26-301.6. Health care claims practices.
             211          (1) As used in this section:
             212          (a) "Articulable reason" may include a determination regarding:
             213          (i) eligibility for coverage;
             214          (ii) preexisting conditions;
             215          (iii) applicability of other public or private insurance;
             216          (iv) medical necessity; and
             217          (v) any other reason that would justify an extension of the time to investigate a claim.
             218          (b) "Health care provider" means a person licensed to provide health care under:
             219          (i) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
             220          (ii) Title 58, Occupations and Professions.
             221          (c) "Insurer" means an admitted or authorized insurer, as defined in Section
             222      31A-1-301 , and includes:
             223          (i) a health maintenance organization; and
             224          (ii) a third party administrator that is subject to this title, provided that nothing in this
             225      section may be construed as requiring a third party administrator to use its own funds to pay


             226      claims that have not been funded by the entity for which the third party administrator is paying
             227      claims.
             228          (d) "Provider" means a health care provider to whom an insurer is obligated to pay
             229      directly in connection with a claim by virtue of:
             230          (i) an agreement between the insurer and the provider;
             231          (ii) a health insurance policy or contract of the insurer; or
             232          (iii) state or federal law.
             233          (2) An insurer shall timely pay every valid insurance claim submitted by a provider in
             234      accordance with this section.
             235          (3) (a) Except as provided in Subsection (4), within 30 days of the day on which the
             236      insurer receives a written claim, an insurer shall:
             237          (i) pay the claim; or
             238          (ii) deny the claim and provide a written explanation for the denial.
             239          (b) (i) Subject to Subsection (3)(b)(ii), the time period described in Subsection (3)(a)
             240      may be extended by 15 days if the insurer:
             241          (A) determines that the extension is necessary due to matters beyond the control of the
             242      insurer; and
             243          (B) before the end of the 30-day period described in Subsection (3)(a), notifies the
             244      provider and insured in writing of:
             245          (I) the circumstances requiring the extension of time; and
             246          (II) the date by which the insurer expects to pay the claim or deny the claim with a
             247      written explanation for the denial.
             248          (ii) If an extension is necessary due to a failure of the provider or insured to submit the
             249      information necessary to decide the claim:
             250          (A) the notice of extension required by this Subsection (3)(b) shall specifically
             251      describe the required information; and
             252          (B) the insurer shall give the provider or insured at least 45 days from the day on
             253      which the provider or insured receives the notice before the insurer denies the claim for failure


             254      to provide the information requested in Subsection (3)(b)(ii)(A).
             255          (4) (a) In the case of a claim for income replacement benefits, within 45 days of the
             256      day on which the insurer receives a written claim, an insurer shall:
             257          (i) pay the claim; or
             258          (ii) deny the claim and provide a written explanation of the denial.
             259          (b) Subject to Subsections (4)(d) and (e), the time period described in Subsection
             260      (4)(a) may be extended for 30 days if the insurer:
             261          (i) determines that the extension is necessary due to matters beyond the control of the
             262      insurer; and
             263          (ii) before the expiration of the 45-day period described in Subsection (4)(a), notifies
             264      the insured of:
             265          (A) the circumstances requiring the extension of time; and
             266          (B) the date by which the insurer expects to pay the claim or deny the claim with a
             267      written explanation for the denial.
             268          (c) Subject to Subsections (4)(d) and (e), the time period for complying with
             269      Subsection (4)(a) may be extended for up to an additional 30 days from the day on which the
             270      30-day extension period provided in Subsection (4)(b) ends if before the day on which the
             271      30-day extension period ends, the insurer:
             272          (i) determines that due to matters beyond the control of the insurer a decision cannot
             273      be rendered within the 30-day extension period; and
             274          (ii) notifies the insured of:
             275          (A) the circumstances requiring the extension; and
             276          (B) the date as of which the insurer expects to pay the claim or deny the claim with a
             277      written explanation for the denial.
             278          (d) A notice of extension under this Subsection (4) shall specifically explain:
             279          (i) the standards on which entitlement to a benefit is based; and
             280          (ii) the unresolved issues that prevent a decision on the claim.
             281          (e) If an extension allowed by Subsection (4)(b) or (c) is necessary due to a failure of


             282      the insured to submit the information necessary to decide the claim:
             283          (i) the notice of extension required by Subsection (4)(b) or (c) shall specifically
             284      describe the necessary information; and
             285          (ii) the insurer shall give the insured at least 45 days from the day on which the
             286      insured receives the notice before the insurer denies the claim for failure to provide the
             287      information requested in Subsection (4)(b) or (c).
             288          (5) If a period of time is extended as permitted under Subsection (3)(b), (4)(b), or
             289      (4)(c), due to an insured or provider failing to submit information necessary to decide a claim,
             290      the period for making the benefit determination shall be tolled from the date on which the
             291      notification of the extension is sent to the insured or provider until the date on which the
             292      insured or provider responds to the request for additional information.
             293          (6) An insurer shall pay all sums to the provider or insured that the insurer is obligated
             294      to pay on the claim, and provide a written explanation of the insurer's decision regarding any
             295      part of the claim that is denied within 20 days of receiving the information requested under
             296      Subsection (3)(b), (4)(b), or (4)(c).
             297          (7) (a) Whenever an insurer makes a payment to a provider on any part of a claim
             298      under this section, the insurer shall also send to the insured an explanation of benefits paid.
             299          (b) Whenever an insurer denies any part of a claim under this section, the insurer shall
             300      also send to the insured:
             301          (i) a written explanation of the part of the claim that was denied; and
             302          (ii) notice of the adverse benefit determination review process established under
             303      Section 31A-22-629 .
             304          (c) This Subsection (7) does not apply to a person receiving benefits under the state
             305      Medicaid program as defined in Section 26-18-2 , unless required by the Department of Health
             306      or federal law.
             307          (8) (a) Beginning with health care claims submitted on or after January 1, 2002, a late
             308      fee shall be imposed on:
             309          (i) an insurer that fails to timely pay a claim in accordance with this section; and


