REPRESENTATIVES Stapleton, G. Smith, Britton, Cirelli, DePiero, Evans, Faber, Fessler, Goodman, Husted, Jolivette, Krupinski, Latell, Metelsky, Olman, Salerno, Schaffer, Sullivan, Wolpert, Woodard, Hoops, Schmidt, Grendell, Clancy, Flowers, Carey, Damschroder, D. Miller, Manning, Lendrum, Allen, Ogg, Womer Benjamin, Sulzer, Hollister, Schneider, Barnes, Perry, Barrett, Seaver, Jones, Rhine, Coates, Latta, Carmichael, Niehaus, Hartnett, Hagan, Willamowski, White, Core, Reinhard, Young, Schuring, Peterson, Otterman, Aslanides, Collier, Gilb, Widowfield, DeWine, Roman, Buehrer, Seitz, Driehaus, Distel, Jerse, Fedor, Webster, Boccieri, Beatty, Hughes, Sferra, Setzer, Kearns

To amend sections 1349.01, 1739.05, 1739.14, 3901.38,

1

3902.11, 3902.21, 3902.22, 3902.23, and 3924.21, to

2

enact new section 3901.381 and sections 3901.382,

3

3901.383, 3901.384, 3901.385, 3901.386, 3901.387,

4

3901.388, 3901.389, 3901.3810, 3901.3811,

5

3901.3812, 3901.3813, and 3901.3814 and to repeal

6

section 3901.381 of the Revised Code to revise the

7

"prompt pay" requirements applicable to insurance

8

companies, health insuring corporations, and other

9

third-party payers of health care services.

10

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That sections 1349.01, 1739.05, 1739.14, 3901.38,	11
3902.11, 3902.21, 3902.22, 3902.23, and 3924.21 be amended and new	12
section 3901.381 and sections 3901.382, 3901.383, 3901.384,	13
3901.385, 3901.386, 3901.387, 3901.388, 3901.389, 3901.3810,	14
3901.3811, 3901.3812, 3901.3813, and 3901.3814 of the Revised	15
Code be enacted to read as follows:	16

Sec. 1349.01.  (A) As used in this section:

17

(1) "Consumer reporting agency" has the same meaning as in	18
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 1681a.	19

(2) "Court" means the division of the court of common pleas	20
having jurisdiction over actions for divorce, annulment,	21
dissolution of marriage, legal separation, child support, or	22
spousal support.	23

(3) "Health insurance coverage" means hospital, surgical, or	24
medical expense coverage provided under any health insurance or	25
health care policy, contract, or plan or any other health benefits	26
arrangement.	27

(4) "Provider" has the same meaning as in section 3901.38	28
3902.11 of the Revised Code.	29

(B) If, pursuant to an action for divorce, annulment,	30
dissolution of marriage, or legal separation, the court determines	31
that a party who is a resident of this state is responsible for	32
obtaining health insurance coverage for the party's former spouse	33
or children or if, pursuant to a child support order issued in	34
accordance with sections 3119.30 to 3119.58 of the Revised Code,	35
the court requires a party who is a resident of this state to	36
obtain health insurance coverage for the children who are the	37
subject of the child support order, and the party fails to obtain	38
such coverage, no provider or collection agency shall collect or	39
attempt to collect from the former spouse, children, or person	40
responsible for the children, any reimbursement of any hospital,	41
surgical, or medical expenses incurred by the provider for	42
services rendered to the former spouse or children, which expenses	43
would have been covered but for the failure of the party to obtain	44
the coverage, if the former spouse, any of the children, or a	45
person responsible for the children, provides the following to the	46
provider or collection agency:	47

(1) A copy of the court order requiring the party to obtain	48
health insurance coverage for the former spouse or children.	49

(2) Reasonable assistance in locating the party and	50
obtaining information about the party's health insurance coverage.	51

(C) If the requirements of divisions (B)(1) and (2) of this	52
section are not met, the provider or collection agency may collect	53
the hospital, surgical, or medical expenses both from the former	54
spouse or person responsible for the children and from the party	55
who failed to obtain the coverage. If the requirements of	56
divisions (B)(1) and (2) are met, the provider or collection	57
agency may collect or attempt to collect the expenses only from	58
the party.	59

A party required to obtain health insurance coverage for a	60
former spouse or children who fails to obtain the coverage is	61
liable to the provider for the hospital, surgical, or medical	62
expenses incurred by the provider as a result of the failure to	63
obtain the coverage. This section does not prohibit a former	64
spouse or person responsible for the children from initiating an	65
action to enforce the order requiring the party to obtain health	66
insurance for the former spouse or children or to collect any	67
amounts the former spouse or person responsible for the children	68
pays for hospital, surgical, or medical expenses for which the	69
party is responsible under the order requiring the party to obtain	70
health insurance for the former spouse or children.	71

(D)(1) If the requirements of divisions (B)(1) and (2) of	72
this section are met, both of the following restrictions shall	73
apply:	74

(a) No collection agency or provider of hospital, surgical,	75
or medical services may report to a consumer reporting agency, for	76
inclusion in the credit file or credit report of the former spouse	77
or person responsible for the children, any information relative	78
to the nonpayment of expenses for the services incurred by the	79
provider, if the nonpayment is the result of the failure of the	80
party responsible for obtaining health insurance coverage to	81
obtain health insurance coverage.	82

(b) No consumer reporting agency shall include in the credit	83
file or credit report of the former spouse or person responsible	84
for the children, any information relative to the nonpayment of	85
any hospital, surgical, or medical expenses incurred by a provider	86
as a result of the party's failure to obtain the coverage.	87

(2) If the requirements of divisions (B)(1) and (2) of this	88
section are not met, both of the following provisions shall apply:	89

(a) A provider of hospital, surgical, or medical services,	90
or a collection agency, may report to a consumer reporting agency,	91
for inclusion in the credit file or credit report of the former	92
spouse or person responsible for the children, any information	93
relative to the nonpayment of expenses for the services incurred	94
by the provider, if the nonpayment is the result of the failure of	95
the party responsible for obtaining health insurance coverage to	96
obtain such coverage.	97

