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Frequently Asked Questions Regarding Health Insurance

Timely Payment

Q.  What are the time frames that a health insurance carrier must follow in paying a health insurance claim timely?

A.  According to Louisiana Act 1017 in 1999, a health insurer must pay a clean claim filed electronically in 25 days, unless the insurer chose a 30-day across the board standard for both electronic and non-electronic claims. A non-electronic clean claim submitted by a non-contracted provider must be paid with 30 days of submission. A non-electronic clean claim submitted by a contracted provider within 45 days of date of service must be paid within 45 days and a non-electronic claim submitted by a contracted provider within 60 days of date of service must be paid within 60 days. For more information on Timely Payment of Health Coverage Claims, please refer to our website for reference to Regulation 74 and R.S. 22:250.31 through 250.37.

Q.  Is there a limit to how long a carrier has after payment of a claim to audit the claim and request a refund?

A.  Yes. The Timely Payment Law provides limits for performing audits for reconsidering the validity of a claim. According to Regulation 74 and R.S. 22:250.34 B., "Health insurance issuers that limit the period of time that a preferred provider or entity under contract for delivery of covered benefits has to submit claims for payment under R.S. 22:250.32 or 250.33 shall have the same limited period of time following payment of such claims to perform any review or audit for purposes of reconsidering the validity of such claims".

Q.  How much interest is owed to a contracted provider for the late payment of claims?

A.  A health insurance issuer who fails to pay a claimant (provider or insured) within the time frames specified in the law/regulation must pay a late payment adjustment equal to one percent of the amount due. For any period greater than twenty-five days past the due date, the health insurance issuer must pay an additional late payment adjustment equal to one percent of the unpaid balance due for each month or partial month that such claim remains unpaid.

Q.  I heard there was a bill that passed in 2004 which provides for a shorter time frame for carriers to pay pharmacies. Can you give me more information on this?

A.  Yes. HB 1468 (Act 876), which passed in the 2004 Legislation Session and will be enacted as La. R.S. 22:250.51 through 22:250.62, requires health insurance issuers to pay a clean claim to pharmacies within a 15 day time frame. This law will go into effect on January 1, 2005.


Q.  At a recent seminar I was told that if an insurance company establishes a contingency plan for the Transaction Code Standards of HIPAA and continues to accept files in a non-HIPAA compliant format, those claims would not be subject to the prompt pay law. Is that correct?

A.  No, this is not necessarily the case. It is true that the federal government had given a green light on contingency plans and many insurers are still temporarily accepting non-HIPAA compliant claims electronically submitted. However, the prompt pay rules should still apply. The HIPAA Administrative Simplification rules and the state's prompt pay laws are governed on different levels, but will certainly have an effect on each other. If a correctly completed non-HIPAA compliant claim is submitted and the health insurance issuer is still accepting those non-HIPAA compliant claims under a contingency plan, then that insurer is still subject to the prompt pay law, which governs the time frame in which that "clean" claim must be paid.


Q.  In regards to the timely payment of a clean claim, what if a claim is sent in and an insurance carrier requests additional information from the patient but the patient refuses to send in the necessary information?

A.  According to La. R.S. 22:250.43 B (6), "To the extent that a health insurance issuer determines that additional information is needed for payment, the health insurance issuer shall notify the health care provider and the enrollee or insured in writing regarding the information needed and identify the party responsible for furnishing the information. In the event that the enrollee or insured is the party responsible for providing such additional information and the enrollee or insured does not provide the requested information to the health insurance issuer within forty-five days from the date of such notification, the health care provider may bill the enrollee or insured for services at the contracted reimbursement rate when a contract exists."


Q.  Do providers have a time limit under state regulations to submit a claim for payment after a date of service?

A.  In general, La. R.S. 22:213 (5) "Proofs of Loss" gives the provider 90 days to file a claim. It states "Affirmative written proof of loss must be furnished to the insurer at its said office in case of claim for loss of time from disability within ninety days after the termination of the period for which the insurer is liable and IN CASE OF CLAIM FOR ANY OTHER LOSS WITHIN NINETY DAYS AFTER THE DATE OF SUCH LOSS (emphasis added)." A carrier may certainly give a provider more time to file a claim, and this is usually addressed in the contract between the health insurer and the provider or in the insured's policy.


