Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1299 3
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By: Representative L. Johnson 5
By: Senator Irvin 6
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For An Act To Be Entitled 8
AN ACT TO PROHIBIT HEALTHCARE INSURERS FROM 9
EXERCISING RECOUPMENT FOR PAYMENT OF HEALTHCARE 10
SERVICES MORE THAN ONE YEAR AFTER PAYMENT FOR 11
HEALTHCARE SERVICES WAS MADE; AND FOR OTHER PURPOSES. 12
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Subtitle 15
TO PROHIBIT HEALTHCARE INSURERS FROM 16
EXERCISING RECOUPMENT FOR PAYMENT OF 17
HEALTHCARE SERVICES MORE THAN ONE YEAR 18
AFTER THE PAYMENT FOR HEALTHCARE 19
SERVICES WAS MADE. 20
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 22
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SECTION 1. Arkansas Code Title 23, Chapter 99, is amended to add an 24
additional subchapter to read as follows: 25
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Subchapter 19 — Recoupment 27
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23-99-1901. Definitions. 29
As used in this subchapter: 30
(1) "Covered person" means an individual who is entitled to 31
receive healthcare services under the terms of a health benefit plan; 32
(2)(A) "Health benefit plan" means an individual, blanket, or 33
group plan, policy, or contract for healthcare services issued, renewed, or 34
extended in this state by a healthcare insurer, health maintenance 35
organization, hospital medical service corporation, or self -insured 36 HB1299
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governmental or church plan in this state. 1
(B) "Health benefit plan" includes: 2
(i) Indemnity and managed care plans; and 3
(ii) Plans providing health benefits to state and 4
public school employees under § 21 -5-401 et seq. 5
(C) "Health benefit plan" does not include: 6
(i) A plan that provides only dental benefits or eye 7
and vision care benefits; 8
(ii) A disability income plan; 9
(iii) A credit insurance plan; 10
(iv) Insurance coverage issued as a supplement to 11
liability insurance; 12
(v) Medical payments under an automobile or 13
homeowners insurance plan; 14
(vi) A health benefit plan provided under Arkansas 15
Constitution, Article 5, § 32, the Workers' Compensation Law, § 11 -9-101 et 16
seq., or the Public Employee Workers' Compensation Act, § 21 -5-601 et seq.; 17
(vii) A plan that provides only indemnity for 18
hospital confinement; 19
(viii) An accident-only plan; 20
(ix) A specified disease plan; or 21
(x) A plan provided under the Medicaid Provider -Led 22
Organized Care Act, § 20 -77-2701; 23
(3)(A) "Healthcare insurer" means an entity that is subject to 24
state insurance regulation and provides coverage for health benefits in this 25
state. 26
(B) "Healthcare insurer" includes: 27
(i) An insurance company; 28
(ii) A health maintenance organization; 29
(iii) A hospital and medical service corporation; 30
and 31
(iv) A sponsor of a nonfederal self -funded 32
governmental healthcare plan; 33
(4) "Healthcare provider" means a person or entity that is 34
licensed, certified, or otherwise authorized by the laws of this state to 35
provide healthcare services; and 36 HB1299
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(5) "Recoupment" means an action or attempt by a healthcare 1
insurer to recover or collect payments already made to a healthcare provider 2
with respect to a claim by: 3
(A) Reducing other payments currently owed to the 4
healthcare provider; 5
(B) Withholding or setting off the amount against current 6
or future payments to the healthcare provider; 7
(C) Demanding repayment from a healthcare provider for a 8
claim already paid; or 9
(D) Any other means that reduce or affect the future claim 10
payments to the healthcare provider. 11
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23-99-1902. Time. 13
(a) Except in cases of fraud committed by a healthcare provider, a 14
healthcare insurer may exercise recoupment from a healthcare provider only 15
within three hundred sixty -five (365) days after the date that the healthcare 16
insurer paid the claim submitted by the healthcare provider. 17
(b)(1) A healthcare insurer that exercises recoupment under subsection 18
(a) of this section shall give the healthcare provider a written or 19
electronic statement specifying the basis for the recoupment. 20
(2) The statement required under subdivision (b)(1) of this 21
section shall include: 22
(A) The disclosure information required under § 23 -99-23
1904; and 24
(B)(i) Notice of any right to internal appeal by the 25
healthcare provider. 26
(ii) If the healthcare provider initiates an 27
internal appeal under subdivision (b)(2)(B)(i) of this section, the 28
healthcare insurer shall suspend recoupment efforts for the alleged 29
overpayment until such time as the healthcare insurer has prevailed after the 30
healthcare provider has exhausted all available internal appeals. 31
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23-99-1903. Persons not covered. 33
(a) Except in the case of fraud committed by a healthcare provider or 34