(b) A consumer reporting agency may include in the credit	98
file or credit report of the former spouse or person responsible	99
for the children, any information relative to the nonpayment of	100
any hospital, surgical, or medical expenses incurred by the	101
provider, if the nonpayment is the result of the failure of the	102
party responsible for obtaining health insurance coverage to	103
obtain such coverage.	104

(3)(a) A provider of hospital, surgical, or medical	105
services, or a collection agency, may report to a consumer	106
reporting agency, for inclusion in the credit file or credit	107
report of that party, any information relative to the nonpayment	108
of expenses for the services incurred by the provider, if the	109
nonpayment is the result of the failure of the party responsible	110
for obtaining health insurance coverage to obtain such coverage.	111

(b) A consumer reporting agency may include in the credit	112
file or credit report of the party responsible for obtaining	113
health insurance coverage, any information relative to the	114
nonpayment of any hospital, surgical, or medical expenses incurred	115
by a provider, if the nonpayment is the result of the failure of	116
that party to obtain health insurance coverage.	117

(4) If any information described in division (D)(2) of this	118
section is placed in the credit file or credit report of the	119
former spouse or person responsible for the children, the consumer	120
reporting agency shall remove the information from the credit file	121
and credit report if the former spouse or person responsible for	122
the children provides the agency with the information required in	123
divisions (B)(1) and (2) of this section. If the agency fails to	124
remove the information from the credit file or credit report	125
pursuant to the terms of the "Fair Credit Reporting Act," 84 Stat.	126
1128, 15 U.S.C. 1681a, within a reasonable time after receiving	127
the information required by divisions (B)(1) and (2) of this	128
section, the former spouse may initiate an action to require the	129
agency to remove the information.	130

If any information described in division (D)(3) of this	131
section is placed in the party's credit file or credit report, the	132
party has the burden of proving that the party is not responsible	133
for obtaining the health insurance coverage or, if responsible,	134
that the expenses incurred are not covered expenses. If the party	135
meets that burden, the agency shall remove the information from	136
the party's credit file and credit report immediately. If the	137
agency fails to remove the information from the credit file or	138
credit report immediately after the party meets the burden, the	139
party may initiate an action to require the agency to remove the	140
information.	141

Sec. 1739.05.  (A) A multiple employer welfare arrangement	142
that is created pursuant to sections 1739.01 to 1739.22 of the	143
Revised Code and that operates a group self-insurance program may	144
be established only if any of the following applies:	145

(1) The arrangement has and maintains a minimum enrollment	146
of three hundred employees of two or more employers.	147

(2) The arrangement has and maintains a minimum enrollment	148
of three hundred self-employed individuals.	149

(3) The arrangement has and maintains a minimum enrollment	150
of three hundred employees or self-employed individuals in any	151
combination of divisions (A)(1) and (2) of this section.	152

(B) A multiple employer welfare arrangement that is created	153
pursuant to sections 1739.01 to 1739.22 of the Revised Code and	154
that operates a group self-insurance program shall comply with all	155
laws applicable to self-funded programs in this state, including	156
sections 3901.04, 3901.041, 3901.19 to 3901.26, 3901.38, 3901.381	157
to 3901.3814, 3901.40, 3901.45, 3901.46, 3902.01 to 3902.14,	158
3923.30, 3923.301, 3923.38, 3923.581, 3923.63, 3924.031, 3924.032,	159
and 3924.27 of the Revised Code.	160

(C) A multiple employer welfare arrangement created pursuant	161
to sections 1739.01 to 1739.22 of the Revised Code shall solicit	162
enrollments only through agents or solicitors licensed pursuant to	163
Chapter 3905. of the Revised Code to sell or solicit sickness and	164
accident insurance.	165

(D) A multiple employer welfare arrangement created pursuant	166
to sections 1739.01 to 1739.22 of the Revised Code shall provide	167
benefits only to individuals who are members, employees of	168
members, or the dependents of members or employees, or are	169
eligible for continuation of coverage under section 1751.53 or	170
3923.38 of the Revised Code or under Title X of the "Consolidated	171
Omnibus Budget Reconciliation Act of 1985," 100 Stat. 227, 29	172
U.S.C.A. 1161, as amended.	173

Sec. 1739.14.  (A) Each member shall pay to the multiple	174
employer welfare arrangement operating a group self-insurance	175
program a premium equal to its share of the arrangement's	176
projected obligation for employee welfare benefit liability,	177
administrative expenses, and other costs incurred by the	178
arrangement as determined by the board of the arrangement or by a	179
third-party administrator and approved by the board of the	180
arrangement. This amount may be adjusted by the board according	181
to the claims experience of each participating member in	182
accordance with criteria set forth in the articles or bylaws of	183
the arrangement.	184

(B) Each member shall pay a premium for each year at the	185
beginning of each fiscal year unless otherwise provided for under	186
the agreement.	187

(C) A multiple employer welfare arrangement operating a	188
group self-insurance program shall make payments, or arrange to	189
have payments made, to the employees of the members out of the	190
fund for employee welfare benefits in accordance with section	191
3901.38 and sections 3901.381 to 3901.3814 of the Revised Code.	192

(D) A board of the multiple employer welfare arrangement	193
operating a group self-insurance program shall determine whether	194
any dividends or assessments shall be paid to or levied against	195
participating members.	196

Sec. 3901.38. (A) As used in this section and section	197
sections 3901.381 to 3901.3814 of the Revised Code:	198

(1)(A) "Beneficiary" means any policyholder, subscriber,	199
member, employee, or other person who is eligible for benefits	200
under a benefits contract.	201

(2)(B) "Benefits contract" means a sickness and accident	202
insurance policy providing hospital, surgical, or medical expense	203
coverage, or a health insuring corporation contract or other	204
policy or agreement under which a third-party payer agrees to	205
reimburse for covered health care or dental services rendered to	206
beneficiaries, up to the limits and exclusions contained in the	207
benefits contract.	208

