R590.
Insurance, Administration. (Effective
6-24-03)
R590-192. Unfair Accident and
Health Income Replacement Claims Settlement Practices Rule.
R590-192-1.
Authority.
This rule is promulgated pursuant to
Subsections 31A-2-201(1) and 31A-2-201(3)(a) in which the commissioner is
empowered to administer and enforce this title and to make rules to implement
the provisions of this title. Further
authority to provide for timely settlement of claims is provided by Subsection
31A-26-301(1). Matters relating to
proof and notice of loss are promulgated pursuant to Section 31A-26-301 and
Subsection 31A-21-312(5). Authority
to promulgate rules defining unfair claims settlement practices or acts is
provided in Subsection 31A-26-303(4). The authority to require a timely,
accurate, and complete response to the department is provided by Subsection
31A-2-202(4) and (6).
R590-192-2.
Purpose.
This rule sets forth minimum standards for
the investigation and disposition of accident and health insurance claims, which
include income replacement claims, arising under policies or certificates issued
in the State of Utah. These standards include fair and rapid settlement of
claims, protection of claimants under insurance policies from unfair claims
settlement practices, and the promotion of the professional competence of those
engaged in processing of claims. The
various provisions of this rule are intended to define procedures and practices
which constitute unfair claim practices and responses to the department.
This rule is regulatory in nature and is not intended to create a private
right of action.
R590-192-3.
Applicability and Scope.
(1) This
rule applies to all accident and health insurance policies, as defined by
Section 31A-1-301 covering individual and group accident and health plans issued
or renewed after January 1, 2003.
(2) This
rule incorporates by reference the Department of Labor, Pension and Welfare
Benefits Administration Rules and Regulations for Administration and
Enforcement: Claims Procedure, 29 CFR 2560.503-1, excluding 2560.503-1(a).
R590-192-4.
Definitions.
For the purpose of this rule the
commissioner adopts the definitions as set forth in Section 31A-1-301, 29 CFR
2560.503-1(m), and the following:
(1) “Adverse
benefit determination” means any of the following: a denial, reduction, or
termination of, or a failure to provide or make payment, in whole or in part,
for a benefit, including any such denial, reduction, termination, or failure to
provide or make payment that is based on a determination of a participant’s or
beneficiary’s eligibility to participate in a plan, and including, with
respect to group health plans, a denial, reduction, or termination of or failure
to provide or make payment, in whole or in part, for a benefit resulting from
the application of any utilization review, as well as a failure to cover an item
or service for which benefits are otherwise experimental or
investigational or not medically necessary or appropriate.
(2) "Beneficiary"
means the party entitled to receive the proceeds or benefits occurring under the
policy.
(3) "Claim
File" means any record either in its original form or as recorded by any
process which can accurately and reliably reproduce the original material
regarding the claim, its investigation, adjustment and settlement.
(4) "Claim
Representative" means any individual, corporation, association,
organization, partnership, or other legal entity authorized to represent an
insurer with respect to a claim, whether or not licensed within the State of
Utah to do so.
(5) "Claimant"
means an insured, the beneficiary or legal representative of the insured,
including a member of the insured's immediate family designated by the insured,
making a claim under a policy.
(6) "Ongoing"
or “Concurrent care" decision means an insurer has approved an ongoing
course of treatment to be provided over a period of time or number of
treatments.
(7) "Days"
means calendar days.
(8) "Documentation"
means a document, record, or other information that is considered relevant to a
claimant’s claim because such document, record, or other information:
(a)
was relied upon in making the benefit determination;
(b)
was submitted, considered, or generated in the course of making the
benefit determination, without regard to whether such document, record, or other
information was relied upon in making the benefit determination; and
(c)
in the case of an insurer providing income replacement benefits,
constitutes a statement of policy or guidance with respect to the insurer
concerning the denied treatment option or benefit for the claimant’s
diagnosis, without regard to whether such advice or statement was relied upon in
making the benefit determination.
(9) "General
business practice" means a pattern of conduct.
(10)
"Investigation" means all activities of an insurer directly or
indirectly related to the determination of liabilities under coverages afforded
by an insurance policy.
(11)
“Medical necessity” means:
(a)
health care services or product that a prudent health care professional
would provide to a patient for the
purpose of preventing, diagnosing or treating an illness, injury, disease or it
symptoms in a manner that is:
(i) in accordance with
generally accepted standards of medical practice in the United States;
(ii) clinically appropriate
in terms of type, frequency, extent, site, and duration;
(iii) not primarily for the
convenience of the patient, physician, or other health care provider; and
(iv) covered under the
contract; and
(b)
when a medical question-of-fact exists, medical necessity shall include
the most appropriate available supply or level of service for the individual in
question, considering potential benefits and harms to the individual, and known
to be effective.
