Senate Bill sb0362c2
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Florida Senate - 2002 CS for CS for SB 362
By the Committees on Health, Aging and Long-Term Care; Banking
and Insurance; and Senators Saunders, Campbell, Peaden and
Cowin
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1 A bill to be entitled
2 An act relating to health insurance; amending
3 s. 408.7057, F.S.; redefining "managed care
4 organization"; including preferred provider
5 organization and health insurers in the claim
6 dispute resolution program; specifying
7 timeframes for submission of supporting
8 documentation necessary for dispute resolution;
9 providing consequences for failure to comply;
10 authorizing the agency to impose fines and
11 sanctions as part of final orders; amending s.
12 627.613, F.S.; revising time of payment of
13 claims provisions; providing requirements and
14 procedures for payment or denial of claims;
15 providing criteria and limitations; revising
16 rate of interest charged on overdue payments;
17 providing for electronic transmission of
18 claims; providing a penalty; providing for
19 attorney's fees and costs; prohibiting
20 contractual modification of provisions of law;
21 creating s. 627.6142, F.S.; defining the term
22 "authorization"; requiring health insurers to
23 provide lists of medical care and health care
24 services that require authorization;
25 prohibiting denial of certain claims; providing
26 procedural requirements for determination and
27 issuance of authorizations of services;
28 amending s. 627.638, F.S.; providing for direct
29 payment for services in treatment of a
30 psychological disorder or substance abuse;
31 amending s. 627.651, F.S.; conforming a
1
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1 cross-reference; amending s. 627.662, F.S.;
2 specifying application of certain additional
3 provisions to group, blanket, and franchise
4 health insurance; amending s. 641.185, F.S.;
5 entitling health maintenance organization
6 subscribers to prompt payment when appropriate;
7 amending s. 641.30, F.S.; conforming a
8 cross-reference; amending s. 641.3155, F.S.;
9 revising definitions; eliminating provisions
10 that require the Department of Insurance to
11 adopt rules consistent with federal
12 claim-filing standards; providing requirements
13 and procedures for payment of claims; requiring
14 payment within specified periods; revising rate
15 of interest charged on overdue payments;
16 requiring employers to provide notice of
17 changes in eligibility status within a
18 specified time period; providing a penalty;
19 entitling health maintenance organization
20 subscribers to prompt payment by the
21 organization for covered services by an
22 out-of-network provider; requiring payment
23 within specified periods; providing payment
24 procedures; providing penalties; amending s.
25 641.3156, F.S.; defining the term
26 "authorization"; requiring health maintenance
27 organizations to provide lists of medical care
28 and health care services that require
29 authorization; prohibiting denial of certain
30 claims; providing procedural requirements for
31 determination and issuance of authorizations of
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1 services; amending ss. 626.9541, 641.3903,
2 F.S.; providing that untruthfully notifying a
3 provider that a filed claim has not been
4 received constitutes an unfair claim-settlement
5 practice by insurers and health maintenance
6 organizations; providing penalties; providing
7 an effective date.
8
9 Be It Enacted by the Legislature of the State of Florida:
10
11 Section 1. Paragraph (a) of subsection (1), paragraph
12 (c) of subsection (2), and subsection (4) of section 408.7057,
13 Florida Statutes, are amended, and paragraphs (e) and (f) are
14 added to subsection (2) of that section, to read:
15 408.7057 Statewide provider and managed care
16 organization claim dispute resolution program.--
17 (1) As used in this section, the term:
18 (a) "Managed care organization" means a health
19 maintenance organization or a prepaid health clinic certified
20 under chapter 641, a prepaid health plan authorized under s.
21 409.912, or an exclusive provider organization certified under
22 s. 627.6472, a preferred provider organization under s.
23 627.6471, or a health insurer licensed pursuant to chapter
24 627.
25 (2)
26 (c) Contracts entered into or renewed on or after
27 October 1, 2000, may require exhaustion of an internal
28 dispute-resolution process as a prerequisite to the submission
29 of a claim by a provider, or health maintenance organization,
30 or health insurer to the resolution organization when the
31 dispute-resolution program becomes effective.
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1 (e) The resolution organization shall require the
2 managed care organization or provider submitting the claim
3 dispute to submit any supporting documentation to the
4 resolution organization within 15 days after receipt by the
5 managed care organization or provider of a request from the
6 resolution organization for documentation in support of the
7 claim dispute. Failure to submit the supporting documentation
8 within such time period shall result in the dismissal of the
9 submitted claim dispute.
10 (f) The resolution organization shall require the
11 respondent in the claim dispute to submit all documentation in
12 support of its position within 15 days after receiving a
13 request from the resolution organization for supporting
14 documentation. Failure to submit the supporting documentation
15 within such time period shall result in a default against the
16 managed care organization or provider. In the event of such a
17 default, the resolution organization shall issue its written
18 recommendation to the agency that a default be entered against
19 the defaulting entity. The written recommendation shall
20 include a recommendation to the agency that the defaulting
21 entity shall pay the entity submitting the claim dispute the
22 full amount of the claim dispute, plus all accrued interest.
23 (4) Within 30 days after receipt of the recommendation
24 of the resolution organization, the agency shall adopt the
25 recommendation as a final order. The agency may issue a final
26 order imposing fines or sanctions, including those contained
27 in s. 641.52. All fines collected under this subsection shall
28 be deposited into the Health Care Trust Fund.
