SCS SB 636 -- PAYMENT OF HEALTH INSURANCE CLAIMS

SPONSOR:  Lembke (Jones, 89)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Health
Care Policy by a vote of 12 to 0.

This substitute changes the laws regarding the payment of health
insurance claims.  In its main provisions, the substitute:

(1)  Requires health insurance carriers, including third-party
contractors, to send an electronic acknowledgment of the date of
receipt within 48 hours after an electronically filed health care
claim is received;

(2)  Increases the period of time, from within 10 working days to
within 30 processing days, that a carrier or third-party
contractor has to send an electronic or facsimile notice of the
status of a health care claim that notifies the claimant whether
the filed claim has any reason which will prevent timely payment
or if more information is required.  If the claim is properly
filed, the carrier must pay or deny the claim;

(3)  Requires a carrier to notify the health care provider,
electronically or by fax, within 10 processing days, instead of
the current 15 days, upon receiving the requested additional
information from the provider to pay the claim, deny all or part
of the claim specifying the reason, or make a final request for
additional information.  If the provider submits the additional
information, the carrier must pay or deny the claim within five
processing days, instead of the current 15 days, of receiving the
additional information;

(4)  Adds a penalty equal to 1% of the total claim amount per day
on unpaid claims if a carrier has not paid a claimant within 45
processing days of receiving the claim;

(5)  Increases the amount at which a carrier can combine interest
and payments on unpaid claims from $5 to $100.  Claims that were
properly denied prior to the forty-fifth processing day will not
be subject to interest or penalties;

(6)  Repeals the current penalty imposed on carriers that do not
take the required action within 40 processing days;

(7)  Specifies that a claim for which a carrier has not
communicated a specific reason for the denial of payment cannot
be considered denied; and

(8)  Changes the requirements a carrier must follow when
requesting the documentation and additional information that is
necessary to process all of a claim.

The substitute becomes effective January 1, 2011.

FISCAL NOTE:  Estimated Income on General Revenue Fund of Unknown
less than $30,579 in FY 2011, Unknown less than $36,710 in FY
2012, and Unknown less than $36,710 in FY 2013.  No impact on
Other State Funds in FY 2011, FY 2012, and FY 2013.

PROPONENTS:  Supporters say that the bill is similar to House
Bill 1498 and removes a loop hole that allows health insurance
claims to not be promptly processed.

Testifying for the bill were Senator Lembke; Missouri State
Medical Association; Nancy Seelen, St. Lukes Health System;
Missouri State Orthopedic Association; Department of Insurance,
Financial Institutions and Professional Registration; Missouri
Hospital Association; Missouri Ambulance Association; BJC
Healthcare; and Missouri Psychiatric Society.

OPPONENTS:  There was no opposition voiced to the committee.

OTHERS:  Others testifying on the bill say there is a circular
reference in the bill that could be a potential error and cause
confusion with the implementation of the bill's provisions.

Testifying on the bill was United Healthcare Services,
Incorporated.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:14 pm