(i) For interventions not
yet in widespread use, the effectiveness shall be based on scientific evidence.
(ii) For established
interventions, the effectiveness shall be based on:
(A) scientific evidence;
(B) professional standards;
and
(C) expert opinion.
(12)
"Notice of Loss" means that notice which is in accordance with
policy provisions and insurer practices. Such
notice shall include any notification, whether in writing or other means, which
reasonably apprizes the insurer of the existence of or facts relating to a
claim.
(13) “Pre-service
claim” means any claim for a benefit under an accident and health policy or
income replacement policy with respect to which the terms of the plan condition
receipt of the benefit, in whole or in part, on approval of the benefit in
advance of obtaining medical care.
(14)
“Post-service claim” means any claim for a benefit that is not a
pre-service claim or urgent care claim.
(15)
"Scientific evidence” is:
(a)(i)
scientific studies published in or accepted for publication by medical
journals that meet nationally recognized requirements for scientific manuscripts
and that submit most of their published articles for review by experts who are
not part of the editorial staff; or
(ii) findings, studies or
research conducted by or under the auspices of federal government agencies and
nationally recognized federal research institutes;
(b)
scientific evidence shall not include published peer-reviewed literature
sponsored to a significant extent by a pharmaceutical manufacturing company or
medical device manufacturer or a single study without other supportable studies.
(16)
“Urgent care claim” means any claim for medical care or treatment
with respect to which the application of the time periods for making non-urgent
care determination:
(a)
could seriously jeopardize the life or health of the claimant or the
ability of the claimant to regain maximum function; or
(b)
in the opinion of a physician with knowledge of the claimant’s medical
condition, would subject the claimant to severe pain that cannot be adequately
managed without the care or treatment that is the subject of the claim.
R590-192-5.
File and Record Documentation.
Each insurer's claim files are subject to
examination by the commissioner or by his duly appointed designees. To aid in such examination:
(1)
Sufficient detailed documentation shall be contained in each claim file
in order to reconstruct the benefit determination, and the calculation of the
claim settlement for each claim.
(2)
Each document within the claim file shall be noted as to date received,
date processed and notification date.
(3)
The insurer shall maintain claim data that are accessible and retrievable
for examination. An insurer shall
be able to provide:
(a)
the claim number;
(b)
copy of all
applicable forms;
(c)
date of loss;
(d)
date of claim receipt;
(e)
date of benefit determination;
(f)
date of settlement of the claim; and
(g)
type of settlement:
(i) payment, including the
amount paid;
(ii) settled without
payment;
(iii) denied.
R590-192-6.
Misrepresentation of Policy Provisions:
Prohibited Acts Applicable to All Insurers.
(1) An
insurer, or the insurer's representative, shall fully disclose to a claimant the
benefits, and/or limitations and exclusions of an insurance policy which relates
to the diagnoses and services relating to the particular claim being presented.
(2) An
insurer, or the insurer's representative, must disclose to a claimant,
provisions of an insurance policy when receiving inquiries regarding such
coverage.
R590-192-7.
Notice of Loss.
(1) Notice
of loss to an insurer, if required, shall be considered timely if made according
to the terms of the policy, subject to the definitions and provisions of this
rule.
(2) Notice
of loss may be given to the insurer or its representative unless the insurer
clearly directs otherwise by means of policy provisions or a separate written
notice mailed or delivered to the insured.
(3) Subject
to policy provisions, a requirement of any notice of loss may be waived by any
authorized representative of the insurer.
(4) The
general practice of the insurer when accepting a notice of loss or notice of
claim shall be consistent for all policyholders in accordance with the terms of
the policy.
R590-192-8.
Notification.
(1) The
insurer shall provide notification to the claimant which includes:
(a)
the specific reason or reasons for the benefit determination, adverse or
not;
(b)
reference to the specific plan provisions on which the benefit
determination is based;
(c) a
description of any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or information is
necessary; and
(d)
a description of the insurer’s review procedures and the time limits
applicable to such procedures, including a statement of the claimant’s right
to bring civil action.
(2) An
insurer and the insurer’s representative, in the case of a failure by a
claimant or an authorized representative of a claimant to follow the individual
or group health plan’s procedures for filing a pre-service claim, shall notify
the claimant or representative, of the failure and provide the proper procedures
to be followed in filing a claim for benefits. This notification shall be
provided to the claimant or authorized representative, as appropriate, as soon
as possible, but not later than five days or 24 hours for a claim involving
urgent care, following the failure. Notification may be oral, unless written
notification is requested by the claimant or authorized representa
ive.
