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(124th General Assembly)
(Amended Substitute Senate Bill Number 4)
AN ACT
To amend sections 1349.01, 1739.05, 1739.14, 3901.38,
3902.11, 3902.21, 3902.22, 3902.23, and 3924.21,
to
enact new section 3901.381 and
sections
3901.382,
3901.383,
3901.384, 3901.385,
3901.386,
3901.387,
3901.388, 3901.389,
3901.3810,
3901.3811,
3901.3812, 3901.3813, and 3901.3814
and to repeal
section
3901.381
of the Revised Code
to revise the
"prompt
pay" requirements
applicable
to insurance
companies, health insuring
corporations, and other
third-party
payers of
health care services.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That sections 1349.01, 1739.05, 1739.14, 3901.38,
3902.11, 3902.21, 3902.22, 3902.23, and 3924.21
be amended and new
section 3901.381 and sections 3901.382,
3901.383, 3901.384,
3901.385, 3901.386, 3901.387, 3901.388,
3901.389, 3901.3810,
3901.3811, 3901.3812, 3901.3813, and 3901.3814 of the
Revised
Code
be
enacted
to read as follows:
Sec. 1349.01. (A) As used in this section: (1) "Consumer reporting agency" has the same meaning as in
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A.
1681a. (2) "Court" means the division of the court of common
pleas
having jurisdiction over actions for divorce, annulment,
dissolution of marriage, legal separation, child support, or
spousal support. (3) "Health insurance coverage" means hospital, surgical,
or
medical expense coverage provided under any health insurance
or
health care policy, contract, or plan or any other health
benefits
arrangement. (4) "Provider" has the same meaning as in section
3901.38
3902.11
of the Revised Code. (B) If, pursuant to an action for divorce, annulment,
dissolution of marriage, or legal separation, the court
determines
that a party who is a resident of this state is responsible
for
obtaining health
insurance coverage for the party's former spouse
or children or if,
pursuant to a child support order issued in
accordance
with sections 3119.30 to 3119.58
of the Revised Code,
the court requires a party who is a resident of this
state to
obtain health
insurance coverage for the children who are the
subject of the
child support order, and the party fails to obtain
such coverage,
no provider or collection agency shall collect or
attempt to
collect from the former spouse, children, or person
responsible for the children, any reimbursement of
any hospital,
surgical, or medical expenses incurred by the
provider for
services rendered to the former spouse or children,
which expenses
would have been covered but for the failure of the
party to obtain
the coverage, if the former spouse, any of the children, or a
person responsible for the children, provides the following to the
provider or
collection agency: (1) A copy of the court order requiring the party to obtain
health insurance coverage for the former spouse or children. (2) Reasonable assistance in locating the party and
obtaining information
about the party's health insurance coverage. (C) If the requirements of divisions (B)(1) and (2)
of this
section are not met, the provider or collection agency
may collect
the hospital, surgical, or medical expenses both
from the former
spouse or person responsible for the children
and from the party
who failed to obtain the coverage. If the
requirements of
divisions (B)(1) and (2) are met, the
provider or collection
agency may collect or attempt to collect
the expenses only from
the party. A party required to obtain health insurance coverage for a
former spouse or children who fails to obtain the coverage is
liable to the provider for the hospital, surgical, or medical
expenses incurred by the provider as a result of the failure to
obtain the coverage. This section does not prohibit a former
spouse or person responsible for the children from initiating an
action to enforce the order requiring the party to obtain health
insurance for the former spouse or children or to collect any
amounts the former spouse or person responsible for the children
pays for hospital, surgical, or medical expenses for which the
party is responsible under the order requiring the party to
obtain
health insurance for the former spouse or children. (D)(1) If the requirements of divisions (B)(1) and (2) of
this
section are met, both of the following restrictions shall
apply: (a) No collection agency or provider of hospital,
surgical,
or medical services may report to a consumer reporting
agency, for
inclusion in the credit file or credit report of the
former spouse
or person responsible for the children, any
information relative
to the nonpayment of expenses for the
services incurred by the
provider, if the nonpayment is the
result of the failure of the
party responsible for obtaining
health insurance coverage to
obtain health insurance coverage. (b) No consumer reporting agency shall include in the credit
file or credit
report of the former spouse or person responsible
for the children, any
information relative to the nonpayment of
any hospital, surgical, or medical
expenses incurred by a provider
as a result of the party's failure to obtain
the coverage.
(2) If the requirements of divisions (B)(1) and (2) of this
section are not met, both of the following provisions shall
apply: (a) A provider of hospital, surgical, or medical services,
or a collection
agency, may report to a consumer reporting agency,
for inclusion in the credit
file or credit report of the former
spouse or person responsible for the
children, any information
relative to the nonpayment of expenses for the
services incurred
by the provider, if the nonpayment is the result of the
failure of
the party responsible for obtaining health insurance coverage to
obtain such coverage. (b) A consumer reporting agency may include in the credit
file or credit
report of the former spouse or person responsible
for the children, any
information relative to the nonpayment of
any hospital, surgical, or medical
expenses incurred by the
provider, if the nonpayment is the result of the
failure of the
party responsible for obtaining health insurance coverage to
obtain such coverage. (3)(a) A provider of hospital, surgical, or medical
services, or a collection
agency, may report to a consumer
reporting agency, for inclusion in the credit
file or credit
report of that party, any information relative to the
nonpayment
of expenses for the services incurred by the provider, if the
nonpayment is the result of the failure of the party responsible
for obtaining
health insurance coverage to obtain such coverage. (b) A consumer reporting agency may include in the credit
file or credit
report of the party responsible for obtaining
health insurance coverage, any
information relative to the
nonpayment of any hospital, surgical, or medical
expenses incurred
by a provider, if the nonpayment is the result of the
failure of
that party to obtain health insurance coverage. (4) If any information described in division (D)(2) of this
section is placed
in the credit file or credit report of the
former spouse or person responsible
for the children, the consumer
reporting agency shall remove the information
from the credit file
and credit report if the former spouse or person
responsible for
the children provides the agency with the information required
in
divisions (B)(1) and (2) of this section. If the agency fails to
remove
the information from the credit file or credit report
pursuant to the terms of
the "Fair Credit Reporting Act," 84 Stat.
