1.1                          A bill for an act
  1.2             relating to health; requiring prompt payment by health 
  1.3             plan companies and third-party administrators of clean 
  1.4             claims for health care services; proposing coding for 
  1.5             new law in Minnesota Statutes, chapter 62Q. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [62Q.75] [PROMPT PAYMENT REQUIRED.] 
  1.8      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  1.9   section, the following terms have the meanings given to them. 
  1.10     (b) "Clean claim" means a claim that has no defect or 
  1.11  impropriety, including any lack of any required substantiating 
  1.12  documentation, or particular circumstance requiring special 
  1.13  treatment that prevents timely payment from being made on a 
  1.14  claim under this section. 
  1.15     (c) "Third-party administrator" means a third-party 
  1.16  administrator or other entity subject to section 60A.23, 
  1.17  subdivision 8, and Minnesota Rules, chapter 2767. 
  1.18     Subd. 2.  [CLAIMS PAYMENTS.] (a) This section applies to 
  1.19  clean claims submitted to a health plan company or third-party 
  1.20  administrator for services provided by any health care provider 
  1.21  or health care facility.  All health plan companies and 
  1.22  third-party administrators must issue, mail, or otherwise 
  1.23  transmit payment: 
  1.24     (1) for paper claims that are clean claims, within 30 
  1.25  calendar days after the date upon which the health plan company 
  2.1   or third-party administrator received the claim; and 
  2.2      (2) for electronic claims that are clean claims, within 14 
  2.3   calendar days after the date upon which the health plan company 
  2.4   or third-party administrator received the claim. 
  2.5      (b) If a health plan company or third-party administrator 
  2.6   does not issue, mail, or otherwise transmit payment within the 
  2.7   period provided in paragraph (a), the health plan company or 
  2.8   third-party administrator must pay interest on the claim for the 
  2.9   period beginning on the day after the required payment date 
  2.10  specified in paragraph (a) and ending on the date on which the 
  2.11  health plan company or third-party administrator makes the 
  2.12  payment.  The interest must be calculated and disbursed in the 
  2.13  same manner as under United States Code, title 42, section 
  2.14  1395h(c).  In any payment, the health plan company or 
  2.15  third-party administrator must itemize any interest payment 
  2.16  being made separately from other payments being made for 
  2.17  services provided. 
  2.18     (c) The rate of interest paid by a health plan company or 
  2.19  third-party administrator under this subdivision shall be 1.5 
  2.20  percent per month or any part of a month. 
  2.21     Subd. 3.  [VIOLATIONS; REPORTING AND FINE.] (a) A health 
  2.22  care provider or health care facility may report any violation 
  2.23  of subdivision 2, paragraph (a), by a health plan company or 
  2.24  third-party administrator to the commissioner with regulatory 
  2.25  authority over the health plan company or third-party 
  2.26  administrator. 
  2.27     (b) If a commissioner with regulatory authority over a 
  2.28  health plan company or third-party administrator determines that 
  2.29  a health plan company or third-party administrator violated 
  2.30  subdivision 2, paragraph (a), ten times or more in a calendar 
  2.31  year for a single individual or entity submitting claims, the 
  2.32  commissioner shall levy a fine of $5,000 upon the tenth 
  2.33  violation.  The fine collected shall be divided equally between 
  2.34  the commissioner levying the fine and the individual or entity 
  2.35  that submitted the claims.  The commissioner levying the fine 
  2.36  must give reasonable notice in writing to the health plan 
  3.1   company or third-party administrator of the intent to levy a 
  3.2   fine and the reasons for the fine.  A fine levied under this 
  3.3   subdivision shall be subject to the contested case and judicial 
  3.4   review provisions of chapter 14. 
  3.5      Sec. 2.  [EFFECTIVE DATE.] 
  3.6      Section 1 is effective August 1, 2000, and applies to 
  3.7   claims submitted on or after that date.