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AN ACT relating to third-party payors. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 205 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Third-party payor": 6
1. Means an insurer, carrier, limited health service organization, 7
government program, company, self-insured health plan, or any other 8
entity that: 9
a. Either: 10
i. Provides any insurance or health plan that is intended to 11
provide coverage or compensation for expenses incurred by 12
a beneficiary; or 13
ii. Is, by statute, contract, or agreement, legally responsible 14
for payment of a claim for a health care item or service 15
furnished to a beneficiary; and 16
b. May have an obligation to provide coverage or compensation to 17
a Medicaid-eligible or Medicaid-participating beneficiary for a 18
health care item or service prior to the Medicaid program's 19
payor of last resort benefits for the item or service; and 20
2. Includes a health insurer or administrator as defined under KRS 21
Chapter 304; and 22
(b) "Beneficiary" means a beneficiary of the insurance, health plan, or 23
payment obligation provided by a third-party payor. 24
(2) Pursuant to 42 U.S.C. 1396a(a)(25)(I): 25
(a) If a third-party payor requires prior authorization for a health care item or 26
service furnished to a Medicaid-eligible or Medicaid-participating 27 UNOFFICIAL COPY 25 RS BR 947
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beneficiary, the third-party payor shall: 1
1. Accept a prior authorization issued by or under the Department for 2
Medicaid Services, any managed care organization contracted to 3
provide Medicaid benefits pursuant to this chapter, or the state's 4
medical assistance program as if the prior authorization was issued by 5
the third-party payor; and 6
2. Not deny any claim for payment of the health care item or service for 7
failure to obtain prior authorization if the item or service received a 8
prior authorization issued by or under the Department for Medicaid 9
Services, any managed care organization contracted to provide 10
Medicaid benefits pursuant to this chapter, or the state's medical 11
assistance program; and 12
(b) A third-party payor shall comply with the requirements applicable to third-13
party payors under Section 2 of this Act. 14
Section 2. KRS 205.623 is amended to read as follows: 15
(1) (a) All health insurers and administrators as defined under KRS Chapter 304 shall 16
provide upon request to the Department for Medicaid Services, by electronic 17
means and in the format prescribed by the department, policy and coverage 18
information and claims paid data on Medicaid-eligible policyholders and 19
dependents. 20
(b) Any request from the department shall include a list of data elements that 21
shall be included on the electronic file from the insurer or administrator. 22
(2) (a) All health insurers and administrators as defined under KRS Chapter 304 shall 23
provide upon request to the Department for Medicaid Services, by electronic 24
means and in the format prescribed by the department, identifying information 25
on all policyholders and dependents to match with the Medicaid management 26
information system to determine which policyholders and dependents also 27 UNOFFICIAL COPY 25 RS BR 947
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participate in the Kentucky Medical Assistance Program. 1
(b) The identifying information shall include the name, address, date of birth, and 2
Social Security number as these items appear in the companies' files and as 3
the department may require. 4
(3) (a) As used in this subsection: 5
1. "Health care claim" means a claim for payment of a health care item 6
or service; and 7
2. "Third-party payor" has the same meaning as in Section 1 of this Act. 8
(b) A third-party payor shall respond within sixty (60) days of receiving an 9
inquiry from the Department for Medicaid Services regarding a health care 10
claim that was submitted within three (3) years of the date of the provision 11
of the item or service. 12
(4) No health insurer or administrator shall be required to provide information under 13
subsection (1) or (2) of this section if doing so would violate any relevant provision 14
of federal law. 15
(5)[(4)] All information obtained by the department pursuant to this section shall be 16
confidential and shall not be open for public inspection. 17
(6)[(5)] The department shall not be charged a fee[ by a third party] for information 18
requested under this section, nor shall the department be charged a fee[ by a third 19
party] for the processing and adjudication of the department's claim for recovery, 20
reclamation, or validation of eligibility. 21
SECTION 3. A NEW SECTION OF KRS CHAPTER 18A IS CREATED TO 22
READ AS FOLLOWS: 23
Any fully insured health benefit plan, self-insured plan, or other health insurance 24
policy, certificate, plan, or contract, or insurer, state cabinet, agency, or official, or 25
third-party administrator, that offers, issues, renews, or provides health insurance 26
coverage to public employees under KRS 18A.225, 18A.2254, or any other section of 27 UNOFFICIAL COPY 25 RS BR 947
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this chapter shall comply with the requirements applicable to third-party payors under 1
Sections 1 and 2 of this Act. 2
Section 4. KRS 205.532 is amended to read as follows: 3
(1) As used in KRS 205.532 to 205.536: 4
(a) "Clean application" means: 5
1. For credentialing purposes, a credentialing application submitted by a 6
provider to a credentialing verification organization that: 7
a. Is complete and correct; 8
b. Does not lack any required substantiating documentation; and 9
c. Is consistent with the requirements for the National Committee for 10
Quality Assurance requirements; or 11
2. For enrollment purposes, an enrollment application submitted by a 12
provider to the department that: 13
