§ 58-3-225. Prompt claim payments under health benefit plans.
§ 58‑3‑225. Prompt claim payments under health benefit plans.
(a) As used in thissection:
(1) "Claimant"includes a health care provider or facility that is responsible or permittedunder contract with the insurer or by valid assignment of benefits for directlymaking the claim with an insurer.
(2) "Health benefitplan" means an accident and health insurance policy or certificate; anonprofit hospital or medical service corporation contract; a healthmaintenance organization subscriber contract; a plan provided by a multipleemployer welfare arrangement; or a plan provided by another benefitarrangement, to the extent permitted by the Employee Retirement Income SecurityAct of 1974, as amended, or by any waiver of or other exception to that actprovided under federal law or regulation. "Health benefit plan" doesnot mean any plan implemented or administered by the North Carolina or UnitedStates Department of Health and Human Services, or any successor agency, or itsrepresentatives. "Health benefit plan" also does not mean any of thefollowing kinds of insurance:
a. Credit.
b. Disability income.
c. Coverage issued as asupplement to liability insurance.
d. Hospital income orindemnity.
e. Insurance underwhich benefits are payable with or without regard to fault and that isstatutorily required to be contained in any liability policy or equivalent self‑insurance.
f. Long‑term ornursing home care.
g. Medical paymentsunder motor vehicle or homeowners' insurance policies.
h. Medicare supplement.
i. Short‑termlimited duration health insurance policies as defined in Part 144 of Title 45of the Code of Federal Regulations.
j. Workers'compensation.
(3) "Health carefacility" means a facility that is licensed under Chapter 131E or Chapter122C of the General Statutes or is owned or operated by the State of NorthCarolina in which health care services are provided to patients.
(4) "Health careprovider" means an individual who is licensed, certified, or otherwiseauthorized under Chapter 90 or 90B of the General Statutes or under the laws ofanother state to provide health care services in the ordinary course ofbusiness or practice of a profession or in an approved education or trainingprogram.
(5) "Insurer"includes an insurance company subject to this Chapter, a service corporationorganized under Article 65 of this Chapter, a health maintenance organizationorganized under Article 67 of this Chapter, or a multiple employer welfarearrangement subject to Article 49 of this Chapter, that writes a health benefitplan.
(b) An insurer shall,within 30 calendar days after receipt of a claim, send by electronic or papermail to the claimant:
(1) Payment of theclaim.
(2) Notice of denial ofthe claim.
(3) Notice that theproof of loss is inadequate or incomplete.
(4) Notice that theclaim is not submitted on the form required by the health benefit plan, by thecontract between the insurer and health care provider or health care facility,or by applicable law.
(5) Notice thatcoordination of benefits information is needed in order to pay the claim.
(6) Notice that theclaim is pending based on nonpayment of fees or premiums.
For purposes of this section, aninsurer is presumed to have received a written claim five business days afterthe claim has been placed first‑class postage prepaid in the UnitedStates mail addressed to the insurer or an electronic claim transmitted to theinsurer or a designated clearinghouse on the day the claim is electronicallytransmitted. The presumption may be rebutted by sufficient evidence that theclaim was received on another day or not received at all.
(c) If the claim isdenied, the notice shall include all of the specific good faith reason orreasons for the denial, including, without limitation, coordination ofbenefits, lack of eligibility, or lack of coverage for the services provided.If the claim is contested or cannot be paid because the proof of loss isinadequate or incomplete, or not paid pending receipt of requested coordinationof benefits information, the notice shall contain the specific good faithreason or reasons why the claim has not been paid and an itemization ordescription of all of the information needed by the insurer to complete theprocessing of the claim. If all or part of the claim is contested or cannot bepaid because of the application of a specific utilization management or medicalnecessity standard is not satisfied, the notice shall contain the specificclinical rationale for that decision or shall refer to specific provisions indocuments that are made readily available through the insurer which provide thespecific clinical rationale for that decision; however, if a notice ofnoncertification has already been provided under G.S. 58‑50‑61(h),then the specific clinical rationale for the decision is not required underthis subsection. If the claim is contested or cannot be paid because ofnonpayment of premiums, the notice shall contain a statement advising theclaimant of the nonpayment of premiums. If a claim is not paid pending receiptof requested coordination of benefits information, the notice shall so specify.If a claim is denied or contested in part, the insurer shall pay the undisputedportion of the claim within 30 calendar days after receipt of the claim andsend the notice of the denial or contested status within 30 days after receiptof the claim. If a claim is contested or cannot be paid because the claim wasnot submitted on the required form, the notice shall contain the required form,if the form is other than a UB or HCFA form, and instructions to complete thatform. Upon receipt of additional information requested in its notice to theclaimant, the insurer shall continue processing the claim and pay or deny theclaim within 30 days after receiving the additional information.