29 Section 2. Section 627.613, Florida Statutes, is
30 amended to read:
31 627.613 Time of payment of claims.--
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1 (1) The contract shall include the following
2 provision:
3
4 "Time of Payment of Claims: After receiving written
5 proof of loss, the insurer will pay monthly all benefits then
6 due for (type of benefit). Benefits for any other loss covered
7 by this policy will be paid as soon as the insurer receives
8 proper written proof."
9
10 (2) Health insurers shall reimburse all claims or any
11 portion of any claim from an insured or an insured's
12 assignees, for payment under a health insurance policy, within
13 35 45 days after receipt of the claim by the health insurer.
14 If a claim or a portion of a claim is contested by the health
15 insurer, the insured or the insured's assignees shall be
16 notified, in writing, that the claim is contested or denied,
17 within 35 45 days after receipt of the claim by the health
18 insurer. The notice that a claim is contested shall identify
19 the contested portion of the claim, and the specific reasons
20 for contesting the claim, and written itemization of any
21 additional information or additional documents needed to
22 process the claim or the contested portion of the claim. A
23 health insurer may not make more than one request under this
24 subsection in connection with a claim unless the provider
25 fails to submit all of the requested information to process
26 the claim or if information submitted by the provider raises
27 new, additional issues not included in the original written
28 itemization, in which case the health insurer may provide the
29 health care provider with one additional opportunity to submit
30 the additional information needed to process the claim. In no
31 case may the health insurer request duplicate information.
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1 (3) A health insurer, upon receipt of the additional
2 information requested from the insured or the insured's
3 assignees shall pay or deny the contested claim or portion of
4 the contested claim, within 35 60 days.
5 (4) A health An insurer shall pay or deny any claim no
6 later than 120 days after receiving the claim. Failure to do
7 so creates an uncontestable obligation for the health insurer
8 to pay the claim to the provider.
9 (5) Payment of a claim is considered shall be treated
10 as being made on the date the payment was electronically
11 transferred or otherwise delivered a draft or other valid
12 instrument which is equivalent to payment was placed in the
13 United States mail in a properly addressed, postpaid envelope
14 or, if not so posted, on the date of delivery.
15 (6) All overdue payments shall bear simple interest at
16 the rate of 12 10 percent per year. Interest on a late payment
17 of a claim or uncontested portion of a claim begins to accrue
18 on the 36th day after the claim has been received. Interest
19 due is payable with the payment of the claim.
20 (7) Upon written notification by an insured, an
21 insurer shall investigate any claim of improper billing by a
22 physician, hospital, or other health care provider. The
23 insurer shall determine if the insured was properly billed for
24 only those procedures and services that the insured actually
25 received. If the insurer determines that the insured has been
26 improperly billed, the insurer shall notify the insured and
27 the provider of its findings and shall reduce the amount of
28 payment to the provider by the amount determined to be
29 improperly billed. If a reduction is made due to such
30 notification by the insured, the insurer shall pay to the
31 insured 20 percent of the amount of the reduction up to $500.
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1 (8) A provider claim for payment shall be considered
2 received by the health insurer, if the claim has been
3 electronically transmitted to the health insurer, when receipt
4 is verified electronically or, if the claim is mailed to the
5 address disclosed by the health insurer, on the date indicated
6 on the return receipt. A provider must wait 35 days following
7 receipt of a claim before submitting a duplicate claim.
8 (9)(a) If, as a result of retroactive review of
9 coverage decisions or payment levels, a health insurer
10 determines that it has made an overpayment to a provider for
11 services rendered to an insured, the health insurer must make
12 a claim for such overpayment. The health insurer may not
13 reduce payment to that provider for other services unless the
14 provider agrees to the reduction or fails to respond to the
15 health insurer's claim as required in this subsection.
16 (b) A provider shall pay a claim for an overpayment
17 made by a health insurer that the provider does not contest or
18 deny within 35 days after receipt of the claim that is mailed
19 or electronically transferred to the provider.
20 (c) A provider that denies or contests a health
21 insurer's claim for overpayment or any portion of a claim
22 shall notify the health insurer, in writing, within 35 days
23 after the provider receives the claim that the claim for
24 overpayment is contested or denied. The notice that the claim
25 for overpayment is contested or denied must identify the
26 contested portion of the claim and the specific reason for
27 contesting or denying the claim, and, if contested, must
28 include a request for additional information. The provider
29 shall pay or deny the claim for overpayment within 35 days
30 after receipt of the information.
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1 (d) Payment of a claim for overpayment is considered
2 made on the date payment was electronically transferred or
3 otherwise delivered to the health insurer or on the date that
4 the provider receives a payment from the health insurer that
5 reduces or deducts the overpayment. An overdue payment of a
6 claim bears simple interest at the rate of 12 percent per
7 year. Interest on an overdue payment of a claim for
8 overpayment or for any uncontested portion of a claim for
9 overpayment begins to accrue on the 36th day after the claim
10 for overpayment has been received.
11 (e) A provider shall pay or deny any claim for
12 overpayment no later than 120 days after receiving the claim.
13 Failure to do so creates an uncontestable obligation for the
14 provider to pay the claim to the health insurer.
15 (f) A health insurer's claim for overpayment shall be
16 considered received by a provider, if the claim has been
17 electronically transmitted to the provider, when receipt is
18 verified electronically, or, if the claim is mailed to the
19 address disclosed by the provider, on the date indicated on
20 the return receipt. A health insurer must wait 35 days
21 following the provider's receipt of a claim for overpayment
22 before submitting a duplicate claim.
