HLS 12RS-902 ENGROSSED
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2012
HOUSE BILL NO. 564
BY REPRESENTATIVE JOHNSON
INSURANCE CLAIMS: Provides relative to prompt payment of long-term care insurance
claims
AN ACT1
To enact R.S. 22:1188.1, relative to long-term care insurance; to provide for prompt2
payment of long-term care insurance claims; to provide for definitions; to provide3
for applicability; to provide with respect to violations; and to provide for related4
matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 22:1188.1 is hereby enacted to read as follows: 7
ยง1188.1. Prompt payment of clean claims8
A. For purposes of this Section:9
(1) "Claim" means a request for payment of benefits under an in-force10
policy, regardless of whether the benefit claimed is covered under the policy or any11
terms or conditions of the policy have been met.12
(2) "Clean claim" means a claim that has no defect or impropriety, including13
any lack of required substantiating documentation, such as satisfactory evidence of14
expenses incurred or particular circumstances requiring special treatment that15
prevents timely payment from being made on the claim.16
B. Within thirty business days after receipt of a claim for benefits under a17
long-term care insurance policy or certificate, an insurer shall pay such claim if it is18
a clean claim or send a written notice acknowledging the date of receipt of the claim19
and either of the following:20 HLS 12RS-902 ENGROSSED
HB NO. 564
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are additions.
(1) That the insurer is declining to pay all or part of the claim and the1
specific reason or reasons for denial.2
(2) That additional information is necessary to determine if all or part of the3
claim is payable and the specific additional information that is necessary.4
C. Within thirty business days after receipt of all requested additional5
information pursuant to Paragraph (B)(2) of this Section, an insurer shall pay a claim6
for benefits under a long-term care insurance policy or certificate if it is a clean claim7
or send a written notice that the insurer is declining to pay all or part of the claim and8
the specific reason or reasons for denial.9
D. If an insurer fails to comply with Subsection B or C of this Section, such10
insurer shall pay interest at the rate of one percent per month on the amount of the11
claim that should have been paid but that remains unpaid forty-five business days12
after the receipt of the claim pursuant to such Subsection B of this Section or after13
receipt of all requested additional information pursuant to such Subsection C of this14
Section. The interest payable pursuant to this Subsection shall be included in any15
late reimbursement without requiring the person who filed the original claim to make16
any additional claim for such interest.17
E. The provisions of this Section shall not apply where the insurer has a18
reasonable basis supported by specific information that such claim was fraudulently19
submitted.20
F. Any violation of this Section by an insurer if committed flagrantly and in21
conscious disregard of the provisions of this Section with such frequency as to22
constitute a general business practice shall be considered a violation of R.S. 22:196323
et seq.24 HLS 12RS-902 ENGROSSED
HB NO. 564
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Johnson HB No. 564
Abstract: Provides relative to prompt payment of long-term care insurance claims,
including defining the term "clean claim", requiring interest on unpaid clean claims
after 45 days, and making certain flagrant violations of proposed law an unfair trade
practices act in the business of insurance.
Proposed law provides relative to prompt payment of long-term care insurance claims as
follows:
(1)Defines a "clean claim" as a claim that has no defect or impropriety, including any
lack of required substantiating documentation, such as satisfactory evidence of
expenses incurred or particular circumstances requiring special treatment that
prevents timely payment from being made on the claim.
(2)Requires an insurer within 30 business days after receipt of a claim to pay such
claim if it is a clean claim or send a written notice acknowledging the date of receipt
of the claim and either of the following:
(a)That the insurer is declining to pay all or part of the claim and the specific
reason or reasons for denial.
(b)That additional information is necessary to determine if all or any part of the
claim is payable and the specific additional information that is necessary.
(3)Requires an insurer within 30 business days after receipt of all requested additional
information pursuant to (2)(b) above, to pay a claim for benefits under a long-term
care insurance policy or certificate if it is a clean claim or send a written notice that
the insurer is declining to pay all or part of the claim and the specific reason or
reasons for denial.
(4)Provides that if an insurer fails to comply with (2) or (3) above, such insurer shall
pay interest at the rate of 1% per month on the amount of the claim that should have
been paid but that remains unpaid 45 business days after the receipt of the claim
pursuant to (2) above or after receipt of all requested additional information pursuant
to (3) above. Specifies that such interest payable shall be included in any late
reimbursement without requiring the person who filed the original claim to make any
additional claim for such interest.
(5)Makes proposed law inapplicable when the insurer has a reasonable basis supported
by specific information that such claim was fraudulently submitted.
(6)Makes any violation of proposed law by an insurer if committed flagrantly and in
conscious disregard of proposed law with such frequency as to constitute a general
business practice a violation of present law which defines unfair trade practices,
making it punishable by certain monetary penalties or suspension or revocation of
licensor by the commissioner of insurance.
(Adds R.S. 22:1188.1)