AN ACT to amend the Indiana Code concerning insurance.
SECTION 1. IC 5-10-8.1 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2001]:
Chapter 8.1. State Employee Health Benefits; Provider Payment
Sec. 1. As used in this chapter, "administrator" means:
(1) the state personnel department;
(2) an entity with which the state contracts to administer
health coverage under IC 5-10-8-7(b); or
(3) a prepaid health care delivery plan with which the state
contracts under IC 5-10-8-7(c).
Sec. 2. As used in this chapter, "clean claim" means a claim
submitted by a provider for payment under a health benefit plan
that has no defect, impropriety, or particular circumstance
requiring special treatment preventing payment.
Sec. 3. As used in this chapter, "covered individual" means an
individual who is:
(1) covered under a self-insurance program established under
IC 5-10-8-7(b) to provide group health coverage; or
(2) entitled to services under a contract for health services
entered into or renewed under IC 5-10-8-7(c).
Sec. 4. As used in this chapter, "health benefit plan" means a
self-insurance program established to provide group health
coverage as described in IC 5-10-8-7(b), or a contract for health
services as described in IC 5-10-8-7(c).
Sec. 5. As used in this chapter, "provider" has the meaning set
forth in IC 27-8-11-1.
Sec. 6. (a) The administrator shall pay or deny each clean claim
in accordance with section 7 of this chapter.
(b) An administrator shall notify a provider of any deficiencies
in a submitted claim not less than:
(1) thirty (30) days for a claim that is filed electronically; or
(2) forty-five (45) days for a claim that is filed on paper;
and describe any remedy necessary to establish a clean claim.
(c) Failure of an administrator to notify a provider as required
under subsection (b) establishes the submitted claim as a clean
claim.
Sec. 7. (a) The administrator shall pay or deny each clean claim
as follows:
(1) If the claim is filed electronically, not more than thirty (30)
days after the date the claim is received by the administrator.
(2) If the claim is filed on paper, not more than forty-five (45)
days after the date the claim is received by the administrator.
(b) If:
(1) the administrator fails to pay or deny a clean claim in the
time required under subsection (a); and
(2) the administrator subsequently pays the claim;
the administrator shall pay the provider that submitted the claim
interest on the health benefit plan allowable amount of the claim
paid under this section.
(c) Interest paid under subsection (b):
(1) accrues beginning:
(A) thirty-one (31) days after the date the claim is filed
under subsection (a)(1); or
(B) forty-six (46) days after the date the claim is filed
under subsection (a)(2); and
(2) stops accruing on the date the claim is paid.
(d) In paying interest under subsection (b), the administrator
shall use the same interest rate as provided in IC 12-15-21-3(7)(A).
Sec. 8. A provider shall submit only the following forms for
payment by an administrator:
(1) HCFA-1500.
(2) HCFA-1450 (UB-92).
(3) American Dental Association (ADA) claim form.
SECTION 2. IC 27-8-5-3 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2001]: Sec. 3. (a) Except as provided in
subsection (c), each policy delivered or issued for delivery to any
person in this state shall contain the provisions specified in this
subsection in the words in which the same appear in this section.
However, the insurer may, at its option, substitute for one (1) or more
of the provisions corresponding provisions of different wording
approved by the commissioner that are in each instance no less
favorable in any respect to the insured or the beneficiary. The
provisions shall be preceded individually by the caption appearing in
this subsection or, at the option of the insurer, by appropriate individual
or group captions or subcaptions as the commissioner may approve.
(1) A provision as follows: ENTIRE CONTRACT; CHANGES:
This policy, including the endorsements and the attached papers, if any,
constitutes the entire contract of insurance. No change in this policy
shall be valid until approved by an executive officer of the insurer and
unless such approval be endorsed hereon or attached hereto. No agent
has authority to change this policy or to waive any of its provisions.
(2) A provision as follows: TIME LIMIT ON CERTAIN
DEFENSES: (A) After two (2) years from the date of issue of this
policy no misstatements, except fraudulent misstatements, made by the
applicant in the application for such policy shall be used to void the
policy or to deny a claim for loss incurred or disability (as defined in
the policy) commencing after the expiration of such two (2) year
period.
The foregoing policy provision shall not be so construed as to affect
any legal requirement for avoidance of a policy of denial of a claim
during such initial two (2) year period, nor to limit the application of
subsection (b), (1), (2), (3), (4), and (5) in the event of misstatement
with respect to age or occupation or other insurance.
A policy which the insured has the right to continue in force subject
to its terms by the timely payment of premium:
(1) until at least age fifty (50); or
(2) in the case of a policy issued after forty-four (44) years of age,
for at least five (5) years from its date of issue;
may contain in lieu of the foregoing the following provision (from
which the clause in parentheses may be omitted at the insurer's option)
under the caption "INCONTESTABLE": After this policy has been in
force for a period of two (2) years during the lifetime of the insured
(excluding any period during which the insured is disabled), it shall
become incontestable as to the statements contained in the application.
(B) No claim for loss incurred or disability (as defined in the policy)
commencing after two (2) years from the date of issue of this policy
shall be reduced or denied on the ground that a disease or physical
condition, not excluded from coverage by name or specific description
effective on the date of loss, had existed prior to the effective date of
coverage of this policy.
(3) A provision as follows: GRACE PERIOD: A grace period of
(insert a number not less than "7" for weekly premium policies, "10"
for monthly premium policies and "31" for all other policies) days will
be granted for the payment of each premium falling due after the first
premium, during which grace period the policy shall continue in force.
A policy in which the insurer reserves the right to refuse renewal
shall have, at the beginning of the above provision: "Unless not less
than thirty (30) days prior to the premium due date the insurer has
delivered to the insured or has mailed to the insured's last address as
shown by the records of the insurer written notice of its intention not
to renew this policy beyond the period for which the premium has been
accepted."