(3) "Completed claim" means a proof of loss or a claim for	209
payment for health care services which has been submitted to the	210
appropriate claims processing office of the third-party payer	211
accompanied by sufficient documentation for the third-party payer	212
to determine proof of loss and reasonably required by the	213
third-party payer to accept or reject the claim.	214

(4)(C) "Hospital" has the same meaning set forthas in	215
section 3727.01 of the Revised Code.	216

(5) "Proof of loss" means a claim for payment for health	217
care services which has been submitted to the appropriate claims	218
processing office of the third-party payer accompanied by	219
sufficient documentation for the third-party payer to determine	220
benefits payable under the benefits contract and reasonably	221
required by the third-party payer to accept or reject the claim.	222

(6)(D) "Provider" means a hospital, nursing home, physician,	223
podiatrist, dentist, pharmacist, chiropractor, or other licensed	224
health care provider entitled to reimbursement by a third-party	225
payer for services rendered to a beneficiary under a benefits	226
contract.	227

(7)(E) "Reimburse" means indemnify, make payment, or	228
otherwise accept responsibility for payment for health care	229
services rendered to a beneficiary, or arrange for the provision	230
of health care services to a beneficiary.	231

(8)(F) "Third-party payer" means any of the following:

232

(a)(1) An insurance company;

233

(b)(2) A health insuring corporation;

234

(c)(3) A labor organization;

235

(d)(4) An employer;

236

(e)(5) An intermediary organization, as defined in section	237
1751.01 of the Revised Code, that is not a health delivery network	238
contracting solely with self-insured employers;	239

(f)(6) An administrator subject to sections 3959.01 to	240
3959.16 of the Revised Code;	241

(g)(7) A health delivery network, as defined in section	242
1751.01 of the Revised Code;	243

(h)(8) Any other person that is obligated pursuant to a	244
benefits contract to reimburse for covered health care services	245
rendered to beneficiaries under such contract.	246

(B)(1) Except as provided in division (B)(2) of this section	247
and in section 3901.381 of the Revised Code, within twenty-four	248
days of the receipt of a completed claim from a provider or a	249
beneficiary for reimbursement for health care services rendered by	250
the provider to a beneficiary, a third-party payer shall, in	251
accordance with division (D) of this section, make payment of any	252
amount due on such claim.	253

(2) A third-party payer and a provider may, in negotiating a	254
reimbursement contract, agree to any time period by which a	255
third-party payer shall, subject to division (D) of this section,	256
make payment of any amount due on a completed claim. Nothing in	257
this division shall be construed as limiting in any manner the	258
application of the requirements of this section to any benefits or	259
reimbursement contract.	260

(3) Any provider or beneficiary aggrieved with respect to	261
any act of a third-party payer that such provider or beneficiary	262
believes to be a violation of division (B)(1) or (2) of this	263
section may file a written complaint with the superintendent of	264
insurance. If a series of such complaints is received by the	265
superintendent with respect to a particular third-party payer and	266
if, after investigation, the superintendent finds that such	267
third-party payer has engaged in a series of such violations	268
which, taken together, constitute a consistent pattern or a	269
practice of such third-party payer to violate division (B)(1) or	270
(2) of this section, the superintendent shall issue an order	271
requiring such third-party payer to cease and desist from engaging	272
in such violations and to pay a late payment penalty as specified	273
in divisions (B)(4) and (5) of this section with respect to the	274
claims the superintendent finds were not timely paid. In the	275
order, the superintendent shall specify the reasons for the	276
superintendent's finding and order and state that a hearing	277
conducted pursuant to Chapter 119. of the Revised Code shall be	278
held within fifteen days after requested in writing by the	279
third-party payer. The provisions of division (B)(3) of this	280
section are in addition to, and not in lieu of, such other	281
remedies as providers and beneficiaries may otherwise have by law.	282

(4)(a) The late payment penalty shall be computed based upon	283
the number of days that have elapsed between the date payment is	284
due in accordance with division (B)(1) or (2) of this section and	285
the date payment is actually sent.	286

(b) The interest rate for determining the amount of the late	287
payment penalty shall be the rate agreed to by the provider and	288
the third-party payer or the rate specified by and determined in	289
accordance with division (A) of section 1343.01 of the Revised	290
Code.	291

(5) A provider and a third-party payer may enter into a	292
contractual agreement in which the timing of payments by the	293
third-party payer is not directly related to the receipt of a	294
completed claim. Such contractual arrangement may include	295
periodic interim payment arrangements, capitation payment	296
arrangements, or other payment arrangements acceptable to the	297
provider and the third-party payer. Except as agreed to under	298
such contract, this section does not apply to such payment	299
arrangements.	300

(6) Any late payment penalty due and payable by a	301
third-party payer in accordance with this section shall not be	302
used to reduce benefits or payments otherwise payable under a	303
benefits contract.	304

(C) No third-party payer shall refuse to process or pay	305
within the time period required under division (B)(1) or (2) of	306
this section a completed claim submitted by a provider on the	307
ground the beneficiary has not been discharged from the hospital	308
or the treatment has not been completed, if the submitted claim	309
covers services actually rendered and charges actually incurred	310
over at least a thirty-day period.	311

(D)(1) Notwithstanding section 1751.13 or division (I)(2) of	312
section 3923.04 of the Revised Code, a reimbursement contract	313
entered into or renewed on or after June 29, 1988, between a	314
third-party payer and a hospital shall provide that reimbursement	315
for any service provided by a hospital pursuant to a reimbursement	316
contract and covered under a benefits contract shall be made	317
directly to the hospital.	318

(2) If the third-party payer and the hospital have not	319
entered into a contract regarding the provision and reimbursement	320
for covered services, the third-party payer shall accept and honor	321
a completed and validly executed assignment of benefits with a	322
hospital by a beneficiary, except when the third-party payer has	323
notified the hospital in writing of the conditions under which the	324
third-party payer will not accept and honor an assignment of	325
benefits. Such notice shall be made annually.	326

