SENATORS Mumper, Armbruster, Blessing, Spada, Hottinger, Jacobson, Jordan, Oelslager, Mead, Amstutz, Robert Gardner, Harris, DiDonato, Herington, Ryan, Prentiss, Mallory, Shoemaker, Hagan, Randy Gardner

To amend sections 1349.01, 1739.05, 1739.14, 3901.38,

1

3902.11, 3902.21, 3902.22, 3902.23, and 3924.21,

2

to enact new section 3901.381 and sections

3

3901.382, 3901.383, 3901.384, 3901.385, 3901.386,

4

3901.387, 3901.388, 3901.389, 3901.3810,

5

3901.3811, 3901.3812, 3901.3813, and 3901.3814

6

and to repeal section 3901.381 of the Revised Code

7

to revise the "prompt pay" requirements applicable

8

to insurance companies, health insuring

9

corporations, and other third-party payers of

10

health care services.

11

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

Section 1.  That sections 1349.01, 1739.05, 1739.14, 3901.38,	12
3902.11, 3902.21, 3902.22, 3902.23, and 3924.21 be amended and new	13
section 3901.381 and sections 3901.382, 3901.383, 3901.384,	14
3901.385, 3901.386, 3901.387, 3901.388, 3901.389, 3901.3810,	15
3901.3811, 3901.3812, 3901.3813, and 3901.3814 of the Revised	16
Code be enacted to read as follows:	17

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

18

(1) "Consumer reporting agency" has the same meaning as in	19
the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 1681a.	20

(2) "Court" means the division of the court of common pleas	21
having jurisdiction over actions for divorce, annulment,	22
dissolution of marriage, legal separation, child support, or	23
spousal support.	24

(3) "Health insurance coverage" means hospital, surgical, or	25
medical expense coverage provided under any health insurance or	26
health care policy, contract, or plan or any other health benefits	27
arrangement.	28

(4) "Provider" has the same meaning as in section 3901.38	29
3902.11 of the Revised Code.	30

(B) If, pursuant to an action for divorce, annulment,	31
dissolution of marriage, or legal separation, the court determines	32
that a party who is a resident of this state is responsible for	33
obtaining health insurance coverage for the party's former spouse	34
or children or if, pursuant to a child support order issued in	35
accordance with sections 3119.30 to 3119.58 of the Revised Code,	36
the court requires a party who is a resident of this state to	37
obtain health insurance coverage for the children who are the	38
subject of the child support order, and the party fails to obtain	39
such coverage, no provider or collection agency shall collect or	40
attempt to collect from the former spouse, children, or person	41
responsible for the children, any reimbursement of any hospital,	42
surgical, or medical expenses incurred by the provider for	43
services rendered to the former spouse or children, which expenses	44
would have been covered but for the failure of the party to obtain	45
the coverage, if the former spouse, any of the children, or a	46
person responsible for the children, provides the following to the	47
provider or collection agency:	48

(1) A copy of the court order requiring the party to obtain	49
health insurance coverage for the former spouse or children.	50

(2) Reasonable assistance in locating the party and	51
obtaining information about the party's health insurance coverage.	52

(C) If the requirements of divisions (B)(1) and (2) of this	53
section are not met, the provider or collection agency may collect	54
the hospital, surgical, or medical expenses both from the former	55
spouse or person responsible for the children and from the party	56
who failed to obtain the coverage. If the requirements of	57
divisions (B)(1) and (2) are met, the provider or collection	58
agency may collect or attempt to collect the expenses only from	59
the party.	60

A party required to obtain health insurance coverage for a	61
former spouse or children who fails to obtain the coverage is	62
liable to the provider for the hospital, surgical, or medical	63
expenses incurred by the provider as a result of the failure to	64
obtain the coverage. This section does not prohibit a former	65
spouse or person responsible for the children from initiating an	66
action to enforce the order requiring the party to obtain health	67
insurance for the former spouse or children or to collect any	68
amounts the former spouse or person responsible for the children	69
pays for hospital, surgical, or medical expenses for which the	70
party is responsible under the order requiring the party to obtain	71
health insurance for the former spouse or children.	72

(D)(1) If the requirements of divisions (B)(1) and (2) of	73
this section are met, both of the following restrictions shall	74
apply:	75

(a) No collection agency or provider of hospital, surgical,	76
or medical services may report to a consumer reporting agency, for	77
inclusion in the credit file or credit report of the former spouse	78
or person responsible for the children, any information relative	79
to the nonpayment of expenses for the services incurred by the	80
provider, if the nonpayment is the result of the failure of the	81
party responsible for obtaining health insurance coverage to	82
obtain health insurance coverage.	83

(b) No consumer reporting agency shall include in the credit	84
file or credit report of the former spouse or person responsible	85
for the children, any information relative to the nonpayment of	86
any hospital, surgical, or medical expenses incurred by a provider	87
as a result of the party's failure to obtain the coverage.	88

(2) If the requirements of divisions (B)(1) and (2) of this	89
section are not met, both of the following provisions shall apply:	90

(a) A provider of hospital, surgical, or medical services,	91
or a collection agency, may report to a consumer reporting agency,	92
for inclusion in the credit file or credit report of the former	93
spouse or person responsible for the children, any information	94
relative to the nonpayment of expenses for the services incurred	95
by the provider, if the nonpayment is the result of the failure of	96
the party responsible for obtaining health insurance coverage to	97
obtain such coverage.	98