Each policy in which the insurer reserves the right to refuse renewal
on an individual basis shall provide, in substance, in a provision of the
policy, in an endorsement on the policy, or in a rider attached to the
policy, that subject to the right to terminate the policy upon
non-payment of premium when due, such right to refuse renewal shall
not be exercised before the renewal date occurring on, or after and
nearest, each anniversary, or in the case of lapse and reinstatement at
the renewal date occurring on, or after and nearest, each anniversary of
the last reinstatement, and that any refusal or renewal shall be without
prejudice to any claim originating while the policy is in force. The
preceding sentence shall not apply to accident insurance only policies.
(4) A provision as follows: REINSTATEMENT: If any renewal
premium is not paid within the time granted the insured for payment,
a subsequent acceptance of premium by the insurer or by any agent
authorized by the insurer to accept such premium, without requiring in
connection therewith an application for reinstatement, shall reinstate
the policy. Provided, that if the insurer or such agent requires an
application for reinstatement and issues a conditional receipt for the
premium tendered, the policy will be reinstated upon approval of such
application by the insurer or, lacking such approval, upon the forty-fifth
day following the date of such conditional receipt unless the insurer has
previously notified the insured in writing of its disapproval of such
application. The reinstated policy shall cover only loss resulting from
such accidental injury as may be sustained after the date of
reinstatement and loss due to such sickness as may begin more than ten
(10) days after such date. In all other respects the insured and insurer
shall have the same rights as they had under the policy immediately
before the due date of the defaulted premium, subject to any provisions
endorsed hereon or attached hereto in connection with the
reinstatement. Any premium accepted in connection with a
reinstatement shall be applied to a period for which premium has not
been previously paid, but not to any period more than sixty (60) days
prior to the date of reinstatement.
The last sentence of the above provision may be omitted from any
policy which the insured has the right to continue in force subject to its
terms by the timely payment of premiums:
(1) until at least fifty (50) years of age; or
(2) in the case of a policy issued after forty-four (44) years of age,
for at least five (5) years from its date of issue.
(5) A provision as follows: NOTICE OF CLAIM: Written notice of
claim must be given to the insurer within twenty (20) days after the
occurrence or commencement of any loss covered by the policy, or as
soon thereafter as is reasonably possible. Notice given by or on behalf
of the insured or the beneficiary to the insurer at _______ (insert the
location of such office as the insurer may designate for the purpose), or
to any authorized agent of the insurer, with information sufficient to
identify the insured, shall be deemed notice to the insurer.
In a policy providing a loss-of-time benefit which may be payable
for at least two (2) years, an insurer may insert the following between
the first and second sentences of the above provision:
Subject to the qualifications set forth below, if the insured suffers
loss of time on account of disability for which indemnity may be
payable for at least two (2) years, the insured shall, at least once in
every six (6) months after having given notice of claim, give to the
insurer notice of continuance of said disability, except in the event of
legal incapacity. The period of six (6) months following any filing of
proof by the insured or any payment by the insurer on account of such
claim or any denial of liability in whole or in part by the insurer shall
be excluded in applying this provision. Delay in the giving of such
notice shall not impair the insurer's right to any indemnity which would
otherwise have accrued during the period of six (6) months preceding
the date on which such notice is actually given.
(6) A provision as follows: CLAIM FORMS: The insurer, upon
receipt of a notice of claim, will furnish to the claimant such forms as
are usually furnished by it for filing proofs of loss. If such forms are not
furnished within fifteen (15) days after the giving of such notice, the
claimant shall be deemed to have complied with the requirements of
this policy as to proof of loss upon submitting, within the time fixed in
the policy for filing proofs of loss, written proof covering the
occurrence, the character, and the extent of the loss for which claim is
made.
(7) A provision as follows: PROOFS OF LOSS: Written proof of
loss must be furnished to the insurer at its said office in case of claim
for loss for which this policy provides any periodic payment contingent
upon continuing loss within ninety (90) days after the termination of
the period for which the insurer is liable and in case of claim for any
other loss within ninety (90) days after the date of such loss. Failure to
furnish such proof within the time required shall not invalidate nor
reduce any claim if it was not reasonably possible to give proof within
such time, provided such proof is furnished as soon as reasonably
possible and in no event, except in the absence of legal capacity, later
than one (1) year from the time proof is otherwise required.
(8) A provision as follows: TIME OF PAYMENT OF CLAIMS:
Indemnities payable under this policy for any loss other than loss for
which this policy provides any periodic payment will be paid:
(1) immediately upon receipt of due written proof of such loss; or
(2) in accordance with IC 27-8-5.7;
whichever is more favorable to the policyholder. Subject to due
written proof of loss, all accrued indemnities for loss for which this
policy provides periodic payment will be paid _______ (insert period
for payment which must not be less frequently than monthly) and any
balance remaining unpaid upon the termination of liability will be paid
immediately upon receipt of due written proof. This provision must
reflect compliance with IC 27-8-5.7.
(9) A provision as follows: PAYMENT OF CLAIMS: Indemnity for
loss of life will be payable in accordance with the beneficiary
designation and the provisions respecting such payment which may be
prescribed herein and effective at the time of payment. If no such
designation or provision is then effective, such indemnity shall be
payable to the estate of the insured. Any other accrued indemnities
unpaid at the insured's death may, at the option of the insurer, be paid
either to such beneficiary or to such estate. All other indemnities will
be payable to the insured.