1128, 15 U.S.C. 1681a, within a
reasonable time after receiving
the information required by divisions (B)(1)
and (2) of this
section, the former spouse may initiate an action to require
the
agency to remove the information. If any information described in division (D)(3) of this
section is placed in
the party's credit file or credit report, the
party has the burden of proving
that the party is not responsible
for obtaining the health insurance coverage
or, if responsible,
that the expenses incurred are not covered expenses. If
the party
meets that burden, the agency shall remove the information from
the
party's credit file and credit report immediately. If the
agency fails to
remove the information from the credit file or
credit report immediately after
the party meets the burden, the
party may initiate an action to require the
agency to remove the
information. Sec. 1739.05. (A) A multiple employer welfare arrangement
that is created pursuant to sections 1739.01 to 1739.22 of the
Revised Code and that operates a group self-insurance program may
be established only if any of the following applies: (1) The arrangement has and maintains a minimum enrollment
of three hundred employees of two or more employers. (2) The arrangement has and maintains a minimum enrollment
of three hundred self-employed individuals. (3) The arrangement has and maintains a minimum enrollment
of three hundred employees or self-employed individuals in any
combination of divisions (A)(1) and (2) of this section. (B) A multiple employer welfare arrangement that is
created
pursuant to sections 1739.01 to 1739.22 of the Revised
Code and
that operates a group self-insurance program shall
comply with all
laws applicable to self-funded programs in this
state, including
sections 3901.04, 3901.041, 3901.19 to 3901.26,
3901.38, 3901.381
to
3901.3814, 3901.40, 3901.45, 3901.46, 3902.01 to
3902.14,
3923.30,
3923.301, 3923.38,
3923.581, 3923.63, 3924.031,
3924.032,
and
3924.27
of the Revised Code. (C) A multiple employer welfare arrangement created
pursuant
to sections 1739.01 to 1739.22 of the Revised Code shall
solicit
enrollments only through agents or solicitors licensed
pursuant to
Chapter 3905. of the Revised Code to sell or solicit
sickness and
accident insurance. (D) A multiple employer welfare arrangement created
pursuant
to sections 1739.01 to 1739.22 of the Revised Code shall
provide
benefits only to individuals who are members, employees
of
members, or the dependents of members or employees, or are
eligible for continuation of coverage under section 1751.53 or
3923.38 of the Revised Code or under Title X of the "Consolidated
Omnibus Budget Reconciliation Act of 1985," 100 Stat. 227, 29
U.S.C.A. 1161, as amended. Sec. 1739.14. (A) Each member shall pay to the multiple
employer welfare arrangement operating a group self-insurance
program a premium equal to its share of the arrangement's
projected obligation for employee welfare benefit liability,
administrative expenses, and other costs incurred by the
arrangement as determined by the board of the arrangement or by a
third-party administrator and approved by the board of the
arrangement. This amount may be adjusted by the board according
to the claims experience of each participating member in
accordance with criteria set forth in the articles or bylaws of
the arrangement. (B) Each member shall pay a premium for each year at the
beginning of each fiscal year unless otherwise provided for under
the agreement. (C) A multiple employer welfare arrangement operating a
group self-insurance program shall make payments, or arrange to
have payments made, to the employees of the members out of the
fund for employee welfare benefits in accordance with
section
3901.38
and sections 3901.381 to
3901.3814 of the Revised Code. (D) A board of the multiple employer welfare arrangement
operating a group self-insurance program shall determine whether
any dividends or assessments shall be paid to or levied against
participating members. Sec. 3901.38.
(A) As used in
this section
and
section
sections
3901.381
to
3901.3814 of the
Revised
Code: (1)(A) "Beneficiary" means any policyholder, subscriber,
member, employee, or other person who is eligible for benefits
under a benefits contract.
(2)(B) "Benefits contract" means a sickness and accident
insurance policy providing hospital, surgical, or medical expense
coverage, or a health insuring
corporation
contract or other
policy or
agreement under which a third-party payer agrees to
reimburse for covered
health care
or dental services rendered to
beneficiaries, up to
the limits and exclusions
contained in the
benefits contract.
(3) "Completed claim" means a proof of loss or a claim
for
payment for health care services
which
has been submitted to
the
appropriate claims
processing office of the third-party payer
accompanied by
sufficient documentation for
the
third-party payer
to
determine
proof of loss
and reasonably required by
the
third-party payer
to accept or
reject the claim.
(4)(C) "Hospital" has the same meaning
set forth
as in
section
3727.01 of the Revised Code.
(5) "Proof of loss"
means a claim for payment for
health
care services which has been submitted to the appropriate claims
processing office of the third-party payer accompanied by
sufficient documentation for the third-party payer to determine
benefits payable under the benefits contract and reasonably
required by the third-party payer to accept or reject the
claim.
