Notice of Public Hearing
Insurance Commissioner Donna Lee H. Williams hereby gives notice that a public hearing will be held on Tuesday December 3, 2002, at 2:00 p.m. in the Executive Conference Room of the Delaware Department of Insurance, 841 Silver Lake Boulevard, Dover, Delaware. The hearing is to consider amendments to Regulation 80 relating to the standards for prompt, fair and equitable settlement of claims for health care services.
The purpose for amending Regulation 80 is to re-define certain terms and to reduce the number of days in which a health insurer may pay a clean claim from 45 to 30. Additionally, the regulation will be re-numbered to conform to the format required by the Registrar of Regulations.
The hearing will be conducted in accordance with the Delaware Administrative Procedures Act, 29 Del. C. Chapter 101. Comments are being solicited from any interested party. Comments may be in writing or may be presented orally at the Hearing. Written comments must be received by the Department of Insurance no later than Tuesday December 3, 2002, at 2:00 p.m. and should be addressed to Deputy Attorney General Michael J. Rich, Delaware Department of Insurance, 841 Silver Lake Boulevard, Dover, DE 19904. Those wishing to testify or give an oral statement must notify Michael J. Rich at (302) 739-4251, Ext. 171 no later than Monday, December 2, 2002.
Reg. 80, Standards For Prompt, Fair and Equitable Settlement of ClaimsFor Health Care Services
Adopted and signed on July 2, 1998
Effective November 4, 1998
Amended effective _______
1.0 Authority
2.0 Definitions
3.0 Scope
4.0 Purpose
5.0 Prompt Payment of Claims
6.0 General Business Practice
7.0 Penalties
8.0 Causes of Action
9.0 Separability
10.0 Effective Date
1.0 Authority
This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§ 311, 2304(16), and 2312. It is promulgated in accordance with 29 Del. C. Chapter 101.
2.0 Definitions
For the purpose of this regulation, the following definitions shall apply:
a. Health Insurer — health insurance companies, health maintenance organizations, health service corporations and any other entity providing a plan of health insurance or benefits subject to state insurance regulations.
b. Health Care Provider — any entity or individual licensed, certified or otherwise permitted by law to provide health care in the ordinary course of business, practice or profession.
c. Policyholder — a person covered under a health insurance policy or a representative designated by such person and entitled to make claims on his or her behalf.
d. Clean Claim — a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that substantially prevents timely payments from being made on the claim.
2.1 “Carrier” or “Health Insurer” shall have the same meaning applied to it by 18 Del.C. § 3343(a)(1).
2.2 “Clean Claim” shall mean a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that substantially prevents timely payments from being made on the claim.
2.3 “Health Care Provider” shall mean any entity or individual licensed, certified or otherwise permitted by law pursuant to Titles 16 or 24 of the Delaware Code to provide health care services.
2.4 “Policyholder,” “Insured” or “Subscriber” shall be a person covered under a health insurance policy or a representative designated by such person and entitled to make claims on his or her behalf.
3.0 Scope
This regulation shall apply to all health insurers as defined in Section 2.0 above, and shall apply to all plans or policies of health insurance or benefits delivered or issued for delivery in this State and which cover residents of this State or employees of employers located in this State and their dependents. Exempted from the provisions of this regulation are policies of automobile and workers compensation insurance, hospital income and disability income insurance, Medicare supplement and long-term care insurance.
4.0 Purpose
The purpose of this regulation is to ensure that health insurers pay claims to policyholders and health care providers in a timely manner. This regulation will establish standards for both determining promptness in settling claims and determining the existence of a general business practice for failing to promptly settle such claims under 18 Del. C. § 2304(16).
5.0 Prompt Payment of Claims
5.1 A health insurer shall pay a clean claim to a policyholder or covered person, or make payment to a health care provider no later than 30 45 calendar days after receipt of a clean claim or bill for services.
5.2 A claim is not a clean claim as defined in section 2 d. 2.2 if any of the following circumstances exist:
5.2.1 Where the obligation of a health insurer to pay a claim or make a payment for health care services rendered is not reasonable clear due to a good faith dispute regarding the eligibility of a person for coverage, the liability of another insurer or corporation for all or part of a claim, the amount of the claim, the benefits covered under a contract or agreement, or the manner in which services were accessed or provided.
5.2.2 Where there exists a reasonable basis supported by specific information,
available for review by the Department, that such claim was submitted fraudulently.
5.2.3 . For claims properly disputed or litigated and subsequently paid.
5.3 In those cases covered by subparagraph b(1) above section 5.2.1, a health insurer shall pay all portions of a claim meeting the definition of clean claim found in section 2 d. in accordance with subsection 5 a hereof this section. Additionally, a health insurer shall notify the policyholder in writing within 3015 days of the receipt of the claim:
5.3.1 that such carrier is not obligated to pay the claim or make the medical payment, in whole or in part, stating the specific reasons why it is not liable; or
5.3.2 that additional information is needed and is being sought to determine liability to pay the claim or make the healthcare payment.
5.4 Upon receipt of the information provided in subparagraph c(2) above required by section 5.3.2, or upon the administrative resolution of a dispute wherein the health insurer is deemed obligated to pay the claim or make medical payment, a health insurer shall comply with paragraph “a.” of this section make payment as required by section 5.1.
6.0 General Business Practice
6.1 Within a 36 month period, three instances of a health insurer’s failure to pay a Claim or bill for services promptly, as defined in section 5 above, shall give rise to a rebuttable presumption that the insurer is in violation of 18 Del.C. §2304(16)(f). In determining whether the presumption is rebutted the Commissioner may consider, among other things, whether the health insurer meets nationally recognized timeline standards for claims payments such as those applicable to the Medicare, Medicaid or Federal Employees Health Benefit Plan programs.
6.2 The 36 month time period established in paragraph “a.” above section 6.1 shall be measured based upon the date the claims or bills became due. Each claim or bill, or portion of a claim or bill, pertaining to a single medical treatment or procedure provided to an individual policyholder that is processed in violation of this regulation shall constitute an “instance” as described in paragraph “a.” above section 6.1.
7.0 Penalties
In addition to the imposition of penalties in accordance with 18 Del.C. § 2312(b), the Commissioner may order the health insurer to pay to the health care provider or claimant, in full settlement of the claim or bill for health care services, the amount of the claim or bill plus interest at the maximum rate allowable to lenders under 6 Del.C. 2301(a). Such interest shall be computed from the date the claim or bill for services first became due.
8.0 Causes of Action
This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a health insurer or its representative based upon a violation of 18 Del. C. § 2304 (16).
9.0 Separability
If any provision of this regulation or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of such provisions, and the application of such provision to any person or circumstance other than those as to which it is held invalid, shall not be affected.
10.0 Effective Date
This regulation, as amended, shall become effective 120 90 days from the date signed by the Commissionerafter its publication in the Register of Regulations.
ADOPTED AND SIGNED BY THE COMMISSIONER
_______________, 2003