1.1                          A bill for an act
  1.2             relating to health; requiring prompt payments by 
  1.3             health maintenance organizations and nonprofit health 
  1.4             service plan corporations of certain claims made by 
  1.5             providers; requiring claim errors to be reported 
  1.6             within a certain time; establishing penalties; 
  1.7             proposing coding for new law in Minnesota Statutes, 
  1.8             chapter 62Q. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  [62Q.68] [PROMPT PAYMENTS TO PROVIDERS.] 
  1.11     Subdivision 1.  [APPLICABILITY.] This section applies to 
  1.12  health maintenance organizations regulated under chapter 62D and 
  1.13  nonprofit health service plan corporations regulated under 
  1.14  chapter 62C. 
  1.15     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
  1.16  following terms have the meanings given them: 
  1.17     (1) "clean claim" means an original paper or electronic 
  1.18  claim with correct data elements, prepared in accordance with 
  1.19  the health maintenance organization's or nonprofit health 
  1.20  service plan corporation's published specifications for claims 
  1.21  preparation, that does not require an attachment or text 
  1.22  information to pay or deny the claim; 
  1.23     (2) "provider" has the meaning given in section 62J.70, 
  1.24  subdivision 2; and 
  1.25     (3) "valid provider claim" means a clean claim submitted 
  1.26  directly to the health maintenance organization or nonprofit 
  1.27  health service plan corporation by an eligible provider for 
  2.1   health care services provided to an eligible enrollee. 
  2.2      Subd. 3.  [CLAIMS PAYMENTS TO PROVIDERS.] A health 
  2.3   maintenance organization or nonprofit health service plan 
  2.4   corporation must pay or deny a valid provider claim for health 
  2.5   care services within 30 days of receiving the claim.  Adjustment 
  2.6   claims, claims with attachments and text information, and claims 
  2.7   submitted to the health maintenance organization or nonprofit 
  2.8   health service plan corporation as a secondary or tertiary 
  2.9   payer, which have been prepared in accordance with the published 
  2.10  specifications of the health maintenance organization or 
  2.11  nonprofit health service plan corporation, must be adjudicated 
  2.12  within 60 days after receiving the claim. 
  2.13     Subd. 4.  [PAYMENT OF INTEREST ON LATE PAYMENTS.] (a) If a 
  2.14  health maintenance organization or nonprofit health service plan 
  2.15  corporation fails to pay or deny a valid provider claim within 
  2.16  30 days as specified in subdivision 3, the health maintenance 
  2.17  organization or nonprofit health service plan corporation must 
  2.18  pay interest to the provider on the claim.  If a negotiated 
  2.19  contract or agreement between a provider and a health 
  2.20  maintenance organization or nonprofit health service plan 
  2.21  corporation requires an audit by the health maintenance 
  2.22  organization or nonprofit health service plan corporation before 
  2.23  acceptance and payment of the claim, interest payments do not 
  2.24  apply until 30 days after the timely completion of the audit by 
  2.25  the health maintenance organization or nonprofit health service 
  2.26  plan corporation.  Before any interest payment is made, the 
  2.27  provider must bill the health maintenance organization or 
  2.28  nonprofit health service plan corporation for the interest. 
  2.29     (b) The rate of interest paid by a health maintenance 
  2.30  organization or nonprofit health service plan corporation under 
  2.31  this subdivision shall be 1-1/2 percent per month or any part of 
  2.32  the month. 
  2.33     (c) All interest payments and collection costs must be paid 
  2.34  from the current operating budget of the health maintenance 
  2.35  organization or nonprofit health service plan corporation.  No 
  2.36  health maintenance organization or nonprofit health service plan 
  3.1   corporation may seek to increase its premium rates for the 
  3.2   purpose of obtaining funds to pay interest payments or 
  3.3   collection costs. 
  3.4      (d) A provider who prevails in a civil action to collect 
  3.5   interest payments from a health maintenance organization or 
  3.6   nonprofit health service plan corporation shall be awarded the 
  3.7   costs and disbursements, including attorneys fees, incurred in 
  3.8   bringing the action. 
  3.9      (e) No interest costs may accrue against a health 
  3.10  maintenance organization or nonprofit health service plan 
  3.11  corporation that delays payment of a claim due to a disagreement 
  3.12  with the provider; provided, that the dispute must be settled 
  3.13  within 30 days after the claim becomes overdue.  Upon resolution 
  3.14  of the dispute, the health maintenance organization or nonprofit 
  3.15  health service plan corporation must pay the provider accrued 
  3.16  interest on all proper claims for which payment was not received 
  3.17  within the applicable time limits specified in subdivision 3. 
  3.18     (f) The minimum monthly interest payment that a health 
  3.19  maintenance organization or nonprofit health service plan 
  3.20  corporation must pay to a provider for the unpaid balance for 
  3.21  any single overdue claim equal to or exceeding $100 is $10.  For 
  3.22  unpaid balances of less than $100, the health maintenance 
  3.23  organization or nonprofit health service plan corporation must 
  3.24  pay the actual interest payment due to the provider. 
  3.25     (g) A health maintenance organization or nonprofit health 
  3.26  service plan corporation is not required to make an interest 
  3.27  payment on a claim for which payment has been delayed for 
  3.28  purposes of reviewing potentially fraudulent or abusive billing 
  3.29  practices, if there is an eventual finding of fraud or abuse in 
  3.30  any judicial or administrative agency proceeding. 
  3.31     Subd. 5.  [CLAIMS ERRORS.] For purposes of payments made to 
  3.32  providers receiving reimbursement from a health maintenance 
  3.33  organization or nonprofit health service plan corporation, a 
  3.34  health maintenance organization or nonprofit health service plan 
  3.35  corporation that receives a claim that is incorrect, defective, 
  3.36  or otherwise improper must notify the provider of any error 
  4.1   within 30 days of discovery of the error. 
  4.2      Sec. 2.  [EFFECTIVE DATE.] 
  4.3      Section 1 is effective July 1, 1999, and applies to claims 
  4.4   made under health maintenance organization or nonprofit health 
  4.5   service plan corporation contracts with providers entered into 
  4.6   or renewed on or after that date.