(6)(D) "Provider" means a hospital, nursing home, physician,
podiatrist, dentist, pharmacist, chiropractor, or other
licensed
health care provider entitled to reimbursement by a third-party
payer for services rendered to a beneficiary under a benefits
contract.
(7)(E) "Reimburse" means indemnify, make payment, or
otherwise accept responsibility for payment for health care
services rendered to a beneficiary, or arrange for the provision
of health care services to a beneficiary.
(8)(F) "Third-party payer" means any of the following:
(a)(1) An insurance company;
(b)(2) A health insuring corporation;
(c)(3) A
labor organization;
(d)(4) An employer;
(e)(5) An intermediary
organization, as defined in section
1751.01
of the Revised Code, that is not a health
delivery network
contracting solely with self-insured employers;
(f)(6) An administrator subject to sections 3959.01 to
3959.16 of the Revised Code;
(g)(7) A health delivery network, as defined in section
1751.01 of the
Revised Code;
(h)(8) Any other person that is obligated pursuant to a
benefits contract to reimburse for covered health care services
rendered to beneficiaries under such contract.
(B)(1) Except as provided in division (B)(2) of this
section
and in section 3901.381 of the Revised Code,
within twenty-four
days of the receipt of a completed
claim from a provider or a
beneficiary for reimbursement for
health care services rendered by
the provider to a beneficiary, a
third-party payer shall, in
accordance with division (D) of this
section, make payment of any
amount due on such claim.
(2) A third-party payer and a provider may, in negotiating
a
reimbursement contract, agree to any time period by which a
third-party payer shall, subject to division (D) of this section,
make payment of any amount due on a completed claim. Nothing in
this division shall be construed as limiting in any manner the
application of the requirements of this section to any benefits
or
reimbursement contract.
(3) Any provider or beneficiary aggrieved with respect to
any act of a third-party payer that such provider or beneficiary
believes to be a violation of division (B)(1) or (2) of this
section may file a written complaint with the superintendent of
insurance. If a series of such complaints is received by the
superintendent with respect to a particular third-party payer and
if, after investigation, the superintendent finds that such
third-party payer has engaged in a series of such violations
which, taken together, constitute a consistent pattern or a
practice of such third-party payer to violate division (B)(1) or
(2) of this section, the superintendent shall issue an order
requiring such third-party payer to cease and desist from
engaging
in such violations and to pay a late payment penalty as
specified
in divisions (B)(4) and (5) of this section with
respect to the
claims the superintendent finds were not timely
paid. In the
order, the superintendent shall specify the reasons
for the
superintendent's finding and order and state that a
hearing
conducted
pursuant to Chapter 119. of the Revised Code shall be
held within
fifteen days after requested in writing by the
third-party payer.
The provisions of division (B)(3) of this
section are in
addition to, and not in lieu of, such other
remedies as providers
and beneficiaries may otherwise have by law.
(4)(a) The late payment penalty shall be computed based
upon
the number of days that have elapsed between the date
payment is
due in accordance with division (B)(1) or (2) of this
section and
the date payment is actually sent.
(b) The interest rate for determining the amount of the
late
payment penalty shall be the rate agreed to by the provider
and
the third-party payer or the rate specified by and determined
in
accordance with division (A) of section 1343.01 of the Revised
Code.
(5) A provider and a third-party payer may enter into a
contractual agreement in which the timing of payments by the
third-party payer is not directly related to the receipt of a
completed claim. Such contractual arrangement may include
periodic interim payment arrangements, capitation payment
arrangements, or other payment arrangements acceptable to the
provider and the third-party payer. Except as agreed to under
such contract, this section does not apply to such payment
arrangements.
(6) Any late payment penalty due and payable by a
third-party payer in accordance with this section shall not be
used to reduce benefits or payments otherwise payable under a
benefits contract.
(C) No third-party payer shall refuse to process or pay
within the time period required under division (B)(1) or (2) of
this section a completed claim submitted by a provider on the
ground the beneficiary has not been discharged from the hospital
or the treatment has not been completed, if the submitted claim
covers services actually rendered and charges actually incurred
over at least a thirty-day period.
(D)(1) Notwithstanding section 1751.13 or
division (I)(2) of
section 3923.04 of the Revised Code, a
reimbursement contract
entered into or renewed on or after June 29,
1988, between a
third-party payer and a hospital shall provide that reimbursement
for any service provided by a hospital pursuant to a
reimbursement
contract and covered under a benefits contract
shall be made
directly to the hospital.
(2) If the third-party payer and the hospital have not
entered into a contract regarding the provision and reimbursement
for covered services, the third-party payer shall accept and
honor
a completed and validly executed assignment of benefits
with a
hospital by a beneficiary, except when the third-party
payer has
notified the hospital in writing of the conditions
under which the
third-party payer will not accept and honor an
assignment of
benefits. Such notice shall be made annually.
(3) A third-party payer may not refuse to accept and honor
a
validly executed assignment of benefits with a hospital
pursuant
to division (D)(2) of this section for medically
necessary
hospital services provided on an emergency basis.
(E) A series of violations which taken together,
constitute
a consistent pattern or a practice of violation of any
of the
provisions of this section is an unfair and deceptive act
pursuant
to sections 3901.19 to 3901.23 of the Revised Code and
is subject
to proceedings pursuant to those sections.