The following provisions, or either of them, may be included with
the foregoing provision at the option of the insurer:
If any indemnity of this policy shall be payable to the estate of the
insured, or to an insured or beneficiary who is a minor or otherwise not
competent to give a valid release, the insurer may pay such indemnity,
up to an amount not exceeding $ _______ (insert an amount which
shall not exceed $1,000), to any relative by blood or connection by
marriage of the insured or beneficiary who is deemed by the insurer to
be equitably entitled thereto. Any payment made by the insurer in good
faith pursuant to this provision shall fully discharge the insurer to the
extent of such payment.
Subject to any written direction of the insured in the application or
otherwise all or a portion of any indemnities provided by this policy on
account of hospital, nursing, medical, or surgical services may, at the
insurer's option and unless the insured requests otherwise in writing not
later than the time of filing proofs of such loss, be paid directly to the
hospital or person rendering such services; but it is not required that the
service be rendered by a particular hospital or person.
For the purposes of this section a "minor" is a person under the age
of eighteen (18) years. A person eighteen (18) years of age or over is
competent, insofar as the person's age is concerned, to sign a valid
release.
(10) A provision as follows: PHYSICAL EXAMINATIONS AND
AUTOPSY: The insurer at its own expense shall have the right and
opportunity to examine the person of the insured when and as often as
it may reasonably require during the pendency of a claim hereunder
and to make an autopsy in case of death where it is not forbidden by
law.
(11) A provision as follows: LEGAL ACTIONS: No action at law
or in equity shall be brought to recover on this policy prior to the
expiration of sixty (60) days after written proof of loss has been
furnished in accordance with the requirements of this policy. No such
action shall be brought after the expiration of three (3) years after the
time written proof of loss is required to be furnished.
(12) A provision as follows: CHANGE OF BENEFICIARY: Unless
the insured makes an irrevocable designation of beneficiary, the right
to change of beneficiary is reserved to the insured and the consent of
the beneficiary or beneficiaries shall not be requisite to surrender or
assignment of this policy or to any change of beneficiary or
beneficiaries, or to any other changes in this policy.
The first clause of this provision, relating to the irrevocable
designation of beneficiary, may be omitted at the insurer's option.
(13) A provision as follows: GUARANTEED RENEWABILITY:
In compliance with the federal Health Insurance Portability and
Accountability Act of 1996 (P.L.104-191), renewability is guaranteed.
(b) Except as provided in subsection (c), no policy delivered or
issued for delivery to any person in Indiana shall contain provisions
respecting the matters set forth below unless the provisions are in the
words in which the provisions appear in this section. However, the
insurer may use, instead of any provision, a corresponding provision of
different wording approved by the commissioner which is not less
favorable in any respect to the insured or the beneficiary. Any
substitute provision contained in the policy shall be preceded
individually by the appropriate caption appearing in this subsection or,
at the option of the insurer, by appropriate individual or group captions
or subcaptions as the commissioner may approve.
(1) A provision as follows: CHANGE OF OCCUPATION: If the
insured be injured or contract sickness after having changed the
insured's occupation to one classified by the insurer as more hazardous
than that stated in this policy or while doing for compensation anything
pertaining to an occupation so classified, the insurer will pay only such
portion of the indemnities provided in this policy as the premium paid
would have purchased at the rates and within the limits fixed by the
insurer for such more hazardous occupation. If the insured changes the
insured's occupation to one classified by the insurer as less hazardous
than that stated in this policy, the insurer, upon receipt of proof of such
change of occupation, will reduce the premium rate accordingly, and
will return the excess pro rata unearned premium from the date of
change of occupation or from the policy anniversary date immediately
preceding receipt of such proof, whichever is the more recent. In
applying this provision, the classification of occupational risk and the
premium rates shall be such as have been last filed by the insurer prior
to the occurrence of the loss for which the insurer is liable or prior to
date of proof of change in occupation with the state official having
supervision of insurance in the state where the insured resided at the
time this policy was issued; but if such filing was not required, then the
classification of occupational risk and the premium rates shall be those
last made effective by the insurer in such state prior to the occurrence
of the loss or prior to the date of proof of change in occupation.
(2) A provision as follows: MISSTATEMENT OF AGE: If the age
of the insured has been misstated, all amounts payable under this policy
shall be such as the premium paid would have purchased at the correct
age.
(3) A provision as follows: OTHER INSURANCE IN THIS
INSURER: If an accident or sickness or accident and sickness policy
or policies previously issued by the insurer to the insured are in force
concurrently herewith, making the aggregate indemnity for _______
(insert type of coverage or coverages) in excess of $ _______ (insert
maximum limit of indemnity or indemnities) the excess insurance shall
be void and all premiums paid for such excess shall be returned to the
insured or to the insured's estate. Or, instead of that provision:
Insurance effective at any one (1) time on the insured under a like
policy or policies, in this insurer is limited to the one (1) such policy
elected by the insured, the insured's beneficiary or the insured's estate,
as the case may be, and the insurer will return all premiums paid for all
other such policies.
(4) A provision as follows: INSURANCE WITH OTHER
INSURER: If there is other valid coverage, not with this insurer,
providing benefits for the same loss on a provision of service basis or
on an expense incurred basis and of which this insurer has not been
given written notice prior to the occurrence or commencement of loss,
the only liability under any expense incurred coverage of this policy
shall be for such proportion of the loss as the amount which would
otherwise have been payable hereunder plus the total of the like
amounts under all such other valid coverages for the same loss of
which this insurer had notice bears to the total like amounts under all
valid coverages for such loss, and for the return of such portion of the
premiums paid as shall exceed the pro-rata portion of the amount so
determined. For the purpose of applying this provision when other
coverage is on a provision of service basis, the "like amount" of such
other coverage shall be taken as the amount which the services
rendered would have cost in the absence of such coverage.
