SS#2 SCS HS HCS HB 328 & 88 -- MANAGED CARE REGULATION

This bill makes several changes to managed care regulations.
The bill requires employees of hospitals and ambulatory surgical
centers to be informed of their right to notify the Department
of Health of any information concerning alleged violations of
applicable federal or state laws or administrative rules
concerning patient care and safety or facility safety.

MANAGED CARE REGULATION

Health carriers are currently required to monitor the ability,
clinical and financial capacity, and legal authority of their
providers to furnish contracted benefits to enrollees.  The bill
removes the requirement to monitor financial capacity and allows
a health carrier to require a health care provider to obtain
audited financial statements if the provider received at least
10% of total medical expenditures made by the health carrier.

The bill establishes procedures for submission of claims, time
frames within which claims must be paid, and penalties for
failure to act on a claim in the required fashion; these
provisions will become effective on January 1, 2002.  Health
carriers must, within 10 days of receipt of a claim, either send
an acknowledgment of the date of receipt or send a status notice
requesting additional information.  Within 15 days of receipt of
additional information, the health carrier will pay the claim or
the undisputed portion of the claim or send notice of receipt
and claim status denying all or part of the claim, specifying
each reason for denial or making a final request for more
information.

If the health carrier has not paid the claimant by the 45th day
from the date of receipt of the claim, the health carrier will
pay the claimant 1% interest per month on the unpaid balance of
the claim.  If the health carrier fails to pay, deny, or suspend
the claim within 40 processing days and has received notice from
the health care provider by the 40th day that the claim has not
been paid, denied, or suspended, the health carrier must also
pay 50% of the claim (up to $20) per day for failure to pay the
claim or interest.  This penalty will not accrue beyond 30 days
unless the claimant provides a second written or electronic
notice on or after 30 days to the health carrier that the claim
remains unpaid and that penalties are due.  If a court finds
that the health carrier failed to meet the claim payment
requirements, the court will award reasonable attorney fees.  If
the court finds that the health care provider filed suit without
reasonable grounds to recover a claim, the court will award the
health carrier reasonable attorney fees.

The bill requires health carriers to allow nonparticipating
health care providers to file claims for up to one year from the
date of service and participating health care providers to file
claims for up to 6 months from the date of service, unless a
contract between the carrier and provider specifies otherwise.
Refunds or offsets against paid claims cannot be requested after
12 months, except in cases of fraud or misrepresentation by the
health care provider.  These provisions will become effective on
January 1, 2002.

Health carriers must issue confirmations of receipt of
electronically filed claims within one working day.  After
January 1, 2003, all claims for reimbursement for health care
services will be submitted in an electronic format consistent
with standards required by the federal Health Insurance
Portability and Accountability Act (HIPAA) of 1996.  All
electronically filed claims will be submitted in a uniform
format using standard medical code sets.  The Department of
Insurance will issue rules pertaining to the format and medical
code sets which are consistent and no more stringent than
simplification standards in HIPAA.  These provisions will become
effective on January 1, 2002.

The Department of Insurance is authorized to conduct
examinations to determine compliance with claim processing
requirements.  Compliance is defined as paying 95% of claims
received in a given calendar year within the bill's guidelines.
The director is authorized to levy administrative penalties up
to $25 per claim for the percentage of noncompliant claims, up
to $250,000 annually.  If the director determines that health
carriers are not paying interest due, he or she may order the
health carriers to pay the interest; and the director may assess
a monetary penalty of up to 25% of unpaid interest payments.
The department will develop a method for health care providers
to file complaints of violations of the bill's provisions, and
the director will consider any complaints when determining
whether to examine a health carrier's compliance.  The bill
specifies information to be included in complaints.  These
provisions will become effective January 1, 2002.

The bill requires health carriers, upon notification, to provide
an enrollee with the necessary forms, instructions, and an
additional 10 days to enroll a newly born child if an
application is required in order to continue coverage beyond the
31-day period after the child's birth.

OTHER PROVISIONS

No contract between providers and health carriers can require
the mandatory use of a hospitalist, which is defined in the bill.

A completed application for medical assistance benefits will be
approved or denied within 30 days from submission to the
Division of Family Services or its successor.  The bill requires
the Division of Medical Services to remit to a licensed nursing
home operator the Medicaid payment for a newly admitted Medicaid
resident in a licensed, long-term care facility within 45 days
of the admission date.

The bill also prohibits any insurer or its agent from requiring
an applicant or policyholder to disclose whether or not any
insurer has denied any of that person's claims.

Missouri House of Representatives
Last Updated November 26, 2001 at 11:43 am