Q.  I have been informed that my insurance carrier is "recouping" payment for a claim from my provider? What exactly does this mean?

A.  This is a situation where a carrier realizes it has overpaid on a particular claim, therefore they "recoup" the money by offsetting the amount they would have paid on the next claim by the amount that they overpaid on the prior claim. La. R.S. 22:250.38 of the Insurance Code provides the health insurance issuer with guidelines, including notification provisions, as to the manner in which they should handle the recoupment of a payment.


Medical Necessity Review Organizations (MNRO)

Q.  What is a Medical Necessity Review Organization?

A.  Any entity that makes a decision to deny a health care service based on lack of medical necessity, if the service is otherwise offered and payable under his policy, must be licensed as a Medical Necessity Review Organization (MNRO) to make this determination. A health plan can either apply to become its own MNRO or delegate this function by contracting with a licensed MNRO.

Q.  What types of plans must follow the MNRO guidelines?

A. According to Regulation 77 and Chapter 7 of Title 22:

    1. The law only applies to fully insured health plans that subject benefit eligibility to medical necessity requirements. Self-funded, employer sponsored health plans are exempt under federal labor law (ERISA).
    2. The law does not apply to health plans provided by the federal government (including Federal Employee Programs, Medicare and Medicare+Choice).
    3. The law does not apply to plans providing only "excepted benefits" (limited benefit health plans providing coverage only for cancer, dental, disability, accidental injuries, etc. This also includes hospital indemnity plans with fixed benefits payable "per day" / "per illness or injury").

Q.  Is an Independent / External Review available through the Department of Insurance, for a denial of a covered benefit deemed medically unnecessary? I am enrolled in a plan that is fully funded and all appeals, including an external review through their office, have been exhausted.

A.  External reviews are conducted by an independent review organization, coordinated through the insurance carrier, not the Department of Insurance. However, if you wish to lodge a formal complaint regarding the manner in which your appeals were conducted, we would be happy to investigate the matter for you. A complaint form can be found on our website at www.ldi.state.la.us under the Office of Health Insurance, Quality Management.

Q.  What type of appeal rights do I have under MNRO?

A.  When your health plan denies a service because they feel it is not medically necessary, then you have a right to appeal with your health plan. The appeal process involves a two-level internal appeal and an external or independent appeal, which is outlined in Chapter 7 of Title 22 and Regulation 77, both of which are accessible on our website at www.ldi.state.la.us.

Q.  How do I apply to become a MNRO or an IRO?

A.  Complete the MNRO or IRO application and the biographical affidavits, which can be found on our website, and forward them to Mike Boutwell, Company Licensing Division, P.O. Box 94214, Baton Rouge, Louisiana 70804-9214.

Q.  I am currently licensed as a MNRO. When and how do I renew my license?

A.  In the 2009 Regular Legislative Session in Louisiana, Act 33 repealed LA R.S. 22:1125, removing the biannual license renewal requirement for MNROs as well as the associated fees.  However, Act 33 added LA R.S. 22:1138 D. (2) to existing MNRO law, which provides that, �At the time of filing its annual report, an MNRO other than a health insurance issuer shall pay a filing fee in the amount set forth in R.S. 22:821.�  LA R.S. 22:821 B. (28) states that the annual report filing fee for a Medical Necessity Review Organization other that a health insurance issuer will be $500.00.

Q.  Does a MNRO need to file an annual report? If so, when is it due and is there a filing fee?

A.  A MNRO is required to file an annual summary report of its program activities with the Louisiana Commissioner of Insurance, pursuant to LA R.S. 22:1121 et seq, and the Department of Insurance Regulation 77.  This report shall include, but not be limited to, a description of any substantive changes that have been implemented during the year by the MNRO.  Additionally, a MNRO is required to maintain an external review register and report activities annually to the commissioner relative to external reviews.  Annual reports are due in the Department of Insurance no later than March 1st of each year and the information must reflect activity from January 1 through December 31 of the preceding year.  Act 33 of the 2009 Regular Legislative Session added LA R.S. 22:1138 D. (2) which provides that at the time of filing its annual report, an MNRO other than a health insurance issuer shall pay an annual report filing fee in the amount of $500 (see LA R.S. 22:821 B. (28).