If the foregoing policy provision is included in a policy which also
contains the next following policy provision there shall be added to the
caption of the foregoing provision the phrase "EXPENSE INCURRED
BENEFITS". The insurer may, at its option, include in this provision
a definition of "other valid coverage," approved as to form by the
commissioner, which definition shall be limited in subject matter to
coverage provided by organizations subject to regulation by insurance
law or by insurance authorities of this or any other state of the United
States or any province of Canada, and by hospital or medical service
organizations, and to any other coverage the inclusion of which may be
approved by the commissioner. In the absence of such definition such
term shall not include group insurance, automobile medical payments
insurance, or coverage provided by hospital or medical service
organizations or by union welfare plans or employer or employee
benefit organizations. For the purpose of applying the foregoing policy
provision with respect to any insured, any amount of benefit provided
for such insured pursuant to any compulsory benefit statute (including
any worker's compensation or employer's liability statute) whether
provided by a governmental agency or otherwise shall in all cases be
deemed to be "other valid coverage" of which the insurer has had
notice. In applying the foregoing policy provision no third party
liability coverage shall be included as "other valid coverage".
(5) A provision as follows: INSURANCE WITH OTHER
INSURERS: If there is other valid coverage, not with this insurer,
providing benefits for the same loss on other than an expense incurred
basis and of which this insurer has not been given written notice prior
to the occurrence or commencement of loss, the only liability for such
benefits under this policy shall be for such proportion of the
indemnities otherwise provided hereunder for such loss as the like
indemnities of which the insurer had notice (including the indemnities
under this policy) bear to the total amount of all like indemnities for
such loss, and for the return of such portion of the premium paid as
shall exceed the pro-rata portion for the indemnities thus determined.
If the foregoing policy provision is included in a policy which also
contains the next preceding policy provision, there shall be added to the
caption of the foregoing provision the phrase "-OTHER BENEFITS."
The insurer may, at its option, include in this provision a definition of
"other valid coverage," approved as to form by the commissioner,
which definition shall be limited in subject matter to coverage provided
by organizations subject to regulation by insurance law or by insurance
authorities of this or any other state of the United States or any
province of Canada, and to any other coverage to the inclusion of
which may be approved by the commissioner. In the absence of such
definition such term shall not include group insurance or benefits
provided by union welfare plans or by employer or employee benefit
organizations. For the purpose of applying the foregoing policy
provision with respect to any insured, any amount of benefit provided
for such insured pursuant to any compulsory benefit statute (including
any worker's compensation or employer's liability statute) whether
provided by a governmental agency or otherwise shall in all cases be
deemed to be "other valid coverage" of which the insurer has had
notice. In applying the foregoing policy provision no third party
liability coverage shall be included as "other valid coverage".
(6) A provision as follows: RELATION OF EARNINGS TO
INSURANCE: If the total monthly amount of loss of time benefits
promised for the same loss under all valid loss of time coverage upon
the insured, whether payable on a weekly or monthly basis, shall
exceed the monthly earnings of the insured at the time disability
commenced or the insured's average monthly earnings for the period of
two (2) years immediately preceding a disability for which claim is
made, whichever is the greater, the insurer will be liable only for such
proportionate amount of such benefits under this policy as the amount
of such monthly earnings or such average monthly earnings of the
insured bears to the total amount of monthly benefits for the same loss
under all such coverage upon the insured at the time such disability
commences and for the return of such part of the premiums paid during
such two (2) years as shall exceed the pro rata amount of the premiums
for the benefits actually paid; but this shall not operate to reduce the
total monthly amount of benefits payable under all such coverage upon
the insured below the sum of two hundred dollars ($200) or the sum of
the monthly benefits specified in such coverages, whichever is the
lesser, nor shall it operate to reduce benefits other than those payable
for loss of time.
The foregoing policy provision may be inserted only in a policy
which the insured has the right to continue in force subject to its terms
by the timely payment of premiums:
(1) until at least fifty (50) years of age; or
(2) in the case of a policy issued after forty-four (44) years of age,
for at least five (5) years from its date of issue.
The insurer may, at its option, include in this provision a definition of
"valid loss of time coverage", approved as to form by the
commissioner, which definition shall be limited in subject matter to
coverage provided by governmental agencies or by organizations
subject to regulation by insurance law or by insurance authorities of
this or any other state of the United States or any province of Canada,
or to any other coverage the inclusion of which may be approved by the
commissioner or any combination of such coverages. In the absence of
such definition the term shall not include any coverage provided for the
insured pursuant to any compulsory benefit statute (including any
worker's compensation or employer's liability statute), or benefits
provided by union welfare plans or by employer or employee benefit
organizations.
(7) A provision as follows: UNPAID PREMIUM: Upon the payment
of a claim under this policy, any premium then due and unpaid or
covered by any note or written order may be deducted therefrom.
(8) A provision as follows: CONFORMITY WITH STATE
STATUTES: Any provision of this policy which, on its effective date,
is in conflict with the statutes of the state in which the insured resides
on such date is hereby amended to conform to the minimum
requirements of such statutes.
(9) A provision as follows: ILLEGAL OCCUPATION: The insurer
shall not be liable for any loss to which a contributing cause was the
insured's commission of or attempt to commit a felony or to which a
contributing cause was the insured's being engaged in an illegal
occupation.
section.
(1) A policy may be issued to any common carrier or to any
operator, owner or lessee of a means of transportation, who or
which shall be deemed the policyholder, covering a group of
persons who may become passengers defined by reference to their
travel status on such common carrier or such means of
transportation.
(2) A policy may be issued to an employer, who shall be deemed
the policyholder, covering any group of employees, dependents or
guests, defined by reference to specified hazards incident to an
activity or activities or operations of the policyholder.
(3) A policy may be issued to a college, school, or other
institution of learning, a school district or districts, or school
jurisdictional unit, or to the head, principal, or governing board of
any such educational unit, who or which shall be deemed the
policyholder, covering students, teachers, or employees.
