Session of 2000
By Committee on Federal and State Affairs

10             AN  ACT concerning insurance; establishing standards for prompt, fair
11             and equitable settlements of claims for health care and payments for
12             health care services.
14       Be it enacted by the Legislature of the State of Kansas:
15             Section  1. As used in this act:
16             (a)(1)   ``Clean claim'' means a claim for payment of health care ex-
17       penses that is submitted to a carrier on the carrier's standard claim form
18       with all the required fields completed with correct and complete infor-
19       mation in accordance with the carrier's published filing requirements.
20             (2) ``Clean claim'' shall not mean a claim for payment of expenses
21       incurred during any period of time in which premium payments to the
22       carrier are delinquent.
23             (b) ``Carrier'' means an insurance company, medical and hospital
24       service corporation, health maintenance organization, managed care plan,
25       preferred provider organization or other third-party administrator or en-
26       tity reimbursing the costs of health care services which holds a valid cer-
27       tificate of authority from the commissioner of insurance.
28             (c) ``Commissioner'' means the insurance commissioner of this state.
29             (d) ``Provider'' shall have the meaning ascribed to it in K.S.A. 1999
30       Supp. 40-4602 and amendments thereto.
31             Sec.  2. (a) Each clean claim which has been submitted to a carrier
32       within six months from the date upon which a covered service has been
33       provided shall be paid, denied or settled by the carrier within:
34             (1) Thirty calendar days after receipt by the carrier if such claim has
35       been submitted electronically; or
36             (2) forty-five calendar days after receipt by the carrier if such claim
37       has been submitted by any other means.
38             (b) If the resolution of a claim requires the submission of any addi-
39       tional information, the carrier shall notify the physician or provider within
40       10 days after receipt of such claim, either electronically or in writing,
41       acknowledging receipt of the claim and the status of the claim. Such
42       notice shall state that:
43             (1) The insurer refuses to reimburse all or part of the claim and spec-


  1       ify each surrounding reason for denial; or
  2             (2) additional information is necessary to determine if all or any part
  3       of such claim will be reimbursed. Such notice shall state specifically what
  4       additional information is necessary.
  5             (c) After receiving a request for additional information, the provider
  6       claiming reimbursement shall submit all additional information requested
  7       by the carrier within 30 days after receipt of the request for additional
  8       information. Failure to furnish such additional information within the
  9       time required shall not invalidate nor reduce the claim if it was not rea-
10       sonably possible to furnish such information within such time.
11             (d) Except as provided in subsection (a), in the absence of fraud or
12       any action which involves external review under K.S.A. 1999 Supp. 40-
13       22a13 through 40-22a16, and amendments thereto, all claims shall be
14       paid, denied or settled within 90 calendar days after receipt of the claim
15       by the carrier.
16             (e) Notwithstanding the provisions of subsections (b), (c) and (d), the
17       carrier shall pay any undisputed portion of a submitted claim in accord-
18       ance with subsection (a).
19             Sec.  3. (a) The carrier shall pay to the provider interest at a rate of
20       1% per month on the amount of the claim that remains unpaid after 30
21       days for electronically filed claim. The carrier shall pay to the provider
22       interest at the rate of 1% per month on the amount of the claim that
23       remains unpaid after 45 days for claims filed by any other means. The
24       interest required by this section to be paid shall be included in any late
25       reimbursement made to the provider without the necessity for the pro-
26       vider to make an additional claim for the interest.
27             (b) In addition to other remedies provided by law, a provider who
28       has filed a claim may file a civil action against the carrier for any violation
29       of this act. If the court finds that a violation of this act has occurred, the
30       court shall award to a prevailing plaintiff fees and other expenses as de-
31       termined to be reasonable in addition to the claimed reimbursement and
32       interest, unless the court finds that the position of the carrier was sub-
33       stantially justified.
34             (c) If the commissioner finds, after notice and hearing that a carrier
35       has repeatedly violated this act, the commissioner may impose against the
36       carrier a civil penalty not to exceed $10,000 after a hearing held in ac-
37       cordance with the Kansas administrative procedure act.
38             Sec.  4. The commissioner may adopt reasonable rules and regula-
39       tions necessary for the implementation of this act.
40        Sec.  5. This act shall take effect and be in force from and after its
41       publication in the statute book.