23 (10) Any retroactive reductions of payments or demands
24 for refund of previous overpayments that are due to
25 retroactive review of coverage decisions or payment levels
26 must be reconciled to specific claims. Any retroactive demands
27 by providers for payment due to underpayments or nonpayments
28 for covered services must be reconciled to specific claims.
29 The look-back or audit-review period shall not exceed 2 years
30 after the date the claim was paid by the health insurer,
31 unless fraud in billing is involved.
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1 (11) A health insurer may not deny a claim because of
2 the insured's ineligibility if the provider can document
3 receipt of the insured's eligibility confirmation by the
4 health insurer prior to the date or time covered services were
5 provided. Any person who knowingly and willfully misinforms a
6 provider prior to receipt of services as to his or her
7 coverage eligibility commits insurance fraud, punishable as
8 provided in s. 817.50.
9 (12)(a) Without regard to any other remedy or relief
10 to which a person is entitled, or obligated to under contract,
11 anyone aggrieved by a violation of this section may bring an
12 action to obtain a declaratory judgment that an act or
13 practice violates this section and to enjoin a person who has
14 violated, is violating, or is otherwise likely to violate this
15 section.
16 (b) In any action brought by a person who has suffered
17 a loss as a result of a violation of this section, such person
18 may recover any amounts due the person under this section,
19 including accrued interest, plus attorney's fees and court
20 costs as provided in paragraph (c).
21 (c) In any civil litigation resulting from an act or
22 practice involving a violation of this section by a health
23 insurer in which the health insurer is found to have violated
24 this section, the provider, after judgment in the trial court
25 and after exhausting all appeals, if any, shall receive his or
26 her attorney's fees and costs from the insurer; however, such
27 fees shall not exceed three times the amount in controversy or
28 $5,000, whichever is greater. In any such civil litigation, if
29 the insurer is found not to have violated this section, the
30 insurer, after judgment in the trial court and exhaustion of
31 all appeals, if any, may receive its reasonable attorney's
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1 fees and costs from the provider on any claim or defense that
2 the court finds the provider knew or should have known was not
3 supported by the material facts necessary to establish the
4 claim or defense or would not be supported by the application
5 of then-existing law as to those material facts.
6 (d) The attorney for the prevailing party shall submit
7 a sworn affidavit of his or her time spent on the case and his
8 or her costs incurred for all the motions, hearings, and
9 appeals to the trial judge who presided over the civil case.
10 (e) Any award of attorney's fees or costs shall become
11 a part of the judgment and subject to execution as the law
12 allows.
13 (13) The provisions of this section may not be waived,
14 voided, or nullified by contracts.
15 Section 3. Section 627.6142, Florida Statutes, is
16 created to read:
17 627.6142 Treatment authorization; payment of claims.--
18 (1) For purposes of this section, "authorization"
19 includes any requirement of a provider to notify an insurer in
20 advance of providing a covered service, regardless of whether
21 the actual terminology used by the insurer includes, but is
22 not limited to, preauthorization, precertification,
23 notification, or any other similar terminology.
24 (2) A health insurer that requires authorization for
25 medical care or health care services shall provide to each
26 provider with whom the health insurer has contracted pursuant
27 to s. 627.6471 or s. 627.6472 a list of the medical care and
28 health care services that require authorization and the
29 authorization procedures used by the health insurer at the
30 time a contract becomes effective. A health insurer that
31 requires authorization for medical care or health care
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1 services shall provide to all other providers, not later than
2 10 working days after a request is made, a list of the medical
3 care and health care services that require authorization and
4 the authorization procedures established by the insurer. The
5 medical care or health care services that require
6 authorization and the authorization procedures used by the
7 insurer shall not be modified unless written notice is
8 provided at least 30 days in advance of any changes to all
9 affected insureds as well as to all contracted providers and
10 all other providers that had previously requested in writing a
11 list of medical care or health care services that require
12 authorization. An insurer that makes such list and procedures
13 accessible to providers and insureds electronically is in
14 compliance with this section so long as notice is provided at
15 least 30 days in advance of any changes in such list or
16 procedures to all insureds, contracted providers, and
17 noncontracted providers who had previously requested a list of
18 medical care or health care services that require
19 authorization.
20 (3) Any claim for a covered service that does not
21 require authorization that is ordered by a contracted
22 physician and entered on the medical record may not be denied.
23 If the health insurer determines that an overpayment has been
24 made, then a claim for overpayment should be submitted to the
25 provider pursuant to s. 627.613.
26 (4)(a) Any claim for treatment may not be denied if a
27 provider follows the health insurer's published authorization
28 procedures and receives authorization, unless the provider
29 submits information to the health insurer with the willful
30 intention to misinform the health insurer.
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1 (b) Upon receipt of a request from a provider for
2 authorization, the health insurer shall issue a written
3 determination indicating whether the service or services are
4 authorized. If the request for an authorization is for an
5 inpatient admission, the determination shall be transmitted to
6 the provider making the request in writing no later than 24
7 hours after the request is made by the provider. If the health
8 insurer denies the request for authorization, the health
9 insurer shall notify the insured at the same time the insurer
10 notifies the provider requesting the authorization. A health
11 insurer that fails to respond to a request for an
12 authorization pursuant to this paragraph within 24 hours is
13 considered to have authorized the inpatient admission and
14 payment shall not be denied.