(3) A third-party payer may not refuse to accept and honor a	327
validly executed assignment of benefits with a hospital pursuant	328
to division (D)(2) of this section for medically necessary	329
hospital services provided on an emergency basis.	330

(E) A series of violations which taken together, constitute	331
a consistent pattern or a practice of violation of any of the	332
provisions of this section is an unfair and deceptive act pursuant	333
to sections 3901.19 to 3901.23 of the Revised Code and is subject	334
to proceedings pursuant to those sections.	335

Sec. 3901.381. (A) Except as provided in sections 3901.382,	336
3901.383, 3901.384, and 3901.386 of the Revised Code, a	337
third-party payer shall process a claim for payment for health	338
care services rendered by a provider to a beneficiary in	339
accordance with this section.	340

(B)(1) Unless division (B)(2) or (3) of this section	341
applies, when a third-party payer receives from a provider or	342
beneficiary a claim on the standard claim form prescribed in rules	343
adopted by the superintendent of insurance under section 3902.22	344
of the Revised Code, the third-party payer shall pay or deny the	345
claim not later than thirty days after receipt of the claim. When	346
a third-party payer denies a claim, the third-party payer shall	347
notify the provider and the beneficiary. The notice shall state,	348
with specificity, why the third-party payer denied the claim.	349

(2)(a) Unless division (B)(3) of this section applies, when	350
a provider or beneficiary has used the standard claim form, but	351
the third-party payer determines that reasonable supporting	352
documentation is needed to establish the third-party payer's	353
responsibility to make payment, the third-party payer shall pay or	354
deny the claim not later than forty-five days after receipt of the	355
claim. Supporting documentation includes the verification of	356
employer and beneficiary coverage under a benefits contract,	357
confirmation of premium payment, medical information regarding the	358
beneficiary and the services provided, information on the	359
responsibility of another third-party payer to make payment or	360
confirmation of the amount of payment by another third-party	361
payer, and information that is needed to correct material	362
deficiencies in the claim related to a diagnosis or treatment or	363
the provider's identification.	364

Not later than thirty days after receipt of the claim, the	365
third-party payer shall notify all relevant external sources that	366
the supporting documentation is needed. All such notices shall	367
state, with specificity, the supporting documentation needed. If	368
the notice was not provided in writing, the provider, beneficiary,	369
or third-party payer may request the third-party payer to provide	370
the notice in writing, and the third-party payer shall then	371
provide the notice in writing. If any of the supporting	372
documentation is under the control of the beneficiary, the	373
beneficiary shall provide the supporting documentation to the	374
third-party payer.	375

The number of days that elapse between the third-party	376
payer's last request for supporting documentation within the	377
thirty-day period and the third-party payer's receipt of all of	378
the supporting documentation that was requested shall not be	379
counted for purposes of determining the third-party payer's	380
compliance with the time period of not more than forty-five days	381
for payment or denial of a claim. Except as provided in division	382
(B)(2)(b) of this section, if the third-party payer requests	383
additional supporting documentation after receiving the initially	384
requested documentation, the number of days that elapse between	385
making the request and receiving the additional supporting	386
documentation shall be counted for purposes of determining the	387
third-party payer's compliance with the time period of not more	388
than forty-five days.	389

(b) If a third-party payer determines, after receiving	390
initially requested documentation, that it needs additional	391
supporting documentation pertaining to a beneficiary's preexisting	392
condition, which condition was unknown to the third-party payer	393
and about which it was reasonable for the third-party payer to	394
have no knowledge at the time of its initial request for	395
documentation, and the third-party payer subsequently requests	396
this additional supporting documentation, the number of days that	397
elapse between making the request and receiving the additional	398
supporting documentation shall not be counted for purposes of	399
determining the third-party payer's compliance with the time	400
period of not more than forty-five days.	401

(c) When a third-party payer denies a claim, the third-party	402
payer shall notify the provider and the beneficiary. The notice	403
shall state, with specificity, why the third-party payer denied	404
the claim.	405

(d) If a third-party payer determines that supporting	406
documentation related to medical information is routinely	407
necessary to process a claim for payment of a particular health	408
care service, the third-party payer shall establish a description	409
of the supporting documentation that is routinely necessary and	410
make the description available to providers in a readily	411
accessible format.	412

Third-party payers and providers shall, in connection with a	413
claim, use the most current CPT code in effect, as published by	414
the American medical association, the most current ICD-9 code in	415
effect, as published by the United States department of health and	416
human services, the most current CDT code in effect, as published	417
by the American dental association, or the most current HCPCS code	418
in effect, as published by the United States health care financing	419
administration.	420

(3) When a provider or beneficiary submits a claim by using	421
the standard claim form prescribed in the superintendent's rules,	422
but the information provided in the claim is materially deficient,	423
the third-party payer shall notify the provider or beneficiary not	424
later than fifteen days after receipt of the claim. The notice	425
shall state, with specificity, the information needed to correct	426
all material deficiencies. Once the material deficiencies are	427
corrected, the third-party payer shall proceed in accordance with	428
division (B)(1) or (2) of this section.	429

It is not a violation of the notification time period of not	430
more than fifteen days if a third-party payer fails to notify a	431
provider or beneficiary of material deficiencies in the claim	432
related to a diagnosis or treatment or the provider's	433
identification. A third-party payer may request the information	434
necessary to correct these deficiencies after the end of the	435
notification time period. Requests for such information shall be	436
made as requests for supporting documentation under division	437
(B)(2) of this section, and payment or denial of the claim is	438
subject to the time periods specified in that division.	439

(C) For purposes of this section, if a dispute exists	440
between a provider and a third-party payer as to the day a claim	441
form was received by the third-party payer, both of the following	442
apply:	443

(1) If the provider or a person acting on behalf of the	444
provider submits a claim directly to a third-party payer by mail	445
and retains a record of the day the claim was mailed, there exists	446
a rebuttable presumption that the claim was received by the	447
third-party payer on the fifth business day after the day the	448
claim was mailed, unless it can be proven otherwise.	449