(b) A consumer reporting agency may include in the credit	99
file or credit report of the former spouse or person responsible	100
for the children, any information relative to the nonpayment of	101
any hospital, surgical, or medical expenses incurred by the	102
provider, if the nonpayment is the result of the failure of the	103
party responsible for obtaining health insurance coverage to	104
obtain such coverage.	105

(3)(a) A provider of hospital, surgical, or medical	106
services, or a collection agency, may report to a consumer	107
reporting agency, for inclusion in the credit file or credit	108
report of that party, any information relative to the nonpayment	109
of expenses for the services incurred by the provider, if the	110
nonpayment is the result of the failure of the party responsible	111
for obtaining health insurance coverage to obtain such coverage.	112

(b) A consumer reporting agency may include in the credit	113
file or credit report of the party responsible for obtaining	114
health insurance coverage, any information relative to the	115
nonpayment of any hospital, surgical, or medical expenses incurred	116
by a provider, if the nonpayment is the result of the failure of	117
that party to obtain health insurance coverage.	118

(4) If any information described in division (D)(2) of this	119
section is placed in the credit file or credit report of the	120
former spouse or person responsible for the children, the consumer	121
reporting agency shall remove the information from the credit file	122
and credit report if the former spouse or person responsible for	123
the children provides the agency with the information required in	124
divisions (B)(1) and (2) of this section. If the agency fails to	125
remove the information from the credit file or credit report	126
pursuant to the terms of the "Fair Credit Reporting Act," 84 Stat.	127
1128, 15 U.S.C. 1681a, within a reasonable time after receiving	128
the information required by divisions (B)(1) and (2) of this	129
section, the former spouse may initiate an action to require the	130
agency to remove the information.	131

If any information described in division (D)(3) of this	132
section is placed in the party's credit file or credit report, the	133
party has the burden of proving that the party is not responsible	134
for obtaining the health insurance coverage or, if responsible,	135
that the expenses incurred are not covered expenses. If the party	136
meets that burden, the agency shall remove the information from	137
the party's credit file and credit report immediately. If the	138
agency fails to remove the information from the credit file or	139
credit report immediately after the party meets the burden, the	140
party may initiate an action to require the agency to remove the	141
information.	142

Sec. 1739.05.  (A) A multiple employer welfare arrangement	143
that is created pursuant to sections 1739.01 to 1739.22 of the	144
Revised Code and that operates a group self-insurance program may	145
be established only if any of the following applies:	146

(1) The arrangement has and maintains a minimum enrollment	147
of three hundred employees of two or more employers.	148

(2) The arrangement has and maintains a minimum enrollment	149
of three hundred self-employed individuals.	150

(3) The arrangement has and maintains a minimum enrollment	151
of three hundred employees or self-employed individuals in any	152
combination of divisions (A)(1) and (2) of this section.	153

(B) A multiple employer welfare arrangement that is created	154
pursuant to sections 1739.01 to 1739.22 of the Revised Code and	155
that operates a group self-insurance program shall comply with all	156
laws applicable to self-funded programs in this state, including	157
sections 3901.04, 3901.041, 3901.19 to 3901.26, 3901.38, 3901.381	158
to 3901.3814, 3901.40, 3901.45, 3901.46, 3902.01 to 3902.14,	159
3923.30, 3923.301, 3923.38, 3923.581, 3923.63, 3924.031, 3924.032,	160
and 3924.27 of the Revised Code.	161

(C) A multiple employer welfare arrangement created pursuant	162
to sections 1739.01 to 1739.22 of the Revised Code shall solicit	163
enrollments only through agents or solicitors licensed pursuant to	164
Chapter 3905. of the Revised Code to sell or solicit sickness and	165
accident insurance.	166

(D) A multiple employer welfare arrangement created pursuant	167
to sections 1739.01 to 1739.22 of the Revised Code shall provide	168
benefits only to individuals who are members, employees of	169
members, or the dependents of members or employees, or are	170
eligible for continuation of coverage under section 1751.53 or	171
3923.38 of the Revised Code or under Title X of the "Consolidated	172
Omnibus Budget Reconciliation Act of 1985," 100 Stat. 227, 29	173
U.S.C.A. 1161, as amended.	174

Sec. 1739.14.  (A) Each member shall pay to the multiple	175
employer welfare arrangement operating a group self-insurance	176
program a premium equal to its share of the arrangement's	177
projected obligation for employee welfare benefit liability,	178
administrative expenses, and other costs incurred by the	179
arrangement as determined by the board of the arrangement or by a	180
third-party administrator and approved by the board of the	181
arrangement. This amount may be adjusted by the board according	182
to the claims experience of each participating member in	183
accordance with criteria set forth in the articles or bylaws of	184
the arrangement.	185

(B) Each member shall pay a premium for each year at the	186
beginning of each fiscal year unless otherwise provided for under	187
the agreement.	188

(C) A multiple employer welfare arrangement operating a	189
group self-insurance program shall make payments, or arrange to	190
have payments made, to the employees of the members out of the	191
fund for employee welfare benefits in accordance with section	192
3901.38 and sections 3901.381 to 3901.3814 of the Revised Code.	193

(D) A board of the multiple employer welfare arrangement	194
operating a group self-insurance program shall determine whether	195
any dividends or assessments shall be paid to or levied against	196
participating members.	197

Sec. 3901.38.  (A) As used in this section and section	198
sections 3901.381 to 3901.3814 of the Revised Code:	199

(1)(A) "Beneficiary" means any policyholder, subscriber,	200
member, employee, or other person who is eligible for benefits	201
under a benefits contract.	202