(3) Income
replacement adverse benefit determinations must:
(a)
if an internal rule, guideline, protocol, or other criterion was relied
upon in making the adverse determination, provide either the specific rule,
guideline, protocol, or other similar criterion; or a statement that such a
rule, guideline, protocol, or other similar criterion was relied upon in making
the adverse determination and that a copy of such rule, guideline, protocol, or
other criterion will be provided free of charge to the claimant upon request;
or
(b)
if the adverse benefit determination is based on a medical necessity or
experimental treatment or similar exclusion or limit, provide either an
explanation of the scientific or clinical judgment for the determination,
applying the terms of the plan to the claimant’s medical circumstances, or a
statement that such explanation will be provided free of charge upon request.
(4) Urgent
care adverse benefit determination must:
(a)
provide written or electronic notification to the claimant no later than
three days after the oral notification; and
(b)
provide a description of the expedited review process applicable to such
claims.
R590-192-9.
Minimum Standards for Claim Benefit Determination and Settlement.
(1) All
benefit determination time limits begin once the insurer receives a claim,
without regard to whether all necessary information was filed with the original
claim. If the insurer requires an extension due to the claimant’s failure to
submit necessary information, the time for making a decision is tolled from the
date the notice is sent to the claimant through:
(a)
the date that the claimant provides the necessary information; or
(b) 48
hours after the end of the period afforded the claimant to provide the specified
additional information.
(2) Urgent
Care Claims:
(a)
In a case of urgent care, an insurer shall notify the claimant of the
insurer’s benefit decision, adverse or not, as soon as possible, taking into
account the medical exigencies of the situation, but no later than 72 hours
after the receipt of the claim.
(b) it
is the insurer’s duty to determine whether a claim is urgent based on the
information provided by the claimant or authorized representative. However, if
the claimant does not provide sufficient information for the plan to make a
decision, the plan must notify the claimant as soon as possible, but not later
than 24 hours after receipt of the claim, of the specific information that is
required. The claimant shall be given reasonable time, but not less than 48
hours, to provide that information.
(c) The
insurer must notify the claimant of the insurer's decision as soon as possible
but not later than 48 hours after the earlier of the plan’s receipt of the
requested information or the end of the time given to the claimant to provide
the information.
(3) Concurrent
Care Decision:
(a)
Reduction or termination of concurrent care:
(i) Any reduction in the
course of treatment is considered an adverse benefit determination.
(ii) The insurer must give
the consumer notice, with sufficient time to appeal that adverse benefit
determination and sufficient time to receive a decision of the appeal before any
reduction or termination of care occurs.
(b)
Extension of concurrent care:
(i) A claimant may request
an extension of treatment beyond what has already been approved.
(ii) If the request for an
extension is made at least 24 hours before the end of the approved treatment,
the insurer must notify the claimant of the insurer’s decision as soon as
possible but no later than 24 hours after receipt of the claim.
(iii) If the request for
extension does not involve urgent care, the insurer must notify the claimant of
the insurer’s benefit decision using the response times for a post-service
claim.
(4) Pre-Service
Benefit Determination:
(a)
An insurer must notify the claimant of the insurer's benefit decision
within 15 days of receipt of the request for care.
(b)
If the insurer is unable to make a decision within that time due to
circumstances beyond the insurer’s control, such as late receipt of medical
records, it must notify the claimant before expiration of the original 15 days
that it intends to extend the time and then the insurer may take as long as 15
additional days to reach a decision.
(c)
If the extension is due to failure of the claimant to submit necessary
information, the extension notice of delay must give specific information about
what the claimant has to provide and the claimant must be given at least 45 days
to submit the requested information.
(d)
once the pre-service claim determination has been made and the medical
care rendered, the actual claim filed for payment will be processed according to
the time requirements of a post-service claim.
(5) Post-Service
Claims:
(a)
An insurer must notify the claimant of the insurer's benefit decision
within 30 days of receipt of the request for claim.
(b)
If the insurer is unable to make a decision within that time due to
circumstances beyond the insurer’s control, such as late receipt of medical
records, it must notify the claimant before expiration of the original 30 days
that it intends to extend the time and then the insurer may take as long as 15
additional days to reach a decision.
(c)
If the extension is due to failure of the claimant to submit necessary
information, the extension notice of delay must give specific information about
what the claimant has to provide and the claimant must be given at least 45 days
to submit the requested information.
R590-192-10.
Minimum Standards for Income Replacement Benefit Determination and
Settlement.
In the case of a claim for income
replacement benefits, the insurer shall notify the claimant, of the insurer’s
adverse benefit determination within a reasonable period of time, but not later
than 45 days after receipt of the claim by the insurer.