(2) If the provider or a person acting on behalf of the	450
provider submits a claim directly to a third-party payer	451
electronically, there exists a rebuttable presumption that the	452
claim was received by the third-party payer twenty-four hours	453
after the claim was submitted, unless it can be proven otherwise.	454

(D) Nothing in this section requires a third-party payer to	455
provide more than one notice to an employer whose premium for	456
coverage of employees under a benefits contract has not been	457
received by the third-party payer.	458

(E) Compliance with the provisions of division (B)(3) of	459
this section shall be determined separately from compliance with	460
the provisions of divisions (B)(1) and (2) of this section.	461

Sec. 3901.382. Beginning six months after the date specified	462
in section 262 of the "Health Insurance Portability and	463
Accountability Act of 1996," 110 Stat. 2027, 42 U.S.C.A. 1320d-4,	464
on which a third-party payer is initially required to comply with	465
a standard or implementation specification for the electronic	466
exchange of health information, as adopted or established by the	467
United States secretary of health and human services pursuant to	468
that act, sections 3901.381, 3901.384, 3901.385, 3901.389,	469
3901.3810, 3901.3811, 3901.3812, and 3901.3813 of the Revised Code	470
apply to a claim submitted to a third-party payer for payment for	471
health care services only if the claim is submitted	472
electronically. A provider and third-party payer may enter into a	473
contractual arrangement under which the third-party payer agrees	474
to process claims that are not submitted electronically because of	475
the financial hardship that electronic submission of claims would	476
create for the provider or any other extenuating circumstance.	477

Sec. 3901.383. A provider and a third-party payer may do	478
either of the following:	479

(A) Enter into a contractual agreement in which payment of	480
any amount due for rendering health care services is to be made by	481
the third-party payer within time periods shorter than those set	482
forth in section 3901.381 of the Revised Code;	483

(B) Enter into a contractual agreement in which the timing	484
of payments by the third-party payer is not directly related to	485
the receipt of a claim form. The contractual arrangement may	486
include periodic interim payment arrangements, capitation payment	487
arrangements, or other periodic payment arrangements acceptable to	488
the provider and the third-party payer. Under a capitation payment	489
arrangement, the third-party payer shall begin paying the	490
capitated amounts to the beneficiary's primary care provider not	491
later than sixty days after the date the beneficiary selects or is	492
assigned to the provider. Under any other contractual periodic	493
payment arrangement, the contractual agreement shall state, with	494
specificity, the timing of payments by the third-party payer.	495

Sec. 3901.384. (A) Subject to division (B) of this section,	496
a third-party payer that requires timely submission of claims for	497
payment for health care services shall process a claim that is	498
not submitted in a timely manner if a claim for the same services	499
was initially submitted to a different third-party payer or state	500
or federal program that offers health care benefits and that payer	501
or program has determined that it is not responsible for the cost	502
of the health care services. When a claim is submitted later than	503
one year after the last date of service for which reimbursement is	504
sought under the claim, the third-party payer shall pay or deny	505
the claim not later than ninety days after receipt of the claim	506
or, alternatively, pursuant to the requirements of sections	507
3901.381 to 3901.388 of the Revised Code. The third-party payer	508
must make an election to process such claims either within the	509
ninety-day period or under section 3901.381 of the Revised Code.	510
If the claim is denied, the third-party payer shall notify the	511
provider and the beneficiary. The notice shall state, with	512
specificity, why the third-party payer denied the claim.	513

(B) The third-party payer may refuse to process a claim	514
submitted by a provider if the provider submits the claim later	515
than forty-five days after receiving notice from the different	516
third-party payer or a state or federal program that that payer or	517
program is not responsible for the cost of the health care	518
services, or if the provider does not submit the notice of denial	519
from the different third-party payer or program with the claim.	520
The failure of a provider to submit a notice of denial in	521
accordance with this division shall not affect the terms of a	522
benefits contract.	523

(C) For purposes of this section, both of the following	524
apply:	525

(1) A determination that a third-party payer or state or	526
federal program is not responsible for the cost of health care	527
services includes a determination regarding coordination of	528
benefits, preexisting health conditions, ineligibility for	529
coverage at the time services were provided, subrogation	530
provisions, and similar findings;	531

(2) State and federal programs that offer health care	532
benefits include medicare, medicaid, workers' compensation, the	533
civilian health and medical program of the uniformed services and	534
other elements of the tricare program offered by the United States	535
department of defense, and similar state or federal programs.	536

(D) Any provision of a contractual arrangement entered into	537
between a third-party payer and a provider or beneficiary that is	538
contrary to divisions (A) to (C) of this section is unenforceable.	539

Sec. 3901.385.  A third-party payer shall not do either of	540
the following:	541

(A) Engage in any business practice that unfairly or	542
unnecessarily delays the processing of a claim or the payment of	543
any amount due for health care services rendered by a provider to	544
a beneficiary;	545

(B) Refuse to process or pay within the time periods	546
specified in section 3901.381 of the Revised Code a claim	547
submitted by a provider on the grounds the beneficiary has not	548
been discharged from the hospital or the treatment has not been	549
completed, if the submitted claim covers services actually	550
rendered and charges actually incurred over at least a thirty-day	551
period.	552

Sec. 3901.386. (A) Notwithstanding section 1751.13 or	553
division (I)(2) of section 3923.04 of the Revised Code, a	554
reimbursement contract entered into or renewed on or after June	555
29, 1988, between a third-party payer and a hospital shall provide	556
that reimbursement for any service provided by a hospital pursuant	557
to a reimbursement contract and covered under a benefits contract	558
shall be made directly to the hospital.	559

(B) If the third-party payer and the hospital have not	560
entered into a contract regarding the provision and reimbursement	561
of covered services, the third-party payer shall accept and honor	562
a completed and validly executed assignment of benefits with a	563
hospital by a beneficiary, except when the third-party payer has	564
notified the hospital in writing of the conditions under which the	565
third-party payer will not accept and honor an assignment of	566
benefits. Such notice shall be made annually.	567

