CORRECTION OF PAYMENT ERRORS
Present law prohibits a health insurance entity from being required to correct a payment error to a healthcare provider if the provider's request for a payment correction is filed more than 18 months after the date that the healthcare provider received payment for the claim from the health insurance entity. Except in cases of fraud committed by the healthcare provider, a health insurance entity may only recoup reimbursements to the provider during the 18-month period after the date that the health insurance entity paid the claim submitted by the healthcare provider. This bill changes the time period in this provision from 18 months to six months. Additionally, this bill prohibits a health insurance entity from imposing a monetary penalty on the provider with respect to an overpayment.
RETROACTIVE DENIAL OF REIMBURSEMENTS
Present law requires a health insurance entity that recoups reimbursement to a healthcare provider to give the healthcare provider a written or electronic statement specifying the basis for the recoupment. If a health insurance entity determines that payment was made for services not covered under the covered person's health insurance coverage, then present law requires the health insurance entity to give written notice to the healthcare provider of its intent to recoup a previously paid claim and may (i) request a refund from the healthcare provider or (ii) make a recoupment of the payment from the healthcare provider. The notice required may be included in the results of an audit submitted to the healthcare provider.
This bill removes the above provisions and provides, instead, that if a provider reports an overpayment by a health insurance entity to the health insurance entity in accordance with the process identified by the health insurance entity, then this bill prohibits the health insurance entity from recouping any additional overpayment amount that is discovered more than 60 days from the date of the provider's report to the health insurance entity that arose from the same claim or claims subject to the report.
AMOUNT OF RECOUPMENT
This bill requires the amount of a recoupment to equal the difference between the actual amount paid to a provider and the amount that should have been paid as specified in the notice provided to the provider under this bill. A health insurance entity is prohibited from basing a recoupment on the extrapolation of other claims from an audit.
PROCESS OF RECOUPING
Present law provides that if a health insurance entity chooses to recoup from a provider amounts previously paid pursuant to the present law, then present law requires the health insurance entity must provide the provider written documentation that specifies (i) the amount of the recoupment, (ii) the covered person's name to whom the recoupment applies, (iii) the patient identification number, (iv) the date or dates of service, (v) the service or services on which the recoupment is based, and (vi) the pending claims being recouped or that future claims will be recouped.
This bill rewrites the above provision to, instead, require a health insurance entity that intends to recoup a previously paid claim to give the provider 60 days' advance written or electronic notice specifying the basis for the recoupment, and the notice must contain, at a minimum, the following information:
(1) The CPT codes in the claims subject to the recoupment, or, if no CPT code is available, a description of the healthcare items or services for which the health insurance entity overpaid;
(2) A detailed explanation of why the previously made payment is being recouped;
(3) The claims subject to the recoupment, including applicable claim numbers;
(4) The covered person's full legal name and any identification numbers;
(5) The dates on which the provider provided the healthcare items or services, the costs of which are being recouped by the health insurance entity;
(6) The amount of recoupment;
(7) Each claim's date of payment and how it was issued to the provider and, if applicable, the number of the check containing the recoupment or electronic payment identifying information; and
(8) The process by which the provider may appeal the recoupment, including the instructions for the appeal process.
This bill authorizes the 60 days' notice to be included with the results of an audit submitted to a provider.
APPEALS
This bill prohibits payment from being withheld from the provider until all appeals are exhausted, unless the provider notifies the health insurance entity that the provider is not appealing the recoupment or withdraws the appeal. Both entities must follow the dispute resolution process as set forth in the Tennessee Heath Carrier Grievance and External Review Procedure Act if the provider chooses to appeal the recoupment.
This bill provides that, once all appeals are exhausted, if it is determined that a health insurance entity is entitled to a recoupment, then this bill requires the health insurance entity to give written notice to the provider of the amount the health insurance entity is entitled to recoup from the previously paid claim and may (i) request a refund from the provider or (ii) recoup by reducing payments currently owed to the provider by clearly identifying the pending claims from which the health insurance entity intends to recoup the overpayment.
WAIVERS BY CONTRACT
Present law prohibits the present law from being waived, voided, or nullified by contract. However, the health insurance entity and the healthcare provider are permitted to toll the time periods contained in the above provisions through mutually negotiated and separate tolling agreements if both parties agree to toll or extend the time periods. This bill removes the authority to toll the time periods.
CONFLICTS WITH OTHER LAWS
Present law is prohibited from interfering with, or otherwise repealing, the following:
(1) The prompt payment appeals process described in the Health Maintenance Organization Act of 1986;
(2) The authority of a receiver appointed by the commissioner to audit or collect overpayment made to providers more than 18 months from the date that the managed care organization (MCO) paid the claim;
(3) The authority of the TennCare bureau to collect overpayments made to providers more than 18 months from the date that the MCO paid the claim if discovered and verified by the bureau pursuant to an audit of an MCO; or
(4) The subrogation rights or authority of the bureau of TennCare.
After January 1, 2025, this bill adds to the present law by also prohibiting interfering with, or otherwise repealing, the Prior Authorization Fairness Act.
PENALTIES
Present law authorizes the commissioner of commerce and insurance ("commissioner") to impose a penalty of two times the amount of the claim or $750, whichever amount is less, if the commissioner finds a health insurance entity has failed to comply with the present law. In the alternative, the healthcare provider may seek injunctive or other appropriate relief in the chancery or circuit court in the county where the provider resides or practices. This bill raises the amount of $750 to $1,500.
RULEMAKING
Present law requires the commissioner to adopt rules to ensure compliance with the present law. This bill, instead, authorizes the commissioner to promulgate such rules.