(4) A policy may be issued to any religious, charitable,
recreational, educational, or civic organization, or branch thereof,
which shall be deemed the policyholder, covering any group of
members or participants defined by reference to specified hazards
incident to any activity or activities or operations sponsored or
supervised by such policyholder.
(5) A policy may be issued to a sports team, camp, or sponsor
thereof, which shall be deemed the policyholder, covering
members, campers, employees, officials, or supervisors.
(6) A policy may be issued to any volunteer fire department, first
aid, emergency management, or other such volunteer
organization, which shall be deemed the policyholder, covering
any group of members or participants defined by reference to
specified hazards incident to an activity or activities or operations
sponsored or supervised by such policyholder.
(7) A policy may be issued to a newspaper or other publisher,
which shall be deemed the policyholder, covering its carriers.
(8) A policy may be issued to an association, including a labor
union, which shall have a constitution and bylaws and which has
been organized and is maintained in good faith for purposes other
than that of obtaining insurance, which shall be deemed the
policyholder, covering any group of members or participants
defined by reference to specified hazards incident to an activity
or activities or operations sponsored or supervised by such
policyholder.
(9) A policy may be issued to cover any other risk or class of risks
which, in the discretion of the commissioner, may be properly
eligible for blanket accident and sickness insurance. The
discretion of the commissioner may be exercised on an individual
risk basis or class of risks, or both.
(b) Each such policy shall contain in substance provisions which in
the opinion of the commissioner are not less favorable to the
policyholder and the individual insured than the following:
(1) A provision that the policy, including endorsements and a
copy of the application, if any, of the policyholder and the persons
insured shall constitute the entire contract between the parties,
and that any statement made by the policyholder or by a person
insured shall in absence of fraud, be deemed a misrepresentation
and not a warranty, and that no such statements shall be used in
defense to a claim under the policy, unless contained in a written
application. Such person, his beneficiary, or assignee, shall have
the right to make written request to the insurer for a copy of such
application and the insurer shall, within fifteen (15) days after the
receipt of such request at its home office or any branch office of
the insurer, deliver or mail to the person making such request a
copy of such application. If such copy shall not be so delivered or
mailed, the insurer shall be precluded from introducing such
application as evidence in any action based upon or involving any
statements contained therein.
(2) A provision that written notice of sickness or of injury must be
given to the insurer within twenty (20) days after the date when
such sickness or injury occurred. Failure to give notice within
such time shall not invalidate nor reduce any claim if it is shown
not to have been reasonably possible to give such notice and that
notice was given as soon as was reasonably possible.
(3) A provision that the insurer will furnish either to the claimant
or to the policyholder for delivery to the claimant such forms as
are usually furnished by it for filing proof of loss. If such forms
are not furnished before the expiration of fifteen (15) days after
giving of such notice, the claimant shall be deemed to have
complied with the requirements of the policy as to proof of loss
upon submitting, within the time fixed in the policy for filing
proof of loss, written proof covering the occurrence, the character,
and the extent of the loss for which claim is made.
(4) A provision that in the case of claim for loss of time for
disability, written proof of such loss must be furnished to the
insurer within ninety (90) days after the commencement of the
period for which the insurer is liable and that subsequent written
proofs of the continuance of such disability must be furnished to
the insurer at such intervals as the insurer may reasonably require,
and that in the case of claim for any other loss, written proof of
such loss must be furnished to the insurer within ninety (90) days
after the date of such loss. Failure to furnish such proof within
such time shall not invalidate nor reduce any claim if it shall be
shown not to have been reasonably possible to furnish such proof
and that such proof was furnished as soon as was reasonably
possible.
(5) A provision that all benefits payable under the policy other
than benefits for loss of time will be payable:
(A) immediately upon receipt of due written proof of such
loss; or
(B) in accordance with IC 27-8-5.7;
whichever is more favorable to the policyholder, and that,
subject to due proof of loss, all accrued benefits payable under the
policy for loss of time will be paid not less frequently than
monthly during the continuance of the period for which the
insurer is liable, and that any balance remaining unpaid at the
termination of such period will be paid immediately upon receipt
of such proof.
(6) A provision that the insurer at its own expense, shall have the
right and opportunity to examine the person of the injured or sick
individual when and so often as it may reasonably require during
the pendency of claim under the policy and also the right and
opportunity to make an autopsy where it is not prohibited by law.
(7) A provision that no action at law or in equity shall be brought
to recover under the policy prior to the expiration of sixty (60)
days after written proof of loss has been furnished in accordance
with the requirements of the policy and that no such action shall
be brought after the expiration of three (3) years after the time
written proof of loss is required to be furnished.
The insurer may omit from a policy any portion of any of the above
provisions which is not applicable to that policy. An individual
application need not be required from a person covered under a blanket
accident and sickness policy, nor shall it be necessary for the insurer to
furnish each person a certificate.
(c) All benefits under any blanket accident and sickness policy shall
be payable to the person insured, or to the insured's designated
beneficiary or beneficiaries, or to the insured's estate, except that if the
person insured be a minor or otherwise not competent to give a valid
release, such benefits may be made payable to the insured's parent,
guardian, or other person actually supporting the insured. However, the
policy may provide in substance that all or any portion of any benefits
provided by any such policy on account of hospital, nursing, medical,
or surgical services may, at the option of the insurer and unless the
insured requests otherwise in writing not later than the time of filing
proofs of such loss, be paid directly to the hospital or person rendering
such services; but, the policy may not require that the service be
rendered by a particular hospital or person. Payment so made shall
discharge the insurer's obligations with respect to the amount of
insurance so paid.
(d) This section applies only to policies delivered or issued for
delivery in Indiana after August 19, 1975.