(2)(B) "Benefits contract" means a sickness and accident	203
insurance policy providing hospital, surgical, or medical expense	204
coverage, or a health insuring corporation contract or other	205
policy or agreement under which a third-party payer agrees to	206
reimburse for covered health care or dental services rendered to	207
beneficiaries, up to the limits and exclusions contained in the	208
benefits contract.	209

(3) "Completed claim" means a proof of loss or a claim for	210
payment for health care services which has been submitted to the	211
appropriate claims processing office of the third-party payer	212
accompanied by sufficient documentation for the third-party payer	213
to determine proof of loss and reasonably required by the	214
third-party payer to accept or reject the claim.	215

(4)(C) "Hospital" has the same meaning set forth as in	216
section 3727.01 of the Revised Code.	217

(5) "Proof of loss" means a claim for payment for health	218
care services which has been submitted to the appropriate claims	219
processing office of the third-party payer accompanied by	220
sufficient documentation for the third-party payer to determine	221
benefits payable under the benefits contract and reasonably	222
required by the third-party payer to accept or reject the claim.	223

(6)(D) "Provider" means a hospital, nursing home, physician,	224
podiatrist, dentist, pharmacist, chiropractor, or other licensed	225
health care provider entitled to reimbursement by a third-party	226
payer for services rendered to a beneficiary under a benefits	227
contract.	228

(7)(E) "Reimburse" means indemnify, make payment, or	229
otherwise accept responsibility for payment for health care	230
services rendered to a beneficiary, or arrange for the provision	231
of health care services to a beneficiary.	232

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

233

(a)(1) An insurance company;

234

(b)(2) A health insuring corporation;

235

(c)(3) A labor organization;

236

(d)(4) An employer;

237

(e)(5) An intermediary organization, as defined in section	238
1751.01 of the Revised Code, that is not a health delivery network	239
contracting solely with self-insured employers;	240

(f)(6) An administrator subject to sections 3959.01 to	241
3959.16 of the Revised Code;	242

(g)(7) A health delivery network, as defined in section	243
1751.01 of the Revised Code;	244

(h)(8) Any other person that is obligated pursuant to a	245
benefits contract to reimburse for covered health care services	246
rendered to beneficiaries under such contract.	247

(B)(1) Except as provided in division (B)(2) of this section	248
and in section 3901.381 of the Revised Code, within twenty-four	249
days of the receipt of a completed claim from a provider or a	250
beneficiary for reimbursement for health care services rendered by	251
the provider to a beneficiary, a third-party payer shall, in	252
accordance with division (D) of this section, make payment of any	253
amount due on such claim.	254

(2) A third-party payer and a provider may, in negotiating a	255
reimbursement contract, agree to any time period by which a	256
third-party payer shall, subject to division (D) of this section,	257
make payment of any amount due on a completed claim. Nothing in	258
this division shall be construed as limiting in any manner the	259
application of the requirements of this section to any benefits or	260
reimbursement contract.	261

(3) Any provider or beneficiary aggrieved with respect to	262
any act of a third-party payer that such provider or beneficiary	263
believes to be a violation of division (B)(1) or (2) of this	264
section may file a written complaint with the superintendent of	265
insurance. If a series of such complaints is received by the	266
superintendent with respect to a particular third-party payer and	267
if, after investigation, the superintendent finds that such	268
third-party payer has engaged in a series of such violations	269
which, taken together, constitute a consistent pattern or a	270
practice of such third-party payer to violate division (B)(1) or	271
(2) of this section, the superintendent shall issue an order	272
requiring such third-party payer to cease and desist from engaging	273
in such violations and to pay a late payment penalty as specified	274
in divisions (B)(4) and (5) of this section with respect to the	275
claims the superintendent finds were not timely paid. In the	276
order, the superintendent shall specify the reasons for the	277
superintendent's finding and order and state that a hearing	278
conducted pursuant to Chapter 119. of the Revised Code shall be	279
held within fifteen days after requested in writing by the	280
third-party payer. The provisions of division (B)(3) of this	281
section are in addition to, and not in lieu of, such other	282
remedies as providers and beneficiaries may otherwise have by law.	283

(4)(a) The late payment penalty shall be computed based upon	284
the number of days that have elapsed between the date payment is	285
due in accordance with division (B)(1) or (2) of this section and	286
the date payment is actually sent.	287

(b) The interest rate for determining the amount of the late	288
payment penalty shall be the rate agreed to by the provider and	289
the third-party payer or the rate specified by and determined in	290
accordance with division (A) of section 1343.01 of the Revised	291
Code.	292

(5) A provider and a third-party payer may enter into a	293
contractual agreement in which the timing of payments by the	294
third-party payer is not directly related to the receipt of a	295
completed claim. Such contractual arrangement may include	296
periodic interim payment arrangements, capitation payment	297
arrangements, or other payment arrangements acceptable to the	298
provider and the third-party payer. Except as agreed to under	299
such contract, this section does not apply to such payment	300
arrangements.	301

(6) Any late payment penalty due and payable by a	302
third-party payer in accordance with this section shall not be	303
used to reduce benefits or payments otherwise payable under a	304
benefits contract.	305

(C) No third-party payer shall refuse to process or pay	306
within the time period required under division (B)(1) or (2) of	307
this section a completed claim submitted by a provider on the	308
ground the beneficiary has not been discharged from the hospital	309
or the treatment has not been completed, if the submitted claim	310
covers services actually rendered and charges actually incurred	311
over at least a thirty-day period.	312