Sec. 3901.381. (A) Except as provided in sections 3901.382,
3901.383, 3901.384, and 3901.386 of the Revised Code, a
third-party payer
shall
process a claim for payment for health
care services
rendered by a provider to a beneficiary in
accordance with this section. (B)(1) Unless division (B)(2) or (3) of this
section
applies,
when a third-party payer receives
from a
provider
or
beneficiary a
claim on the standard claim form prescribed
in
rules
adopted by
the superintendent of insurance under section
3902.22
of the
Revised Code, the third-party payer shall pay or deny the
claim
not
later
than
thirty days after receipt of the claim. When
a
third-party payer denies a claim, the third-party payer shall
notify the provider and the beneficiary. The notice shall state,
with specificity, why the third-party payer denied the claim. (2)(a) Unless division (B)(3) of this section
applies,
when
a provider or beneficiary has used the standard
claim form,
but
the third-party payer determines that reasonable
supporting
documentation is needed to establish the third-party
payer's
responsibility to make payment, the third-party payer
shall
pay or
deny the claim not later than forty-five days after
receipt
of the
claim.
Supporting documentation includes the verification
of
employer and beneficiary coverage under a benefits contract,
confirmation of premium payment, medical information regarding the
beneficiary and the services provided, information on the
responsibility of another third-party payer to make payment or
confirmation of the amount of
payment by another third-party
payer, and
information that is needed to correct material
deficiencies in the
claim related to a diagnosis or treatment or
the provider's
identification.
Not later than thirty days after receipt of
the claim, the
third-party payer shall notify all relevant external sources that
the supporting documentation is needed.
All such notices shall
state, with specificity, the
supporting
documentation
needed. If
the notice was not provided in writing, the provider, beneficiary,
or third-party payer may request the third-party payer to provide
the notice in writing, and the third-party payer shall then
provide the notice in writing. If any of the supporting
documentation is
under the
control of the
beneficiary, the
beneficiary shall
provide the
supporting documentation to the
third-party payer. The number of days that
elapse between the third-party
payer's last request for supporting
documentation within the
thirty-day period and the third-party payer's receipt of all of
the supporting documentation that was
requested shall not
be
counted for purposes of
determining the third-party payer's
compliance with the time
period of not more than
forty-five days
for payment or denial of a
claim. Except as provided in division
(B)(2)(b) of this section, if the third-party payer requests
additional
supporting
documentation after receiving the initially
requested
documentation, the number of days that elapse between
making the
request and receiving the additional supporting
documentation shall be counted for
purposes of determining the
third-party payer's compliance with
the time period of not more
than forty-five days. (b) If a third-party payer determines, after receiving
initially requested documentation, that it needs additional
supporting documentation pertaining to a beneficiary's preexisting
condition, which condition was unknown to the third-party payer
and about which it was reasonable for the third-party payer to
have no knowledge at the time of its initial request for
documentation, and the third-party payer subsequently requests
this additional supporting documentation, the number of days that
elapse between making the request and receiving the additional
supporting documentation shall not be counted for purposes of
determining the third-party payer's compliance with the time
period of not more than forty-five days. (c) When a third-party payer denies a claim, the third-party
payer shall notify the provider and the beneficiary. The notice
shall state, with specificity, why the third-party payer denied
the claim.
(d) If a third-party payer determines that supporting
documentation related to medical information is routinely
necessary to process a claim for payment of a particular health
care service, the third-party payer shall establish a description
of the supporting documentation that is routinely necessary and
make the description available to providers in a readily
accessible format.
Third-party payers and providers shall, in connection with a
claim, use the most current CPT code in effect, as published by
the American medical association, the most current ICD-9 code in
effect, as published by the United States department of health and
human services, the most current CDT code in effect, as published
by the American dental association, or the most current HCPCS code
in effect, as published by the United States health care financing
administration. (3) When a provider or beneficiary submits a claim by using
the standard claim form prescribed in the superintendent's
rules,
but the information provided in the claim is materially
deficient,
the third-party payer shall notify the provider or
beneficiary not
later than fifteen days after receipt of the claim.
The notice
shall state, with specificity,
the
information needed to correct
all material deficiencies. Once the
material deficiencies are
corrected, the
third-party payer shall
proceed in accordance with
division (B)(1) or (2) of this section. It is not a violation of the notification time period of not
more than fifteen days if a third-party payer fails to notify a
provider or beneficiary of material deficiencies in the claim
related to a diagnosis or treatment or the provider's
identification. A third-party payer may request the information
necessary to correct these deficiencies after the end of the
notification time period.
Requests for such information shall be
made as requests for
supporting documentation under division
(B)(2) of this section,
and payment or denial of the claim is
subject to the time periods
specified in that division. (C) For purposes of this section, if a dispute exists
between a
provider and a third-party payer as to the day a claim
form
was received by the
third-party payer, both
of the following
apply: (1) If the provider or a person acting on behalf of the
provider submits a claim directly to a third-party payer by mail
and retains a
record of the day the claim was mailed, there exists
a
rebuttable
presumption that the claim was received by the
third-party payer
on the fifth
business day after the day the
claim
was mailed,
unless it can be proven
otherwise. (2) If the provider or a person acting on behalf of the
provider submits a claim directly to a third-party payer
electronically, there
exists a
rebuttable presumption that the
claim was received by the
third-party payer
twenty-four hours
after the claim was submitted,
unless it can be proven
otherwise.
