SB2030.DOC

THE SENATE	S.B. NO.	2030
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII

A BILL FOR AN ACT

relating to health.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The State's worsening economy has impacted many state programs including those overseen by the department of human services. Frequently, many entities that contract with the department of human services are not reimbursed for services provided in a timely fashion. This is a problem for many entities doing business with the department of human services, including social service agencies as well as contracted health plans providing services to those enrolled in the State's managed medicaid program, QUEST.

Many health plans in the State contract with the department of human services to participate as QUEST health plans because it is a community service. Unfortunately, delays in payments make it increasingly difficult to provide these services during dire economic times.

In addition, when health plans do not meet the requirements of Hawaii's clean claims law for the processing and timely payment of claims, interest payments are incurred on these delayed payments. When the State delays payments to health plans for services already provided, a plan may ultimately end up paying interest on these amounts when the delay is clearly beyond the control of the health plan.

In order to prevent this from continuing to occur, the legislature believes that QUEST health plans should be exempt from the interest accrual provisions of the clean claims act only in those instances in which delays are caused by nonpayment from either the federal or state government.

SECTION 2. Section 431:13-108, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:

"(g) Notwithstanding section 478-2 to the contrary, interest shall be allowed at a rate of fifteen per cent a year for money owed by an entity on payment of a claim exceeding the applicable time limitations under this section, as follows:

(1) For an uncontested claim:

(A) Filed in writing, interest from the first calendar day after the thirty-day period in subsection (b); or

(B) Filed electronically, interest from the first calendar day after the fifteen-day period in subsection (b);

(2) For a contested claim filed in writing:

(A) For which notice was provided under subsection (c), interest from the first calendar day thirty days after the date the additional information is received; or

(B) For which notice was not provided within the time specified under subsection (c), interest from the first calendar day after the claim is received; or

(3) For a contested claim filed electronically:

(A) For which notice was provided under subsection (c), interest from the first calendar day fifteen days after the additional information is received; or

(B) For which notice was not provided within the time specified under subsection (c), interest from the first calendar day after the claim is received.

The commissioner may suspend the accrual of interest if the commissioner determines that the entity's failure to pay a claim within the applicable time limitations was the result of a major disaster or of an unanticipated major computer system failure.

Accrual of interest shall be suspended automatically if the entity's failure to pay a claim within the applicable time limitations is the result of late payment to the entity by the state or federal government for services provided to beneficiaries of a government program."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________