PA 09-204—sSB 47

Insurance and Real Estate Committee

Public Health Committee

AN ACT CONCERNING CONTRACTS BETWEEN HEALTH CARE PROVIDERS AND CONTRACTING HEALTH ORGANIZATIONS

SUMMARY: This act expands the (1) fee information a managed care organization or preferred provider network (i. e. , contracting health organization) must give to health care providers with whom it contracts and (2) list of providers to whom the requirement and related provisions apply. It prohibits contracting health organizations from making material changes to a provider's fee schedule except as the act specifies.

It also requires a contracting health organization to give each contracted provider Internet, electronic, or digital access to policies and procedures regarding providers' (1) payments, (2) duties and requirements under the contract, and (3) inquiries and appeals, including (a) contact information for the office responsible for responding to them and (b) a description of appeal rights applicable to providers, enrollees, and enrollees' dependents.

The act prohibits a contracting health organization, more than 18 months after receiving a clean (i. e. , complete) claim, from canceling, denying, or demanding the return of full or partial payment it made in error for an authorized covered service except under specified circumstances and subject to certain procedures.

EFFECTIVE DATE: January 1, 2010, except for the provisions relating to material changes to fee schedules and cancellation of authorized covered services, which are effective July 1, 2010.

ACCESS TO CODES AND FEES

Prior law required contracting health organizations to allow a contracted physician, physician group, or physician organization to confidentially view, in a digital format, the fees payable for the 50 current procedural terminology (CPT) codes most commonly performed by the physician, group, or organization. The law applied with respect to physicians, surgeons, chiropractors, podiatrists, psychologists, and optometrists.

The act instead requires the organization to establish and implement a procedure to provide each contracted provider Internet, electronic, or digital access to the organization's fees for the CPT and the Health Care Procedure Coding System (HCPCS) codes (1) applicable to the provider's specialty and (2) that the provider requests for other services for which he or she actually bills or intends to bill the organization, provided the codes are within the provider's specialty or subspecialty. The act defines “provider” as a physician, surgeon, chiropractor, podiatrist, psychologist, optometrist, naturopath, or advanced practice registered nurse licensed in Connecticut, or a group or organization of such people, who has entered into or renews a participating provider contract with a contracting health organization to render services to the organization's enrollees and enrollees' dependents.

By law, (1) the right to access fees applies only to a provider whose services are reimbursed using CPT codes and (2) fee information is proprietary and confidential. The organization may penalize the unauthorized distribution of the information, including terminating the provider's contract.

CHANGES TO FEE SCHEDULES

The act prohibits contracting health organizations from making material changes to a provider's fee schedule except as specified. A contracting health care organization may make changes once a year if it gives providers at least 90 days' advance notice by mail, e-mail, or fax. Upon receipt of the notice, a provider may terminate its contract by giving the organization at least 60 days' advance written notice.

The act also allows an organization to make changes at any time if it gives providers at least 30 days' advance notice by mail, e-mail, or fax if the changes are:

1. to comply with a federal or state requirement, but if the requirement takes effect in fewer than 30 days, the organization must give providers as much notice as possible;

2. to comply with changes to the medical data code sets in federal regulations (45 CFR 162. 1002);

3. to comply with changes to national best practice protocols made by the National Quality Forum or other national accrediting or standard-setting organization based on peer-reviewed medical literature generally recognized by the relevant medical community or the results of clinical trials generally recognized and accepted by the relevant medical community;

4. consistent with changes in Medicare billing or medical management practices, as long as the changes are made to relevant provider contracts and relate to the same specialty or payment methodology;

5. because the federal Food and Drug Administration (FDA) or peer-reviewed medical literature generally recognized by the relevant medical community identifies a drug, treatment, procedure, or device as no longer safe and effective;

6. to address payment or reimbursement for a new drug, treatment, procedure, or device that becomes available and is determined to be safe and effective by the FDA or by peer-reviewed medical literature generally recognized by the relevant medical community; or

7. mutually agreed to by the organization and the provider.

PAYMENT CANCELLATION, DENIAL, OR RETURN

The act prohibits a contracting health organization, more than 18 months after receiving a clean (i. e. , complete) claim, from canceling, denying, or demanding the return of full or partial payment for an authorized covered service due to administrative or eligibility error, unless the:

1. organization (a) has a documented basis to believe that the provider fraudulently submitted the claim, (b) already paid the provider for the claim, or (c) paid a claim that should have been or was paid by a federal or state program; or

2. provider (a) did not bill the claim appropriately based on documentation or evidence of what medical service was actually provided or (b) received payment from a different insurer, payor, or administrator through coordination of benefits, subrogation, or coverage under an automobile insurance or workers' compensation policy.

The act gives a provider that receives a payment from another source one year after the date of the payment cancellation, denial, or return to resubmit an adjusted claim with the organization on a secondary payor basis, regardless of the organization's timely filing requirements.

Advance Notice Required

The act requires an organization to give a provider at least 30 days' advance notice of a payment cancellation, denial, or return demand by mail, e-mail, or fax. The organization must include in a notice demanding a return of payment the (1) amount it wants returned, (2) claim to which it relates, and (3) basis for it.

Appeal

The act allows a provider to appeal, in accordance with the organization's procedures, a payment cancellation, denial, or return demand within 30 days after receiving notice of it. It requires a payment return demand to be stayed (i. e. , postponed) during the appeal.

Adjusted Claim

If there is no appeal or an appeal is denied, the act allows a provider to resubmit an adjusted claim, if applicable, to the organization within 30 days after receiving notice of (1) a payment cancellation or denial or (2) an appeal denial. A claim may not be resubmitted if the organization demanded a return of payment.

Other Appropriate Insurance Coverage

The act gives a provider one year after the date of the written notice of a payment cancellation, denial, or return demand to (1) identify any other appropriate insurance coverage applicable on the date of service and (2) file a claim with the insurer, HMO, or other issuing entity, regardless of its timely filing requirements.

BACKGROUND

HMO Provider Contracts and Billing Enrollees

By law, every contract between an HMO and a participating provider of health care services must be in writing and contain specified provisions or variations the insurance commissioner approves. If the participating provider contract is not in writing or does not have the specified provisions, the law prohibits the provider from collecting or attempting to collect from the subscriber or enrollee any amount for which the HMO is responsible (CGS 38a-193(c)).

When an HMO has primary payment responsibility, the law makes it an unfair trade practice for a provider to (1) request payment from an enrollee, other than a copayment or deductible, for covered medical services or (2) report to a credit reporting agency an enrollee's failure to pay a bill for medical services (CGS 20-7f).

Prompt Claim Payments

By law, an insurer or other entity must pay a clean claim within 45 days of receiving it (CGS 38a-816(15)). If a claim contains a deficiency, the insurer must send written notice to the claimant or health care provider, as the case may be, of all alleged deficiencies within 30 days of receiving the claim. The insurer must process the claim within 30 days of receiving the corrected claim and add 15% interest if payment is late.

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