40-2442. Same; claims; procedures; rules and regulations; erroneous payment of claims by insurer, limitation on recovery of; audit of pharmacy records, limitations on.
40-2442
40-2442. Same; claims; procedures; rules andregulations; erroneous payment of claims by insurer, limitation on recovery of;audit of pharmacy records, limitations on.(a) Within 30 days after receipt of any claim, andamendmentsthereto, anyinsurer issuing a policy of accident and sickness insurance shall pay a cleanclaim forreimbursement in accordance with this section or send a written or electronicnoticeacknowledging receipt of and the status of the claim. Such notice shall includethe date suchclaim was received by the insurer and state that:
(1) The insurer refuses to reimburse all or part of the claim and specifyeach reason fordenial; or
(2) additional information is necessary to determine if all or any part ofthe claim will bereimbursed and what specific additional information is necessary.
(b) If any insurer issuing a policy of accident and sickness insurance failsto comply withsubsection (a), such insurer shall pay interest at the rate of 1% per monthon the amount of theclaim that remains unpaid 30 days after the receipt of the claim. The interestpaid pursuant tothis subsection shall be included in any late reimbursement without requiringthe person whofiled the original claim to make any additional claim for such interest.
(c) After receiving a request for additional information, the person claimingreimbursement shall submit all additional information requested by the insurerwithin 30 daysafter receipt of the request for additional information. Failure to furnishsuch additionalinformation within the time required shall not invalidate nor reduce the claimif it was notreasonably possible to give such information within such time, provided suchproof is furnishedas soon as possible as defined (within the time prescribed) in paragraph (7) ofsubsection (A) ofK.S.A. 40-2203, and amendments thereto.
(d) Within 15 days after receipt of all the requested additional information,an insurerissuing a policy of accident and sickness insurance shall pay a clean claim inaccordance withthis section or send a written or electronic notice that states:
(1) Such insurer refuses to reimburse all or part of the claim; and
(2) specifies each reason for denial.Any insurer issuing a policy of accident and sickness insurance that fails tocomply with thissubsection shall pay interest on any amount of the claim that remains unpaid atthe rate of 1%per month.
(e) The provisions of subsection (b) shall not apply when there is a goodfaith disputeabout the legitimacy of the claim, or when there is a reasonable basissupported by specificinformation that such claim was submitted fraudulently.
(f) In the event that an insurer erroneously pays a claim providingbenefitsto which theinsured person or provider is not entitled, the insurer shall not initiate arequest forreimbursement or refund of that erroneous payment, or in any other way seek torecoup theerroneous payment, unless such action is initiated within 18 months after theend of the month inwhich the erroneous payment was made. In cases of fraud by the insured personor provider, such action may be initiated within the applicable statute oflimitations pursuant to K.S.A. 60-513, and amendments thereto.In the case ofan audit of the records of a pharmacy by a managed carecompany, insurance company, third party payor or the representative of themanaged care company, insurance company or third party payor, the periodcovered by the audit shall not exceedtwo years from the date the claim was submitted to or adjudicated or asotherwise provided by state or federal law.
(g) Any violation of this act by an insurer issuing apolicy of accident andsicknessinsurance with flagrant and conscious disregard of the provisions of this actor with suchfrequency as to constitute a general business practice shall be considered aviolation of the unfairtrade practices act in K.S.A. 40-2401 et seq. and amendments thereto.
(h) The commissioner of insurance shall adopt rules andregulations necessaryto carryout the provisions of the Kansas health care prompt payment act.
History: L. 2000, ch. 147, § 45;L. 2008, ch. 134, § 2; July 1.