Q.  Do consumers have the right to receive a copy of a health insurer's medical criteria for approving a medical procedure?

A.  Yes, Section 3077 E of Title 22 states, "A written notification of an adverse determination shall include the principal reason or reasons for the determination, the instructions for initiating an appeal or reconsideration of the determination, and the instructions for requesting a written statement of the clinical rationale, including the clinical review criteria used to make the determination."


Q.  How long can an insurance company keep a claim in review? We have a patient that is in critical condition and is requiring surgery and the claim has been in review for four months. Is there a law that addresses this problem?

A.  If the member's plan is a fully insured product and the issue is whether a procedure is medically necessary or not, then the carrier should make this determination within 30 days of receiving the necessary information. Please see La. R.S. 22:3070 for additional information or file a complaint with this office for assistance.


Q.  As a contracted group of physicians and peers, we conduct medical necessity reviews for a MNRO. However, we do not make the final decision - we simply make the recommendation to the MNRO. Should we be licensed?

A.  Louisiana's law requires that a licensed MNRO (whether an independently licensed MNRO or a licensed health insurance issuer authorized to be its own MNRO) offer an internal level of appeal for medical necessity denials. If the issue is not resolved to the claimant's satisfaction, the MNRO must inform the insured of their right to an external appeal through an independent review organization (IRO) certified in the State of Louisiana. Many people often confuse the roles an IRO with that of an outside network of physicians contracted with a licensed MNRO for internal purposes only.

Often times, a MNRO will contract with an outside network of physicians in order to have the appropriate expertise review a medical necessity decision. After reviewing the issue, that outside organization will then submit their recommendation to the MNRO, but the LICENSED MNRO IS THE ENTITY THAT HOLDS THE FINAL RESPONSIBILITY IN MAKING AN ADVERSE DETERMINATION. In this case, the outside network would have no liability to the insured, as they are not the entity responsible for issuing the decision to the plan member. The denial should come from the MNRO, on the MNRO's letterhead, and NOT from the contracted entity.

However, if your physician group is taking responsibility for the denials and issuing the adverse determination to the plan member directly, then your group must make application to be licensed as a MNRO in Louisiana.


Q.  If a policy was not purchased in LA, does that void the requirements of MNRO for that health plan? For example, a health plan recently stated that MNRO did not apply to them because the policy was not purchased in LA.

A.  According to Section 6201 of Regulation 77, the purpose of this regulation is to regulate "health insurance issuers who seek to establish exception criteria or limitations on covered benefits that are otherwise offered and payable under a policy or certificate of coverage sold or in effect in this state, by requiring a medical necessity determination to be made by the health insurance issuer."


Q.  I understand the MNRO Act to say, in reference to an expedited appeal, that the MNRO is responsible for payment of services until they notify us of the determination. Does this apply to any other levels of appeal? Often companies do not authorize past the notification that the case is going to MD review or appeal at times, leaving three or more days denied when they finally notify us.

A.  La. R.S. 22:3077 C (3) states (in reference to an adverse determination regarding a concurrent review), "The service shall be authorized and payable by the health insurance issuer without liability, subject to the provisions of the policy or subscriber agreement, until the provider has been notified of the adverse determination. The covered person shall not be liable for the cost of any services delivered following documented notification to the provider unless notified of such liability in advance." Also, La. R.S. 3077 B (3) states that in the case of an adverse determination of a non-emergency admission, the provider has to be notified within one work day, with written documentation to be provided within two working days.