(1) This
period may be extended by the insurer for up to 30 days, provided that the
insurer determines that such an extension is necessary due to matters beyond the
control of the insurer and notifies the claimant, prior to the expiration of the
initial 45-day period, of the circumstances requiring the extension of time and
the date by which the insurer expects to render a decision.
(2) If,
prior to the end of the first 30-day extension period, the insurer determines
that, due to matters beyond the control of the insurer, a decision cannot be
rendered within that extension period, the period for making the determination
may be extended for up to an additional 30 days, provided the insurer notifies
the claimant prior to the expiration of the first 30-day extension period, of
the circumstances requiring the extension and the date at which the insurer
expects to render a decision.
(3) Each
notice of extension shall specifically explain the standards on which
entitlement to a benefit is based, the unresolved issues that prevent a decision
on the claim, and the additional information needed to resolve those issues, and
the claimant shall be afforded at least 45 days within which to provide the
specified information.
R590-192-11.
Minimum Standards for Responses to the Department.
(1) Every
insurer, upon receipt of an inquiry from the department regarding a claim, shall
furnish the department with a substantive response to the inquiry within the
appropriate number of days indicated by such inquiry.
If it is determined by the insurer that they are unable to respond in the
time frame requested, the insurer may contact the department to request an
extension.
(2) The
insurer shall acknowledge and substantively respond within 15 days to any
written communication from the claimant relating to a pending claim.
R590-192-12.
Unfair Methods, Deceptive Acts and Practices Defined.
The commissioner, pursuant to Subsection
31A-26-303(4), hereby finds the following acts, or the failure to perform
required acts, to be misleading, deceptive, unfairly discriminatory or
overreaching in the settlement of claims:
(1) denying
or threatening the denial of the payment of claims or rescinding, canceling or
threatening the rescission or cancellation of coverage under a policy for any
reason which is not clearly described in the policy as a reason for such denial,
cancellation or rescission;
(2) failing
to provide the insured or beneficiary with a written explanation of the evidence
of any investigation or file materials giving rise to the denial of a claim
based on misrepresentation or fraud on an insurance application, when such
alleged misrepresentation is the basis for the denial;
(3) compensation
by an insurer of its employees, agents or contractors of any amounts which are
based on savings to the insurer as a result of denying or reducing the payment
of claims, unless compensation relates to the discovery of billing or processing
errors;
(4) failing
to deliver a copy of standards for prompt investigation of claims to the
department when requested to do so;
(5) refusing
to settle claims without conducting a reasonable and complete investigation;
(6) denying
a claim or making a claim payment to the insured or beneficiary not accompanied
by a statement or explanation of benefits setting forth the exclusion or benefit
under which the denial or payment is being made and how the payment amount was
calculated;
(7) failing
to make payment of a claim following notice of loss when liability is reasonably
clear under one coverage in order to influence settlements under other portions
of the insurance policy coverage or under other policies of insurance;
(8) advising
a claimant not to obtain the services of an attorney or other advocate or
suggesting that the claimant will receive less money if an attorney is used to
pursue or advise on the merits of a claim;
(9) misleading
a claimant as to the applicable statute of limitations;
(10)
deducting from a loss or claims payment made under one policy those
premiums owed by the insured on another policy, unless the insured consents to
such arrangement;
(11)
failing to settle a claim on the basis that responsibility for payment of
the claim should be assumed by others, except as may otherwise be provided by
policy provisions;
(12)
issuing a check or draft in partial settlement of a loss or a claim under
a specified coverage when such check or draft contains language which purports
to release the insurer or its insured from total liability;
(13)
refusing to provide a written reason for the denial of a claim upon
demand of the claimant;
(14)
refusing to pay reasonably incurred expenses to the claimant when such
expenses resulted from a delay, as prohibited by this rule, in the claim
settlement;
(15)
failing to pay interest at the legal rate in Title 15:
(a)
upon amounts that are due and unpaid within 20 days of completion of
investigation;
(b)
to a health care provider on amounts that are due and unpaid after the
time limits allowed under 31A-26-301.6 ; and
(16)
failing to provide a claimant with an explanation of benefits.
R590-192-13.
Severability.
If any provision or clause of this rule or
its application to any person or situation is held invalid, such invalidity may
not affect any other provision or application of this rule which can be given
effect without the invalid provision or application, and to this end the
provisions of this rule are declared to be severable.
R590-192-14.
Enforcement Date.
The commissioner will begin enforcing the
revised provisions of this rule 45 days from the rule’s effective date.
KEY:
insurance law
2003
31A-1-301
31A-2-201
31A-2-204
31A-2-308
31A-21-312
31A-26-303
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