(D)(1) Notwithstanding section 1751.13 or division (I)(2) of	313
section 3923.04 of the Revised Code, a reimbursement contract	314
entered into or renewed on or after June 29, 1988, between a	315
third-party payer and a hospital shall provide that reimbursement	316
for any service provided by a hospital pursuant to a reimbursement	317
contract and covered under a benefits contract shall be made	318
directly to the hospital.	319

(2) If the third-party payer and the hospital have not	320
entered into a contract regarding the provision and reimbursement	321
for covered services, the third-party payer shall accept and honor	322
a completed and validly executed assignment of benefits with a	323
hospital by a beneficiary, except when the third-party payer has	324
notified the hospital in writing of the conditions under which the	325
third-party payer will not accept and honor an assignment of	326
benefits. Such notice shall be made annually.	327

(3) A third-party payer may not refuse to accept and honor a	328
validly executed assignment of benefits with a hospital pursuant	329
to division (D)(2) of this section for medically necessary	330
hospital services provided on an emergency basis.	331

(E) A series of violations which taken together, constitute	332
a consistent pattern or a practice of violation of any of the	333
provisions of this section is an unfair and deceptive act pursuant	334
to sections 3901.19 to 3901.23 of the Revised Code and is subject	335
to proceedings pursuant to those sections.	336

Sec. 3901.381. (A) Except as provided in sections 3901.382,	337
3901.383, and 3901.384 of the Revised Code, a third-party payer	338
shall process a claim for payment for health care services	339
rendered by a provider to a beneficiary in accordance with the	340
time periods specified in this section.	341

(B)(1) Unless division (B)(2), (3), or (4) of this section	342
applies, when a third-party payer receives from a provider or	343
beneficiary a claim on the standard claim form prescribed in rules	344
adopted by the superintendent of insurance under section 3902.22	345
of the Revised Code, the third-party payer shall pay or deny the	346
claim not later than thirty days after receipt of the claim. When	347
a third-party payer denies a claim, the third-party payer shall	348
notify the provider and the beneficiary. The notice shall state,	349
with specificity, why the third-party payer denied the claim.	350

(2) Unless division (B)(3) or (4) of this section applies,	351
when a provider or beneficiary has used the standard claim form,	352
but the third-party payer determines that reasonable supporting	353
documentation is needed to establish the third-party payer's	354
responsibility to make payment, the third-party payer shall pay or	355
deny the claim not later than forty-five days after receipt of the	356
claim. Supporting documentation includes the verification of	357
employer and beneficiary coverage under a benefits contract,	358
confirmation of premium payment, medical information regarding the	359
beneficiary and the services provided, information on the	360
responsibility of another third-party payer to make payment, and	361
information that is needed to correct material deficiencies in the	362
claim related to the identification of a diagnosis, treatment, or	363
provider.	364

Not later than thirty days after receipt of the claim, the	365
third-party payer shall notify the provider, beneficiary, or	366
third-party payer that the supporting documentation is needed. The	367
notice shall state, with specificity, the supporting documentation	368
needed. If any of the supporting documentation is under the	369
control of the beneficiary, the beneficiary shall provide the	370
supporting documentation to the third-party payer.	371

The number of days that elapse between the third-party	372
payer's request for supporting documentation and receipt of the	373
requested documentation shall not be counted for purposes of	374
determining the third-party payer's compliance with the time	375
period of not more than forty-five days for payment or denial of a	376
claim. If the third-party payer requests additional supporting	377
documentation after receiving the initially requested	378
documentation, the number of days that elapse between making the	379
request and receiving the documentation shall be counted for	380
purposes of determining the third-party payer's compliance with	381
the time period of not more than forty-five days.	382

When a third-party payer denies a claim, the third-party	383
payer shall notify the provider and the beneficiary. The notice	384
shall state, with specificity, why the third-party payer denied	385
the claim. If a claim is denied because the provider failed to	386
submit the supporting documentation needed to establish the	387
third-party payer's responsibility to pay the claim and the	388
provider in any manner charges the beneficiary an amount for the	389
cost of the services, other than copayments or co-insurance	390
required by a benefits contract, the provider shall notify the	391
beneficiary that the charge is the result of a denied claim and	392
shall notify the third-party payer that the beneficiary has been	393
charged. The notices shall be made in writing and sent	394
simultaneously to the beneficiary and third-party payer. In each	395
notice, the provider shall include the number assigned by the	396
third-party payer to the claim that was denied.	397

If a third-party payer determines that supporting	398
documentation related to medical information is routinely	399
necessary to process a claim for payment of a particular health	400
care service, the third-party payer shall establish a description	401
of the supporting documentation that is routinely necessary and	402
make the description available to providers in a readily	403
accessible format.	404

(3) When a provider or beneficiary submits a claim by using	405
the standard claim form prescribed in the superintendent's rules,	406
but the information provided in the claim is materially deficient,	407
the third-party payer shall notify the provider or beneficiary not	408
later than fifteen days after receipt of the claim. The notice	409
shall state, with specificity, the information needed to correct	410
all material deficiencies. Once the material deficiencies are	411
corrected, the third-party payer shall proceed in accordance with	412
division (B)(1), (2), or (4) of this section.	413

It is not a violation of the notification time period of not	414
more than fifteen days if a third-party payer finds after the end	415
of the period that it is necessary to request information related	416
to the identification of a diagnosis, treatment, or provider.	417
Requests for such information shall be made as requests for	418
supporting documentation under division (B)(2) of this section,	419
and payment or denial of the claim is subject to the time periods	420
specified in that division.	421

