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Sponsors: Reps. Cato, Wilkins, Altman, G.M. Smith, Sandifer, Simrill, Walker, Kirsh, Leach, Mahaffey, Owens and Chellis
Document Path: l:\council\bills\nbd\12008ac04.doc
Companion/Similar bill(s): 644
Introduced in the House on January 13, 2004
Currently residing in the House Committee on Labor, Commerce and Industry
Summary: Health Care Financial Recovery Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 12/17/2003 House Prefiled 12/17/2003 House Referred to Committee on Labor, Commerce and Industry 1/13/2004 House Introduced and read first time HJ-86 1/13/2004 House Referred to Committee on Labor, Commerce and Industry HJ-87 1/14/2004 House Member(s) request name added as sponsor: Owens 3/31/2004 House Member(s) request name added as sponsor: Chellis
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 19 TO TITLE 44 SO AS TO ENACT THE "SOUTH CAROLINA HEALTH CARE FINANCIAL RECOVERY ACT" WHICH REQUIRES AN INSURER PROVIDING PAYMENT OR REIMBURSEMENT FOR HEALTH CARE SERVICES TO ACCEPT CERTAIN STANDARDIZED CLAIM FORMS, TO PROVIDE THAT ELIGIBLE CLAIMS PROPERLY SUBMITTED ARE DUE AND PAYABLE BY THE INSURER WITHIN FORTY-FIVE DAYS OF THE DATE RECEIVED, TO REQUIRE AN INSURER TO NOTIFY A CLAIMANT WITHIN FIFTEEN DAYS IF THE CLAIM IS NOT ELIGIBLE AND TO STATE THE REASONS FOR FAILING TO PAY THE CLAIM, TO REQUIRE AN INSURER WHO PAYS OR REIMBURSES HEALTH CARE PROVIDERS THROUGH CAPITATION METHODS TO MAKE PAYMENTS WITHIN FORTY-FIVE DAYS OF THE PROVIDER RENDERING OR BEING RESPONSIBLE FOR RENDERING THE HEALTH CARE SERVICE, TO PROVIDE THAT A CLAIM NOT PROPERLY PAID OR DISPUTED IS OVERDUE AND ACCRUES INTEREST AT THE LEGAL RATE, TO PROVIDE THAT PROVIDERS AND INSUREDS WHO ARE NOT PAID WITHIN SIXTY DAYS FOR ELECTRONIC CLAIMS AND NINETY DAYS FOR PAPER CLAIMS MAY BE AWARDED COURT COSTS AND ATTORNEY FEES, AND TO PROVIDE THAT CERTAIN VIOLATIONS CONSTITUTE UNFAIR TRADE PRACTICES; AND TO AMEND SECTION 38-71-230, RELATING TO THE ADOPTION OF STANDARDIZED CLAIM FORMS AND THE ADDITION OF LOGOS TO CLAIM FORMS, SO AS TO MAKE TECHNICAL CORRECTIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 44 of the 1976 Code is amended by adding:
Section 44-19-10. This chapter may be cited as the 'South Carolina Health Care Financial Recovery Act'.
Section 44-19-20. The provisions of this chapter apply to all insurers, insurance companies, provider networks, provider organizations, managed care organizations, managed care plans, health maintenance organizations, third party payors, payment administrators, and other agents, contractors, and subcontractors in the administration of programs of health, hospital, dental, and medical insurance. The provisions of this chapter are remedial and must be liberally construed to effectuate their purpose and apply in addition to other remedies available at law or equity.
Section 44-19-30. As used in this chapter:
(1) 'Accident and health insurance' means insurance of human beings against death or personal injury by accident and insurance of human beings against sickness, ailment, and any type of physical disability resulting from accident or disease and prepaid dental service, including coverages required by the workers' compensation law of this State, under the terms of any hospital, medical, dental policy or certificate, major medical expense insurance, hospital or medical service plan, contract, or health maintenance organization subscriber contract which provides benefits consisting of medical care provided directly, through insurance or reimbursement, or otherwise, and including items and services paid for as medical care or health care services. 'Accident and health insurance' includes the entire contract between the insurer and the insured, including the policy, riders, endorsements, and the application, if attached.