SECTION 4. IC 27-8-5-19, AS AMENDED BY P.L.14-2000,
SECTION 58, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2001]: Sec. 19. (a) As used in this chapter, "late enrollee" has
the meaning set forth in 26 U.S.C. 9801(b)(3).
(b) A policy of group accident and sickness insurance may not be
issued to a group that has a legal situs in Indiana unless it contains in
substance:
(1) the provisions described in subsection (c); or
(2) provisions that, in the opinion of the commissioner, are:
(A) more favorable to the persons insured; or
(B) at least as favorable to the persons insured and more
favorable to the policyholder;
than the provisions set forth in subsection (c).
(c) The provisions referred to in subsection (b)(1) are as follows:
(1) A provision that the policyholder is entitled to a grace period
of thirty-one (31) days for the payment of any premium due
except the first, during which grace period the policy will
continue in force, unless the policyholder has given the insurer
written notice of discontinuance in advance of the date of
discontinuance and in accordance with the terms of the policy.
The policy may provide that the policyholder is liable to the
insurer for the payment of a pro rata premium for the time the
policy was in force during the grace period. A provision under
this subdivision may provide that the insurer is not obligated to
pay claims incurred during the grace period until the premium
due is received.
(2) A provision that the validity of the policy may not be
contested, except for nonpayment of premiums, after the policy
has been in force for two (2) years after its date of issue, and that
no statement made by a person covered under the policy relating
to the person's insurability may be used in contesting the validity
of the insurance with respect to which the statement was made,
unless:
(A) the insurance has not been in force for a period of two (2)
years or longer during the person's lifetime; or
(B) the statement is contained in a written instrument signed
by the insured person.
However, a provision under this subdivision may not preclude the
assertion at any time of defenses based upon a person's
ineligibility for coverage under the policy or based upon other
provisions in the policy.
(3) A provision that a copy of the application, if there is one, of
the policyholder must be attached to the policy when issued, that
all statements made by the policyholder or by the persons insured
are to be deemed representations and not warranties, and that no
statement made by any person insured may be used in any contest
unless a copy of the instrument containing the statement is or has
been furnished to the insured person or, in the event of death or
incapacity of the insured person, to the insured person's
beneficiary or personal representative.
(4) A provision setting forth the conditions, if any, under which
the insurer reserves the right to require a person eligible for
insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition to part or all of the
person's coverage.
(5) A provision specifying any additional exclusions or limitations
applicable under the policy with respect to a disease or physical
condition of a person that existed before the effective date of the
person's coverage under the policy and that is not otherwise
excluded from the person's coverage by name or specific
description effective on the date of the person's loss. An exclusion
or limitation that must be specified in a provision under this
subdivision:
(A) may apply only to a disease or physical condition for
which medical advice, diagnosis, care, or treatment was
received by the person or recommended to the person during
the six (6) months before the enrollment date of the person's
coverage; and
(B) may not apply to a loss incurred or disability beginning
after the earlier of:
(i) the end of a continuous period of twelve (12) months
beginning on or after the enrollment date of the person's
coverage; or
(ii) the end of a continuous period of eighteen (18) months
beginning on the enrollment date of the person's coverage if
the person is a late enrollee.
This subdivision applies only to group policies of accident and
sickness insurance other than those described in section 2.5(a)(1)
through 2.5(a)(8) of this chapter.
(6) A provision specifying any additional exclusions or limitations
applicable under the policy with respect to a disease or physical
condition of a person that existed before the effective date of the
person's coverage under the policy. An exclusion or limitation that
must be specified in a provision under this subdivision:
(A) may apply only to a disease or physical condition for
which medical advice or treatment was received by the person
during a period of three hundred sixty-five (365) days before
the effective date of the person's coverage; and
(B) may not apply to a loss incurred or disability beginning
after the earlier of the following:
(i) The end of a continuous period of three hundred
sixty-five (365) days, beginning on or after the effective date
of the person's coverage, during which the person did not
receive medical advice or treatment in connection with the
disease or physical condition.
(ii) The end of the two (2) year period beginning on the
effective date of the person's coverage.
This subdivision applies only to group policies of accident and
sickness insurance described in section 2.5(a)(1) through
2.5(a)(8) of this chapter.
(7) If premiums or benefits under the policy vary according to a
person's age, a provision specifying an equitable adjustment of:
(A) premiums;
(B) benefits; or
(C) both premiums and benefits;
to be made if the age of a covered person has been misstated. A
provision under this subdivision must contain a clear statement of
the method of adjustment to be used.
(8) A provision that the insurer will issue to the policyholder, for
delivery to each person insured, a certificate setting forth a
statement that:
(A) explains the insurance protection to which the person
insured is entitled;
(B) indicates to whom the insurance benefits are payable; and
liability under the terms of the policy in accordance with
IC 27-8-5.7; and
(B) subject to due proof of loss, all accrued benefits under the
policy for loss of time will be paid not less frequently than
monthly during the continuance of the period for which the
insurer is liable, and any balance remaining unpaid at the
termination of the period for which the insurer is liable will be
paid as soon as possible after receipt of the proof of loss.
(13) A provision that benefits for loss of life of the person insured
are payable to the beneficiary designated by the person insured.
However, if the policy contains conditions pertaining to family
status, the beneficiary may be the family member specified by the
policy terms. In either case, payment of benefits for loss of life is
subject to the provisions of the policy if no designated or
specified beneficiary is living at the death of the person insured.
All other benefits of the policy are payable to the person insured.
The policy may also provide that if any benefit is payable to the
estate of a person or to a person who is a minor or otherwise not
competent to give a valid release, the insurer may pay the benefit,
up to an amount of five thousand dollars ($5,000), to any relative
by blood or connection by marriage of the person who is deemed
by the insurer to be equitably entitled to the benefit.