(4) When a third-party payer is the secondary payer, the	422
beneficiary shall submit to the third-party payer an explanation	423
of benefits or other evidence of payment or denial by the primary	424
payer not later than thirty days after payment by the primary	425
payer. The third-party payer shall pay or deny the claim not	426
later than thirty days after it receives the explanation of	427
benefits or other evidence of payment or denial by the primary	428
payer. When a third-party payer denies a claim, the third-party	429
payer shall notify the provider and the beneficiary. The notice	430
shall state, with specificity, why the third-party payer denied	431
the claim.	432

(C) For purposes of this section, if a dispute exists	433
between a provider and a third-party payer as to the day a claim	434
form was received by the third-party payer, both of the following	435
apply:	436

(1) If the provider submits a claim by mail and retains a	437
record of the day the claim was mailed, there exists a rebuttable	438
presumption that the claim was received by the third-party payer	439
on the fifth business day after the day the claim was mailed,	440
unless it can be proven otherwise.	441

(2) If the provider submits a claim electronically, there	442
exists a rebuttable presumption that the claim was received by the	443
third-party payer twenty-four hours after the claim was submitted,	444
unless it can be proven otherwise.	445

(D) Nothing in this section requires a third-party payer to	446
provide more than one notice to an employer whose premium for	447
coverage of employees under a benefits contract has not been	448
received by the third-party payer.	449

Sec. 3901.382. Beginning six months after the date specified	450
in section 262 of the "Health Insurance Portability and	451
Accountability Act of 1996," 110 Stat. 2027, 42 U.S.C.A. 1320d-4,	452
on which a third-party payer is initially required to comply with	453
a standard or implementation specification for the electronic	454
exchange of health information, as adopted or established by the	455
United States secretary of health and human services pursuant to	456
that act, sections 3901.381, 3901.384, 3901.385, 3901.389,	457
3901.3810, 3901.3811, 3901.3812, and 3901.3813 of the Revised Code	458
apply to a claim submitted to a third-party payer for payment for	459
health care services only if the claim is submitted	460
electronically. A provider and third-party payer may enter into a	461
contractual arrangement under which the third-party payer agrees	462
to process claims that are not submitted electronically because of	463
the financial hardship that electronic submission of claims would	464
create for the provider or any other extenuating circumstance.	465

Sec. 3901.383. A provider and a third-party payer may do	466
either of the following:	467

(A) Enter into a contractual agreement in which payment of	468
any amount due for rendering health care services is to be made by	469
the third-party payer within time periods shorter than those set	470
forth in section 3901.381 of the Revised Code;	471

(B) Enter into a contractual agreement in which the timing	472
of payments by the third-party payer is not directly related to	473
the receipt of a claim form. The contractual arrangement may	474
include periodic interim payment arrangements, capitation payment	475
arrangements, or other periodic payment arrangements acceptable to	476
the provider and the third-party payer. Under a capitation payment	477
arrangement, the third-party payer shall begin paying the	478
capitated amounts to the beneficiary's primary care provider not	479
later than sixty days after the date the beneficiary selects or is	480
assigned to the provider. Under any other contractual periodic	481
payment arrangement, the contractual agreement shall state, with	482
specificity, the timing of payments by the third-party payer.	483

Sec. 3901.384. (A) Subject to division (B) of this section,	484
a third-party payer that requires timely submission of claims for	485
payment for health care services shall process a claim that is	486
not submitted in a timely manner if a claim for the same services	487
was initially submitted to a different third-party payer or state	488
or federal program that offers health care benefits and that payer	489
or program has determined that it is not responsible for the cost	490
of the health care services. When a claim is submitted later than	491
one year after the last date of service for which reimbursement is	492
sought under the claim, the third-party payer shall pay or deny	493
the claim not later than ninety days after receipt of the claim.	494
If the claim is denied, the third-party payer shall notify the	495
provider and the beneficiary. The notice shall state, with	496
specificity, why the third-party payer denied the claim.	497

(B) The third-party payer may refuse to process a claim	498
submitted by a provider if the provider submits the claim later	499
than thirty days after receiving notice from the different	500
third-party payer or a state or federal program that that payer or	501
program is not responsible for the cost of the health care	502
services.	503

(C) For purposes of this section, both of the following	504
apply:	505

(1) A determination that a third-party payer or state or	506
federal program is not responsible for the cost of health care	507
services includes a determination regarding coordination of	508
benefits, preexisting health conditions, ineligibility for	509
coverage at the time services were provided, subrogation	510
provisions, and similar findings;	511

(2) State and federal programs that offer health care	512
benefits include medicare, medicaid, workers' compensation, the	513
civilian health and medical program of the uniformed services and	514
other elements of the tricare program offered by the United States	515
department of defense, and similar state or federal programs.	516

(D) Any provision of a contractual arrangement entered into	517
between a third-party payer and a provider or beneficiary that is	518
contrary to divisions (A) to (C) of this section is unenforceable.	519

Sec. 3901.385.  A third-party payer shall not do either of	520
the following:	521

(A) Engage in any business practice that unfairly or	522
unnecessarily delays the processing of a claim or the payment of	523
any amount due for health care services rendered by a provider to	524
a beneficiary;	525

