Relating to the use of automated adjudication systems by health carriers, and including civil penalties

For each claim a carrier intends to downcode or deny, the carrier shall provide notice to the health care provider (provider) of the proposed downcoding or denial that includes the required information detailed in the bill, and shall allow the provider a minimum of days to appeal the decision or submit additional documentation. If no appeal is submitted and the downcode or denial is finalized, the downcode or denial must be clearly identified in the explanation of benefits or remittance advice, labeled, and include all associated documentation and justification. A system shall not be used by a carrier as the sole basis for denying a claim based on lack of medical necessity, rejecting a claim due to missing or insufficient documentation, modifying a code without verification by a reviewer, or flagging or withholding a claim for health care services that are routine, commonly accepted, or historically validated. A carrier shall disclose to the insurance division the use of a system in the processing of claims that includes the information detailed in the bill. A carrier shall maintain documentation for each claim for which reimbursement is decreased by a system that shows the submitted code, the adjusted code, the reason for the downcode, and whether a review by a reviewer was conducted, and shall retain the documentation for a minimum of five years. If a provider receives a notice of a proposed denial or downcode of a claim, the provider may appeal the denial or downcode within days by submitting additional documentation to a carrier or requesting the carrier to provide a review by a reviewer. A carrier shall respond to an appeal within days. If, after review, it is determined that the originally billed code was supported by proper documentation, the carrier shall readjust the claim to the original code and provide the provider with a written explanation of the readjustment. Upon request by a provider, a carrier shall provide an annual report that summarizes the total number of claims processed under the carrier’s system, the number and percentage of claims that were denied or downcoded by the carrier’s system, the number and percentage of claims the provider appealed, and the number of claims that were adjusted after performing a review by a reviewer. The commissioner of insurance may, upon a finding that a carrier intentionally or recklessly processed claims by a system in violation of the bill, impose a penalty of not more than $10,000 for each violation. A provider or person damaged by a violation of the bill may bring a civil action against a carrier for violation of the bill to recover damages, to enjoin the carrier from further violations, and to seek any other relief available by law. A provider or person who prevails in an action against a carrier shall be entitled to an award of court costs and reasonable attorney fees. The commissioner of insurance shall adopt rules to administer the bill, including but not limited to rules that specify the standards for the review process by a reviewer, the form and content of notices to providers, the requirements for appeals, and recordkeeping and audit standards.