(2) 'Clean claim' means an eligible electronic or paper claim for reimbursement submitted as required on a standardized HCFA 1500 or UB 92 claim form, or the successor of each or as either may be amended from time to time, or other forms or formats as may be required under the Health Insurance Portability and Accountability Act of 1996, for health care services rendered by an eligible provider to an insured person that has no material defect or impropriety including, but not limited to, any lack of required substantiating documentation or coding, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under the terms of the policy or the insurer's published filing requirements.
(3) 'Health care services' means services included in furnishing an individual medical or dental care or hospitalization, or services incident to the furnishing of medical or dental care or hospitalization, and other services to prevent, alleviate, cure, or heal human illness, injury, or physical disability.
(4) 'Health maintenance organization' means an entity, group, or person who undertakes to provide or arrange for basic health care services to enrollees in exchange for a fixed prepaid premium. (5) 'Insured' means an individual resident of this State who is eligible to receive benefits from an insurer.
(6) 'Insurer' includes an entity, corporation, fraternal organization, burial association, health maintenance organization, managed care organization, managed care plan, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. For purposes of this chapter, an insurer is an entity, person, or group providing health insurance or reimbursement for health care services whether for profit or otherwise, which is licensed to engage in the business of insurance in this State and which is subject to state insurance regulation, including multiple employer self-insured health plans licensed pursuant to Chapter 41 of Title 38.
(7) 'Managed care organization' means a licensed insurance company, a hospital or medical services plan contract, a health maintenance organization, or any other entity which is subject to state insurance regulation and which operates a managed care plan. (8) 'Managed care plan' means a plan operated by a managed care organization which provides for the financing and delivery of health care and treatment services to individuals enrolled in the plan through its own employed health care providers or contracting with selected specific providers that conform to explicit selection standards, or both. A managed care plan also customarily has a formal organizational structure for continual quality assurance, a certified utilization review program, dispute resolution, and financial incentives for individual enrollees to use the plan's participating providers and procedures.
(9) 'Participating provider agreement' means a contract, agreement, arrangement, or other instrument executed between a provider and insurer that requires or permits the provider to furnish or arrange for health care services to the insurer or the insurer's insured on a fee-for service, capitation, or other contractually specified payment method.
(10) 'Provider' means a physician, dentist, hospital, or other person properly licensed, certified, or permitted, where required, to furnish health care services.
Section 44-19-40. (A) All correspondence, both paper and electronic, between insurers, insureds, and providers regarding claims and matters of reimbursement must bear the date of its origination at the time it is transmitted or delivered. Correspondence not dated in accordance with this subsection has no legal effect or evidentiary value for the purposes of enforcing or defending against enforcement of this chapter.
(B) An insurer providing payment or reimbursement for health care services furnished by a provider in this State shall accept the standardized HCFA 1500 claim form, or its successor or as it may be amended from time to time. An insurer providing payment or reimbursement for health care services furnished by a hospital licensed in this State shall accept the standardized UB 92 claim form, or its successor or as it may be amended from time to time. The HCFA 1500 or the UB 92 claim form, or the successor of each or as either may be amended from time to time, may be altered only with a customized logo which must appear in the top portion of the claim form one inch vertical from the top.
Section 44-19-50. (A) A clean claim submitted electronically or on paper is due and payable within forty-five days from the date received by the insurer.
(B) An insurer shall, within fifteen calendar days after receipt of a claim that is not a clean claim, mail to the person claiming payment or benefits a letter or notice, dated as specified in Section 44-19-40, which disputes the claim and states the reasons the insurer may have for failing to pay the claim, either in whole or in part, and which also gives the person notified a written itemization of any documents or other information needed to process the claim or any portions of the claim which are being disputed. Failure to provide this notice is deemed a waiver as to any defect in the claim, and the claim must be processed, paid, and enforceable as if it were a clean claim.