15 (5) If the proposed medical care or health care
16 service or services involve an inpatient admission and the
17 health insurer requires an authorization as a condition of
18 payment, the health insurer shall review and issue a written
19 or electronic authorization for the total estimated length of
20 stay for the admission, based on the recommendation of the
21 patient's physician. If the proposed medical care or health
22 care service or services are to be provided to an insured who
23 is an inpatient in a health care facility and authorization is
24 required, the health insurer shall issue a written
25 determination indicating whether the proposed services are
26 authorized or denied no later than 4 hours after the request
27 is made by the provider. A health insurer who fails to respond
28 to such request within 4 hours is considered to have
29 authorized the requested medical care or health care service
30 and payment shall not be denied.
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1 (6) Authorization may not be required for emergency
2 services and care or emergency medical services as provided
3 pursuant to ss. 395.002, 395.1041, 401.45, and 401.252. Such
4 emergency services and care shall extend through any inpatient
5 admission required in order to provide for stabilization of an
6 emergency medical condition pursuant to state and federal law.
7 (7) The provisions of this section may not be waived,
8 voided, or nullified by contract.
9 Section 4. Subsection (3) is added to section 627.638,
10 Florida Statutes, to read:
11 627.638 Direct payment for hospital, medical
12 services.--
13 (3) Under any health insurance policy insuring against
14 loss or expense due to hospital confinement or to medical and
15 related services, payment of benefits shall be made directly
16 to any recognized hospital, doctor, or other person who
17 provided services for the treatment of a psychological
18 disorder or treatment for substance abuse, including drug and
19 alcohol abuse, when the treatment is in accordance with the
20 provisions of the policy and the insured specifically
21 authorizes direct payment of benefits. Payments shall be made
22 under this section, notwithstanding any contrary provisions in
23 the health insurance contract. This subsection applies to all
24 health insurance policies now or hereafter in force as of the
25 effective date of this act.
26 Section 5. Subsection (4) of section 627.651, Florida
27 Statutes, is amended to read:
28 627.651 Group contracts and plans of self-insurance
29 must meet group requirements.--
30 (4) This section does not apply to any plan which is
31 established or maintained by an individual employer in
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1 accordance with the Employee Retirement Income Security Act of
2 1974, Pub. L. No. 93-406, or to a multiple-employer welfare
3 arrangement as defined in s. 624.437(1), except that a
4 multiple-employer welfare arrangement shall comply with ss.
5 627.419, 627.657, 627.6575, 627.6578, 627.6579, 627.6612,
6 627.66121, 627.66122, 627.6615, 627.6616, and 627.662(8)(6).
7 This subsection does not allow an authorized insurer to issue
8 a group health insurance policy or certificate which does not
9 comply with this part.
10 Section 6. Section 627.662, Florida Statutes, is
11 amended to read:
12 627.662 Other provisions applicable.--The following
13 provisions apply to group health insurance, blanket health
14 insurance, and franchise health insurance:
15 (1) Section 627.569, relating to use of dividends,
16 refunds, rate reductions, commissions, and service fees.
17 (2) Section 627.602(1)(f) and (2), relating to
18 identification numbers and statement of deductible provisions.
19 (3) Section 627.635, relating to excess insurance.
20 (4) Section 627.638, relating to direct payment for
21 hospital or medical services.
22 (5) Section 627.640, relating to filing and
23 classification of rates.
24 (6) Section 627.6142, relating to treatment
25 authorizations.
26 (7)(6) Section 627.645(1), relating to denial of
27 claims.
28 (8)(7) Section 627.613, relating to time of payment of
29 claims.
30 (9)(8) Section 627.6471, relating to preferred
31 provider organizations.
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1 (10)(9) Section 627.6472, relating to exclusive
2 provider organizations.
3 (11)(10) Section 627.6473, relating to combined
4 preferred provider and exclusive provider policies.
5 (12)(11) Section 627.6474, relating to provider
6 contracts.
7 Section 7. Paragraph (e) of subsection (1) of section
8 641.185, Florida Statutes, is amended to read:
9 641.185 Health maintenance organization subscriber
10 protections.--
11 (1) With respect to the provisions of this part and
12 part III, the principles expressed in the following statements
13 shall serve as standards to be followed by the Department of
14 Insurance and the Agency for Health Care Administration in
15 exercising their powers and duties, in exercising
16 administrative discretion, in administrative interpretations
17 of the law, in enforcing its provisions, and in adopting
18 rules:
19 (e) A health maintenance organization subscriber
20 should receive timely, concise information regarding the
21 health maintenance organization's reimbursement to providers
22 and services pursuant to ss. 641.31 and 641.31015 and is
23 entitled to prompt payment from the organization when
24 appropriate pursuant to s. 641.3155.
25 Section 8. Subsection (1) of section 641.30, Florida
26 Statutes, is amended to read:
27 641.30 Construction and relationship to other laws.--
28 (1) Every health maintenance organization shall accept
29 the standard health claim form prescribed pursuant to s.
30 641.3155 627.647.
