RIGHTS AND RESPONSIBILITIES THAT IMPACT PROVIDERS UNDER COLORADO HEALTH INSURANCE LAW

RIGHTS AND RESPONSIBILITIES THAT IMPACT PROVIDERS UNDER COLORADO HEALTH INSURANCE LAW

Adapted from a publication of the Colorado Department of Regulatory Agencies

Colorado Division of Insurance

Colorado health insurance law includes a number of provisions that directly affect providers. It is helpful for a consumer to know some of these laws because they enhance consumer protections. Of particular impact are laws governing network adequacy, prompt payment of claims, and “hold harmless” clauses.

Providers are reminded that the Colorado Division of Insurance is prohibited by law from arbitrating, mediating, or settling contract disputes between carriers and participating providers (Section 10-16-121(4), C.R.S.) However the Division can investigate and bring enforcement actions concerning carriers’ unfair claim settlement practices that are purposeful or constitute routine business practices. The Division can also pursue violations of Colorado insurance laws.

REFERENCE INFORMATION

The statutes referred to in this writing may be accessed through the Colorado State Government website at www.state.co.us under Government/General Assembly.

The Colorado Insurance Regulations cited in this writing are on the Division of Insurance’s website at www.dora.state.co.us/insurance under Main Menu/Regulations & Bulletins.

BILLING AND REIMBURSEMENT

Hold Harmless Clauses – Contracts between providers and managed care plans must contain a “hold harmless” clause prohibiting participating providers from seeking reimbursement from patients for money owed to participating providers by the plan. This prohibition does not apply to copays, deductibles, or coinsurance. (Section 10-16-705(3), C.R.S.)

Prompt Payment of Claims – Effective January 1, 2000, legislation requires that a plan:

Ø Provide a copy of its filing requirements (including directions for how to correctly and completely fill out a claim form) to covered persons and participating providers.

Ø Pay, deny or settle a “clean claim” within 30 days of receipt by the carrier if electronically filed (45 days if paper). A “clean claim” is a complete and correct filing on the carrier’s standard form.

Ø If the plan needs additional information, it must be requested within 30 days after receipt.

Ø Providers must respond to a plan’s request for additional information within 30 days of receipt. If the response is not received within 30 days, the plan may deny the claim.

Ø Pay at an annual rate of ten percent interest to the insured (or provider with proper assignment) for clean claims not paid within the 30/45 day time frame.

Ø Pay an additional flat three percent penalty if a claim is not paid, denied, or settled within 90 days.

Ø Capitation and pre-payments are not covered by the prompt payment statute.

Ø (Section 10-16-106.5, C.R.S.)

Continuing care facility coverage – HMOs are required to allow elderly and disabled patients who have been hospitalized to return to the same residential facility they resided in prior to hospitalization. They can receive covered benefits for the follow-up care even if the HMO doesn’t have a contract with that facility, as long as the facility can provide the required care and will accept payment on the same terms as in-network providers. (Section 10-16-413.5, C. R. S.)
Intermediary insolvencies – If a managed care plan has a contract with an intermediary and the intermediary in turn has subcontracts with providers, and if the intermediary becomes insolvent or fails to make payments to its subcontractors, then the managed care plan is responsible for the payments owed to the providers. Health plans may apply to the Commission of Insurance to use an alternative mechanism and exempt from this requirement to ensure provider payment. (Section 10-16-705(5), C.R.S.)
Reimbursement of providers – Plans offered by a Sickness and Accident Insurance Company must reimburse specified types of providers who deliver a covered service if that provider is licensed/certified to deliver that service and, if applicable, is a network provider. (Section 10-16-104(7), C.R.S.)
Inpatient continuity of care – When coverage is terminated (except for failure to pay premiums, or for fraud or abuse), managed care plans must continue to provide/pay for continued care for patients being treated in an inpatient facility until the patient is discharged. (Section 10-16-705(4), C.R.S.)

PRIOR AUTHORIZATION AND UTILIZATION REVIEW

Timelines for utilization review decisions – Carriers must approve or deny requests for services or reimbursement of a claim involving utilization review, i.e. medical necessity and appropriateness, in writing, within specific timelines set forth by law. Adverse utilization review decisions must be in writing, cite the specific reason for the decision, and be signed by a physician. (Section 10-16-113 C.R.S., and Colorado Insurance Regulation 4-2-17.)
Pre-authorizations are the provider’s responsibility – Where a managed care plan requires pre-authorizations for particular services, the sole responsibility for obtaining any necessary pre-authorization rests with the participating provider who recommends or orders the service, not the covered person. (Section 10-16-705(14), C.R.S.)
No retrospective revocation of a preauthorization – When a treatment or procedure has been pre-authorized by a managed care plan for a person covered under the plan (even if mistakenly because it turns out not to be a covered benefit) benefits cannot be retrospectively denied except for fraud and abuse. (Section 10-16-794(4), C.R.S.)
Emergency care coverage – Plans cannot deny coverage for services necessary to evaluate and stabilize a patient who reasonably believes that an emergency exists (prudent layperson standard), even if it turns out it was not a real emergency or if the patient did not get pro-authorization for care.(Colorado Insurance Regulation 4-2-17)
Care at and through a participating facility – When a covered person receives services or treatment in accordance with plan provisions at a network facility, the benefit level for all covered services and treatment received through the facility shall be at the in-network benefit. (Section 10-16-704(3), C.R.S.)

