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108th CONGRESS
  2d Session
                                S. 2308

 To provide for prompt payment and interest on late payments of health 
                              care claims.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 8, 2004

 Mr. Corzine (for himself, Mr. Reed, Mr. Bingaman, Mr. Lautenberg, and 
 Ms. Cantwell) introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To provide for prompt payment and interest on late payments of health 
                              care claims.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prompt Payment of Health Benefits 
Claims Act of 2004''.

SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et 
seq.) is amended by adding at the end the following:

``SEC. 714. PROMPT PAYMENT OF HEALTH BENEFITS CLAIMS.

    ``(a) Timeframe for Payment of Complete Claim.--A group health 
plan, and a health insurance issuer offering group health insurance 
coverage in connection with a group health plan, shall pay all complete 
claims and uncontested claims--
            ``(1) in the case of a claim that is submitted 
        electronically, within 14 days of the date on which the claim 
        is submitted; or
            ``(2) in the case of a claim that is not submitted 
        electronically, within 30 days of the date on which the claim 
        is submitted.
    ``(b) Procedures Involving Submitted Claims.--
            ``(1) In general.--Not later than 10 days after the date on 
        which a complete claim is submitted, a group health plan, and a 
        health insurance issuer offering group health insurance 
        coverage in connection with a group health plan, shall provide 
        the claimant with a notice that acknowledges receipt of the 
        claim by the plan or issuer. Such notice shall be considered to 
        have been provided on the date on which the notice is mailed or 
        electronically transferred.
            ``(2) Claim deemed to be complete.--A claim is deemed to be 
        a complete claim under this section if the group health plan or 
        health insurance issuer involved does not provide notice to the 
        claimant of any deficiency in the claim within 10 days of the 
        date on which the claim is submitted.
            ``(3) Incomplete claims.--
                    ``(A) In general.--If a group health plan or health 
                insurance issuer determines that a claim for health 
                care expenses is incomplete, the plan or issuer shall, 
                not later than the end of the period described in 
                paragraph (2), notify the claimant of such 
                determination. Such notification shall specify all 
                deficiencies in the claim and shall list all additional 
                information or documents necessary for the proper 
                processing and payment of the claim.
                    ``(B) Determination after submission of additional 
                information.--A claim is deemed to be a complete claim 
                under this paragraph if the group health plan or health 
                insurance issuer involved does not provide notice to 
                the claimant of any deficiency in the claim within 10 
                days of the date on which additional information is 
                received pursuant to subparagraph (A).
                    ``(C) Payment of uncontested portion of a claim.--A 
                group health plan or health insurance issuer shall pay 
                any uncontested portion of a claim in accordance with 
                subsection (a).
            ``(4) Obligation to pay.--A claim for health care expenses 
        that is not paid or contested by a group health plan or health 
        insurance issuer within the timeframes set forth in this 
        subsection shall be deemed to be a complete claim and paid by 
        the plan or issuer in accordance with subsection (a).
    ``(c) Date of Payment of Claim.--Payment of a complete claim under 
this section is considered to have been made on the date on which full 
payment is received by the health care provider.
    ``(d) Interest Schedule.--
            ``(1) In general.--With respect to a complete claim, a 
        group health plan or health insurance issuer that fails to 
        comply with subsection (a) shall pay the claimant interest on 
        the amount of such claim, from the date on which such payment 
        was due as provided in this section, at the following rates:
                    ``(A) 1\1/2\ percent per month from the 1st day of 
                nonpayment after payment is due through the 15th day of 
                such nonpayment.
                    ``(B) 2 percent per month from the 16th day of such 
                nonpayment through the 45th day of such nonpayment.
                    ``(C) 2\1/2\ percent per month after the 46th day 
                of such nonpayment.
            ``(2) Contested claims.--With respect to claims for health 
        care expenses that are contested by the plan or issuer, once 
        such claim is deemed complete under subsection (b), the 
        interest rate applicable for noncompliance under this 
        subsection shall apply consistent with paragraphs (1) and (2).
    ``(e) Private Right of Action.--Nothing in this section shall be 
construed to prohibit or limit a claim or action not covered by the 
subject matter of this section that any claimant has against a group 
health plan, or a health insurance issuer.
    ``(f) Anti-Retaliation.--Consistent with applicable Federal or 
State law, a group health plan or health insurance issuer shall not 
retaliate against a claimant for exercising a right of action under 
this section.
    ``(g) Fines and Penalties.--