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1 Section 9. Section 641.3155, Florida Statutes, is
2 amended to read:
3 641.3155 Payment of claims.--
4 (1)(a) As used in this section, the term "clean claim"
5 for a noninstitutional provider means a paper or electronic
6 billing instrument that consists of the HCFA 1500 data set
7 that has all mandatory entries for a physician licensed under
8 chapter 458, chapter 459, chapter 460, chapter 461, or chapter
9 490 or other appropriate form for any other noninstitutional
10 provider, or its successor. For institutional providers,
11 "claim" means a paper or electronic billing instrument that
12 consists of the UB-92 data set or its successor that has all
13 mandatory entries. claim submitted on a HCFA 1500 form which
14 has no defect or impropriety, including lack of required
15 substantiating documentation for noncontracted providers and
16 suppliers, or particular circumstances requiring special
17 treatment which prevent timely payment from being made on the
18 claim. A claim may not be considered not clean solely because
19 a health maintenance organization refers the claim to a
20 medical specialist within the health maintenance organization
21 for examination. If additional substantiating documentation,
22 such as the medical record or encounter data, is required from
23 a source outside the health maintenance organization, the
24 claim is considered not clean. This definition of "clean
25 claim" is repealed on the effective date of rules adopted by
26 the department which define the term "clean claim."
27 (b) Absent a written definition that is agreed upon
28 through contract, the term "clean claim" for an institutional
29 claim is a properly and accurately completed paper or
30 electronic billing instrument that consists of the UB-92 data
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1 set or its successor with entries stated as mandatory by the
2 National Uniform Billing Committee.
3 (c) The department shall adopt rules to establish
4 claim forms consistent with federal claim-filing standards for
5 health maintenance organizations required by the federal
6 Health Care Financing Administration. The department may adopt
7 rules relating to coding standards consistent with Medicare
8 coding standards adopted by the federal Health Care Financing
9 Administration.
10 (2)(a) A health maintenance organization shall pay any
11 clean claim or any portion of a clean claim made by a contract
12 provider for services or goods provided under a contract with
13 the health maintenance organization or a clean claim made by a
14 noncontract provider which the organization does not contest
15 or deny within 35 days after receipt of the claim by the
16 health maintenance organization which is submitted mailed or
17 electronically transferred by the provider, either
18 electronically or using hand delivery, the United States mail,
19 or a reputable overnight delivery service.
20 (b) A health maintenance organization that denies or
21 contests a provider's claim or any portion of a claim shall
22 notify the provider, in writing, within 35 days after the
23 health maintenance organization receives the claim that the
24 claim is contested or denied. The notice that the claim is
25 denied or contested must identify the contested portion of the
26 claim and the specific reason for contesting or denying the
27 claim, and, if contested, must give the provider a written
28 itemization of any include a request for additional
29 information or additional documents needed to process the
30 claim or any portion of the claim that is not being paid. If
31 the provider submits additional information, the provider
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1 must, within 35 days after receipt of the request, mail or
2 electronically transfer the information to the health
3 maintenance organization. The health maintenance organization
4 shall pay or deny the claim or portion of the claim within 35
5 45 days after receipt of the information. A health maintenance
6 organization may not make more than one request under this
7 paragraph in connection with a claim, unless the provider
8 fails to submit all of the requested information to process
9 the claim or if information submitted by the provider raises
10 new, additional issues not included in the original written
11 itemization, in which case the health maintenance organization
12 may provide the health care provider with one additional
13 opportunity to submit the additional information needed to
14 process the claim. In no case may the health insurer request
15 duplicate information.
16 (c) A health maintenance organization shall not deny
17 or withhold payment on a claim because the insured has not
18 paid a required deductible or copayment.
19 (3) Payment of a claim is considered made on the date
20 the payment was received or electronically transferred or
21 otherwise delivered. An overdue payment of a claim bears
22 simple interest at the rate of 12 10 percent per year.
23 Interest on an overdue payment for a clean claim or for any
24 uncontested portion of a clean claim begins to accrue on the
25 36th day after the claim has been received. The interest is
26 payable with the payment of the claim.
27 (4) A health maintenance organization shall pay or
28 deny any claim no later than 120 days after receiving the
29 claim. Failure to do so creates an uncontestable obligation
30 for the health maintenance organization to pay the claim to
31 the provider.
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1 (5)(a) If, as a result of retroactive review of
2 coverage decisions or payment levels, a health maintenance
3 organization determines that it has made an overpayment to a
4 provider for services rendered to a subscriber, the
5 organization must make a claim for such overpayment. The
6 organization may not reduce payment to that provider for other
7 services unless the provider agrees to the reduction in
8 writing after receipt of the claim for overpayment from the
9 health maintenance organization or fails to respond to the
10 organization's claim as required in this subsection.
11 (b) A provider shall pay a claim for an overpayment
12 made by a health maintenance organization which the provider
13 does not contest or deny within 35 days after receipt of the
14 claim that is mailed or electronically transferred to the
15 provider.
16 (c) A provider that denies or contests an
17 organization's claim for overpayment or any portion of a claim
18 shall notify the organization, in writing, within 35 days
19 after the provider receives the claim that the claim for
20 overpayment is contested or denied. The notice that the claim
21 for overpayment is denied or contested must identify the
22 contested portion of the claim and the specific reason for
23 contesting or denying the claim, and, if contested, must
24 include a request for additional information. If the
25 organization submits additional information, the organization
26 must, within 35 days after receipt of the request, mail or
27 electronically transfer the information to the provider. The
28 provider shall pay or deny the claim for overpayment within 45
29 days after receipt of the information.