a. Is complete and correct; 14
b. Does not lack any required substantiating documentation; 15
c. Complies with all provider screening requirements pursuant to 42 16
C.F.R. pt. 455; and 17
d. Is on behalf of a provider who does not have accounts receivable 18
with the department; 19
(b) "Credentialing alliance" means a contractual agreement entered into by 20
Medicaid managed care organizations under which the managed care 21
organizations agree to utilize a single credentialing verification organization 22
and an identical credentialing process for the purpose of ensuring the timely 23
and efficient credentialing of providers; 24
(c) "Credentialing application date" means the date that a credentialing 25
verification organization receives a clean application from a provider; 26
(d) "Credentialing verification organization" means an organization that gathers 27 UNOFFICIAL COPY 25 RS BR 947
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data and verifies the credentials of providers in a manner consistent with 1
federal and state laws and the requirements of the National Committee for 2
Quality Assurance; 3
(e) "Department" means the Department for Medicaid Services; 4
(f) "Medicaid managed care organization" or "managed care organization" means 5
an entity with which the department has contracted to serve as a managed care 6
organization as defined in 42 C.F.R. sec. 438.2; 7
(g) "Provider" has the same meaning as in KRS 304.17A-700; and 8
(h) "Request for proposals" has the same meaning as in KRS 45A.070. 9
(2) Every contract entered into or renewed on or after the effective date of this 10
Act[June 29, 2023], for the delivery of Medicaid services by a managed care 11
organization shall: 12
(a) Be in compliance with KRS 205.522 and 205.532 to 205.536;[ and] 13
(b) Require participation in a credentialing alliance recognized by the department 14
pursuant to subsection (4) of this section if such an alliance has been 15
established or utilization of the credentialing organization designated by the 16
department pursuant to subsection (5) of this section; and 17
(c) Require the managed care organization to: 18
1. Require any health care payor entity that the organization operates or 19
controls within this state to comply with the requirements applicable to 20
third-party payors under Sections 1 and 2 of this Act; and 21
2. Use all reasonable efforts to require entities or businesses with which 22
the organization is associated as part of the organization's managed 23
care operations to comply with the requirements applicable to third-24
party payors under Sections 1 and 2 of this Act. 25
(3) The department shall enroll a provider within sixty (60) calendar days of receipt of 26
a clean provider enrollment application. The date of enrollment shall be the date 27 UNOFFICIAL COPY 25 RS BR 947
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that the provider's clean application was initially received by the department. The 1
time limits established in this section shall be tolled or paused for any delay caused 2
by an external entity. Tolling events include but are not limited to the screening 3
requirements contained in 42 C.F.R. pt. 455 and searches of federal databases 4
maintained by entities such as the United States Centers for Medicare and Medicaid 5
Services. 6
(4) (a) The department shall formally recognize a credentialing alliance formed by 7
managed care organizations if: 8
1. One hundred percent (100%) of the total number of managed care 9
organizations have entered into a contractual agreement to form the 10
credentialing alliance prior to December 1, 2023; 11
2. The credentialing verification organization contracted as part of the 12
credentialing alliance is accredited by the National Committee for 13
Quality Assurance; and 14
3. The credentialing verification organization contracted as part of the 15
credentialing organization is owned by or affiliated with a statewide 16
healthcare trade association. 17
(b) A credentialing alliance established pursuant to this section shall: 18
1. Implement a single credentialing application via a web-based portal 19
available to all providers seeking to be credentialed for any Medicaid 20
managed care organization that participates in the credentialing alliance; 21
2. Perform primary source verification and credentialing committee review 22
of each credentialing application that results in a recommendation on the 23
provider's credentialing within thirty (30) days of receipt of a clean 24
application; 25
3. Notify providers within five (5) business days of receipt of a 26
credentialing application if the application is incomplete; 27 UNOFFICIAL COPY 25 RS BR 947
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4. Provide provider outreach and help desk services during common 1
business hours to facilitate provider applications and credentialing 2
information; 3
5. Expeditiously communicate the credentialing recommendation and 4
supporting credentialing information electronically to the department 5
and to each participating Medicaid managed care organization with 6
which the provider is seeking credentialing; and 7
6. Conduct reevaluation of provider documentation when required 8
pursuant to state or federal law or when necessary for the provider to 9
maintain participation status with a Medicaid managed care 10
organization. 11
(5) (a) If a credentialing alliance has not been established and recognized by the 12
department pursuant to subsection (4) of this section by December 31, 2023, 13
the department shall, through a request for proposals and in accordance with 14
KRS Chapter 45A, designate a single credentialing verification organization 15
to verify the credentials of providers on behalf of all managed care 16
organizations. 17
(b) If the department designates a single credentialing verification organization 18
pursuant to this subsection: 19
1. The contract between the department and the credentialing verification 20