(14) A provision that the insurer has the right and must be
allowed the opportunity to:
(A) examine the person of the individual for whom a claim is
made under the policy when and as often as the insurer
reasonably requires during the pendency of the claim; and
(B) conduct an autopsy in case of death if it is not prohibited
by law.
(15) A provision that no action at law or in equity may be brought
to recover on the policy less than sixty (60) days after proof of
loss is filed in accordance with the requirements of the policy and
that no action may be brought at all more than three (3) years after
the expiration of the time within which proof of loss is required
by the policy.
(16) In the case of a policy insuring debtors, a provision that the
insurer will furnish to the policyholder, for delivery to each debtor
insured under the policy, a certificate of insurance describing the
coverage and specifying that the benefits payable will first be
applied to reduce or extinguish the indebtedness.
(17) If the policy provides that hospital or medical expense
coverage of a dependent child of a group member terminates upon
the child's attainment of the limiting age for dependent children
set forth in the policy, a provision that the child's attainment of the
limiting age does not terminate the hospital and medical coverage
of the child while the child is:
(A) incapable of self-sustaining employment because of
mental retardation or mental or physical disability; and
(B) chiefly dependent upon the group member for support and
maintenance.
A provision under this subdivision may require that proof of the
child's incapacity and dependency be furnished to the insurer by
the group member within one hundred twenty (120) days of the
child's attainment of the limiting age and, subsequently, at
reasonable intervals during the two (2) years following the child's
attainment of the limiting age. The policy may not require proof
more than once per year in the time more than two (2) years after
the child's attainment of the limiting age. This subdivision does
not require an insurer to provide coverage to a mentally retarded
or mentally or physically disabled child who does not satisfy the
requirements of the group policy as to evidence of insurability or
other requirements for coverage under the policy to take effect. In
any case, the terms of the policy apply with regard to the coverage
or exclusion from coverage of the child.
(18) A provision that complies with the group portability and
guaranteed renewability provisions of the federal Health
Insurance Portability and Accountability Act of 1996
(P.L.104-191).
(d) Subsection (c)(5), (c)(8), and (c)(13) do not apply to policies
insuring the lives of debtors. The standard provisions required under
section 3(a) of this chapter for individual accident and sickness
insurance policies do not apply to group accident and sickness
insurance policies.
(e) If any policy provision required under subsection (c) is in whole
or in part inapplicable to or inconsistent with the coverage provided by
an insurer under a particular form of policy, the insurer, with the
approval of the commissioner, shall delete the provision from the
policy or modify the provision in such a manner as to make it
consistent with the coverage provided by the policy.
SECTION 5. IC 27-8-5.7 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2001]:
Chapter 5.7. Accident and Sickness Insurance; Provider
Payment
Sec. 1. As used in this chapter, "accident and sickness insurance
policy" has the meaning set forth in IC 27-8-5-1.
Sec. 2. As used in this chapter, "clean claim" means a claim
submitted by a provider for payment under an accident and
sickness insurance policy issued in Indiana that has no defect,
impropriety, or particular circumstance requiring special
treatment preventing payment.
Sec. 3. As used in this chapter, "insurer" means an insurance
company issued a certificate of authority in Indiana to issue
accident and sickness insurance policies. The term includes:
(1) a preferred provider plan (as defined in IC 27-8-11-1); and
(2) an insurance administrator that:
(A) collects charges or premiums; and
(B) adjusts or settles claims;
in connection with coverage under an accident and sickness
insurance policy.
Sec. 4. As used in this chapter, "provider" has the meaning set
forth in IC 27-8-11-1.
Sec. 5. (a) An insurer shall pay or deny each clean claim in
accordance with section 6 of this chapter.
(b) An insurer shall notify a provider of any deficiencies in a
submitted claim not less than:
(1) thirty (30) days for a claim that is filed electronically; or
(2) forty-five (45) days for a claim that is filed on paper;
and describe any remedy necessary to establish a clean claim.
(c) Failure of an insurer to notify a provider as required under
subsection (b) establishes the submitted claim as a clean claim.
Sec. 6. (a) An insurer shall pay or deny each clean claim as
follows:
(1) If the claim is filed electronically, within thirty (30) days
after the date the claim is received by the insurer.
(2) If the claim is filed on paper, within forty-five (45) days
after the date the claim is received by the insurer.
(b) If:
(1) an insurer fails to pay or deny a clean claim in the time
required under subsection (a); and
(2) the insurer subsequently pays the claim;
the insurer shall pay the provider that submitted the claim interest
on the accident and sickness insurance policy allowable amount of
the claim paid under this section.
(c) Interest paid under subsection (b):
(1) accrues beginning:
(A) thirty-one (31) days after the date the claim is filed
under subsection (a)(1); or
(B) forty-six (46) days after the date the claim is filed
under subsection (a)(2); and
(2) stops accruing on the date the claim is paid.
(d) In paying interest under subsection (b), an insurer shall use
the same interest rate as provided in IC 12-15-21-3(7)(A).
Sec. 7. A provider shall submit only the following forms for
payment by an insurer:
(1) HCFA-1500.
(2) HCFA-1450 (UB-92).
(3) American Dental Association (ADA) claim form.
Sec. 8. (a) If the commissioner finds that an insurer has failed
during any calendar year to process and pay clean claims in
compliance with this chapter, the commissioner may assess an
aggregate civil penalty against the insurer according to the
following schedule:
(1) If the insurer has paid at least eighty-five percent (85%)
but less than ninety-five percent (95%) of all clean claims
received from all providers during the calendar year in
compliance with this chapter, a civil penalty of up to ten
thousand dollars ($10,000).
