Text: HF00625 Text: HF00627 Text: HF00600 - HF00699 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 the "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 with
1 8 respect to a health care service, treatment decision, or
1 9 benefit a health care service, treatment decision, or benefit
1 10 that is consistent with generally accepted principles of
1 11 professional practice.
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 service.
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 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. 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 liable for damages for harm to
3 2 an insured or enrollee proximately caused by the health care
3 3 services treatment decision made by an employee, agent, or
3 4 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. In an action brought against a third-party payor
3 10 pursuant to this section, any of the following shall be
3 11 defenses:
3 12 a. That neither the third-party payor, nor an employee,
3 13 agent, or representative of the third-party payor controlled,
3 14 influenced, or participated in the health care treatment
3 15 decision.
3 16 b. That the third-party payor did not deny or delay
3 17 payment for any health care services prescribed or recommended
3 18 by a health care provider to the insured or enrollee.
3 19 4. Subsections 1 and 2 do not create an obligation on the
3 20 part of the third-party payor to provide any health care
3 21 services to an insured or enrollee that are not covered by the
3 22 health care plan offered by the third-party payor.
3 23 5. A provision under state law prohibiting a third-party
3 24 payor from practicing medicine or being licensed to practice
3 25 medicine shall not be asserted as a defense by such third-
3 26 party payor in an action brought against it pursuant to this
3 27 section or any other applicable law.
3 28 Sec. 4. NEW SECTION. 514L.4 THIRD-PARTY PAYOR
3 29 PROHIBITIONS.
3 30 1. A third-party payor shall not remove a health care
3 31 provider from its plan or refuse to renew the participation of
3 32 a health care provider under its plan for advocating
3 33 appropriate and medically necessary health care services for
3 34 an insured or enrollee.
3 35 2. A third-party payor shall not enter into a contract
4 1 with a hospital or health care provider or pharmaceutical
4 2 company which includes an indemnification or hold harmless
4 3 clause for the acts or conduct of the third-party payor. Any
4 4 such indemnification or hold harmless clause in an existing
4 5 contract is void.
4 6 3. In an action against a third-party payor, a finding
4 7 that a health care provider is an employee, agent, or
4 8 representative of such third-party payor shall not be based
4 9 solely on proof that such a health care provider's name
4 10 appears in a listing of approved health care providers made
4 11 available to an insured or enrollee under a health care plan.
4 12 Sec. 5. NEW SECTION. 514L.5 EXCLUSIONS.
4 13 1. This chapter does not apply to workers' compensation
4 14 coverages.
4 15 2. This chapter does not create any liability on the part
4 16 of an employer or an employer group purchasing organization
4 17 that purchases health care services coverage or assumes risk
4 18 on behalf of its employees for providing health care services.
4 19 EXPLANATION
4 20 This bill creates new Code chapter 514L, the third-party
4 21 payor liability Act, regarding third-party payor liability for
4 22 health care treatment decisions, and prohibiting certain other
4 23 acts by third-party payors.
4 24 New Code section 514L.2 contains definitions for the new
4 25 chapter. "Third-party payor" is defined as a health insurance
4 26 carrier, health maintenance organization, managed care entity,
4 27 or organized delivery system. "Appropriate and medically
4 28 necessary" is defined as a health care service, treatment
4 29 decision, or benefit that is consistent with generally
4 30 accepted principles of professional practice. Code section
4 31 514L.2 also defines the terms "enrollee", "health care plan",
4 32 "health care provider", "health care treatment decision",
4 33 "health insurance carrier", "health maintenance organization",
4 34 "insured", "managed care entity", "ordinary care", "organized
4 35 delivery system", and "physician".
5 1 New Code section 514L.3 requires a third-party payor to
5 2 exercise a duty of ordinary care when making health care
5 3 treatment decisions, and imposes liability for damages
5 4 proximately caused by the failure to exercise that duty of
5 5 care. A third-party payor is also liable for damages
5 6 proximately caused to an insured or enrollee because of
5 7 treatment decisions made by an employee, agent, or
5 8 representative of the third-party payor where the third-party
5 9 payor's exercise of influence or control over such party has
5 10 resulted in a failure to exercise ordinary care.
5 11 A third-party payor may assert the following as defenses to
5 12 an action based on failure to exercise ordinary care: that
5 13 the third-party payor did not influence, control, or
5 14 participate in the health care treatment decision, or that the
5 15 third-party payor did not deny or delay payment for prescribed
5 16 or recommended health care services. Code section 514L.3 also
5 17 provides that the third-party payor may not assert as a
5 18 defense that state law prohibits a third-party payor from
5 19 practicing medicine.
5 20 New Code section 514L.4 provides that third-party payors
5 21 may not remove or refuse to renew the participation of a
5 22 health care provider for advocating appropriate and medically
5 23 necessary health care services, and may not include an
5 24 indemnification or hold-harmless clause for the acts of the
5 25 third-party payor in its contract with a health care provider.
5 26 Finally, new Code section 514L.5 provides that the chapter
5 27 does not apply to workers' compensation coverage, and does not
5 28 create liability for employers who purchase or provide health
5 29 care coverage.
5 30 LSB 2320HH 79
5 31 jj/cf/24
Text: HF00625 Text: HF00627 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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