HF2635: Health Insurance Provider Requirements

Amends and expands requirements for health insurance carriers and utilization review organizations. Key provisions include strict timelines for processing and auditing claims, reimbursement for administrative costs of audits, expanded definitions of covered entities, new standards of conduct prohibiting certain penalties and unfair contract terms, and detailed requirements for prior authorization denials and appeals. The bill also exempts certain cancer-related and emergency health services from prior authorization. Civil penalties and litigation cost recovery are provided for violations, and the insurance commissioner is directed to adopt rules for enforcement.

Key Points & Impacts

• Requires health carriers to pay or deny clean claims within 30 days (electronic) or 45 days (paper), and prohibits retroactive denial/reduction/recoupment after payment without evidence of fraud, misrepresentation, or duplication.

• Mandates reimbursement to health care providers for reasonable administrative costs incurred in responding to audits of clean claims by carriers.

• Establishes strict notice and completion deadlines for health carrier audits (initiation notice within 15 days, completion within 45 days of receiving documentation, 14 days for appeal determinations).

• Automatic approval and prompt payment (with 10% interest) of claims when carriers violate audit process timelines.

• Prohibits carriers from penalizing, reducing reimbursement, charging fees, or terminating providers for referring to or affiliating with out-of-network providers, and bars interference in staffing/referral decisions.

• Bars enforcement of unreasonable or unconscionable contract terms with providers and requires opportunity for negotiation on agreements or amendments.

• Sets requirements that only clinical peers or qualified reviewers may deny or downgrade prior authorization requests, and mandates written, detailed rationale and credentials for such determinations, plus timely consultation and independent appeals.

• Exempts cancer-related screenings/services (per national guidelines) and urgent inpatient conditions from prior authorization or additional utilization review requirements.