(C) A third-party payer may not refuse to accept and honor a	568
validly executed assignment of benefits with a hospital pursuant	569
to division (B) of this section for medically necessary hospital	570
services provided on an emergency basis.	571

Sec. 3901.387. (A) When a provider or beneficiary submits	572
a duplicative claim for payment for health care services before	573
the time periods specified in section 3901.381 of the Revised Code	574
have elapsed for the original claim submitted, the third-party	575
payer may deny the duplicative claim. Denials of claims	576
determined to be duplicative by the department of insurance shall	577
not be considered by the department in a market conduct	578
examination of a third-party payer's compliance with section	579
3901.381 of the Revised Code. The superintendent of insurance	580
shall have the discretion to exclude an original claim in	581
determining a violation under section 3901.381 of the Revised	582
Code.	583

(B)(1) A third-party payer shall establish a system whereby	584
a provider and a beneficiary may obtain information regarding the	585
status of a claim for payment for health care services, provided	586
the claim is not materially deficient. A third-party payer shall	587
inform providers and beneficiaries of the mechanisms that may be	588
used to gain access to the system.	589

(2) If a third-party payer delegates the processing of	590
payments to another entity, the third-party payer shall require	591
the entity to comply with division (B)(1) of this section on	592
behalf of the third-party payer.	593

Sec. 3901.388. (A) A payment made by a third-party payer to a	594
provider in accordance with sections 3901.381 to 3901.386 of the	595
Revised Code shall be considered final two years after payment is	596
made. After that date, the amount of the payment is not subject	597
to adjustment, except in the case of fraud by the provider.	598

(B) A third-party payer may recover the amount of any part	599
of a payment that the third-party payer determines to be an	600
overpayment if the recovery process is initiated not later than	601
two years after the payment was made to the provider. The	602
third-party payer shall inform the provider of its determination	603
of overpayment by providing notice in accordance with division (C)	604
of this section. The third-party payer shall give the provider an	605
opportunity to appeal the determination. If the provider fails	606
to respond to the notice sooner than thirty days after the notice	607
is made, elects not to appeal the determination, or appeals the	608
determination but the appeal is not upheld, the third-party payer	609
may initiate recovery of the overpayment.	610

When a provider has failed to make a timely response to the	611
notice of the third-party payer's determination of overpayment,	612
the third-party payer may recover the overpayment by deducting the	613
amount of the overpayment from other payments the third-party	614
payer owes the provider or by taking action pursuant to any other	615
remedy available under the Revised Code. When a provider elects	616
not to appeal a determination of overpayment or appeals the	617
determination but the appeal is not upheld, the third-party payer	618
shall permit a provider to repay the amount by making one or more	619
direct payments to the third-party payer or by having the amount	620
deducted from other payments the third-party payer owes the	621
provider.	622

(C) The notice of overpayment a third-party payer is	623
required to give a provider under division (B) of this section	624
shall be made in writing and shall specify all of the following:	625

(1) The full name of the beneficiary who received the	626
health care services for which overpayment was made;	627

(2) The date or dates the services were provided;

628

(3) The amount of the overpayment;

629

(4) The claim number or other pertinent numbers;

630

(5) A detailed explanation of basis for the third-party	631
payer's determination of overpayment;	632

(6) The method in which payment was made, including, for	633
tracking purposes, the date of payment and, if applicable, the	634
check number;	635

(7) That the provider may appeal the third-party payer's	636
determination of overpayment, if the provider responds to the	637
notice within thirty days;	638

(8) The method by which recovery of the overpayment would	639
be made, if recovery proceeds under division (B) of this section.	640

(D) Any provision of a contractual arrangement entered into	641
between a third-party payer and a provider or beneficiary that is	642
contrary to divisions (A) to (C) of this section is unenforceable.	643

Sec. 3901.389. (A) Any third-party payer that fails to	644
comply with section 3901.381 of the Revised Code, or any	645
contractual payment arrangement entered into under section	646
3901.383 of the Revised Code, shall pay interest in accordance	647
with this section.	648

(B) Interest shall be computed based upon the number of days	649
that have elapsed between the date payment is due in accordance	650
with section 3901.381 of the Revised Code or the contractual	651
payment arrangement entered into under section 3901.383 of the	652
Revised Code, and the date payment is made. The interest rate for	653
determining the amount of interest due shall be equal to an annual	654
percentage rate of eighteen per cent.	655

(C) For purposes of this section, if a dispute exists	656
between a provider and a third-party payer as to the day a payment	657
was made by the third-party payer, both of the following apply:	658

(1) If the third-party payer or a person acting on behalf of	659
the third-party payer submits a payment directly to a provider by	660
mail and retains a record of the day the payment was mailed, there	661
exists a rebuttable presumption that the payment was made five	662
business days before the day the payment was received by the	663
provider, unless it can be proven otherwise.	664

(2) If the third-party payer or a person acting on behalf of	665
the third-party payer submits a payment directly to a provider	666
electronically, there exists a rebuttable presumption that the	667
payment was made twenty-four hours before the date the payment was	668
received by the provider, unless it can be proven otherwise.	669

(D) Interest due in accordance with this section shall be	670
paid directly to the provider at the time payment of the claim is	671
made and shall not be used toreduce benefits or payments	672
otherwise payable under a benefits contract.	673

Sec. 3901.3810. (A) A provider or beneficiary aggrieved with	674
respect to any act of a third-party payer that the provider or	675
beneficiary believes to be a violation of sections 3901.381 to	676
3901.388 of the Revised Code may file a written complaint with the	677
superintendent of insurance regarding the violation.	678

(B) A third-party payer shall not retaliate against a	679
provider or beneficiary who files a complaint under division (A)	680
of this section. If a provider or beneficiary is aggrieved with	681
respect to any act of the third-party payer that the provider or	682
beneficiary believes to be retaliation for filing a complaint	683
under division (A) of this section, the provider or beneficiary	684
may file a written complaint with the superintendent regarding the	685
alleged retaliation.	686