(d) If an insurer requestsadditional information under subsection (c) of this section and the insurerdoes not receive the additional information within 90 days after the requestwas made, the insurer shall deny the claim and send the notice of denial to theclaimant in accordance with subsection (c) of this section. The insurer shallinclude the specific reason or reasons for denial in the notice, including thefact that information that was requested was not provided. The insurer shallinform the claimant in the notice that the claim will be reopened if theinformation previously requested is submitted to the insurer within one yearafter the date of the denial notice closing the claim.
(e) Health benefit planclaim payments that are not made in accordance with this section shall bearinterest at the annual percentage rate of eighteen percent (18%) beginning onthe date following the day on which the claim should have been paid. Ifadditional information was requested by the insurer under subsection (b) ofthis section, interest on health benefit claim payments shall begin to accrueon the 31st day after the insurer received the additional information. Apayment is considered made on the date upon which a check, draft, or othervalid negotiable instrument is placed in the United States Postal Service in aproperly addressed, postpaid envelope, or, if not mailed, on the date of theelectronic transfer or other delivery of the payment to the claimant. Thissubsection does not apply to claims for benefits that are not covered by thehealth benefit plan; nor does this subsection apply to deductibles, co‑payments,or other amounts for which the insurer is not liable.
(f) Insurers mayrequire that claims be submitted within 180 days after the date of theprovision of care to the patient by the health care provider and, in the caseof health care provider facility claims, within 180 days after the date of thepatient's discharge from the facility. However, an insurer may not limit thetime in which claims may be submitted to fewer than 180 days. Unless otherwiseagreed to by the insurer and the claimant, failure to submit a claim within thetime required does not invalidate or reduce any claim if it was not reasonablypossible for the claimant to file the claim within that time, provided that theclaim is submitted as soon as reasonably possible and in no event, except inthe absence of legal capacity of the insured, later than one year from the timesubmittal of the claim is otherwise required.
(g) If a claim forwhich the claimant is a health care provider or health care facility has notbeen paid or denied within 60 days after receipt of the initial claim, theinsurer shall send a claim status report to the insured. Provided, however,that the claims status report is not required during the time an insurer isawaiting information requested under subsection (c) of this section. The reportshall indicate that the claim is under review and the insurer is communicatingwith the health care provider or health care facility to resolve the matter.While a claim remains unresolved, the insurer shall send a claim status reportto the insured with a copy to the provider 30 days after the previous reportwas sent.
(h) Subject to the timelines required under this section, the insurer may recover overpayments made tothe health care provider or health care facility by making demands for refundsand by offsetting future payments. Any such recoveries may also include relatedinterest payments that were made under the requirements of this section. Not lessthan 30 calendar days before an insurer seeks overpayment recovery or offsetsfuture payments, the insurer shall give written notice to the health careprovider or health care facility, which notice shall be accompanied by adequatespecific information to identify the specific claim and the specific reason forthe recovery. The recovery of overpayments or offsetting of future paymentsshall be made within the two years after the date of the original claim paymentunless the insurer has reasonable belief of fraud or other intentionalmisconduct by the health care provider or health care facility or its agents,or the claim involves a health care provider or health care facility receivingpayment for the same service from a government payor. The health care provideror health care facility may recover underpayments or nonpayments by the insurerby making demands for refunds. Any such recoveries by the health care provideror health care facility of underpayments or nonpayment by the insurer mayinclude applicable interest under this section. The recovery of underpaymentsor nonpayments shall be made within the two years after the date of theoriginal claim adjudication, unless the claim involves a health provider orhealth care facility receiving payment for the same service from a governmentpayor.
(i) Every insurershall maintain written or electronic records of its activities under thissection, including records of when each claim was received, paid, denied, orpended, and the insurer's review and handling of each claim under this section,sufficient to demonstrate compliance with this section.
(j) A violation ofthis section by an insurer subjects the insurer to the sanctions in G.S. 58‑2‑70.The authority of the Commissioner under this subsection does not impair theright of a claimant to pursue any other action or remedy available under law.With respect to a specific claim, an insurer paying statutory interest in goodfaith under this section is not subject to sanctions for that claim under thissubsection.
(k) An insurer is notin violation of this section nor subject to interest payments under thissection if its failure to comply with this section is caused in material partby (i) the person submitting the claim, or (ii) by matters beyond the insurer'sreasonable control, including an act of God, insurrection, strike, fire, orpower outages. In addition, an insurer is not in violation of this section orsubject to interest payments to the claimant under this section if the insurerhas a reasonable basis to believe that the claim was submitted fraudulently andnotifies the claimant of the alleged fraud.
(l) Expired January 1,2003.
(m) Nothing in thissection limits or impairs the patient's liability under existing law forpayment of medical expenses. (2000‑162, s. 4(a); 2001‑417, s. 1; 2007‑362,s. 1; 2009‑382, s. 16.)