Substitute House Bill No. 5377, also known as Public Act No. 26-56, amends existing laws regarding the return of payments made to health care providers by contracting health organizations and insurers. The bill reduces the time frame in which these organizations can cancel, deny, or demand the return of payments for authorized covered services due to administrative or eligibility errors from eighteen months to twelve months after the receipt of a clean claim. Exceptions to this rule include instances of suspected fraud, improper billing, duplicate payments, payments made by federal or state programs, or payments received from other insurers. Additionally, providers are granted one year to resubmit adjusted claims after a payment demand and must be notified at least thirty days in advance of any payment cancellation or demand.

The bill also introduces new notification requirements for health care providers, mandating that organizations provide detailed information about the payment demand, including the amount and basis for the demand. Providers have the right to appeal such demands within thirty days, and if the organization fails to respond within thirty business days, the appeal will be resolved in favor of the provider. Furthermore, the bill allows providers one year to identify other applicable insurance coverage and file claims, regardless of the timely filing requirements of the other insurers. Overall, the legislation aims to enhance the protections for health care providers regarding payment disputes and streamline the claims process.