Sec. 3901.3811. (A) No third-party payer shall fail to	687
comply with sections 3901.381 and 3901.384 to 3901.3810 of the	688
Revised Code.	689

(B) The superintendent of insurance may require third-party	690
payers to submit reports of their compliance with division (A) of	691
this section. If reports are required, the superintendent shall	692
prescribe the content, format, and frequency of the reports in	693
consultation with third-party payers. The superintendent shall not	694
require reports to be submitted more frequently than once every	695
three months.	696

The superintendent shall not use findings from reports	697
submitted by a third-party payer under this division as the basis	698
of a finding of a violation of division (A) of this section or the	699
imposition of penalties under section 3901.3812 of the Revised	700
Code. However, the information contained in the reports may cause	701
the superintendent to conduct a market conduct examination of the	702
third-party payer. During this examination, the superintendent	703
may examine data collected from the same time period as covered by	704
these reports and the superintendent's examination findings may be	705
used as the basis for finding a violation of division (A) of this	706
section.	707

Sec. 3901.3812. (A) If, after completion of an examination	708
involving information collected from a six-month period, the	709
superintendent finds that a third-party payer has committed a	710
series of violations that, taken together, constitutes a	711
consistent pattern or practice of violating division (A) of	712
section 3901.3811 of the Revised Code, the superintendent may	713
impose on the third-party payer any of the administrative remedies	714
specified in division (B) of this section. In making a finding	715
under this division, the superintendent shall apply the error	716
tolerance standards for claims processing contained in the market	717
conduct examiners handbook issued by the national association of	718
insurance commissioners in effect at the time the claims were	719
processed.	720

Before imposing an administrative remedy, the superintendent	721
shall provide written notice to the third-party payer informing	722
the third-party payer of the reasons for the superintendent's	723
finding, the administrative remedy the superintendent proposes to	724
impose, and the opportunity to submit a written request for an	725
administrative hearing regarding the finding and proposed remedy.	726
If the third-party payer requests a hearing, the superintendent	727
shall conduct the hearing in accordance with Chapter 119. of the	728
Revised Code not later than fifteen days after receipt of the	729
request.	730

(B)(1) In imposing administrative remedies under division	731
(A) of this section for violations of section 3901.381 of the	732
Revised Code, the superintendent may do any of the following:	733

(a) Levy a monetary penalty in an amount determined in	734
accordance with division (B)(3) of this section;	735

(b) Order the payment of interest directly to the provider	736
in accordance with section 3901.389 of the Revised Code;	737

(c) Order the third-party payer to cease and desist from	738
engaging in the violations;	739

(d) If a monetary penalty is not levied under division	740
(B)(1)(a) of this section, impose any of the administrative	741
remedies provided for in section 3901.22 of the Revised Code,	742
other than those specified in divisions (D)(4) and (5) and (G) of	743
that section.	744

(2) In imposing administrative remedies under division (A)	745
of this section for violations of sections 3901.384 to 3901.3810	746
of the Revised Code, the superintendent may do any of the	747
following:	748

(a) Levy a monetary penalty in an amount determined in	749
accordance with division (B)(3) of this section;	750

(b) Order the payment of interest directly to the provider	751
in accordance with section 3901.38 of the Revised Code;	752

(c) Order the third-party payer to cease and desist from	753
engaging in the violations;	754

(d) If a monetary penalty is not levied under division	755
(B)(2)(a) of this section, impose any of the administrative	756
remedies provided for in section 3901.22 of the Revised Code,	757
other than those specified in divisions (D)(4) and (5) and (G) of	758
that section. For violations of sections 3901.384 to 3901.3810 of	759
the Revised Code that did not comply with section 3901.381 of the	760
Revised Code, the superintendent may also use section 3901.22 of	761
the Revised Code except divisions (D)(4) and (5) of that section.	762

(3) A finding by the superintendent that a third-party payer	763
has committed a series of violations that, taken together,	764
constitutes a consistent pattern or practice of violating division	765
(A) of section 3901.3811 of the Revised Code, shall constitute a	766
single offense for purposes of levying a fine under division	767
(B)(1)(a) and (B)(2)(a) of this section. For a first offense, the	768
superintendent may levy a fine of not more than one hundred	769
thousand dollars. For a second offense that occurs on or earlier	770
than four years from the first offense, the superintendent may	771
levy a fine of not more than one hundred fifty thousand dollars.	772
For a third or additional offense that occurs on or earlier than	773
seven years after a first offense, the superintendent may levy a	774
fine of not more than three hundred thousand dollars. In	775
determining the amount of a fine to be levied within the specified	776
limits, the superintendent shall consider the following factors:	777

(a) The extent and frequency of the violations;

778

(b) Whether the violations were due to circumstances beyond	779
the third-party payer's control;	780

(c) Any remedial actions taken by the third-party payer to	781
prevent future violations;	782

(d) The actual or potential harm to others resulting from	783
the violations;	784

(e) If the third-party payer knowingly and willingly	785
committed the violations;	786

(f) The third-party payer's financial condition;

787

(g) Any other factors the superintendent considers	788
appropriate.	789

(C) The remedies imposed by the superintendent under this	790
section are in addition to, and not in lieu of, such other	791
remedies as providers and beneficiaries may otherwise have by law.	792

(D) Any fine collected under this section shall be paid into	793
the state treasury as follows:	794

(1) Twenty-five per cent of the total to the credit of the	795
department of insurance operating fund created by section 3901.021	796
of the Revised Code;	797

(2) Sixty-five per cent of the total to the credit of the	798
general revenue fund;	799

(3) Ten per cent of the total to the credit of claims	800
processing education fund, which is hereby created.	801

All money credited to the claims processing education fund	802
shall be used by the department of insurance to make technical	803
assistance available to third-party payers, providers, and	804
beneficiaries for effective implementation of the provisions of	805
sections 3901.38 and 3901.381 to 3901.3814 of the Revised Code.	806