            ``(1) Fines.--
                    ``(A) In general.--If a group health plan or health 
                insurance issuer offering group health insurance 
                coverage, willfully and knowingly violates this section 
                or has a pattern of repeated violations of this 
                section, the Secretary shall impose a fine not to 
                exceed $1,000 per claim for each day a response is 
                delinquent beyond the date on which such response is 
                required under this section.
                    ``(B) Repeated violations.--If 3 separate fines 
                under subparagraph (A) are levied within a 5-year 
                period, the Secretary is authorized to impose a penalty 
                in an amount not to exceed $10,000 per claim.
            ``(2) Remedial action plan.--Where it is established that 
        the group health plan or health insurance issuer willfully and 
        knowingly violated this section or has a pattern of repeated 
        violations, the Secretary shall require the group health plan 
        or health insurance issuer to--
                    ``(A) submit a remedial action plan to the 
                Secretary; and
                    ``(B) contact claimants regarding the delays in the 
                processing of claims and inform claimants of steps 
                being taken to improve such delays.
    ``(h) Definitions.--In this section:
            ``(1) Claimant.--The term `claimant' means a participant, 
        beneficiary or health care provider submitting a claim for 
        payment of health care expenses.
            ``(2) Complete claim.--The term `complete claim' is a claim 
        for payment of covered health care expenses that--
                    ``(A) in the case of a claim involving a health 
                care provider that is an institution or other facility 
                or agency that provides health care services, is a 
                properly completed billing instrument that consists 
                of--
                            ``(i) the Health Care Financing 
                        Administration 1450 (UB-92) paper form, or its 
                        successor, as adopted by the NUBC, with data 
                        element usage consistent with the usage 
                        prescribed in the UB-92 National Uniform 
                        Billing Data Elements Specification Manual, 
                        and, for claims submitted before October 1, 
                        2002, any State-designated data requirements 
                        that are determined and approved by the State 
                        uniform billing committee of the State in which 
                        the health care service or supply is furnished; 
                        or
                            ``(ii) the electronic format for 
                        institutional claims (and accompanying 
                        implementation guide) adopted as a standard by 
                        the Secretary of Health and Human Services 
                        pursuant to section 1173 of the Social Security 
                        Act (42 U.S.C. 1320d-2); and
                    ``(B) in the case of claim involving a health care 
                provider that is a physician or other individual who is 
                licensed, accredited, or certified under State law to 
                provide specified health care services, is a properly 
                completed billing instrument that--
                            ``(i) the Health Care Financing 
                        Administration 1500 paper form, or its 
                        successor, as adopted by the NUCC and further 
                        defined by data element specifications 
                        contained in the NUCC implementation guide or, 
                        if such specifications are not issued by the 
                        NUCC, the data element specifications contained 
                        in the Medicare Carriers Manual Part 4 (HCFA-
                        Pub 14-4) sections 2010.1 through 2010.4; or
                            (ii) the electronic format for professional 
                        claims (and accompanying implementation guide) 
                        adopted as a standard by the Secretary of 
                        Health and Human Services pursuant to section 
                        1173 of the Social Security Act (42 U.S.C. 
                        1320d-2).
            ``(3) Contested claim.--The term `contested claim' means a 
        claim for health care expenses that is denied by a group health 
        plan or health insurance issuer during or after the benefit 
        determination process.
            ``(4) Health care provider.--The term `health care 
        provider' includes a physician or other individual who is 
        licensed, accredited, or certified under State law to provide 
        specified health care services and who is operating with the 
        scope of such licensure, accreditation, or certification, as 
        well as an institution or other facility or agency that 
        provides health care services and is licensed, accredited, or 
        certified to provide health care items and services under 
        applicable State law.
            ``(5) Incomplete claim.--The term `incomplete claim' means 
        a claim for health care expenses that cannot be adjudicated 
        because it fails to include all of the required data elements 
        necessary for adjudication.
            ``(6) NUBC.--The term `NUBC' means the National Uniform 
        Billing Committee.
            ``(7) NUCC.--The term `NUCC' means the National Uniform 
        Claim Committee.''.

SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Group Market.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg-4 et seq.) is amended by adding at 
the end the following:

``SEC. 2707. PROMPT PAYMENT OF HEALTH BENEFITS CLAIMS.

    ``(a) Timeframe for Payment of Complete Claim.--A group health 
plan, and a health insurance issuer offering group health insurance 
coverage in connection with a group health plan, shall pay all complete 
claims and uncontested claims--
            ``(1) in the case of a claim that is submitted 
        electronically, within 14 days of the date on which the claim 
        is submitted; or
            ``(2) in the case of a claim that is not submitted 
        electronically, within 30 days of the date on which the claim 
        is submitted.
    ``(b) Procedures Involving Submitted Claims.--
            ``(1) In general.--Not later than 10 days after the date on 
        which a complete claim is submitted, a group health plan, and a 
        health insurance issuer offering group health insurance 
        coverage in connection with a group health plan, shall provide 
        the claimant with a notice that acknowledges receipt of the 
        claim by the plan or issuer. Such notice shall be considered to 
        have been provided on the date on which the notice is mailed or 
        electronically transferred.
            ``(2) Claim deemed to be complete.--A claim is deemed to be 
        a complete claim under this section if the group health plan or 
        health insurance issuer involved does not provide notice to the 
        claimant of any deficiency in the claim within 10 days of the 
        date on which the claim is submitted.
            ``(3) Incomplete claims.--
                    ``(A) In general.--If a group health plan or health 
                insurance issuer determines that a claim for health 
                care expenses is incomplete, the plan or issuer shall, 
                not later than the end of the period described in 
                paragraph (2), notify the claimant of such 
                determination. Such notification shall specify all 
                deficiencies in the claim and shall list all additional 
                information or documents necessary for the proper 
                processing and payment of the claim.
                    ``(B) Determination after submission of additional 
                information.--A claim is deemed to be a complete claim 
                under this paragraph if the group health plan or health 
                insurance issuer involved does not provide notice to 
                the claimant of any deficiency in the claim within 10 
                days of the date on which the additional information is 
                received pursuant to subparagraph (A).
                    ``(C) Payment of uncontested portion of a claim.--A 
                group health plan or health insurance issuer shall pay 
                any uncontested portion of a claim in accordance with 
                subsection (a).
            ``(4) Obligation to pay.--A claim for health care expenses 
        that is not paid or contested by a group health plan or health 
        insurance issuer within the timeframes set forth in this 
        subsection shall be deemed to be a complete claim and paid by 
        the plan or issuer in accordance with subsection (a).
    ``(c) Date of Payment of Claim.--Payment of a complete claim under 
this section is considered to have been made on the date on which full 
payment is received by the health care provider.
    ``(d) Interest Schedule.--
            ``(1) In general.--With respect to a complete claim, a 
        group health plan or health insurance issuer that fails to 
        comply with subsection (a) shall pay the claimant interest on 
        the amount of such claim, from the date on which such payment 
        was due as provided in this section, at the following rates:
                    ``(A) 1\1/2\ percent per month from the 1st day of 
                nonpayment after payment is due through the 15th day of 
                such nonpayment.
                    ``(B) 2 percent per month from the 16th day of such 
                nonpayment through the 45th day of such nonpayment.
                    ``(C) 2\1/2\ percent per month after the 46th day 
                of such nonpayment.
            ``(2) Contested claims.--With respect to claims for health 
        care expenses that are contested by the plan or issuer, once 
        such claim is deemed complete under subsection (b), the 
        interest rate applicable for noncompliance under this 
        subsection shall apply consistent with paragraphs (1) and (2).
    ``(e) Private Right of Action.--Nothing in this section shall be 

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