(D) Nothing in this section requires a third-party payer to
provide more than one notice to an employer whose premium for
coverage of employees under a benefits contract has not been
received by the third-party payer. (E) Compliance with the provisions of division (B)(3) of
this section shall be determined separately from compliance with
the provisions of divisions (B)(1) and (2) of this section.
Sec. 3901.382. Beginning six months after the date specified
in section 262 of the "Health Insurance Portability and
Accountability Act of 1996," 110 Stat. 2027, 42 U.S.C.A. 1320d-4,
on which a third-party payer is initially required to comply with
a standard or implementation specification for the electronic
exchange of health information, as adopted or established by the
United States secretary of health and human services pursuant to
that act, sections 3901.381, 3901.384, 3901.385, 3901.389,
3901.3810, 3901.3811, 3901.3812, and 3901.3813 of the
Revised Code
apply to a claim submitted to a third-party payer for payment for
health care services
only if the claim is submitted
electronically. A provider and third-party payer may enter into a
contractual arrangement under which the third-party payer agrees
to process claims that are not submitted electronically because of
the financial hardship that electronic submission of claims would
create for the provider or any other extenuating circumstance.
Sec. 3901.383. A
provider and a third-party payer may do
either of
the following: (A) Enter into a contractual agreement in which payment of
any
amount due
for rendering health care services is to be made by
the
third-party payer within
time periods shorter than those set
forth
in section
3901.381 of the Revised Code; (B) Enter into a contractual
agreement in which the timing
of payments by the third-party
payer is not directly related to
the receipt of a
claim form. The contractual
arrangement
may
include periodic
interim payment arrangements,
capitation
payment
arrangements,
or other periodic payment
arrangements
acceptable to
the provider and the
third-party payer. Under a capitation payment
arrangement, the third-party
payer
shall begin paying the
capitated amounts to the
beneficiary's
primary care provider
not
later than sixty days after the date the beneficiary
selects or is
assigned to the provider. Under any other contractual periodic
payment arrangement, the
contractual agreement shall state, with
specificity, the timing
of
payments by the third-party payer.
Sec. 3901.384. (A) Subject to division (B) of this section,
a
third-party payer that requires timely submission of claims for
payment for health care services shall process a claim that is
not submitted in a timely manner if a claim for the same services
was initially submitted to a different third-party payer or state
or federal program that offers health care benefits and that payer
or program has determined that it is not responsible for the cost
of the health care services. When a claim is submitted later than
one year after the last date of service for which reimbursement is
sought under the claim, the third-party payer shall pay or deny
the claim not later than ninety days after receipt of the claim
or, alternatively, pursuant to the requirements of sections
3901.381 to 3901.388 of the Revised Code. The third-party payer
must make an election to process such claims either within the
ninety-day period or under section 3901.381 of the Revised Code.
If the claim is denied, the third-party payer shall notify the
provider and the beneficiary. The notice shall state, with
specificity, why the third-party payer denied the claim. (B) The third-party payer may refuse to process a claim
submitted by a provider if the provider submits the claim later
than forty-five days
after receiving notice from the different
third-party
payer or a state or federal program that that payer or
program is
not responsible for the cost of the health care
services, or if the provider does not submit the notice of denial
from the different third-party payer or program with the claim.
The failure of a provider to submit a notice of denial in
accordance with this division shall not affect the terms of a
benefits contract. (C) For purposes of this section,
both of the following
apply: (1) A determination that a third-party payer or state or
federal program is not responsible for the cost of health care
services includes a determination regarding coordination of
benefits, preexisting health conditions, ineligibility for
coverage at the time services were provided, subrogation
provisions, and similar findings; (2) State and federal programs that offer health care
benefits include medicare, medicaid, workers' compensation, the
civilian health and medical program of the uniformed services and
other elements of the tricare program offered by the United States
department of defense, and similar state or federal programs. (D) Any provision of a contractual arrangement entered into
between a third-party payer and a provider or beneficiary that is
contrary to divisions (A) to (C) of this section is
unenforceable.
Sec. 3901.385. A third-party payer shall not do either of
the following: (A) Engage in
any
business practice that unfairly or
unnecessarily delays the
processing of a claim or the payment of
any
amount due for health
care services rendered by a provider to
a
beneficiary; (B) Refuse to process or pay
within the time periods
specified in
section 3901.381 of the
Revised Code a claim
submitted by a provider on the
grounds
the
beneficiary has not
been discharged from the hospital
or the
treatment has not been
completed, if the submitted claim
covers
services actually
rendered and charges actually incurred
over at
least a thirty-day
period.
Sec. 3901.386. (A) Notwithstanding
section 1751.13 or
division
(I)(2) of section 3923.04 of
the Revised
Code, a
reimbursement contract
entered into or renewed on or after
June
29, 1988, between a
third-party payer and a hospital shall provide
that
reimbursement for any service provided by a hospital pursuant
to
a reimbursement contract and covered under a benefits contract
shall be made directly to the hospital. (B) If the
third-party payer and the hospital have not
entered into a
contract regarding the provision and reimbursement
of covered
services, the third-party payer shall accept and honor
a
completed and validly executed assignment of benefits with a
hospital by a beneficiary, except when the third-party payer has
notified the hospital in writing of the conditions under which
the
third-party payer will not accept and honor an assignment of
benefits. Such notice shall be made annually. (C) A third-party
payer may not refuse to accept and honor a
validly executed
assignment of benefits with a hospital pursuant
to division
(B) of this section for
medically necessary hospital
services provided on an emergency
basis.