(B) Refuse to process or pay within the time periods	526
specified in section 3901.381 of the Revised Code a claim	527
submitted by a provider on the grounds the beneficiary has not	528
been discharged from the hospital or the treatment has not been	529
completed, if the submitted claim covers services actually	530
rendered and charges actually incurred over at least a thirty-day	531
period.	532

Sec. 3901.386. (A) Notwithstanding section 1751.13 or	533
division (I)(2) of section 3923.04 of the Revised Code, a	534
reimbursement contract entered into or renewed on or after June	535
29, 1988, between a third-party payer and a hospital shall provide	536
that reimbursement for any service provided by a hospital pursuant	537
to a reimbursement contract and covered under a benefits contract	538
shall be made directly to the hospital.	539

(B) If the third-party payer and the hospital have not	540
entered into a contract regarding the provision and reimbursement	541
of covered services, the third-party payer shall accept and honor	542
a completed and validly executed assignment of benefits with a	543
hospital by a beneficiary, except when the third-party payer has	544
notified the hospital in writing of the conditions under which the	545
third-party payer will not accept and honor an assignment of	546
benefits. Such notice shall be made annually.	547

(C) A third-party payer may not refuse to accept and honor a	548
validly executed assignment of benefits with a hospital pursuant	549
to division (B) of this section for medically necessary hospital	550
services provided on an emergency basis.	551

Sec. 3901.387. (A) When a provider or beneficiary submits	552
a duplicative claim for payment for health care services before	553
the time periods specified in section 3901.381 of the Revised Code	554
have elapsed for the original claim submitted, the third-party	555
payer may deny the duplicative claim.	556

(B)(1) A third-party payer shall establish a system whereby	557
a provider and a beneficiary may obtain information regarding the	558
status of a claim for payment for health care services. A	559
third-party payer shall inform providers and beneficiaries of the	560
mechanisms that may be used to gain access to the system.	561

(2) If a third-party payer delegates the processing of	562
payments to another entity, the third-party payer shall require	563
the entity to comply with division (B)(1) of this section on	564
behalf of the third-party payer.	565

Sec. 3901.388.  A payment made by a third-party payer to a	566
provider in accordance with sections 3901.381 to 3901.386 of the	567
Revised Code shall be considered final two years after payment is	568
made. After that date, the amount of the payment is not subject	569
to adjustment, except in the case of fraud by the provider.	570

(B) A third-party payer may recover the amount of any part	571
of a payment that the third-party payer determines to be an	572
overpayment if the recovery process is initiated not later than	573
two years after the payment was made to the provider. The	574
third-party payer shall inform the provider of its determination	575
of overpayment by providing notice in accordance with division (C)	576
of this section. The third-party payer shall give the provider an	577
opportunity to appeal the determination. If the provider fails	578
to respond to the notice sooner than thirty days after the notice	579
is made, elects not to appeal the determination, or appeals the	580
determination but the appeal is not upheld, the third-party payer	581
may initiate recovery of the overpayment.	582

When a provider has failed to make a timely response to the	583
notice of the third-party payer's determination of overpayment,	584
the third-party payer may recover the overpayment by deducting the	585
amount of the overpayment from other payments the third-party	586
payer owes the provider or by taking action pursuant to any other	587
remedy available under the Revised Code. When a provider elects	588
not to appeal a determination of overpayment or appeals the	589
determination but the appeal is not upheld, the third-party payer	590
shall permit a provider to repay the amount by making one or more	591
direct payments to the third-party payer or by having the amount	592
deducted from other payments the third-party payer owes the	593
provider.	594

(C) The notice of overpayment a third-party payer is	595
required to give a provider under division (B) of this section	596
shall be made in writing and shall specify all of the following:	597

(1) The full name of the beneficiary who received the	598
health care services for which overpayment was made;	599

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

600

(3) The amount of the overpayment;

601

(4) The claim number;

602

(5) A detailed explanation of basis for the third-party	603
payer's determination of overpayment.	604

(D) Any provision of a contractual arrangement entered into	605
between a third-party payer and a provider or beneficiary that is	606
contrary to divisions (A) to (C) of this section is unenforceable.	607

Sec. 3901.389. (A) Any third-party payer that fails to	608
comply with section 3901.381 of the Revised Code, or any	609
contractual payment arrangement entered into under section	610
3901.383 of the Revised Code, shall pay interest in accordance	611
with this section.	612

(B) Interest shall be computed based upon the number of days	613
that have elapsed between the date payment is due in accordance	614
with section 3901.381 of the Revised Code or the contractual	615
payment arrangement entered into under section 3901.383 of the	616
Revised Code, and the date payment is made. The interest rate for	617
determining the amount of interest due shall be equal to an annual	618
percentage rate of eighteen per cent.	619

(C) For purposes of this section, if a dispute exists	620
between a provider and a third-party payer as to the day a payment	621
was made by the third-party payer, both of the following apply:	622

(1) If the third-party payer submits a payment by mail and	623
retains a record of the day the payment was mailed, there exists a	624
rebuttable presumption that the payment was made five business	625
days before the day the payment was received by the provider,	626
unless it can be proven otherwise.	627

(2) If the third-party payer submits a payment	628
electronically, there exists a rebuttable presumption that the	629
payment was made twenty-four hours before the date the payment was	630
received by the provider, unless it can be proven otherwise.	631

(D) Interest due in accordance with this section shall be	632
paid directly to the provider at the time payment of the claim is	633
made and shall not be used to reduce benefits or payments	634
otherwise payable under a benefits contract.	635