organization shall be submitted to the Government Contract Review 21
Committee of the Legislative Research Commission for comment and 22
review; 23
2. The credentialing verification organization shall be reimbursed on a per 24
provider credentialing basis by the department with the reimbursement 25
being offset or deducted equally from each managed care organizations 26
capitation payment; 27 UNOFFICIAL COPY 25 RS BR 947
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3. The credentialing verification organization shall comply with paragraph 1
(b) of subsection (4) of this section; and 2
4. The department may promulgate administrative regulations in 3
accordance with KRS Chapter 13A to ensure the timely and efficient 4
credentialing of providers. 5
(6) If a Medicaid managed care organization assumes responsibility and costs for their 6
own provider credentialing by entering into a credentialing alliance pursuant to this 7
section, the timely credentialing of providers shall be given significant weight as a 8
factor in the scoring process when the department evaluates the Medicaid managed 9
care organization's response to requests for proposals for all contract awards. 10
(7) A Medicaid managed care organization shall: 11
(a) Determine whether it will contract with the provider within thirty (30) 12
calendar days of receipt of the verified credentialing information from a 13
credentialing verification organization either designated by the department or 14
contracted by managed care organizations as part of a credentialing alliance; 15
and 16
(b) 1. Within ten (10) days of an executed contract, ensure that any internal 17
processing systems of the managed care organization have been updated 18
to include: 19
a. The accepted provider contract; and 20
b. The provider as a participating provider. 21
2. In the event that the loading and configuration of a contract with a 22
provider will take longer than ten (10) days, the managed care 23
organization may take an additional fifteen (15) days if it has notified 24
the provider of the need for additional time. 25
(8) (a) Nothing in this section requires a Medicaid managed care organization to 26
contract with a provider if the managed care organization and the provider do 27 UNOFFICIAL COPY 25 RS BR 947
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not agree on the terms and conditions for participation. 1
(b) Nothing in this section shall prohibit a provider and a managed care 2
organization from negotiating the terms of a contract prior to the completion 3
of the department's enrollment and screening process. 4
(9) (a) For the purpose of reimbursement of claims, once a provider has met the 5
terms and conditions for credentialing and enrollment, the provider's 6
credentialing application date shall be the date from which the provider's 7
claims become eligible for payment. 8
(b) A Medicaid managed care organization shall not require a provider to appeal 9
or resubmit any clean claim submitted during the time period between the 10
provider's credentialing application date and the completion of the 11
credentialing process. 12
(c) Nothing in this section shall limit the department's authority to establish 13
criteria that allow a provider's claims to become eligible for payment in the 14
event of lifesaving or life-preserving medical treatment, such as, for an 15
illustrative but not exclusive example, an organ transplant. 16
(10) Nothing in this section shall prohibit a university hospital, as defined in KRS 17
205.639, from performing the activities of a credentialing verification organization 18
for its employed physicians, residents, and mid-level practitioners where such 19
activities are delineated in the hospital's contract with a Medicaid managed care 20
organization. The provisions of subsections (3), (4), (8), and (9) of this section with 21
regard to payment and timely action on a credentialing application shall apply to a 22
credentialing application that has been verified through a university hospital 23
pursuant to this subsection. 24
(11) To promote seamless integration of licensure information, the relevant provider 25
licensing boards in Kentucky are encouraged to forward and provide licensure 26
information electronically to the department and any credentialing verification 27 UNOFFICIAL COPY 25 RS BR 947
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organization. 1
Section 5. KRS 304.12-255 is amended to read as follows: 2
(1) As used in this section, "health insurer or administrator as defined under KRS 3
Chapter 304" includes: 4
(a) 1. An insurer that issues or renews, or an administrator that administers, 5
a health benefit plan. 6
2. As used in this paragraph, "insurer" and "health benefit plan" have 7
the same meanings as in KRS 304.17A-005; 8
(b) 1. An insurer that issues or renews, or an administrator that administers, 9
a limited health service benefit plan. 10
2. As used in this paragraph, "insurer" and "limited health service 11
benefit plan" have the same meanings as in KRS 304.17C-010; and 12
(c) 1. A limited health service organization that issues or renews, or an 13
administrator that administers, a limited health service contract. 14
2. As used in this paragraph, "limited health service organization" and 15
"limited health service contract" have the same meanings as in KRS 16
304.38A-010. 17
(2) It shall be an unfair or deceptive trade practice for any health insurer or 18
administrator as defined under KRS Chapter 304 to refuse to provide information 19
requested by the Department for Medicaid Services under KRS 205.623(1) or (2), 20
except when providing the requested information would violate any relevant 21
provision of federal law. 22
(3) A health insurer or administrator as defined under KRS Chapter 304 shall 23
comply with the requirements applicable to third-party payors under Sections 1 24
and 2 of this Act. 25