PRINTER'S NO. 3366
No. 2388 Session of 2004
INTRODUCED BY BARRAR, CAPPELLI, EGOLF, GOODMAN, HALUSKA, HARRIS,
R. MILLER, E. Z. TAYLOR, WASHINGTON AND YOUNGBLOOD,
MARCH 8, 2004
REFERRED TO COMMITTEE ON INSURANCE, MARCH 8, 2004
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," providing for retroactive denial of
12 reimbursement of payments to health care providers by
13 insurers.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. The act of May 17, 1921 (P.L.682, No.284), known
17 as The Insurance Company Law of 1921, is amended by adding an
18 article to read:
19 ARTICLE VI-B
20 RETROACTIVE DENIAL OF REIMBURSEMENTS
21 § 601-B. Scope of article.
22 This article shall not apply to reimbursements made as part
23 of an annual contracted reconciliation of a risk-sharing
1 arrangement under an administrative service provider contract.
2 § 602-B. Definitions.
3 The following words and phrases when used in this article
4 shall have the meanings given to them in this section unless the
5 context clearly indicates otherwise:
6 "Code." Any of the following codes:
7 (1) The applicable current procedural terminology (CPT)
8 code, as adopted by the American Medical Association.
9 (2) If for dental service, the applicable code adopted
10 by the American Dental Association.
11 (3) Another applicable code under an appropriate uniform
12 coding scheme used by an insurer in accordance with this
13 article.
14 "Coding guidelines." Those standards or procedures used or
15 applied by a payor to determine the most accurate and
16 appropriate code or codes for payment by the payor for a service
17 or services.
18 "Health care provider." A person, corporation, facility,
19 institution or other entity licensed, certified or approved by
20 the Commonwealth to provide health care or professional medical
21 services. The term includes, but is not limited to, a physician,
22 professional nurse, certified nurse-midwife, podiatrist,
23 hospital, nursing home, ambulatory surgical center or birth
24 center.
25 "Insurer." An entity subject to any of the following:
26 (1) 40 Pa.C.S. Ch. 61 (relating to hospital plan
27 corporations) or 63 (relating to professional health service
28 plan corporations).
29 (2) This act.
30 (3) The act of December 29, 1972 (P.L.1701, No.364),
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1 known as the Health Maintenance Organization Act.
2 "Medical assistance program." The program established under
3 the act of June 13, 1967 (P.L.31, No.21), known as the Public
4 Welfare Code.
5 "Medicare." The Federal program established under Title
6 XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1395
7 et seq.).
8 "Reimbursement." Payments made to a health care provider by
9 an insurer on either a fee-for-service, capitated or premium
10 basis.
11 § 603-B. Retroactive denial of reimbursement.
12 (a) General rule.--If an insurer retroactively denies
13 reimbursement to a health care provider, the insurer:
14 (1) may only retroactively deny reimbursement for
15 services subject to coordination of benefits with another
16 insurer, the medical assistance program or the Medicare
17 program during the 18-month period after the date that the
18 insurer paid the health care provider; and
19 (2) except as provided in paragraph (1), may only
20 retroactively deny reimbursement during a six-month period
21 after the date that the insurer paid the health care
22 provider.
23 (b) Written denial.--An insurer that retroactively denies
24 reimbursement to a health care provider under subsection (a)
25 shall provide the health care provider with a written statement
26 specifying the basis for the retroactive denial. If the
27 retroactive denial of reimbursement results from coordination of
28 benefits, the written statement shall provide the name and
29 address of the entity acknowledging responsibility for payment
30 of the denied claim.
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1 § 604-B. Effect of noncompliance.
2 Except as provided in section 605-B, an insurer that does not
3 comply with the provisions of section 603-B may not
4 retroactively deny reimbursement or attempt in any manner to
5 retroactively collect reimbursement already paid to a health
6 care provider.
7 § 605-B. Fraudulent or improperly coded information.
8 (a) Reasons for denial.--The provisions of section 603-B do
9 not apply if an insurer retroactively denies reimbursement to a
10 health care provider because:
11 (1) the information submitted to the insurer was
12 fraudulent;
13 (2) the information submitted to the insurer was
14 improperly coded and the insurer has provided to the health
15 care provider sufficient information regarding the coding
16 guidelines used by the insurer at least 30 days prior to the
17 date the services subject to the retroactive denial were
18 rendered; or
19 (3) the claim submitted to the insurer was a duplicate
20 claim.
21 (b) Improper coding.--Information submitted to the insurer
22 may be considered to be improperly coded under subsection (a)(2)
23 if the information submitted to the insurer by the health care
24 provider:
25 (1) uses codes that do not conform with the coding
26 guidelines used by the carrier applicable as of the date the
27 service or services were rendered; or
28 (2) does not otherwise conform with the contractual
29 obligations of the health care provider to the insurer
30 applicable as of the date the service or services were
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1 rendered.
2 § 606-B. Coordination of benefits.
3 If an insurer retroactively denies reimbursement for services
4 as a result of coordination of benefits under provisions of
5 section 605-B(a), the health care provider shall have six months
6 from the date of the denial, unless an insurer permits a longer
7 time period, to submit a claim for reimbursement for the service
8 to the insurer, the medical assistance program or Medicare
9 program responsible for payment.
10 Section 2. This act shall take effect in 60 days.
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