Text: HF00339 Text: HF00341 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 514L.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. 514L.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 services 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 that 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. 514L.3 THIRD-PARTY PAYOR DUTY TO
2 30 EXERCISE ORDINARY CARE – LIABILITY.
2 31 1. A third-party payor has the duty to exercise ordinary
2 32 care when making health care treatment decisions and is liable
2 33 for damages for harm to an insured or enrollee proximately
2 34 caused by the third-party payor's failure to exercise such
2 35 ordinary care.
3 1 2. A third-party payor is also liable for damages for harm
3 2 to an insured or enrollee proximately caused by the health
3 3 care services treatment decisions made by an employee, agent,
3 4 or representative of the third-party payor who is acting on
3 5 behalf of the third-party payor and over whom the third-party
3 6 payor has the right to exercise influence or control or has
3 7 actually exercised influence or control if such decision
3 8 results in the failure to exercise ordinary care.
3 9 3. Either of the following is a defense in an action
3 10 brought pursuant to this section against a third-party payor:
3 11 a. That neither the third-party payor, nor an employee,
3 12 agent, or representative of the third-party payor controlled,
3 13 influenced, or participated in the health care services
3 14 treatment decision.
3 15 b. That the third-party payor did not deny or delay
3 16 payment for any health care services prescribed or recommended
3 17 by a health care provider to the insured or enrollee.
3 18 4. A provision under state law prohibiting a third-party
3 19 payor from practicing medicine or being licensed to practice
3 20 medicine shall not be asserted as a defense by such third-
3 21 party payor in an action brought against it pursuant to this
3 22 section or any other applicable law.
3 23 5. In an action against a third-party payor, a finding
3 24 that a health care provider is an employee, agent, or
3 25 representative of such third-party payor shall not be based
3 26 solely on proof that such a health care provider's name
3 27 appears in a listing of approved health care providers made
3 28 available to an insured or enrollee under a health care plan.
3 29 Sec. 4. NEW SECTION. 514L.4 EXCLUSIONS.
3 30 1. Section 514L.3 does not create an obligation on the
3 31 part of the third-party payor to provide any health care
3 32 services to an insured or enrollee that are not covered by the
3 33 health care plan offered by the third-party payor.
3 34 2. This chapter does not create any liability on the part
3 35 of an employer or an employer group purchasing organization
4 1 that purchases health care services coverage or assumes risk
4 2 on behalf of its employees for providing health care services.
4 3 3. This chapter does not apply to workers' compensation
4 4 coverages.
4 5 Sec. 5. NEW SECTION. 514L.5 PROHIBITIONS.
4 6 1. A third-party payor shall not remove a health care
4 7 provider from its plan or refuse to renew the participation of
4 8 a health care provider under its plan for advocating
4 9 appropriate and medically necessary health care services for
4 10 an insured or enrollee.
4 11 2. A third-party payor shall not enter into a contract
4 12 with a hospital or health care provider or pharmaceutical
4 13 company which includes an indemnification or hold harmless
4 14 clause for the acts or conduct of the third-party payor. Any
4 15 such indemnification or hold harmless clause in an existing
4 16 contract is void.
4 17 EXPLANATION
4 18 This bill creates new Code chapter 514L. The bill defines
4 19 "third-party payor" as a health insurance carrier, health
4 20 maintenance organization, managed care entity, or organized
4 21 delivery system.
4 22 New Code section 514L.3 provides that a third-party payor
4 23 has the duty to exercise ordinary care when making health care
4 24 treatment decisions and is liable for damages for harm to an
4 25 insured or enrollee proximately caused by its failure to
4 26 exercise such ordinary care. The bill establishes certain
4 27 defenses to such an action for failure to use ordinary care
4 28 and provides that the duty to exercise ordinary care does not
4 29 create an obligation on the part of the third-party payor to
4 30 provide health care services to an insured or enrollee which
4 31 is not covered by the health care plan offered by the third-
4 32 party payor.
4 33 New Code section 514L.4 contains a list of items which are
4 34 specifically excluded from this chapter's application. New
4 35 Code section 514L.5 lists certain acts third-party payors are
5 1 prohibited from taking.
5 2 LSB 2069YH 79
5 3 jj/cf/24
Text: HF00339 Text: HF00341 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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