Prompt payment of claims - legislative declaration - rules
(1) The general assembly finds, determines, and declares that:
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(1) The general assembly finds, determines, and declares that:
(a) Patients and health-care providers often do not receive the reimbursements to which they are entitled from health insurance entities in a timely manner, even in the case of claims that are submitted on standard forms and do not require additional information for processing; and
(b) Unnecessary delays in the payment of routine and uncontested claims for reimbursement represent an unwarranted drain on health-care providers' resources, which could be better spent attending to the needs of patients, as well as wasting the time and money of the patients themselves. Therefore, it is in the interest of the citizens of Colorado that reasonable standards be imposed for the timely payment of claims.
(2) As used in this section, clean claim means a claim for payment of health-care expenses that is submitted to a carrier on the uniform claim form adopted pursuant to section 10-16-106.3 with all required fields completed with correct and complete information, including all required documents. A claim requiring additional information shall not be considered a clean claim and shall be paid, denied, or settled as set forth in paragraph (b) of subsection (4) of this section. Clean claim does not include a claim for payment of expenses incurred during a period of time for which premiums are delinquent, except to the extent otherwise required by law.
(2.5) This section shall apply to claims made as a result of injuries sustained in a motor vehicle accident regardless of whether fault in such accident has been determined.
(2.7) (a) A policyholder, insured, or provider may submit a claim:
(I) By United States mail, first class, or by overnight delivery service;
(II) Electronically;
(III) By facsimile (fax); or
(IV) By hand delivery.
(b) (I) A carrier shall make a mechanism available to providers that shall enable a provider to confirm the receipt of a claim that is filed with the carrier in a manner other than electronically. Within ten business days after the submission of the claim as determined by the provider, the carrier shall list such claim on the notification mechanism as received. The claim shall be deemed received on the date it is listed on the notification mechanism by the carrier. If a claim is not listed on the notification mechanism, the provider may contact the carrier for the purposes of resubmission of the claim. The carrier shall have a separate facsimile process to receive the resubmission of the paper claims. The resubmitted claim shall be deemed received on the date of the facsimile transmission acknowledgment. If such mechanism is accessible only by electronic means, upon request of the provider, the information must be made available in hard-copy form within three business days.
(II) If the claim is submitted electronically, the claim is presumed to have been received on the date of the electronic verification of receipt by the carrier or the carrier's clearinghouse. The carrier or carrier's clearinghouse shall provide a confirmation within one business day after submission by a provider.
(3) Every carrier shall provide a copy of its filing requirements to:
(a) Every enrollee or insured upon enrollment in the carrier's plan or upon issuance of the policy when applicable;
(b) Every enrollee or insured, upon request, within fifteen calendar days;
(c) Every participating provider upon acceptance of the provider into the carrier's network; and
(d) Every enrollee, insured, and participating provider within fifteen calendar days after any change in the standard form or the accompanying instructions or requirements when applicable.
(4) (a) Clean claims shall be paid, denied, or settled within thirty calendar days after receipt by the carrier if submitted electronically and within forty-five calendar days after receipt by the carrier if submitted by any other means.
(b) If the resolution of a claim requires additional information, the carrier shall, within thirty calendar days after receipt of the claim, give the provider, policyholder, insured, or patient, as appropriate, a full explanation in writing of what additional information is needed to resolve the claim, including any additional medical or other information related to the claim. The person receiving a request for such additional information shall submit all additional information requested by the carrier within thirty calendar days after receipt of such request. Notwithstanding any provision of an indemnity policy to the contrary, the carrier may deny a claim if a provider receives a request for additional information and fails to timely submit additional information requested under this paragraph (b), subject to resubmittal of the claim or the appeals process. If such person has provided all such additional information necessary to resolve the claim, the claim shall be paid, denied, or settled by the carrier within the applicable time period set forth in paragraph (c) of this subsection (4).
(c) Absent fraud, all claims except those described in paragraph (a) of this subsection (4) shall be paid, denied, or settled within ninety calendar days after receipt by the carrier.
(d) (I) Except as otherwise provided in paragraph (b) of this subsection (4), if the carrier intends to prospectively conduct a charge audit, such carrier shall, not later than the forty-fifth day after the date the carrier receives the claim, pay the charges submitted by any participating institutional provider at a rate of at least eighty-five percent of the contracted rate on the claim, less deductibles, coinsurance, and copayments, and shall pay a nonparticipating institutional provider at least sixty percent of the amount due on the claim, less deductibles, coinsurance, and copayments. The carrier shall complete the charge audit, and make any additional payment not later than the ninetieth day after receipt of a claim.
(II) The institutional provider shall allow reasonable access to the records necessary to conduct the audit within the time period required by this paragraph
(d).
(III) For the purposes of this paragraph (d), charge audit means an audit to determine whether data in an enrollee's medical record documents the health-care services listed on a claim for payment submitted to a carrier. Charge audit does not mean a review of the medical necessity of the services provided.
(5) (a) A carrier that fails to pay, deny, or settle a clean claim in accordance with paragraph (a) of subsection (4) of this section or take other required action within the time periods set forth in paragraph (b) of subsection (4) of this section shall be liable for the covered benefit and, in addition, shall pay to the insured or health-care provider, with proper assignment, interest at the rate of ten percent annually on the total amount ultimately allowed on the claim, accruing from the date payment was due pursuant to subsection (4) of this section.
(b) A carrier that fails to pay, deny, or settle a claim in accordance with subsection (4) of this section within ninety days after receiving the claim shall pay to the insured or health-care provider, with proper assignment, a penalty in an amount equal to twenty percent of the total amount ultimately allowed on the claim. Such penalty shall be imposed on the ninety-first day after receipt of the claim by the carrier. If a carrier denies a claim in accordance with subsection (4) of this section within ninety days after receiving the claim and the denial is determined to be unreasonable pursuant a civil action in accordance with section 10-3-1116, the carrier shall pay the penalty in this paragraph (b) to the insured or to the assignee.
(c) To the extent that penalties are not paid concurrently with the claim, the penalties in this section may be paid on a quarterly basis or when the aggregate penalties for a provider exceeds ten dollars.
(6) This section shall not prohibit a carrier from retroactively adjusting payment of a claim that is not subject to the provisions of section 10-16-704, if:
(a) The policyholder notifies the carrier of a change in eligibility of an individual; and
(b) The adjustment is made within thirty days after the carrier's receipt of such notification.
(7) If a carrier delegates its claims processing functions to a third party, the delegation agreement shall provide that the claims processing entity shall comply with the requirements of this section. Any delegation by the carrier shall not be construed to limit the carrier's responsibility to comply with this section or any other applicable section of this article.
(8) This section does not apply to a claim filed:
(a) Pursuant to the Workers' Compensation Act of Colorado, articles 40 to 47 of title 8, C.R.S.; or
(b) For an individual entitled to a three-month grace period as described in section 10-16-140 (1), when the claim is for services rendered after the first month of the three-month grace period. The commissioner may adopt rules as necessary to implement and administer this paragraph (b).
(9) The commissioner may investigate claims against a health coverage plan that is authorized to conduct business in this state when such claims are filed by a provider related to the improper handling or denial of benefits pursuant to this section.