as described under subdivision (b)(1) of this section, a healthcare insurer 35
shall not exercise recoupment if: 36 HB1299
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(1) The healthcare provider or other party on its behalf 1
verified from the healthcare insurer or its agent that an individual was a 2
covered person and eligible for benefits for the respective healthcare 3
services; and 4
(2) The healthcare provider provided healthcare services to the 5
covered person in good -faith reliance on the verification. 6
(b)(1) A healthcare insurer has ninety (90) days from the date of 7
payment to notify the healthcare provider of a verification error and the 8
fact that healthcare services rendered will not be covered if: 9
(A) The verification error was made in good -faith reliance 10
at the time of the verification upon information provided by the party 11
responsible for enrolling a covered person in the health benefit plan; and 12
(B) The party responsible for enrolling a covered person 13
in the health benefit plan is separate and independent from, and is not an 14
employee, representative, assignee, affiliate, subsidiary, or otherwise under 15
the common control of, the healthcare insurer. 16
(2) If a recoupment notice is sent based upon a verification 17
error under subdivision (b)(1) of this section, the healthcare insurer shall 18
include a specific explanation of the error. 19
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23-99-1904. Disclosure required — Exercising recoupment. 21
(a) A healthcare insurer shall give written notice to a healthcare 22
provider of the healthcare insurer's intent to exercise recoupment if the 23
healthcare insurer determines that payment was made: 24
(1) For healthcare services not covered under the covered 25
person's health benefit plan; or 26
(2) To a person who was ineligible to receive benefits under the 27
health benefit plan. 28
(b) A healthcare insurer may: 29
(1) Request a refund from a healthcare provider; or 30
(2) Exercise recoupment of the payment from the healthcare 31
provider under this section. 32
(c) If a healthcare insurer exercises recoupment, then the healthcare 33
insurer shall provide the healthcare provider written documentation that 34
specifies the: 35
(1) Amount of the recoupment; 36 HB1299
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(2) Covered person's name to which the recoupment applies; 1
(3) Patient identification number; 2
(4) Date of the healthcare service; 3
(5) Healthcare service on which the recoupment is based; 4
(6) Pending claim being recouped or future claim that is 5
anticipated to be recouped; and 6
(7) Specific reason for the recoupment. 7
(d)(1) In a recoupment based upon medical necessity determinations, 8
level of service determinations, coding errors, or billing irregularities, 9
the healthcare insurer exercising recoupment shall ensure that the recoupment 10
is reconciled to specific claims and shall provide specific reasons for the 11
recoupment. 12
(2) A specific reason for recoupment under subdivision (d)(1) of 13
this section shall not consist of mere conclusionary statements but shall 14
contain specific information from which the healthcare provider can determine 15
the basis for the recoupment and make a reasoned determination about whether 16
to challenge the recoupment. 17
(3) If the healthcare provider obtained prior authorization for 18
the healthcare service for the covered person from the healthcare insurer or 19
the healthcare insurer's employee, agent, representative, or assign, the 20
healthcare insurer shall not exercise recoupment based upon a retroactive 21
medical necessity determination or level of service determination except in 22
instances of fraud by the healthcare provider in obtaining the prior 23
authorization. 24
(e)(1) If a prior authorization is not obtained by the healthcare 25
provider and the healthcare insurer exercises recoupment based on a 26
determination that the healthcare provider billed the wrong level of care, 27
the healthcare insurer shall state in the notice of recoupment which level of 28
care the healthcare insurer has determined would have been appropriate. 29
(2) If a prior authorization is not obtained by a healthcare 30
provider and the healthcare insurer exercises recoupment based on a 31
determination that the healthcare service rendered was not medically 32
necessary, the healthcare insurer shall include with the notice of 33
recoupment: 34
(A) The specific criteria required for medical necessity 35
for the healthcare service; and 36 HB1299
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(B) The specific reason why the respective healthcare 1
service failed to meet the criteria described under subdivision (e)(2)(A) of 2
this section. 3
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23-99-1905. Unfair trade practices. 5
A healthcare insurer that fails to comply with this subchapter is 6
subject to and in violation of the Trade Practices Act, § 23 -66-201 et seq. 7
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