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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
AMENDED
health insurers; notice; providers
Purpose
Provides payment and notification requirements for health insurers and health care providers.
Background
To improve the efficiency and effectiveness of the healthcare system, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 includes administrative simplification provisions that require the U.S. Department of Health and Human Services (U.S. HHS) to adopt national standards for electronic healthcare transactions and code sets, unique health identifiers and security (P.L. 104-191). The administrative simplification rules require HIPAA-covered health plans to have the ability to send or receive these standardized electronic healthcare transactions when requested by HIPAA-covered providers.
In its January 10, 2014, rule, Administrative Simplification: Adoption of Standards for Healthcare Electronic Funds Transfers (EFTs) and Remittance Advice, the U.S. HHS adopted EFTs via the Automated Clearinghouse (ACH) as part of its EFT standards (45 C.F.R. §§ 162.1601 and 162.1602). While health plans were required to transmit electronic funds transfers via the ACH Network when requested by a provider, the January 2014 rule also noted that, “[h]ealth plans are not required to send healthcare EFT through the ACH Network. They may decide, for instance, to transmit a healthcare EFT via Fedwire or via a payment card network…when health plans do, however, send healthcare EFT through the ACH Network, they must do so using the healthcare EFT standards adopted herein." In today’s marketplace, HIPAA-covered health plans send healthcare payments via the ACH Network, payment card networks and by paper check.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Contractual Payment Requirements
1. Prohibits a contract between a health insurer and a health care provider, that is issued, amended or renewed on or after January 1, 2020, from restricting the method of payment from the health insurer to the health care provider in which the only acceptable payment method is a credit card payment.
2. Requires the health insurer, if that insurer initiates or changes payments to a health care provider using EFT payments, to:
a) notify the health care provider if any fee is associated with a particular payment method;
b) advise the health care provider of the available methods of payment and provide clear instructions to the health care provider as to how to select an alternative payment method; and
c) remit with each payment an explanation of benefits.
3. Prohibits a health insurer that initiates or changes payment to a health care provider using the healthcare EFTs and Remittance Advice from charging a fee solely to transmit the payment to the provider, unless the provider has consented to the fee.
4. Allows a health care provider to charge reasonable fees when transmitting the EFTs or automatic clearing house related to transaction management, data management, portal services and other value-added services above and beyond the bank transmittal.
Network Notification Requirements
5. Requires a health insurer that acquires the provider network of another health insurer, to notify, consistent with the notification provisions of the provider contract, each health care provider of the acquired network.
6. Allows a health care provider that is in a provider network that is acquired to:
a) continue the provider relationship with the health insurer that acquired the provider network;
b) terminate the provider relationship with the health insurer that acquired the provider network in a time and manner consistent with the contract between the health care provider and the health insurer; or
c) enter into a contract directly with the health insurer that acquired the provider network.
7. Prohibits application to acquisitions or arrangements that are disclosed in the network contract between a health care provider and a health insurer and to which the health care provider has already agreed.
Miscellaneous
8. Defines terms.
9. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Allows the restriction of payment by EFT payments.
2. Specifies that a health insurer that initiates or changes payment to a provider using health care EFTs may not charge a fee solely to transmit the payment of a health care provider unless the provider has consented to such a fee.
3. Allows a health care provider to charge reasonable fees related to value-added services.
Amendments Adopted by Committee of the Whole
· Changes the requirements for network notification.
House Action Senate Action
HHS 2/14/19 DPA 8-0-0-1 FIN 3/13/19 DPA 9-0-1
3rd Read 2/26/19 60-0-0
Prepared by Senate Research
April 10, 2019
CS/kja