Sec. 3901.387. (A) When a provider or beneficiary submits
a duplicative
claim for payment for health care services before
the time periods specified in section 3901.381 of the
Revised Code
have elapsed for the original claim submitted, the third-party
payer may deny the duplicative claim. Denials of claims
determined to be duplicative by the department of insurance shall
not be considered by the department in a market conduct
examination of a third-party payer's compliance with section
3901.381 of the Revised Code. The superintendent of insurance
shall have the discretion to exclude an original claim in
determining a violation under section 3901.381 of the Revised
Code. (B)(1)
A third-party payer shall establish a
system whereby
a provider and a beneficiary may obtain
information regarding the
status of a claim for payment for health care services, provided
the claim is not materially deficient. A
third-party payer shall
inform providers and
beneficiaries of the
mechanisms that may be
used to gain access to
the system.
(2) If a third-party payer delegates the processing of
payments to another entity, the third-party payer shall require
the entity to comply with division (B)(1) of this section on
behalf
of the third-party payer.
Sec. 3901.388. (A)
A payment made by a third-party payer
to a
provider in accordance with sections 3901.381 to 3901.386 of
the
Revised
Code shall be
considered final two years after payment is
made. After that
date, the amount of the
payment is not subject
to adjustment,
except in the case of
fraud by the provider. (B) A third-party payer may recover the amount of any
part
of a payment that the third-party payer determines to be an
overpayment if the recovery process is initiated not later than
two years after the payment was made to the provider. The
third-party payer shall
inform the provider of its determination
of overpayment by providing notice in accordance with division (C)
of this section. The
third-party payer shall give the provider an
opportunity to appeal the
determination.
If the provider fails
to respond to the notice sooner than thirty days after the notice
is made, elects not to appeal the determination, or appeals the
determination but the appeal is not
upheld, the third-party payer
may initiate recovery of the
overpayment. When a provider has failed to make a timely response to the
notice of the third-party payer's determination of overpayment,
the third-party payer may recover the overpayment by deducting the
amount of the overpayment from other payments the third-party
payer owes the provider or by taking action pursuant to any other
remedy available under the Revised Code. When a provider elects
not to appeal a determination of overpayment or appeals the
determination but the appeal is not upheld, the third-party payer
shall
permit a provider to repay the amount by making one or more
direct
payments
to the third-party payer or by having the
amount
deducted
from
other
payments the third-party payer owes the
provider.
(C) The notice of overpayment a third-party payer is
required to give a provider under division (B) of this section
shall be made in writing and shall specify all of the following:
(1) The full name of the beneficiary who received the
health care services for which overpayment was made;
(2) The date or dates the services were provided;
(3) The amount of the overpayment;
(4) The claim number or other pertinent numbers;
(5) A detailed explanation of basis for the third-party
payer's determination of overpayment;
(6) The method in which payment was made, including, for
tracking purposes, the date of payment and, if applicable, the
check number;
(7) That the provider may appeal the third-party payer's
determination of overpayment, if the provider responds to the
notice within thirty days;
(8) The method by which recovery of the overpayment would
be made, if recovery proceeds under division (B) of this section.
(D) Any provision of a contractual arrangement entered into
between a third-party payer and a provider or beneficiary that is
contrary to divisions (A) to (C) of this section is unenforceable.
Sec. 3901.389. (A) Any third-party payer that fails to
comply
with section
3901.381
of the Revised Code, or any
contractual payment arrangement
entered
into under section
3901.383 of the Revised Code, shall pay
interest in accordance
with this section. (B) Interest shall be computed based upon the number
of
days
that have elapsed between the date payment is due in
accordance
with
section 3901.381 of the Revised Code or the
contractual
payment arrangement entered into under section
3901.383 of the
Revised Code, and the date payment is made. The
interest rate for
determining the amount of interest
due
shall be
equal to an annual
percentage rate of eighteen per cent. (C) For purposes of this section, if a
dispute
exists
between a provider and a third-party payer as to
the day a
payment
was made by the third-party payer, both of the following apply: (1) If the third-party payer or a person acting on behalf of
the third-party payer submits a payment directly to a provider by
mail and
retains a record of the day the payment was mailed, there
exists a
rebuttable presumption that the payment was made
five
business
days before the day the payment
was received by the
provider,
unless it can be proven otherwise. (2) If the third-party payer or a person acting on behalf of
the third-party payer submits a payment directly to a provider
electronically, there exists
a
rebuttable presumption that the
payment was made twenty-four hours before the date the payment
was
received by the provider,
unless it can be proven otherwise. (D) Interest due in accordance with this section shall be
paid
directly to the provider at the time payment of the claim is
made and shall
not be used to
reduce benefits or payments
otherwise payable under a
benefits contract.
Sec. 3901.3810. (A) A provider or beneficiary aggrieved with
respect to any act of a third-party payer that the provider or
beneficiary believes to be a violation of sections 3901.381 to
3901.388 of the Revised Code may file a
written complaint with the
superintendent of insurance regarding
the violation.
(B) A third-party payer shall not retaliate against a
provider or beneficiary who files a complaint under division (A)
of this section. If a provider or beneficiary is aggrieved with
respect to any act of the third-party payer that the provider or
beneficiary believes to be retaliation for filing a complaint
under division (A) of this section, the provider or beneficiary
may file a written complaint with the superintendent regarding the
alleged
retaliation.