GRIEVANCE PROCEDURES

State-mandated patient grievance procedures – Colorado mandates specific grievance procedures when a plan denies a request for a service or treatment on the grounds that it is not medically necessary, appropriate, efficient, or effective.

NOTE: If the first level appeal review does not resolve differences between the carrier and the covered person, the covered person or attending provider acting on behalf of the patient, may file a grievance on behalf of the patient for a second level appeal review. (Section 10-16-113, C.R.S., and Colorado Insurance Regulation 4-2-17)

External appeal rights for patients – patients who have exhausted carrier internal levels of appeal have the right to request an independent external review of a denial based on medical necessity, appropriateness, effectiveness, or efficiency by an independent external review entity. The attending provider, designated as a representative by the covered person, may file a request for review on behalf of the patient. (Section 10-16-113.5, C.R.S.)
Provider-carrier contract disputes – Managed care plans are required to have internal procedures for resolving administrative, payment, or other contract disputes. (Section 10-16-705(13), C.R.S.)
Resolution of plan-provider contract disputes – Contract disputes between carriers and participating providers shall use dispute resolution mechanisms available in contract law and shall NOT be arbitrated, mediated, or settled by the Division of Insurance. (Section 10-16-707(2) and 10-16-121(4), C.R.S.)

PROVIDER NETWORK ADEQUACY

Requirements for adequate networks – Managed care plans must maintain a network that is sufficient in numbers and types of providers to assure that all covered benefits will be accessible without unreasonable delay. (Section 10-16-704(1), C.R.S.)
Access plans – Managed care insurers and HMOs must maintain network access adequacy plans and must make them available on their business premises to any interested party upon request. (Section 10-16-704(9), C.R.S.)
Insurer duty to oversee contracting providers – Managed care plans are responsible for monitoring the capacity and legal authority of participating providers, and facilities with which they contract, to furnish all covered benefits to covered persons. (Section 10-16-704(7), C.R.S.)

REFERRALS AND ACCESS TO SPECIALISTS

Available referral network – Participating provider referral options cannot be restricted to less than all providers in the network that are qualified to provide covered specialty services. (Section 10-16-704(9) (b) (II), C.R.S.)
Expedited referrals – Managed care plans must have procedures for expediting the referral process when indicated by medical condition. (Section 10-16-704(9) (b) (IV), C.R.S.)
Directory of participating providers – Managed care plans must make available to participating primary care providers a comprehensive list of all of the plan’s participating providers and facilities. (Section 10-16-704(9) (b) (I), C.R.S.)
Standing referrals – Managed care plans must allow primary care providers to make standing referrals to a participating specialist or a participating specialized treatment center for up to one year for medically necessary ongoing treatment that is a covered benefit. (Section 10-16-705(14) (b), C.R.S.)

OTHER SIGINIFICANT PROVIDER RIGHTS AND RESPONSIBILITIES

Required 60-day notice for contract terminations – Carriers and contracting providers must provide at least 60 days notice to one another if either terminates the contract without cause. Where there is a notice of termination, the plan must make a good faith effort to inform affected covered patients within 15 working days of receipt or issuance of a notice of termination. (Section 10-16-705(7), C.R.S.)
Termination of contract – list of patients – Within 5 working days after the date that the provider either gives or receives notice of termination of a contract with a carrier, the provider shall supply the carrier with a list of patients, regularly seen by that provider, who are covered by a plan of the carrier. (Section 10-16-705(7), C.R.S.)
Prohibition on provider “gag” clauses

Ø Participating providers have the right to discuss any and all treatment options with their patients, even if the plan does not cover or would not approve a request for such a treatment option. (Section 10-16-121(1), C.R.S.)

Ø Plans cannot penalize participating providers for discussing with patients their financial incentives and arrangements with the plan, and cannot penalize providers for reporting in good faith to state or federal authorities acts or practices by the carrier that jeopardize patient health or welfare. (Section 10-16-705(11), C.R.S.)

Information may be restricted – By contract, a provider may be precluded from making, publishing, disseminating, or circulating directly or indirectly, aiding, abetting, or encouraging the making, publishing, dissemination or circulation of an oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of the carrier and calculated to injure such carrier. (Section 10-16-121(2), C.R.S.)
Participating provider responsibilities under a particular plan – Managed care plans must have in place a mechanism whereby participating providers can get information on the covered services for which the provider is responsible, including any limitations or conditions on services. (Section 10-16-705(2), C.R.S.)
Assignment of rights and responsibilities – The rights and responsibilities under a contract between a carrier and a participating provider shall not be assigned or delegated by the provider without the prior written consent of the carrier. (Section 10-16-705(8), C.R.S.)
Prohibition against discrimination – Providers may not discriminate against covered persons that are participants in a publicly financed program, with respect to the provision of medically necessary covered benefits. (Section 10-16-705(9), C.R.S.)
Patient insurance status – Carriers must have mechanisms in place by which participating providers may determine, at the time services are provided, whether or not a person is covered by the carrier. (Section 10-16-705(12), C.R.S.)
Business of insurance – Providers that directly assume insurance risk from an individual, employer or group must be licensed by the Colorado Division of Insurance. Providers that only assume risk from licensed insurance companies that retain legal liability for the risks are not required to be licensed by the state. (Colorado Insurance Regulation 2-1-9).