30 (d) Payment of a claim for overpayment is considered
31 made on the date payment was received or electronically
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1 transferred or otherwise delivered to the organization, or the
2 date that the provider receives a payment from the
3 organization that reduces or deducts the overpayment. An
4 overdue payment of a claim bears simple interest at the rate
5 of 12 10 percent a year. Interest on an overdue payment of a
6 claim for overpayment or for any uncontested portion of a
7 claim for overpayment begins to accrue on the 36th day after
8 the claim for overpayment has been received.
9 (e) A provider shall pay or deny any claim for
10 overpayment no later than 120 days after receiving the claim.
11 Failure to do so creates an uncontestable obligation for the
12 provider to pay the claim to the organization.
13 (6) Any retroactive reductions of payments or demands
14 for refund of previous overpayments which are due to
15 retroactive review-of-coverage decisions or payment levels
16 must be reconciled to specific claims unless the parties agree
17 to other reconciliation methods and terms. Any retroactive
18 demands by providers for payment due to underpayments or
19 nonpayments for covered services must be reconciled to
20 specific claims unless the parties agree to other
21 reconciliation methods and terms. The look-back or
22 audit-review period shall not exceed 2 years after the date
23 the claim was paid by the health maintenance organization,
24 unless fraud in billing is involved. The look-back period may
25 be specified by the terms of the contract.
26 (7)(a) A provider claim for payment shall be
27 considered received by the health maintenance organization, if
28 the claim has been electronically transmitted to the health
29 maintenance organization, when receipt is verified
30 electronically or, if the claim is mailed to the address
31 disclosed by the organization, on the date indicated on the
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1 return receipt, or on the date the delivery receipt is signed
2 by the health maintenance organization if the claim is hand
3 delivered. A provider must wait 45 days following receipt of a
4 claim before submitting a duplicate claim.
5 (b) A health maintenance organization claim for
6 overpayment shall be considered received by a provider, if the
7 claim has been electronically transmitted to the provider,
8 when receipt is verified electronically or, if the claim is
9 mailed to the address disclosed by the provider, on the date
10 indicated on the return receipt. An organization must wait 45
11 days following the provider's receipt of a claim for
12 overpayment before submitting a duplicate claim.
13 (c) This section does not preclude the health
14 maintenance organization and provider from agreeing to other
15 methods of submission transmission and receipt of claims.
16 (8) A provider, or the provider's designee, who bills
17 electronically is entitled to electronic acknowledgment of the
18 receipt of a claim within 72 hours.
19 (9) A health maintenance organization may not
20 retroactively deny a claim because of subscriber ineligibility
21 if the provider can document receipt of subscriber eligibility
22 confirmation by the organization prior to the date or time
23 covered services were provided. Every health maintenance
24 organization contract with an employer shall include a
25 provision that requires the employer to notify the health
26 maintenance organization of changes in eligibility status
27 within 30 days more than 1 year after the date of payment of
28 the clean claim. Any person who knowingly misinforms a
29 provider prior to the receipt of services as to his or her
30 coverage eligibility commits insurance fraud punishable as
31 provided in s. 817.50.
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1 (10) A health maintenance organization shall pay a
2 contracted primary care or admitting physician, pursuant to
3 such physician's contract, for providing inpatient services in
4 a contracted hospital to a subscriber, if such services are
5 determined by the organization to be medically necessary and
6 covered services under the organization's contract with the
7 contract holder.
8 (11)(a) Without regard to any other remedy or relief
9 to which a person is entitled, or obligated to under contract,
10 anyone aggrieved by a violation of this section may bring an
11 action to obtain a declaratory judgment that an act or
12 practice violates this section and to enjoin a person who has
13 violated, is violating, or is otherwise likely to violate this
14 section.
15 (b) In any action brought by a person who has suffered
16 a loss as a result of a violation of this section, such person
17 may recover any amounts due the person under this section,
18 including accrued interest, plus attorney's fees and court
19 costs as provided in paragraph (c).
20 (c) In any civil litigation resulting from an act or
21 practice involving a violation of this section by a health
22 maintenance organization in which the organization is found to
23 have violated this section, the provider, after judgment in
24 the trial court and after exhausting all appeals, if any,
25 shall receive his or her attorney's fees and costs from the
26 organization; however, such fees shall not exceed three times
27 the amount in controversy or $5,000, whichever is greater. In
28 any such civil litigation, if the organization is found not to
29 have violated this section, the organization, after judgment
30 in the trial court and exhaustion of all appeals, if any, may
31 receive its reasonable attorney's fees and costs from the
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1 provider on any claim or defense that the court finds the
2 provider knew or should have known was not supported by the
3 material facts necessary to establish the claim or defense or
4 would not be supported by the application of then-existing law
5 as to those material facts.
6 (d) The attorney for the prevailing party shall submit
7 a sworn affidavit of his or her time spent on the case and his
8 or her costs incurred for all the motions, hearings, and
9 appeals to the trial judge who presided over the civil case.
10 (e) Any award of attorney's fees or costs shall become
11 a part of the judgment and subject to execution as the law
12 allows.
13 (12) A health maintenance organization subscriber is
14 entitled to prompt payment from the organization whenever a
15 subscriber pays an out-of-network provider for a covered
16 service and then submits a claim to the organization. The
17 organization shall pay the claim within 35 days after receipt
18 or the organization shall advise the subscriber of what
19 additional information is required to adjudicate the claim.