Sec. 3901.3810. (A) A provider or beneficiary aggrieved with	636
respect to any act of a third-party payer that the provider or	637
beneficiary believes to be a violation of sections 3901.381 to	638
3901.388 of the Revised Code may file a written complaint with the	639
superintendent of insurance regarding the violation.	640

(B) A third-party payer shall not retaliate against a	641
provider or beneficiary who files a complaint under division (A)	642
of this section. If a provider or beneficiary is aggrieved with	643
respect to any act of the third-party payer that the provider or	644
beneficiary believes to be retaliation for filing a complaint	645
under division (A) of this section, the provider or beneficiary	646
may file a written complaint with the superintendent regarding the	647
alleged retaliation.	648

Sec. 3901.3811. (A) No third-party payer shall fail to	649
comply with sections 3901.381 and 3901.384 to 3901.3810 of the	650
Revised Code.	651

(B) The superintendent of insurance may require third-party	652
payers to submit reports of their compliance with division (A) of	653
this section. If reports are required, the superintendent shall	654
prescribe the content, format, and frequency of the reports in	655
consultation with third-party payers. The superintendent shall not	656
require reports to be submitted more frequently than once every	657
three months.	658

The superintendent shall not use findings from reports	659
submitted by a third-party payer under this division as the basis	660
of a finding of a violation of division (A) of this section or the	661
imposition of penalties under section 3901.3812 of the Revised	662
Code.	663

Sec. 3901.3812. (A) If, after completion of an examination	664
involving information collected from a six-month period, the	665
superintendent finds that a third-party payer has committed a	666
series of violations that, taken together, constitutes a	667
consistent pattern or practice of violating division (A) of	668
section 3901.3811 of the Revised Code, the superintendent may	669
impose on the third-party payer any of the administrative remedies	670
specified in division (B) of this section. In making a finding	671
under this division, the superintendent shall use the compliance	672
standards recommended by the national association of insurance	673
commissioners.	674

Before imposing an administrative remedy, the superintendent	675
shall provide written notice to the third-party payer informing	676
the third-party payer of the reasons for the superintendent's	677
finding, the administrative remedy the superintendent proposes to	678
impose, and the opportunity to submit a written request for an	679
administrative hearing regarding the finding and proposed remedy.	680
If the third-party payer requests a hearing, the superintendent	681
shall conduct the hearing in accordance with Chapter 119. of the	682
Revised Code not later than fifteen days after receipt of the	683
request.	684

(B)(1) In imposing administrative remedies under division	685
(A) of this section, the superintendent may do any of the	686
following:	687

(a) Levy a monetary penalty in an amount determined in	688
accordance with division (B)(2) of this section;	689

(b) Order the payment of interest directly to the provider	690
in accordance with 3901.389 of the Revised Code;	691

(c) Order the third-party payer to cease and desist from	692
engaging in the violations;	693

(d) If a monetary penalty is not levied under division	694
(B)(1)(a) of this section, impose any of the administrative	695
remedies provided for in section 3901.22 of the Revised Code,	696
other than those specified in divisions (D)(4) and (5) of that	697
section.	698

(2) For purposes of levying a fine under division (B)(1)(a)	699
of this section, a finding by the superintendent that a series of	700
violations have been committed constitutes a single offense. For	701
a first offense, the superintendent may levy a fine of not more	702
than one hundred thousand dollars. For a second offense that	703
occurs on or earlier than six years from the first offense, the	704
superintendent may levy a fine of not less than fifty thousand	705
dollars nor more than two hundred thousand dollars. For a third	706
or additional offense that occurs on or earlier than six years	707
after a first offense, the superintendent may levy a fine of not	708
less than one hundred thousand dollars nor more than three hundred	709
thousand dollars. In determining the amount of a fine to be	710
levied within the specified limits, the superintendent shall	711
consider the following factors:	712

(a) The extent and frequency of the violations;

713

(b) Whether the violations were due to circumstances beyond	714
the third-party payer's control;	715

(c) Any remedial actions taken by the third-party payer to	716
prevent future violations;	717

(d) The actual or potential harm to others resulting from	718
the violations;	719

(e) If the third-party payer knowingly and willingly	720
committed the violations;	721

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

722

(g) Any other factors the superintendent considers	723
appropriate.	724

(C) The remedies imposed by the superintendent under this	725
section are in addition to, and not in lieu of, such other	726
remedies as providers and beneficiaries may otherwise have by law.	727

(D) Any fine collected under this section shall be paid into	728
the state treasury as follows:	729

(1) Twenty-five per cent of the total to the credit of the	730
department of insurance operating fund created by section 3901.021	731
of the Revised Code;	732

(2) Sixty-five per cent of the total to the credit of the	733
general revenue fund;	734

(3) Ten per cent of the total to the credit of claims	735
processing education fund, which is hereby created.	736

All money credited to the claims processing education fund	737
shall be used by the department of insurance to make technical	738
assistance available to third-party payers, providers, and	739
beneficiaries for effective implementation of the provisions of	740
sections 3901.38 and 3901.381 to 3901.3814 of the Revised Code.	741

Sec. 3901.3813. The superintendent of insurance may adopt	742
rules as the superintendent considers necessary to carry out the	743
purposes of section 3901.38 and sections 3901.381 to 3901.3812 of	744
the Revised Code. The rules shall be adopted in accordance with	745
Chapter 119. of the Revised Code.	746

Sec. 3901.3814. Sections 3901.38 and 3901.381 to 3901.3813	747
of the Revised Code do not apply to the following:	748