Sec. 3901.3811. (A) No third-party payer shall fail to
comply
with sections 3901.381 and 3901.384 to 3901.3810 of the
Revised Code. (B) The superintendent of insurance may require
third-party
payers to submit reports of their compliance
with
division (A) of
this section. If reports are required, the
superintendent shall
prescribe
the content, format, and frequency
of the reports in
consultation with third-party payers. The superintendent shall not
require reports to be submitted more frequently than once every
three months. The superintendent shall not use findings from reports
submitted by a third-party payer under this division as the basis
of a finding of a violation of division (A) of this section or the
imposition of penalties under section 3901.3812 of the Revised
Code. However, the information contained in the reports may cause
the superintendent to conduct a market conduct examination of the
third-party payer. During this examination, the superintendent
may examine data collected from the same time period as covered by
these reports and the superintendent's examination findings may be
used as the basis for finding a violation of division (A) of this
section. Sec. 3901.3812. (A) If, after completion of an examination
involving information collected from a six-month period, the
superintendent finds that a third-party payer has committed a
series of violations that, taken together, constitutes a
consistent pattern or practice of violating division (A) of
section 3901.3811 of the Revised Code, the superintendent may
impose on the third-party payer any of the administrative remedies
specified in division (B) of this section. In making a finding
under this division, the superintendent shall apply the error
tolerance
standards for claims processing contained in the market
conduct examiners handbook issued by the national association of
insurance
commissioners in effect at the time the claims were
processed.
Before imposing an administrative remedy, the superintendent
shall provide written notice to the third-party payer informing
the third-party payer of the reasons for the superintendent's
finding, the administrative remedy the superintendent proposes to
impose, and the opportunity to submit a written request for an
administrative hearing regarding the finding and proposed remedy.
If the third-party payer requests a hearing, the superintendent
shall conduct the hearing in accordance with Chapter 119. of the
Revised Code not later than fifteen days after receipt of the
request. (B)(1) In imposing administrative remedies under division
(A) of this section for violations of section 3901.381 of the
Revised Code, the superintendent may do any of the
following: (a) Levy a monetary penalty in an amount determined in
accordance with division (B)(3) of this section; (b) Order the payment of interest directly to the provider
in accordance with section 3901.389 of the Revised Code; (c) Order the third-party payer to cease and desist from
engaging in the violations; (d) If a monetary penalty is not levied under division
(B)(1)(a) of this section, impose any of the administrative
remedies provided for in section 3901.22 of the Revised Code,
other than those specified in divisions (D)(4) and (5) and (G) of
that
section. (2)
In imposing administrative remedies under division (A)
of this section for violations of sections 3901.384 to 3901.3810
of the Revised Code, the superintendent may do any of the
following:
(a) Levy a monetary penalty in an amount determined in
accordance with division (B)(3) of this section;
(b) Order the payment of interest directly to the provider
in accordance with section 3901.38 of the Revised Code;
(c) Order the third-party payer to cease and desist from
engaging in the violations;
(d) If a monetary penalty is not levied under division
(B)(2)(a) of this section, impose any of the administrative
remedies provided for in section 3901.22 of the Revised Code,
other than those specified in divisions (D)(4) and (5) and (G) of
that section. For violations of sections 3901.384 to 3901.3810 of
the Revised Code that did not comply with section 3901.381 of the
Revised Code, the superintendent may also use section 3901.22 of
the Revised Code except divisions (D)(4) and (5) of that section. (3) A finding by the superintendent that a third-party payer
has committed a series of
violations that, taken together,
constitutes a consistent pattern or practice of violating division
(A) of section 3901.3811 of the Revised Code, shall constitute a
single offense for purposes of levying a fine under division
(B)(1)(a) and (B)(2)(a) of this section. For
a first offense, the
superintendent may levy a fine of not more
than one hundred
thousand dollars. For a second offense that
occurs on or earlier
than four years from the first offense, the
superintendent may
levy a fine of not more than one hundred fifty thousand dollars.
For a third
or additional offense that occurs on or earlier than
seven years
after a first offense, the superintendent may levy a
fine of not more than three hundred
thousand dollars. In
determining the amount of a fine to be
levied within the specified
limits, the superintendent shall
consider the following factors: (a) The extent and frequency of the violations; (b) Whether the violations were due to circumstances beyond
the third-party payer's control; (c) Any remedial actions taken by the third-party payer to
prevent future violations; (d) The actual or potential harm to others resulting from
the violations; (e) If the third-party payer knowingly and willingly
committed the violations; (f) The third-party payer's financial condition; (g) Any other factors the superintendent considers
appropriate. (C) The remedies imposed by the superintendent under
this
section
are in
addition to, and
not
in lieu of, such other
remedies as
providers
and beneficiaries may otherwise
have by law. (D)
Any fine collected under this section shall be paid into
the
state treasury as follows: (1) Twenty-five per cent of the total to the credit of the
department of insurance
operating fund
created by section 3901.021
of the Revised Code; (2) Sixty-five per cent of the total to the credit of the
general revenue fund; (3) Ten per cent of the total to the credit of claims
processing education fund, which is hereby created. All money credited to the claims processing education fund
shall be used by the department of insurance to make technical
assistance available to third-party payers, providers, and
beneficiaries for effective implementation of the provisions of
sections 3901.38 and 3901.381 to 3901.3814 of the Revised Code.
Sec. 3901.3813. The superintendent of insurance may adopt
rules as the superintendent considers necessary to carry out the
purposes of section 3901.38 and sections 3901.381 to 3901.3812 of
the Revised Code.
