A bill to provide for interest on late payments of health care claims.

Subjects a group health plan or a health insurance issuer offering group health insurance coverage to interest penalties on clean claims not timely paid as required by the Social Security Act. Permits beneficiaries or health care providers to bring such a group health plan or a health insurance issuer to court for unpaid bills, after arbitration.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1616 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1616

    To provide for interest on late payments of health care claims.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 1, 2001

 Mr. Torricelli (for himself and Mr. Corzine) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To provide for interest on late payments of health care claims.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. INTEREST ON LATE PAYMENTS OF CLEAN CLAIMS.

    (a) Requirement.--
            (1) In general.--If a group health plan or a health 
        insurance issuer offering group health insurance coverage fails 
        to provide payment of a clean claim (or provides partial 
        payment on such claim) on or before the applicable number of 
        calendar days established for purposes of payment of clean 
        claims under section 1842(c)(2) of the Social Security Act (42 
        U.S.C. 1395u(c)(2))--
                    (A) the payment (or unpaid portion of the payment) 
                shall be overdue; and
                    (B) interest shall be paid on the overdue payment 
                (or unpaid portion) to the provider, participant, 
                beneficiary, or enrollee to which the payment is due in 
                accordance with the requirements set forth in paragraph 
                (2).
            (2) Interest requirements.--
                    (A) Simple interest.--Interest on an overdue 
                payment (including an unpaid portion of a payment) 
                shall accrue at the rate of 18 percent per year.
                    (B) Commencement.--Interest on an overdue payment 
                (or unpaid portion) shall begin to accrue on the date 
                that is 15 days after the date on which all information 
                and documentation required to process the claim is 
                received by the plan or issuer.
                    (C) Payment.--Interest on an overdue payment (or 
                unpaid portion) shall be--
                            (i) included with the payment due on the 
                        clean claim; or
                            (ii) paid within 14 days of the payment of 
                        the clean claim.
    (b) Arbitration.--The Secretary of Health and Human Services, in 
consultation with the Secretary of Labor, shall develop an arbitration 
process under which a participant, beneficiary, or enrollee and a group 
health plan or health insurance issuer may obtain an independent 
determination with respect to a claim for an overdue payment and 
interest under subsection (a).
    (c) Federal Cause of Action.--Notwithstanding any other provision 
of law, upon the termination of the arbitration process under 
subsection (b) with respect to an overdue payment and interest under 
subsection (a), an action seeking to recover such payment and interest 
may be brought in the district court of the United States for the 
judicial district in which the provider, participant, beneficiary, or 
enrollee to which the payment and interest are due resides.
    (d) Third Party Contractors.--The requirements of this section 
shall apply to a group health plan or health insurance issuer 
regardless of whether the plan or issuer contracts with a third party 
for the administration and payment of claims under the plan or 
coverage.
    (e) Definition of Clean Claim.--
            (1) In general.--In this section, the term ``clean claim'' 
        means a claim submitted for health care services or supplies 
        that meets the following requirements:
                    (A) The claim is for a service or supply covered by 
                the group health plan or the health insurance coverage.
                    (B) The claim is submitted with all the information 
                requested by the plan or issuer on the claim form or in 
                other instructions distributed to the provider, 
                participant, beneficiary, or enrollee.
                    (C) The participant, beneficiary, or enrollee to 
                whom the service or supply was provided was covered 
                under the group health plan or health insurance 
                coverage on the date of service.
                    (D) The plan or issuer does not reasonably believe 
                that the claim has been submitted fraudulently.
                    (E) The claim does not require special treatment.
            (2) Definition of special treatment.--For purposes of 
        paragraph (1)(E), the term ``special treatment'' means that--
                    (A) unusual claim processing is required to 
                determine whether a service or supply is covered, such 
                as claims involving experimental treatments or newly 
                approved medications; and
                    (B) the circumstances requiring such processing are 
                documented in the claim file.
            (3) Other definitions.--In this section, the terms ``group 
        health plan'' and ``health insurance issuer'' shall have the 
        meanings given such terms under section 2791 of the Public 
        Health Service Act (42 U.S.C. 300gg-91).
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