20 After receipt of the additional information, the organization
21 shall pay the claim within 10 days. If the organization fails
22 to pay claims submitted by subscribers within the time periods
23 specified in this subsection, the organization shall pay the
24 subscriber interest on the unpaid claim at the rate of 12
25 percent per year. Failure to pay claims and interest, if
26 applicable, within the time periods specified in this
27 subsection is a violation of the insurance code and each
28 occurrence shall be considered a separate violation.
29 (13) The provisions of this section may not be waived,
30 voided, or nullified by contract.
31
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1 Section 10. Section 641.3156, Florida Statutes, is
2 amended to read:
3 641.3156 Treatment authorization; payment of claims.--
4 (1) For purposes of this section, "authorization"
5 includes any requirement of a provider to notify a health
6 maintenance organization in advance of providing a covered
7 service, regardless of whether the actual terminology used by
8 the organization includes, but is not limited to,
9 preauthorization, precertification, notification, or any other
10 similar terminology.
11 (2) A health maintenance organization that requires
12 authorization for medical care and health care services shall
13 provide to each contracted provider at the time a contract is
14 signed a list of the medical care and health care services
15 that require authorization and the authorization procedures
16 used by the organization. A health maintenance organization
17 that requires authorization for medical care and health care
18 services shall provide to each noncontracted provider, not
19 later than 10 working days after a request is made, a list of
20 the medical care and health care services that require
21 authorization and the authorization procedures used by the
22 organization. The list of medical care or health care services
23 that require authorization and the authorization procedures
24 used by the organization shall not be modified unless written
25 notice is provided at least 30 days in advance of any changes
26 to all subscribers, contracted providers, and noncontracted
27 providers who had previously requested a list of medical care
28 or health care services that require authorization. An
29 organization that makes such list and procedures accessible to
30 providers and subscribers electronically is in compliance with
31 this section so long as notice is provided at least 30 days in
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1 advance of any changes in such list or procedures to all
2 subscribers, contracted providers, and noncontracted providers
3 who had previously requested a list of medical care or health
4 care services that require authorization.
5 (3) Any claim for a covered service that does not
6 require an authorization that is ordered by a contracted
7 physician may not be denied. If an organization determines
8 that an overpayment has been made, then a claim for
9 overpayment should be submitted pursuant to s. 641.3155. A
10 health maintenance organization must pay any hospital-service
11 or referral-service claim for treatment for an eligible
12 subscriber which was authorized by a provider empowered by
13 contract with the health maintenance organization to authorize
14 or direct the patient's utilization of health care services
15 and which was also authorized in accordance with the health
16 maintenance organization's current and communicated
17 procedures, unless the provider provided information to the
18 health maintenance organization with the willful intention to
19 misinform the health maintenance organization.
20 (4)(a)(2) A claim for treatment may not be denied if a
21 provider follows the health maintenance organization's
22 authorization procedures and receives authorization for a
23 covered service for an eligible subscriber, unless the
24 provider provided information to the health maintenance
25 organization with the willful intention to misinform the
26 health maintenance organization.
27 (b) On receipt of a request from a provider for
28 authorization pursuant to this section, the health maintenance
29 organization shall issue a written determination indicating
30 whether the service or services are authorized. If the request
31 for an authorization is for an inpatient admission, the
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1 determination must be transmitted to the provider making the
2 request in writing no later than 24 hours after the request is
3 made by the provider. If the organization denies the request
4 for an authorization, the health maintenance organization must
5 notify the subscriber at the same time when notifying the
6 provider requesting the authorization. A health maintenance
7 organization that fails to respond to a request for an
8 authorization from a provider pursuant to this paragraph is
9 considered to have authorized the inpatient admission within
10 24 hours and payment may not be denied.
11 (5) If the proposed medical care or health care
12 service or services involve an inpatient admission and the
13 health maintenance organization requires authorization as a
14 condition of payment, the health maintenance organization
15 shall issue a written or electronic authorization for the
16 total estimated length of stay for the admission. If the
17 proposed medical care or health care service or services are
18 to be provided to a patient who is an inpatient in a health
19 care facility at the time the services are proposed and the
20 medical care or health care service requires an authorization,
21 the health maintenance organization shall issue a
22 determination indicating whether the proposed services are
23 authorized no later than 4 hours after the request by the
24 health care provider. A health maintenance organization that
25 fails to respond to such request within 4 hours is considered
26 to have authorized the requested medical care or health care
27 service and payment may not be denied.
28 (6)(3) Emergency services are subject to the
29 provisions of s. 641.513 and are not subject to the provisions
30 of this section. Such emergency services and care shall extend
31 through any inpatient admission required in order to provide
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1 for stabilization of an emergency medical condition pursuant
2 to state and federal law.
3 (7) The provisions of this section may not be waived,
4 voided, or nullified by contract.