Q.  Are there any rules or rights as a provider of services regarding MD reviews?

A.  The provider is allowed an opportunity to request an informal reconsideration with a provider after an initial adverse determination is issued. The law provides that allowing 10 days following the denial to request the informal reconsideration is reasonable. However, the only time frame the law references in completing this informal reconsideration is "within one working day". Unfortunately, there is nothing that addresses a minimum amount of time that should be given to complete the review.


Q.  Can an MNRO require/request an MD review due to length of stay? Often MNROs will come up with a "new policy" stating they require an MD review after five days.

A.  You are probably speaking of a "concurrent review", in which the health insurance issuer or MNRO reviews the medical necessity or appropriateness of care during a patient's stay or course of treatment. La. R.S. 22:3077 C (1) states that the MNRO may conduct a concurrent review during a patient's stay but must make a determination within one working day of obtaining the results of appropriate medical information. Again, there is nothing that addresses how much time the provider should be given to produce the required information, but a decision should be made within one working day of obtaining that information.


Q.  In reference to an expedited appeal, as a provider, do we have that option? During the hospital stay, a MNRO does not feel it is an emergency and the MNRO will determine if it is an emergency and determine whether they will give us that option.

A.  An expedited appeal should be sought if the patient or provider feels that following the time frame of a standard appeal would jeopardize the life or health of a covered person or would jeopardize the covered person's ability to regain maximum function. Expedited appeals should be evaluated by an appropriate clinical peer that would typically manage the case under review. According to La. R.S. 22:3083 C, an expedited appeal is certainly available to a patient wishing to continue his stay in a facility, however the decision of whether an expedited appeal is medically warranted is not a decision the Department of Insurance would be able to render. This decision is one left to both the treating physician and the MNRO's physician.


Q.  Prior to making a formal complaint to the insurance commissioner are there any options or suggestions when we feel there is a discrepancy between an adverse decision and the medical necessity criteria for that MNRO?

A.  Always make sure that the appropriate appeals are exhausted first. If a patient or provider disagrees with an adverse determination, that is exactly what the MNRO's appeals process is designed to address. Otherwise, you may always contact the Quality Assurance Division at 225/219-8769 for further guidance.


Q.  Are there any rights for us as providers?

A.  Providers have the right to file appeals with the MNRO and are always free to file a complaint with the DOI. We are always willing to assist patients and providers in resolving MNRO issues.


Health Care Consumer Billing and Disclosure Protection Act

Q.  How long after a date of service can a provider bill the patient?

A.  Title 22 does not indicate how long the provider has to bill the patient, as this is an issue normally addressed either in the contract between the insurer and provider or in the insured's policy. While the Department of Insurance does not have direct jurisdiction over providers, we do require under the HMO section of Title 22 that providers refrain from holding a patient liable for amounts that are the health insurance issuer's liability. Therefore, although the Department does not regulate how long after the date of service the provider can bill a patient that is legally owed by the patient, there is a law that governs certain billing practices by providers. During the 2003 legislative session, Rep. Troy Hebert passed HB 1966 (Act 1157), which was enacted as La. R.S. 22:250.41 through 250.47 and is referred to as the Health Care Consumer Billing and Disclosure Protection Act. This bill sets out certain requirements of both providers and health insurance issuers regarding billing practices, certain information to be included on EOBs, activity statements and actual bills, among other things. This law went into effect on January 1, 2004. For a complete copy of this bill, go to www.legis.state.la.us, pull up the 2003 regular legislative session, and enter the bill information as provided above.


Q.  Can a medical practice bill for services performed at another facility without ancillary agreements in place?

A.  According to HB 1966 (Act 1157), which was enacted as La. R.S. 22:250.41 through 250.47, if a facility-based non-contracted provider provides health care services in a base health care facility to an enrollee or insured and files a claim with a health insurance issuer for such facility based services, the insurer shall provide the provider with an explanation of benefits as to any payment determination thereof. This Act, also referred to as the Health Care Consumer Billing and Disclosure Protection Act, became effective January 1, 2004. For a complete copy of this bill, go to www.legis.state.la.us, pull up the 2003 regular legislative session, and enter the bill information as provided above.