As Amended by House Committee
Session of 2000
Substitute for SENATE BILL No. 600
By Senator Brownlee
3-10
10 AN ACT
concerning insurance; relating to standards for prompt, fair
and
11 equitable settlement
of health care claims and payment for health care
12 services; establishing
an unfair trade practices act violation.
13
14 Be it enacted by the Legislature of the
State of Kansas:
15 Section
1. This act shall apply to any policy of accident and
sickness
16 insurance issued or renewed in this
state.
17 Sec. 2. (a)
The term ``clean claim'' means a claim that has no defect
18 or impropriety, including any lack of
required substantiating documen-
19 tation, or particular circumstance
requiring special treatment that pre-
20 vents timely payment from being made on the
claim under this act.
21 (b) The term
``claim'' means a written proof of loss as defined in
22 paragraph (7) of subsection (A) of K.S.A.
40-2203, and amendments
23 thereto, or an electronic proof of loss
which contains the information
24 required by paragraph (7) of subsection (A)
of K.S.A. 40-2203, and
25 amendments thereto.
26 (c) The term
``policy of accident and sickness insurance'' means any
27 policy or contract insuring against loss
resulting from sickness or bodily
28 injury or death by accident, or both, any
hospital or medical expense
29 policy, health, hospital, medical service
corporation contract issued by a
30 stock or mutual company or association, a
health maintenance organiza-
31 tion or any other insurer, third party
administrator or other entity which
32 pays claims pursuant to a policy of
accident and sickness insurance. The
33 term policy of accident and sickness
insurance does not include any policy
34 or contract of reinsurance, life insurance,
endowment or annuity contract,
35 policies or certificates covering only
credit, disability income, long-term
36 care, medicare supplement, dental, drug, or
vision-care only policy, cov-
37 erage issued as a supplement to liability
insurance, insurance arising out
38 of a workers compensation or similar law,
automobile medical-payment
39 insurance or insurance under which benefits
are payable without regard
40 to fault and which is statutorily required
to be contained in any liability
41 insurance policy or equivalent
self-insurance.
42 Sec. 3. (a)
Within 30 days after receipt of any claim, and amendments
43 thereto, any insurer issuing a policy of
accident and sickness insurance
2
1 shall pay a clean claim for
reimbursement in accordance with this section
2 or send a written or electronic
notice acknowledging receipt of and the
3 status of the claim. Such notice
shall include the date such claim was
4 received by the insurer and state
that:
5 (1) The
insurer refuses to reimburse all or part of the claim and spec-
6 ify each reason for denial; or
7
(2) additional information is necessary to determine if all or
any part
8 of the claim will be reimbursed and
what specific additional information
9 is necessary.
10 (b) If any
insurer issuing a policy of accident and sickness insurance
11 fails to comply with subsection (a), such
insurer shall pay interest at the
12 rate of 1.5%
1% per month on the amount of the claim that remains
13 unpaid 30 days after the receipt of the
claim. The interest paid pursuant
14 to this subsection shall be included in any
late reimbursement without
15 requiring the person who filed the original
claim to make any additional
16 claim for such interest.
17 (c) After
receiving a request for additional information, the person
18 claiming reimbursement shall submit all
additional information requested
19 by the insurer within 30 days after receipt
of the request for additional
20 information. Failure to furnish such
additional information within the
21 time required shall not invalidate nor
reduce the claim if it was not rea-
22 sonably possible to give such information
within such time, provided such
23 proof is furnished as soon as possible as
defined (within the time pre-
24 scribed) in paragraph (7) of subsection (A)
of K.S.A. 40-2203, and amend-
25 ments thereto.
26 (d) Within 15
days after receipt of all the requested additional infor-
27 mation, an insurer issuing a policy of
accident and sickness insurance shall
28 pay a clean claim in accordance with this
section or send a written or
29 electronic notice that states:
30 (1) Such insurer
refuses to reimburse all or part of the claim; and
31 (2) specifies
each reason for denial.Any insurer issuing a policy of
32 accident and sickness insurance that fails
to comply with this subsection
33 shall pay interest on any amount of the
claim that remains unpaid at the
34 rate of 1.5%
1% per month.
35 (e) The
provisions of subsection (b) shall not apply when there is a
36 good faith dispute about the legitimacy of
the claim, or when there is a
37 reasonable basis supported by specific
information that such claim was
38 submitted fraudulently.
39 (f) Any violation
of this act by an insurer issuing a policy of accident
40 and sickness insurance with flagrant and
conscious disregard of the pro-
41 visions of this act or with such frequency
as to constitute a general busi-
42 ness practice shall be considered a
violation of the unfair trade practices
43 act in K.S.A. 40-2401 et seq. and
amendments thereto.
3
1 (g) The
commissioner of insurance shall adopt rules and regulations
2 necessary to carry out the provisions
of this act.
3 Sec. 4. This act
shall take effect and be in force from and after Jan-
4 uary 1, 2001, and its publication in
the statute book.