5 Section 11. Paragraph (i) of subsection (1) of section
6 626.9541, Florida Statutes, is amended to read:
7 626.9541 Unfair methods of competition and unfair or
8 deceptive acts or practices defined.--
9 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR
10 DECEPTIVE ACTS.--The following are defined as unfair methods
11 of competition and unfair or deceptive acts or practices:
12 (i) Unfair claim settlement practices.--
13 1. Attempting to settle claims on the basis of an
14 application, when serving as a binder or intended to become a
15 part of the policy, or any other material document which was
16 altered without notice to, or knowledge or consent of, the
17 insured;
18 2. A material misrepresentation made to an insured or
19 any other person having an interest in the proceeds payable
20 under such contract or policy, for the purpose and with the
21 intent of effecting settlement of such claims, loss, or damage
22 under such contract or policy on less favorable terms than
23 those provided in, and contemplated by, such contract or
24 policy; or
25 3. Committing or performing with such frequency as to
26 indicate a general business practice any of the following:
27 a. Failing to adopt and implement standards for the
28 proper investigation of claims;
29 b. Misrepresenting pertinent facts or insurance policy
30 provisions relating to coverages at issue;
31
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1 c. Failing to acknowledge and act promptly upon
2 communications with respect to claims;
3 d. Denying claims without conducting reasonable
4 investigations based upon available information;
5 e. Failing to affirm or deny full or partial coverage
6 of claims, and, as to partial coverage, the dollar amount or
7 extent of coverage, or failing to provide a written statement
8 that the claim is being investigated, upon the written request
9 of the insured within 30 days after proof-of-loss statements
10 have been completed;
11 f. Failing to promptly provide a reasonable
12 explanation in writing to the insured of the basis in the
13 insurance policy, in relation to the facts or applicable law,
14 for denial of a claim or for the offer of a compromise
15 settlement;
16 g. Failing to promptly notify the insured of any
17 additional information necessary for the processing of a
18 claim; or
19 h. Failing to clearly explain the nature of the
20 requested information and the reasons why such information is
21 necessary; or.
22 (i) Notifying providers that claims filed under s.
23 627.613 have not been received when, in fact, the claims have
24 been received.
25 Section 12. Subsection (5) of section 641.3903,
26 Florida Statutes, is amended to read:
27 641.3903 Unfair methods of competition and unfair or
28 deceptive acts or practices defined.--The following are
29 defined as unfair methods of competition and unfair or
30 deceptive acts or practices:
31 (5) UNFAIR CLAIM SETTLEMENT PRACTICES.--
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1 (a) Attempting to settle claims on the basis of an
2 application or any other material document which was altered
3 without notice to, or knowledge or consent of, the subscriber
4 or group of subscribers to a health maintenance organization;
5 (b) Making a material misrepresentation to the
6 subscriber for the purpose and with the intent of effecting
7 settlement of claims, loss, or damage under a health
8 maintenance contract on less favorable terms than those
9 provided in, and contemplated by, the contract; or
10 (c) Committing or performing with such frequency as to
11 indicate a general business practice any of the following:
12 1. Failing to adopt and implement standards for the
13 proper investigation of claims;
14 2. Misrepresenting pertinent facts or contract
15 provisions relating to coverage at issue;
16 3. Failing to acknowledge and act promptly upon
17 communications with respect to claims;
18 4. Denying of claims without conducting reasonable
19 investigations based upon available information;
20 5. Failing to affirm or deny coverage of claims upon
21 written request of the subscriber within a reasonable time not
22 to exceed 30 days after a claim or proof-of-loss statements
23 have been completed and documents pertinent to the claim have
24 been requested in a timely manner and received by the health
25 maintenance organization;
26 6. Failing to promptly provide a reasonable
27 explanation in writing to the subscriber of the basis in the
28 health maintenance contract in relation to the facts or
29 applicable law for denial of a claim or for the offer of a
30 compromise settlement;
31
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1 7. Failing to provide, upon written request of a
2 subscriber, itemized statements verifying that services and
3 supplies were furnished, where such statement is necessary for
4 the submission of other insurance claims covered by individual
5 specified disease or limited benefit policies, provided that
6 the organization may receive from the subscriber a reasonable
7 administrative charge for the cost of preparing such
8 statement;
9 8. Failing to provide any subscriber with services,
10 care, or treatment contracted for pursuant to any health
11 maintenance contract without a reasonable basis to believe
12 that a legitimate defense exists for not providing such
13 services, care, or treatment. To the extent that a national
14 disaster, war, riot, civil insurrection, epidemic, or any
15 other emergency or similar event not within the control of the
16 health maintenance organization results in the inability of
17 the facilities, personnel, or financial resources of the
18 health maintenance organization to provide or arrange for
19 provision of a health service in accordance with requirements
20 of this part, the health maintenance organization is required
21 only to make a good faith effort to provide or arrange for
22 provision of the service, taking into account the impact of
23 the event. For the purposes of this paragraph, an event is
24 not within the control of the health maintenance organization
25 if the health maintenance organization cannot exercise
26 influence or dominion over its occurrence; or
27 9. Systematic downcoding with the intent to deny
28 reimbursement otherwise due; or.
29 10. Notifying providers that claims filed under s.
30 641.3155 have not been received when, in fact, the claims have
31 been received.
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1 Section 13. This act shall take effect October 1,
2 2002.
3
4 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
5 CS/SB 362
6
7 The Committee Substitute for CS/SB 362 differs from CS/SB 362
in the following ways.
8
It sets a maximum amount for attorney's fees and court costs
9 that a provider may receive from a health insurer or health
maintenance organization that violates the prompt pay
10 provisions of the bill. The maximum amount will be three times
the amount in controversy or $5,000 which ever is greater.
11
If a health insurer or health maintenance organization is
12 found not to have violated the prompt pay provisions of the
law, it may receive attorney's fees and costs from any claim
13 or defense that the court finds the provider should have known
was not supported by the material facts.
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