Sec. 3901.3813. The superintendent of insurance may adopt	807
rules as the superintendent considers necessary to carry out the	808
purposes of section 3901.38 and sections 3901.381 to 3901.3812 of	809
the Revised Code. The rules shall be adopted in accordance with	810
Chapter 119. of the Revised Code.	811

Sec. 3901.3814. Sections 3901.38 and 3901.381 to 3901.3813	812
of the Revised Code do not apply to the following:	813

(A) Policies offering coverage that is regulated under	814
Chapters 3935. and 3937. of the Revised Code;	815

(B) An employer's self-insurance plan and any of its	816
administrators, as defined in section 3959.01 of the Revised Code,	817
to the extent that federal law supersedes, preempts, prohibits, or	818
otherwise precludes the application of any provisions of those	819
sections to the plan and its administrators;	820

(C) A third-party payer for coverage provided under the	821
medicare plus choice or medicaid programs operated under Title	822
XVIII and XIX of the "Social Security Act," 49 Stat. 620 (1935),	823
42 U.S.C.A. 301, as amended;	824

(D) A third-party payer for coverage provided under the	825
tricare program offered by the United States department of	826
defense.	827

Sec. 3902.11.  As used in sections 3902.11 to 3902.14 of the	828
Revised Code:	829

(A) "Beneficiary" hasand "third-party payer" have the same	830
meaningmeanings as in division (A)(1) of section 3901.38 of the	831
Revised Code.	832

(B) "Plan of health coverage" means any of the following if	833
the policy, contract, or agreement contains a coordination of	834
benefits provision:	835

(1) An individual or group sickness and accident insurance	836
policy, which policy provides for hospital, dental, surgical, or	837
medical services;	838

(2) Any individual or group contract of a health insuring	839
corporation, which contract provides for hospital, dental,	840
surgical, or medical services;	841

(3) Any other individual or group policy or agreement under	842
which a third-party payer provides for hospital, dental, surgical,	843
or medical services.	844

(C) "Provider" has the same meaning as in division (A)(6) of	845
section 3901.38 of the Revised Codemeans a hospital, nursing	846
home, physician, podiatrist, dentist, pharmacist, chiropractor, or	847
other licensed health care provider entitled to reimbursement by a	848
third-party payer for services rendered to a beneficiary under a	849
benefits contract.	850

(D) "Third-party payer" has the same meaning as in division	851
(A)(8) of section 3901.38 of the Revised Code.	852

Sec. 3902.21.  As used in sections 3902.21 to3902.22 and	853
3902.23 of the Revised Code:	854

(A) "Proof of loss" means the documentation and procedures	855
required and the criteria employed by third-party payers to accept	856
or reject and to determine benefits payable under a claim for	857
reimbursement of health services or supplies, including	858
documentation, procedures, and criteria to determine the medical	859
necessity of health services or supplies.	860

(B) "Third-party payers, "third-party payer" has the same	861
meaning as in section 3901.38 of the Revised Code.	862

Sec. 3902.22.  The superintendent of insurance shall develop	863
a standard claim form and standard proof of loss to be used by all	864
third-party payers and providers for reimbursement of health care	865
services and supplies, taking into consideration the special needs	866
of, and differences between, third-party payers. The standard	867
claim form and standard proof of loss shall be prescribed in rules	868
the superintendent shall adopt in accordance with Chapter 119. of	869
the Revised Code. The superintendent may prescribe a separate	870
claim form for each third-party payer. If a national standard	871
claim form and standard proof of loss is established by the	872
sickness and accident insurance industry, the superintendent shall	873
amend the rules to comply with the national standards. The	874
standard claim form shall include a method to specify the license	875
numbers of physical therapists and other health care professionals	876
rendering services designated as physical therapy, as required	877
under section 4755.56 of the Revised Code.	878

Sec. 3902.23.  Beginning one hundred eighty days after rules	879
adopted under section 3902.22 of the Revised Code take effect, no	880
third-party payer shall fail to use the standard claim form and	881
proof of loss prescribed in those rules.	882

Sec. 3924.21.  (A) As used in this section:

883

(1) "Beneficiary," "hospital," "provider," and "third-party	884
payer" have the same meanings as in section 3901.38 of the Revised	885
Code.	886

(2) "Overcharged" means charged more than the usual and	887
customary charge, rate, or fee that is charged by the provider or	888
hospital for a particular item or service.	889

(3) "Provider" has the same meaning as in section 3902.11 of	890
the Revised Code.	891

(B) If a beneficiary identifies on the billing statement of	892
a provider or hospital any item or service for which the	893
beneficiary was overcharged by more than five hundred dollars and	894
the beneficiary notifies the third-party payer of the error at any	895
time after the thirty-day period immediately following the date on	896
which the third-party payer makes payment to the provider or	897
hospital for the item or service, the provider or hospital shall	898
refund to the beneficiary an amount equal to fifteen per cent of	899
the amount overcharged.	900

(C) A provider or hospital shall not be required to comply	901
with division (B) of this section if, at the time the third-party	902
payer receives notice of the overcharge from the beneficiary, the	903
provider, hospital, or third-party payer is in the process of	904
correcting the error and such process can be documented.	905

Section 2. That existing sections 1349.01, 1739.05, 1739.14,	906
3901.38, 3902.11, 3902.21, 3902.22, 3902.23, and 3924.21 and	907
section 3901.381 of the Revised Code are hereby repealed.	908

Section 3. Sections 1 and 2 of this act shall take effect one	909
year after the act is signed by the Governor or otherwise becomes	910
law.	911

Section 4. Sections 3901.38, 3901.381, 3901.382, 3901.383,	912
3901.384, 3901.385, 3901.386, 3901.387, 3901.388, 3901.389,	913
3901.3810, 3901.3811, 3901.3812, 3901.3813, 3901.3814, 3902.21,	914
3902.22, and 3902.23 of the Revised Code, as amended, enacted, or	915
repealed and reenacted by this act, apply to any claim for	916
payment for health care services that is submitted to a	917
third-party payer on or after the effective date of this act.	918