ON APRIL 8, 2024, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 2328, AS AMENDED.
AMENDMENT #1 rewrites the bill to, instead, do the following:
TIME FOR CORRECTING PAYMENT ERROR TO HEALTHCARE PROVIDER
(1) Establish that a health insurance entity is not required to correct a payment error to a healthcare provider if the provider's request for a payment correction is filed more than 15 months after the date that the healthcare provider received payment for the claim from the health insurance entity;
RECOUPING REIMBURSEMENTS
(2) Except in cases of fraud or suspected fraud committed by the healthcare provider, authorize a health insurance entity to only recoup reimbursements made to the provider during the 15-month period after the date that the health insurance entity paid the claim submitted by the healthcare provider;
(3) If suspected fraud is not established, authorize a health insurance entity to only recoup reimbursements in accordance with (2) above and (6) below;
(4) If a health insurance entity makes a payment pursuant to health insurance coverage issued pursuant to a state employee health plan, authorize the health insurance entity to only recoup reimbursements made to a provider during an eighteen-month period after the date that the health insurance entity paid the claim submitted by the healthcare provider;
RECOUPING CLAIMS
(5) If a health insurance entity or an agent that contracted to provide eligibility verification verifies that an individual is a covered person, and if the healthcare provider provides services to the individual in reliance on the verification, prohibit the health insurance entity from thereafter recouping a claim on the basis that the individual is not a covered person unless the recoupment occurs within six months of the date that the health insurance entity paid the claim; otherwise, the health insurance entity is barred from making the recoupment unless there was fraud by the healthcare provider.
(6) Except in cases of fraud or suspected fraud, require a health insurance entity that intends to recoup a previously paid claim to give the healthcare provider 30 days' advance written or electronic notice specifying the basis for the recoupment, and the notice must contain, at a minimum, the following information:
(A) The CPT codes in the claims subject to the recoupment, or, if no CPT code is available, a description of the healthcare items or services for which the health insurance entity intends to recoup reimbursements;
(B) A detailed explanation of why the previously made payment is being recouped, including (i) identification of the billing codes and modifiers that the health insurance entity believes should have been billed; and (ii) the health insurance entity's policies supporting the billing codes and modifiers that the health insurance entity believes should have been billed;
(C) The claims subject to the recoupment, including applicable claim numbers;
(D) The covered person's full legal name and any identification numbers;
(E) The dates on which the healthcare provider provided the healthcare items or services, the costs of which are being recouped by the health insurance entity;
(F) The estimated amount of recoupment;
(G) Each claim's date of payment and how it was issued to the healthcare provider, including by mail or electronically, and, if applicable, the number of the check containing the recoupment or electronic payment identifying information; and
(H) The process by which the healthcare provider may appeal the recoupment, including the instructions for the appeal process;
(7) If suspected fraud is not established, authorize a health insurance entity to only recoup reimbursements in accordance with (2) and (6) above;
PROHIBITION AGAINST WITHHOLDING PAYMENT
(8) If a healthcare provider initiates an appeal within 30 days of the date of a notice of recoupment pursuant to (6) above, prohibit payment from being withheld from the healthcare provider until all appeals are exhausted;
AUDITS
(9) Authorize the notice required by (6) above to be included with the results of an audit submitted to a healthcare provider;
PENALTY FOR FAILURE TO COMPLY
(10) If the commissioner of commerce and insurance ("commissioner") finds that a health insurance entity has failed to comply with the bill, authorize the commissioner to impose a penalty of two times the amount of the claim or $750, whichever amount is less;
(11) In the alternative to (10) above, authorize the healthcare provider to seek injunctive or other appropriate relief in the chancery or circuit court in the county where the provider resides or practices;
TOLLING TIME PERIODS BY AGREEMENT
(12) Establish that the bill must not be waived, voided, or nullified by contract; however, a health insurance entity and a healthcare provider may toll the time periods described in (2)-(5) above through mutually negotiated and separate tolling agreements if both parties agree to toll such time periods;
AMOUNT OF RECOUPMENT
(12) Require that the amount of a recoupment equal the difference between the actual amount paid to a healthcare provider and the amount that should have been paid pursuant to (13) below;
AVOIDING CONFLICT WITH OTHER LAWS
(13) Establish that the bill does not interfere with or otherwise repeal (i) the prompt payment appeals process described in state law; (ii) the Prior Authorization Fairness Act; (iii) the authority of a receiver appointed by the commissioner to audit or collect overpayment made to providers more than 18 months from the date that a managed care organization (MCO) paid the claim; (iv) the authority of the bureau of TennCare ("bureau") to collect overpayments made to providers more than 15 months from the date that the MCO paid the claim if discovered and verified by the bureau pursuant to an audit of an MCO; or (v) the subrogation rights or authority of the bureau;
CONTRACTORS
(14) Establish that a health insurance entity that contracts directly with the bureau in the provision of services for TennCare recipients is specifically excluded from the bill only for the products and services made by the health insurance entity on behalf of the bureau;
(15) Establish that only a health insurance entity or a health insurance entity's agent that contracts with healthcare providers or is responsible for paying contracted or noncontracted healthcare providers may seek to recover payments made to those healthcare providers. No other entity may pursue recoupments governed by the bill;
RECOUPMENT LIMITATIONS
(16) Prohibit a health insurance entity from basing a recoupment on the extrapolation of other claims from an audit; and
RULEMAKING
(17) Authorize the commissioner to promulgate rules to effectuate the bill.

Statutes affected:
Introduced: 56-7-110
Amended with SA0863 -- 04/08/2024: 56-7-110