Session of 2000
By Senator Brownlee

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. For the purpose of this sections: (a) "Clean claim"
16       means a claim for payment of health care expenses that is submitted to
17       a carrier on the carrier's standard claim form with all the required fields
18       completed with correct and complete information in accordance with the
19       carrier's published filing requirements. Except to the extent otherwise
20       required by law, clean claim shall not include a claim for payment of
21       expenses incurred during any period of time in which premium payments
22       to the 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 the 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; and
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) (A) additional information is necessary to determine if all or any
  3       part of such claim will be reimbursed; and
  4             (B) state specifically what 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       sonable possible to give such information within such time.
11             (d) In the absence of fraud or any action which involves external
12       review under K.S.A. 1999 Supp. 40-22a13 through 40-22a16, inclusive,
13       and amendments thereto, all claims, except those described in subsection
14       (a), shall be paid, denied, or settled within 90 calendar days after receipt
15       of the claim 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       one percent per month on the amount of the claim that remains unpaid
21       after 30 days for electronically filed claim. The carrier shall pay to the
22       provider interest at the rate of one percent per month on the amount of
23       the claim that remains unpaid after 45 days for claims filed by any other
24       means. The interest required by this section to be paid shall be included
25       in any late reimbursement made to the provider without the necessity for
26       the provider 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 section has occurred,
30       the court shall award to a prevailing plaintiff fees and other expenses as
31       determined to be reasonable by rules and regulations in addition to the
32       claimed reimbursement and interest, unless the court finds that the po-
33       sition of the carrier was substantially 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.