(C) Any portion of a disputed claim that meets the criteria established for a clean claim must be paid in accordance with the applicable time limits as set forth in this section.
(D) A resubmitted claim or portion of a resubmitted claim that was not a clean claim when originally filed and was properly disputed by the insurer must be processed upon resubmission in strict accordance with the time limits in the same manner as specified in this section for original clean claims.
(E) An insurer that pays or reimburses health care providers though capitation methods shall make or transmit payments to providers within forty-five calendar days from the date the provider becomes legally responsible for furnishing health care services to the insured, or within forty-five calendar days from the date health care services are rendered, whichever is earlier.
(F) For purposes of this chapter, a claim, or portion of a claim, is reasonably contested where the insurer has not received the completed claim and all information necessary to determine payer liability for the claim, or has not been granted reasonable access to information concerning provider services. Information necessary to determine payer liability for the claim includes, but is not limited to, reports of investigations concerning fraud and misrepresentation, necessary consents, releases, and assignments, a claim on appeal, or other information necessary for the plan to determine the medical necessity for the health care services provided.
Section 44-19-60. (A) A clean claim not paid or properly disputed and capitation payments not paid within the time limits set forth in Section 44-19-50 are considered overdue and automatically accrue interest in the same manner and at the same rate set forth in Section 34-31-20 for money decrees and court judgments. Interest continues to accrue until payment in full is mailed or otherwise transmitted and becomes a just debt due and immediately payable upon accrual.
(B) Providers, insureds, and their agents or assignees may recover, in any court of competent jurisdiction, the amount of overdue claims plus reasonable court costs, attorney's fees, and additional compensatory damages as the court may award in its discretion for electronic claims or portions of electronic claims and paper claims or portions of paper claims that remain unpaid after ninety calendar days from receipt by the insurer or receipt of resubmission. Providers, insureds, and their agents or assignees may recover, in any court of competent jurisdiction, the amount of overdue capitation payments plus reasonable court costs, attorney's fees, and additional compensatory damages as the court may award for payments or portions of payments that remain unpaid after sixty calendar days from the date the provider becomes legally responsible for furnishing health care services to the insured, or sixty calendar days after the date health care services were rendered, whichever is earlier.
(C) The civil remedies in subsections (A) and (B) are in addition to any administrative and criminal penalties or any other remedies provided by law. The remedies in subsections (A) and (B) do not preclude administrative or criminal proceedings from taking place at any time. A violation by an insurer of any provision of this chapter, if committed without just cause and performed with such frequency as to indicate a general business practice, constitutes an improper claim practice punishable under the insurance laws of this State and is an unfair trade practice actionable under both Section 38-57-30 and Chapter 5 of Title 39. However, no portion of this section may be construed to prohibit parties to a provider contract from agreeing to submit their disputes to mediation or arbitration.
(D) It is unlawful to terminate or deselect a provider in retaliation for attempts to enforce this chapter or the insurance law of this State, and any single instance of retaliatory termination or deselection is an unfair trade practice actionable under both Section 38-57-30 and Chapter 5 of Title 39."
SECTION 2. Section 38-71-230(B) and (C) of the 1976 Code is amended to read:
"(B) An organization providing payment or reimbursement for diagnosis and treatment of a condition or a complaint by a licensed physician in South Carolina must accept the standardized HCFA 1500 claim form, or its successor or as it may be amended from time to time. An organization providing payment or reimbursement for diagnosis and treatment of a condition or a complaint by a hospital licensed in South Carolina shall accept the standardized UB
82 92 claim form, or its successor as it may be amended from time to time.
(C) The HCFA 1500 or the UB
82 92 claim form or the successor of each or as either may be amended from time to time may be altered only with a customized logo which must appear in the top portion of the claim form one inch vertical from the top."
SECTION 3. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 4. This act takes effect July 1, 2004.
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