(2) If the insurer has paid at least sixty percent (60%) but less
than eighty-five percent (85%) of all clean claims received
from all providers during the calendar year in compliance
with this chapter, a civil penalty of at least ten thousand
dollars ($10,000) but not more than one hundred thousand
dollars ($100,000).
(3) If the insurer has paid less than sixty percent (60%) of all
clean claims received from all providers during the calendar
year in compliance with this chapter, a civil penalty of at least
one hundred thousand dollars ($100,000) but not more than
two hundred thousand dollars ($200,000).
(b) In determining the amount of a civil penalty under this
section, the commissioner shall consider whether the insurer's
failure to achieve the standards established by this chapter is due
to circumstances beyond the insurer's control.
(c) An insurer may contest a civil penalty imposed under this
section by requesting an administrative hearing under IC 4-21.5
not more than thirty (30) days after the insurer receives notice of
the assessment of the fine.
(d) If the commissioner imposes a civil penalty under this
section, the commissioner may not impose a penalty against the
insurer under IC 27-4-1 for the same activity.
(e) Civil penalties collected under this section shall be deposited
in the state general fund.
SECTION 6. IC 27-13-36.2 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2001]:
Chapter 36.2. Provider Payment
Sec. 1. As used in this chapter, "clean claim" means a claim
submitted by a provider for payment for health care services
provided to an enrollee that has no defect, impropriety, or
particular circumstance requiring special treatment preventing
payment.
Sec. 2. As used in this chapter, "health maintenance
organization" includes:
(1) an insurance administrator that:
(A) collects charges or premiums; and
(B) adjusts or settles claims;
in connection with coverage under a contract with a health
maintenance organization; and
(2) a limited service health maintenance organization.
Sec. 3. (a) A health maintenance organization shall pay or deny
each clean claim in accordance with section 4 of this chapter.
(b) A health maintenance organization shall notify a provider of
any deficiencies in a submitted claim not less than:
(1) thirty (30) days for a claim that is filed electronically; or
(2) forty-five (45) days for a claim that is filed on paper;
and describe any remedy necessary to establish a clean claim.
(c) Failure of a health maintenance organization to notify a
provider as required under subsection (b) establishes the submitted
claim as a clean claim.
Sec. 4. (a) A health maintenance organization shall pay or deny
each clean claim as follows:
(1) If the claim is filed electronically, not less than thirty (30)
days after the date the claim is received by the health
maintenance organization.
(2) If the claim is filed on paper, not less than forty-five (45)
days after the date the claim is received by the health
maintenance organization.
(b) If:
(1) a health maintenance organization fails to pay or deny a
clean claim in the time required under subsection (a); and
(2) the health maintenance organization subsequently pays the
claim;
the health maintenance organization shall pay the provider that
submitted the claim interest on the lesser of the usual, customary,
and reasonable charge for the health care services provided to the
enrollee or an amount agreed to between the health maintenance
organization and the provider paid under this section.
(c) Interest paid under subsection (b):
(1) accrues beginning:
(A) thirty-one (31) days after the date the claim is filed
under subsection (a)(1); or
(B) forty-six (46) days after the date the claim is filed
under subsection (a)(2); and
(2) stops accruing on the date the claim is paid.
(d) In paying interest under subsection (b), a health
maintenance organization shall use the same interest rate as
provided in IC 12-15-21-3(7)(A).
Sec. 5. A provider shall submit only the following forms for
payment by a health maintenance organization:
(1) HCFA-1500.
(2) HCFA-1450 (UB-92).
(3) American Dental Association (ADA) claim form.
Sec. 6. (a) If the commissioner finds that a health maintenance
organization has failed during any calendar year to process and
pay clean claims in compliance with this chapter, the commissioner
may assess an aggregate civil penalty against the health
maintenance organization according to the following schedule:
(1) If the health maintenance organization has paid at least
eighty-five percent (85%) but less than ninety-five percent
(95%) of all clean claims received from all providers during
the calendar year in compliance with this chapter, a civil
penalty of up to ten thousand dollars ($10,000).
(2) If the health maintenance organization has paid at least
sixty percent (60%) but less than eighty-five percent (85%) of
all clean claims received from all providers during the
calendar year in compliance with this chapter, a civil penalty
of at least ten thousand dollars ($10,000) but not more than
one hundred thousand dollars ($100,000).
(3) If the health maintenance organization has paid less than
sixty percent (60%) of all clean claims received from all
providers during the calendar year in compliance with this
chapter, a civil penalty of at least one hundred thousand
dollars ($100,000) but not more than two hundred thousand
dollars ($200,000).
(b) In determining the amount of a civil penalty under this
section, the commissioner shall consider whether the health
maintenance organization's failure to achieve the standards
established by this chapter is due to circumstances beyond the
health maintenance organization's control.
(c) A health maintenance organization may contest a civil
penalty imposed under this section by requesting an administrative
hearing under IC 4-21.5 not more than thirty (30) days after the
health maintenance organization receives notice of the assessment
of the fine.
(d) If the commissioner imposes a civil penalty under this
section, the commissioner may not impose a penalty against the
health maintenance organization under IC 27-4-1 for the same
activity.
(e) Civil penalties collected under this section shall be deposited
in the state general fund.
SECTION 7. [EFFECTIVE JULY 1, 2001] (a) IC 5-10-8.1, as
added by this act, applies to a self-insurance program or contract
with a prepaid health care delivery plan that is established, issued,
entered into, or renewed after June 30, 2001.
(b) IC 27-8-5.7, as added by this act, applies to an accident and
sickness insurance policy (as defined in IC 27-8-5-1) that is issued,
entered into, delivered, or renewed after June 30, 2001.
(c) IC 27-13-36.2, as added by this act, applies to a health
maintenance organization contract issued, entered into, delivered,
or renewed after June 30, 2001.
(d) This SECTION expires July 1, 2006.