Brief ⁽¹⁾

Sub. for SB 600, as amended, concerns the prompt settlement of health care claims and payment for health care services and penalties for failure to comply with the law. The bill sets out the following.

• Requires accident and health insurers, health maintenance organizations, third party administrators, and any similar entity which pays claims pursuant to a policy of accident and sickness insurance to:

• pay a clean claim within 30 days of receipt of the claim (the terms "claim" and "clean claim" are defined); or



• send an electronic or written notice acknowledging receipt of the claim and indicating a refusal to reimburse all or part of the claim, or request additional information to determine if all or part of the claim will be paid (if additional information is requested, the provider has 30 days in which to submit the information and the payer has 15 days after receipt of the information in which to pay or refuse to pay all or part of the claim).





• Imposes an interest penalty of 1.0 percent per month on the amount of the claim that remains unpaid 30 days after receipt of the clean claim, or on the amount of a claim that remains unpaid after the additional information has been provided (the interest penalty is to be paid without the provider having to file an additional claim).



• Makes the flagrant and conscious disregard of the provisions of this act which constitute a general business practice a violation of the Kansas Unfair Trade Practices Law and subjects the violator to penalties set out in that law.



• Exempts from the penalty provisions of the act a claim on which there is a good faith dispute as to its legitimacy, or a claim for which there is a reasonable basis upon which to believe it was submitted fraudulently.



• Becomes effective on January 1, 2001, and upon its publication in the statute book.

Background

Sub. for SB 600 as presented to the Committee for discussion and action represented a compromise worked out by the interested parties. The Senate Committee changed the submitted substitute by reducing from 45 to 30 the number of days in which a claim is to be paid, and increased the interest penalty for failure to promptly pay from 1 percent to 1.5 percent per month.

The House Committee amendment changes the interest rate penalty from 1.5 percent to 1.0 percent per month.

There is no fiscal note on Sub. for SB 600.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html