(A) Policies offering coverage that is regulated under	749
Chapters 3935. and 3937. of the Revised Code;	750

(B) An employer's self-insurance plan and any of its	751
administrators, as defined in section 3959.01 of the Revised Code,	752
to the extent that federal law supersedes, preempts, prohibits, or	753
otherwise precludes the application of any provisions of those	754
sections to the plan and its administrators;	755

(C) A third-party payer for coverage provided under the	756
medicare plus choice or medicaid programs operated under Title	757
XVIII and XIX of the "Social Security Act," 49 Stat. 620 (1935),	758
42 U.S.C.A. 301, as amended;	759

(D) A third-party payer for coverage provided under the	760
tricare program offered by the United States department of	761
defense.	762

Sec. 3902.11.  As used in sections 3902.11 to 3902.14 of the	763
Revised Code:	764

(A) "Beneficiary" has and "third-party payer" have the same	765
meaning meanings as in division (A)(1) of section 3901.38 of the	766
Revised Code.	767

(B) "Plan of health coverage" means any of the following if	768
the policy, contract, or agreement contains a coordination of	769
benefits provision:	770

(1) An individual or group sickness and accident insurance	771
policy, which policy provides for hospital, dental, surgical, or	772
medical services;	773

(2) Any individual or group contract of a health insuring	774
corporation, which contract provides for hospital, dental,	775
surgical, or medical services;	776

(3) Any other individual or group policy or agreement under	777
which a third-party payer provides for hospital, dental, surgical,	778
or medical services.	779

(C) "Provider" has the same meaning as in division (A)(6) of	780
section 3901.38 of the Revised Code means a hospital, nursing	781
home, physician, podiatrist, dentist, pharmacist, chiropractor, or	782
other licensed health care provider entitled to reimbursement by a	783
third-party payer for services rendered to a beneficiary under a	784
benefits contract.	785

(D) "Third-party payer" has the same meaning as in division	786
(A)(8) of section 3901.38 of the Revised Code.	787

Sec. 3902.21.  As used in sections 3902.21 to 3902.22 and	788
3902.23 of the Revised Code:	789

(A) "Proof of loss" means the documentation and procedures	790
required and the criteria employed by third-party payers to accept	791
or reject and to determine benefits payable under a claim for	792
reimbursement of health services or supplies, including	793
documentation, procedures, and criteria to determine the medical	794
necessity of health services or supplies.	795

(B) "Third-party payers, "third-party payer" has the same	796
meaning as in section 3901.38 of the Revised Code.	797

Sec. 3902.22.  The superintendent of insurance shall develop	798
a standard claim form and standard proof of loss to be used by all	799
third-party payers for reimbursement of health care services and	800
supplies, taking into consideration the special needs of, and	801
differences between, third-party payers. The standard claim form	802
and standard proof of loss shall be prescribed in rules the	803
superintendent shall adopt in accordance with Chapter 119. of the	804
Revised Code. The superintendent may prescribe a separate claim	805
form for each third-party payer. If a national standard claim	806
form and standard proof of loss is established by the sickness and	807
accident insurance industry, the superintendent shall amend the	808
rules to comply with the national standards. The standard claim	809
form shall include a method to specify the license numbers of	810
physical therapists and other health care professionals rendering	811
services designated as physical therapy, as required under section	812
4755.56 of the Revised Code.	813

Sec. 3902.23.  Beginning one hundred eighty days after rules	814
adopted under section 3902.22 of the Revised Code take effect, no	815
third-party payer shall fail to use the standard claim form and	816
proof of loss prescribed in those rules, except as provided in	817
section 3729.15 of the Revised Code.	818

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

819

(1) "Beneficiary," "hospital," "provider," and "third-party	820
payer" have the same meanings as in section 3901.38 of the Revised	821
Code.	822

(2) "Overcharged" means charged more than the usual and	823
customary charge, rate, or fee that is charged by the provider or	824
hospital for a particular item or service.	825

(3) "Provider" has the same meaning as in section 3902.11 of	826
the Revised Code.	827

(B) If a beneficiary identifies on the billing statement of	828
a provider or hospital any item or service for which the	829
beneficiary was overcharged by more than five hundred dollars and	830
the beneficiary notifies the third-party payer of the error at any	831
time after the thirty-day period immediately following the date on	832
which the third-party payer makes payment to the provider or	833
hospital for the item or service, the provider or hospital shall	834
refund to the beneficiary an amount equal to fifteen per cent of	835
the amount overcharged.	836

(C) A provider or hospital shall not be required to comply	837
with division (B) of this section if, at the time the third-party	838
payer receives notice of the overcharge from the beneficiary, the	839
provider, hospital, or third-party payer is in the process of	840
correcting the error and such process can be documented.	841

Section 2. That existing sections 1349.01, 1739.05, 1739.14,	842
3901.38, 3902.11, 3902.21, 3902.22, 3902.23, and 3924.21 and	843
section 3901.381 of the Revised Code are hereby repealed.	844

Section 3. Sections 3901.38, 3901.381, 3901.382, 3901.383,	845
3901.384, 3901.385, 3901.386, 3901.387, 3901.388, 3901.389,	846
3901.3810, 3901.3811, 3901.3812, 3901.3813, 3901.3814, 3902.21,	847
3902.22, and 3902.23 of the Revised Code, as amended, enacted, or	848
repealed and reenacted by this act, apply to any claim for	849
payment for health care services that is submitted to a	850
third-party payer on or after the effective date of this act.	851