HF 2367 (LSB 5857YH (2) 90)

HOUSE FILE 2367

BY  RINKER

A BILL FOR

An Act relating to a health insurer’s duty of good faith in negotiations with hospitals.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 507B.4, subsection 1, Code 2024, is amended to read as follows:
   1.  For purposes of subsection 3, paragraph paragraphs “p” and “v”, “insurer” means an entity providing a plan of health insurance, health care benefits, or health care services, or an entity subject to the jurisdiction of the commissioner performing utilization review, including an insurance company offering sickness and accident plans, a health maintenance organization, a nonprofit health service corporation, a plan established pursuant to chapter 509A for public employees, or any other entity providing a plan of health insurance, health care benefits, or health care services. However, “insurer” does not include an entity that sells disability income insurance.
    Sec. 2.  Section 507B.4, subsection 3, Code 2024, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  v.  Failure to negotiate in good faith.  Failure of an insurer to negotiate in good faith all charges with a hospital licensed pursuant to chapter 135B.  “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to an insurer’s duty of good faith in negotiations. Under the bill, it shall be an unfair method of competition and unfair or deceptive act or practice in the business of insurance for an insurer to fail to negotiate in good faith all charges with a hospital licensed pursuant to Code chapter 135B. “Good faith” is defined by the bill as honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. “Insurer” is also defined in the bill.