The
rules shall be adopted in accordance with
Chapter 119. of the
Revised Code.
Sec. 3901.3814. Sections 3901.38 and 3901.381 to
3901.3813
of the Revised Code do not apply to the following:
(A) Policies offering coverage that is regulated
under
Chapters 3935. and 3937. of the Revised Code;
(B) An employer's self-insurance plan and any of its
administrators, as defined in section 3959.01 of the Revised Code,
to the extent that federal law supersedes,
preempts, prohibits, or
otherwise precludes the application of any
provisions of those
sections to the plan and its administrators;
(C) A third-party payer for coverage provided under the
medicare plus choice or medicaid programs operated under Title
XVIII and XIX of the "Social Security Act," 49 Stat. 620 (1935),
42 U.S.C.A. 301, as amended; (D) A third-party payer for coverage provided under the
tricare program offered by the United States department of
defense. Sec. 3902.11. As used in sections 3902.11 to 3902.14 of
the
Revised Code: (A) "Beneficiary"
has
and "third-party
payer"
have the same
meaning
meanings as in
division
(A)(1) of section
3901.38 of the
Revised Code. (B) "Plan of health coverage" means any of the following
if
the policy, contract, or agreement contains a coordination of
benefits provision: (1) An individual or group sickness and accident insurance
policy, which policy provides for hospital,
dental, surgical, or
medical services; (2) Any individual or group contract of a health insuring
corporation, which
contract provides for
hospital, dental,
surgical, or medical services; (3) Any other individual or group policy or agreement
under
which a third-party payer provides for hospital, dental,
surgical,
or medical services. (C) "Provider"
has the same meaning as in division (A)(6)
of
section 3901.38 of the Revised Code
means a hospital, nursing
home, physician, podiatrist, dentist, pharmacist, chiropractor, or
other licensed health care provider entitled to reimbursement by a
third-party payer for services rendered to a beneficiary under a
benefits contract. (D) "Third-party payer" has the same meaning as in
division
(A)(8) of section 3901.38 of the Revised Code.
Sec. 3902.21. As used in sections
3902.21 to
3902.22
and
3902.23 of the Revised Code: (A) "Proof of loss" means the documentation and procedures
required and the
criteria employed by third-party payers to accept
or reject and to determine
benefits payable under a claim for
reimbursement of health services or
supplies, including
documentation, procedures, and criteria to determine the
medical
necessity of health services or supplies.
(B) "Third-party payers, "third-party payer" has the same
meaning as in section 3901.38 of the
Revised Code.
Sec. 3902.22. The superintendent of insurance shall
develop
a standard claim form
and standard proof of loss to be used by all
third-party
payers
and providers for reimbursement of health care
services and
supplies, taking into consideration the
special needs
of, and
differences between, third-party payers. The
standard
claim form
and standard proof of loss shall be prescribed
in rules
the
superintendent shall adopt in accordance with Chapter
119. of
the
Revised Code. The superintendent may prescribe a
separate
claim
form for each third-party payer. If a national
standard
claim
form
and
standard proof of loss is established by
the
sickness and
accident insurance industry, the superintendent
shall
amend the
rules to comply with the national standards. The
standard claim
form shall
include a method to specify the license
numbers of
physical therapists and
other health care professionals
rendering
services designated as physical
therapy, as required
under section
4755.56 of the Revised Code.
Sec. 3902.23. Beginning one hundred eighty days after rules
adopted under
section 3902.22 of the Revised Code take effect, no
third-party payer shall
fail to use the standard claim form
and
proof of loss prescribed in those
rules.
Sec. 3924.21. (A) As used in this section: (1) "Beneficiary," "hospital,"
"provider," and
"third-party
payer" have the same meanings as in section 3901.38
of the Revised
Code. (2) "Overcharged" means charged more than the usual and
customary charge, rate, or fee that is charged by the
provider or
hospital for a particular item or service.
(3) "Provider" has the same meaning as in section 3902.11 of
the Revised Code. (B) If a beneficiary identifies on the billing statement
of
a provider or hospital any item or service for which the
beneficiary was overcharged by more than five hundred dollars and
the beneficiary notifies the third-party payer of the error at
any
time after the thirty-day period immediately following the
date on
which the third-party payer makes payment to the provider
or
hospital for the item or service, the provider or hospital
shall
refund to the beneficiary an amount equal to fifteen per
cent of
the amount overcharged. (C) A provider or hospital shall not be required to
comply
with division (B) of this section if, at the time
the third-party
payer receives notice of the overcharge from the
beneficiary, the
provider, hospital, or third-party payer is in
the process of
correcting the error and such process can be
documented. SECTION 2. That existing sections 1349.01, 1739.05, 1739.14,
3901.38, 3902.11, 3902.21, 3902.22, 3902.23, and 3924.21 and
section 3901.381 of the Revised Code are hereby
repealed.
SECTION 3. Sections 1 and 2 of this act shall take effect one
year after the act is signed by the Governor or otherwise becomes
law.
SECTION 4. Sections 3901.38, 3901.381, 3901.382, 3901.383,
3901.384, 3901.385, 3901.386, 3901.387, 3901.388, 3901.389,
3901.3810, 3901.3811, 3901.3812, 3901.3813, 3901.3814, 3902.21,
3902.22, and
3902.23 of the Revised Code, as
amended, enacted,
or
repealed and
reenacted by this act, apply
to
any claim for
payment for health care
services
that is submitted to
a
third-party payer on or after
the effective
date of this act.
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