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Act No. 159

(H.163)

Health Insurance; Independent Review; Ombudsman;

Certificate of Need; Payment of Health Care Charges

This act makes changes in several areas of the law that relate to health insurance, including the following provisions:

Consumers adversely affected by a health insurance company's decision relating to medically-based decisions can appeal the insurer's decision to an independent, external review panel.

An Office of Health Care Ombudsman is created to assist consumers in resolving complaints with health insurance companies, including health maintenance organizations, and to pursue administrative and judicial remedies on behalf of consumers when necessary.

Several changes are made to the laws governing health insurance companies and health maintenance organizations. Health maintenance organizations are made subject to the state's holding company statute, solvency standards for health maintenance organizations are strengthened, and the prior approval of the Commissioner of Banking, Insurance, Securities, and Health Care Administration is needed before a health maintenance organization is merged, consolidated, acquired, or in some other manner reorganized.

The certificate of need statutes are amended to include review of the construction of a cardiac catheterization laboratory.

Additional staff is added to the Department of Banking, Insurance, Securities, and Health Care Administration.

Standards and procedures are established for payment by health insurance companies of claims by providers and facilities for health care services. Payment must be made within 45 days after receipt of a claim, unless the charge is disputed or denied. Interest accrues after 45 days from the date of the claim, in the case of uncontested claims, or 45 days after all necessary information is received in the case of a contested claim.

After July 1, 1999, health maintenance organizations may not be formed as limited liability companies.

Effective Date: The health maintenance organization solvency provisions, the substantive certificate of need amendments, and the confidentiality of external review documents provision take effect on April 29, 1998. The Ombudsman Office section and the provisions requiring insurance company payment of claims take effect July 1, 1998. The independent, external review provision takes effect March 15, 1999.