             310          (ii) a provider that fails to timely provide information on a claim in accordance with
             311      this section.
             312          (b) For the first 90 days that a claim payment or a provider response to a request for
             313      information is late, the late fee shall be determined by multiplying together:
             314          (i) the total amount of the claim;
             315          (ii) the total number of days the response or the payment is late; and
             316          (iii) .1%.
             317          (c) For a claim payment or a provider response to a request for information that is 91
             318      or more days late, the late fee shall be determined by adding together:
             319          (i) the late fee for a 90-day period under Subsection (8)(b); and
             320          (ii) the following multiplied together:
             321          (A) the total amount of the claim;
             322          (B) the total number of days the response or payment was late beyond the initial
             323      90-day period; and
             324          (C) the rate of interest set in accordance with Section 15-1-1 .
             325          (d) Any late fee paid or collected under this section shall be separately identified on
             326      the documentation used by the insurer to pay the claim.
             327          (e) For purposes of this Subsection (8), "late fee" does not include an amount that is
             328      less than $1.
             329          (9) Each insurer shall establish a review process to resolve claims-related disputes
             330      between the insurer and providers.
             331          (10) An insurer or person representing an insurer may not engage in any unfair claim
             332      settlement practice with respect to a provider. Unfair claim settlement practices include:
             333          (a) knowingly misrepresenting a material fact or the contents of an insurance policy in
             334      connection with a claim;
             335          (b) failing to acknowledge and substantively respond within 15 days to any written
             336      communication from a provider relating to a pending claim;
             337          (c) denying or threatening to deny the payment of a claim for any reason that is not


             338      clearly described in the insured's policy;
             339          (d) failing to maintain a payment process sufficient to comply with this section;
             340          (e) failing to maintain claims documentation sufficient to demonstrate compliance
             341      with this section;
             342          (f) failing, upon request, to give to the provider written information regarding the
             343      specific rate and terms under which the provider will be paid for health care services;
             344          (g) failing to timely pay a valid claim in accordance with this section as a means of
             345      influencing, intimidating, retaliating, or gaining an advantage over the provider with respect to
             346      an unrelated claim, an undisputed part of a pending claim, or some other aspect of the
             347      contractual relationship;
             348          (h) failing to pay the sum when required and as required under Subsection (8) when a
             349      violation has occurred;
             350          (i) threatening to retaliate or actual retaliation against a provider for the provider
             351      applying this section;
             352          (j) any material violation of this section; and
             353          (k) any other unfair claim settlement practice established in rule or law.
             354          (11) (a) The provisions of this section shall apply to each contract between an insurer
             355      and a provider for the duration of the contract.
             356          (b) Notwithstanding Subsection (11)(a), this section may not be the basis for a bad
             357      faith insurance claim.
             358          (c) Nothing in Subsection (11)(a) may be construed as limiting the ability of an insurer
             359      and a provider from including provisions in their contract that are more stringent than the
             360      provisions of this section.
             361          (12) (a) Pursuant to Chapter 2, Part 2, Duties and Powers of Commissioner, and
             362      beginning January 1, 2002, the commissioner may conduct examinations to determine an
             363      insurer's level of compliance with this section and impose sanctions for each violation.
             364          (b) The commissioner may adopt rules only as necessary to implement this section.
             365          (c) The commissioner may establish rules to facilitate the exchange of electronic


             366      confirmations when claims-related information has been received.
             367          (d) Notwithstanding Subsection (12)(b), the commissioner may not adopt rules
             368      regarding the review process required by Subsection (9).
             369          (13) Nothing in this section may be construed as limiting the collection rights of a
             370      provider under Section 31A-26-301.5 .
             371          (14) Nothing in this section may be construed as limiting the ability of an insurer to:
             372          (a) recover any amount improperly paid to a provider or an insured:
             373          (i) in accordance with Section 31A-31-103 or any other provision of state or federal
             374      law;
             375          (ii) within [36] 24 months of the amount improperly paid for a coordination of
             376      benefits error; [or]
             377          (iii) within [18] 12 months of the amount improperly paid for any other reason not
             378      identified in Subsection (14)(a)(i) or (ii); or
             379          (iv) within 36 months of the amount improperly paid when the improper payment was
             380      due to a recovery by Medicaid, Medicare, the Children's Health Insurance Program, or any
             381      other state or federal health care program;
             382          (b) take any action against a provider that is permitted under the terms of the provider
             383      contract and not prohibited by this section;
             384          (c) report the provider to a state or federal agency with regulatory authority over the
             385      provider for unprofessional, unlawful, or fraudulent conduct; or
             386          (d) enter into a mutual agreement with a provider to resolve alleged violations of this
             387      section through mediation or binding arbitration.
             388          (15) A health care provider may only seek recovery from the insurer for an amount
             389      improperly paid by the insurer within the same time frames as Subsections (14)(a) and (b).
             390          Section 8. Section 63I-2-231 is amended to read:
             391           63I-2-231. Repeal dates, Title 31A.
             392          (1) Section 31A-23a-415 is repealed July 1, 2011.
             393          (2) Section 31A-22-619 is repealed July 1, 2010.


             394          Section 9. Effective date.
             395          This bill takes effect on May 12, 2009, except that Section 31A-22-619.5 takes effect
             396      on July 1, 2010.


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