Text: HF00324 Text: HF00326 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 514J.1 TITLE.
1 2 This chapter shall be known and may be cited as "Third-
1 3 party Payor Liability Act".
1 4 Sec. 2. NEW SECTION. 514J.2 DEFINITIONS.
1 5 As used in this chapter, unless the context otherwise
1 6 requires:
1 7 1. "Appropriate and medically necessary" means the
1 8 standard for health care services as determined by a physician
1 9 or health care provider consistent with accepted practices and
1 10 standards of care provided by the medical profession in the
1 11 community.
1 12 2. "Enrollee" means an individual who is enrolled in a
1 13 health care plan, including covered dependents.
1 14 3. "Health care plan" means a plan under which a person
1 15 undertakes to provide, arrange for, pay for, or reimburse any
1 16 part of the cost of any health care services.
1 17 4. "Health care provider" means a person licensed or
1 18 certified under chapter 147, 148, 148A, 148C, 149, 150, 150A,
1 19 151, 152, 153, 154, 154B, or 155A to provide in this state
1 20 professional health care service to an individual during that
1 21 individual's medical care, treatment, or confinement.
1 22 5. "Health care treatment decision" means a determination
1 23 made when health care services are actually provided under the
1 24 health care plan and a decision which affects the quality of
1 25 the diagnosis, care, or treatment provided to the plan's
1 26 insureds or enrollees.
1 27 6. "Health insurance carrier" means an entity subject to
1 28 the insurance laws and regulations of this state, or subject
1 29 to the jurisdiction of the commissioner of insurance, that
1 30 contracts or offers to contract, or that subcontracts or
1 31 offers to subcontract, to provide, deliver, arrange for, pay
1 32 for, or reimburse any of the costs of providing health care
1 33 services, including an insurance company offering sickness and
1 34 accident plans, a health maintenance organization, a nonprofit
1 35 health service corporation, or any other entity providing a
2 1 plan of health insurance, health benefits, or health services.
2 2 7. "Health maintenance organization" means a health
2 3 maintenance organization as defined in section 514B.1.
2 4 8. "Insured" means an individual who is covered by a
2 5 health care plan provided by a health insurance carrier.
2 6 9. "Managed care entity" means an entity that provides a
2 7 health care plan that selects and contracts with health care
2 8 providers; manages and coordinates health care services
2 9 delivery; monitors necessity, appropriateness, and quality of
2 10 health care services delivered by health care providers; and
2 11 performs utilization review and cost control.
2 12 10. "Ordinary care" means, in the case of a third-party
2 13 payor, that degree of care that a third-party of ordinary
2 14 prudence would provide under the same or similar
2 15 circumstances. In the case of a person who is an employee,
2 16 agent, or representative of a third-party payor, "ordinary
2 17 care" means that degree of care that a person of ordinary
2 18 prudence in the same profession, specialty, or area of
2 19 practice as such person would use in the same or similar
2 20 circumstances.
2 21 11. "Organized delivery system" means an organized
2 22 delivery system as licensed by the director of public health.
2 23 12. "Physician" means an individual licensed under chapter
2 24 148, 150, or 150A to practice medicine and surgery,
2 25 osteopathy, or osteopathic medicine and surgery.
2 26 13. "Third-party payor" means a health insurance carrier,
2 27 health maintenance organization, managed care entity, or
2 28 organized delivery system.
2 29 Sec. 3. NEW SECTION. 514J.3 THIRD-PARTY PAYOR LIABILITY.
2 30 1. A third-party payor has the duty to exercise ordinary
2 31 care when making health care treatment decisions and is liable
2 32 for damages for harm to an insured or enrollee proximately
2 33 caused by the third-party payor's failure to exercise such
2 34 ordinary care.
2 35 2. A third-party payor is also liable for damages for harm
3 1 to an insured or enrollee proximately caused by the health
3 2 care treatment decisions made by an employee, agent, or
3 3 representative of the third-party payor who is acting on
3 4 behalf of the third-party payor and over whom the third-party
3 5 payor has the right to exercise influence or control or has
3 6 actually exercised influence or control if such decision
3 7 results in the failure to exercise ordinary care.
3 8 3. It is a defense in an action brought pursuant to this
3 9 section against a third-party payor that neither the third-
3 10 party payor, nor an employee, agent, or representative of the
3 11 third-party payor controlled, influenced, or participated in
3 12 the health care treatment decision; or that the third-party
3 13 payor did not deny or delay payment for any health care
3 14 services prescribed or recommended by a health care provider
3 15 to the insured or enrollee.
3 16 4. Subsections 1 and 2 do not create an obligation on the
3 17 part of the third-party payor to provide any health care
3 18 services to an insured or enrollee that are not covered by the
3 19 health care plan offered by the third-party payor.
3 20 5. This chapter does not create any liability on the part
3 21 of an employer or an employer group purchasing organization
3 22 that purchases health care services coverage or assumes risk
3 23 on behalf of its employees.
3 24 6. A third-party payor shall not remove a health care
3 25 provider from its plan or refuse to renew the participation of
3 26 a health care provider under its plan for advocating
3 27 appropriate and medically necessary health care for the
3 28 insured or enrollee.
3 29 7. A third-party payor shall not enter into a contract
3 30 with a hospital or health care provider or pharmaceutical
3 31 company which includes an indemnification or hold harmless
3 32 clause for the acts or conduct of the third-party payor. Any
3 33 such indemnification or hold harmless clause in an existing
3 34 contract is void.
3 35 8. A provision under state law prohibiting a third-party
4 1 payor from practicing medicine or being licensed to practice
4 2 medicine shall not be asserted as a defense by such third-
4 3 party payor in an action brought against it pursuant to this
4 4 section or any other applicable law.
4 5 9. In an action against a third-party payor, a finding
4 6 that a health care provider is an employee, agent, or
4 7 representative of such third-party payor shall not be based
4 8 solely on proof that such a health care provider's name
4 9 appears in a listing of approved health care providers made
4 10 available to an insured or enrollee under a health care plan.
4 11 10. This chapter does not apply to workers' compensation
4 12 coverage.
4 13 EXPLANATION
4 14 This bill creates new Code chapter 514J. The bill provides
4 15 that a third-party payor has the duty to exercise ordinary
4 16 care when making health care treatment decisions and is liable
4 17 for damages for harm to an insured or enrollee proximately
4 18 caused by its failure to exercise such ordinary care. The
4 19 bill establishes certain defenses to such an action for
4 20 failure to use ordinary care and provides that the duty to
4 21 exercise ordinary care does not create an obligation on the
4 22 part of the third-party payor to provide health care services
4 23 to an insured or enrollee which is not covered by the health
4 24 care plan offered by the third-party payor. The bill defines
4 25 "third-party payor" as a health insurance carrier, health
4 26 maintenance organization, managed care entity, or organized
4 27 delivery system.
4 28 LSB 2195HH 78
4 29 mj/cf/24
Text: HF00324 Text: HF00326 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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