Oklahoma 2024 Regular Session

Oklahoma Senate Bill SB557 Compare Versions

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4		-	An Act
5		-	ENROLLED SENATE
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	1st Session of the 59th Legislature (2023)
	34	+
	35	+	ENGROSSED SENATE
6	36		BILL NO. 557 By: Montgomery of the Senate
7	37
8	38		and
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10	40		Sneed and Waldron of the
11	41		House
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15	47		An Act relating to the Unfair Claims Settlement
16	48		Practices Act; amending 36 O.S. 2021, Section 1250.5,
17	49		as amended by Section 1, Chapte r 266, O.S.L. 2022 (3 6
18	50		O.S. Supp. 2022, Section 1250.5) , which relates to
19	51		acts by an insurer; providing that denial of payment
20	52		to claimant for certain services by certain providers
21	53		shall constitute an un fair claim settlement practice;
22	54		requiring review of certain mental health and
23	55		substance use disorder claims by provider with
24	56		certain credentials; and providing an effective date.
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28		-	SUBJECT: Unfair Claims Settlement Practices Act
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30	61		BE IT ENACTED BY THE PEOPLE OF THE STA TE OF OKLAHOMA:
31		-
32	62		SECTION 1. AMENDATORY 36 O.S. 2021, Section 1250.5, as
33	63		amended by Section 1, Chapter 266, O.S.L. 2022 (36 O.S. Supp. 2022,
34	64		Section 1250.5), is amended to read as follows:
35		-
36	65		Section 1250.5. Any of the following acts by an insurer, if
37	66		committed in violation of Section 1250.3 of this title, constitutes
38	67		an unfair claim settlement practice exclusive of paragraph 16 of
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	69	+	SB557 HFLR Page 2
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39	95		this section which shall be applic able solely to health benefit
40	96		plans:
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42	97		1. Failing to fully disc lose to first-party claimants,
43	98		benefits, coverages, or other provisions of any ins urance policy or
44	99		insurance contract when the benefits, coverages or other provisions
45	100		are pertinent to a claim;
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48		-	ENR. S. B. NO. 557 Page 2
49	101		2. Knowingly misrepresenting to claimants pertinent facts or
50	102		policy provisions relating to coverages at issue;
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52	103		3. Failing to adopt and implem ent reasonable standards for
53	104		prompt investigations of claims arising under i ts insurance policies
54	105		or insurance contracts;
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56	106		4. Not attempting in good faith to effectuate prompt, fair and
57	107		equitable settlement of claims submitted in which liability has
58	108		become reasonably clear;
59		-
60	109		5. Failing to comply with the provisions of Section 1219 of
61	110		this title;
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63	111		6. Denying a claim for failure to exhibit the property without
64	112		proof of demand and unfounded refusal by a claimant to do so;
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66	113		7. Except where there is a time l imit specified in the policy,
67	114		making statements, written or otherwise, which req uire a claimant to
68	115		give written notice of loss or proof of loss within a specified time
69	116		limit and which seek to relieve the company of its obligations if
70	117		the time limit is not complied with unless the failure t o comply
71	118		with the time limit prejudices the ri ghts of an insurer. Any policy
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	120	+	SB557 HFLR Page 3
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72	146		that specifies a time limit covering damage to a roof due to wind or
73	147		hail must allow the filing of claims after the first anniversary but
74	148		no later than twenty-four (24) months after the date of the loss, if
75	149		the damage is not evident without inspection;
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77	150		8. Requesting a claimant to sign a release that extends beyond
78	151		the subject matter that gave rise to the claim payment;
79		-
80	152		9. Issuing checks, draft s or electronic payment in partial
81	153		settlement of a loss or claim under a specified coverage which
82	154		contain language releasing an insurer or its insured from its total
83	155		liability;
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85	156		10. Denying payment to a claimant on the grounds that services,
86	157		procedures, or supplies provided by a treating phy sician, or a
87	158		hospital, or person or entity licensed or otherwise authorized to
88	159		provide health care services were not medically necess ary unless the
89	160		health insurer or administrator, as defined in Section 1442 of this
90	161		title, first obtains an opinion from any provider of health care
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92		-	ENR. S. B. NO. 557 Page 3
93	162		licensed by law and prece ded by a medical examination or claim
94	163		review, to the effect that the services, proc edures or supplies for
95	164		which payment is being denied were not medically necessary . In the
96	165		event that claims for mental hea lth or substance use disorder
97	166		treatments and services are under review, the reviewing health care
98	167		provider shall have appropriate, qualified, and specialized
99	168		credentials with respect to the services and treatments. Upon
100	169		written request of a claimant, treating physician, or hospital, or
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101	197		authorized person or entity, the opinion shall be set forth in a
102	198		written report, prepared and signed by the review ing physician. The
103	199		report shall detail which specific services, procedures, or supplies
104	200		were not medically ne cessary, in the opinion of the reviewing
105	201		physician, and an explanation of that co nclusion. A copy of each
106	202		report of a reviewing physician shall b e mailed by the health
107	203		insurer, or administrator, postage prepaid, to the claimant,
108	204		treating physician, or hospital, or authorized person or entity
109	205		requesting same within fifteen (15) days after receipt of the
110	206		written request. As used in this paragraph, “physician” means a
111	207		person holding a valid license to practice medicine and surgery ,
112	208		osteopathic medicine, podiatric medicine, dentistry, chiropractic,
113	209		or optometry, pursua nt to the state licensing provisions of Title 59
114	210		of the Oklahoma Statutes;
115		-
116	211		11. Compensating a reviewing physician, as defined in paragraph
117	212		10 of this section, on the basis of a percentage of the amount by
118	213		which a claim is reduced for payment;
119		-
120	214		12. Violating the provisions of the Health Care Fraud
121	215		Prevention Act;
122		-
123	216		13. Compelling, without just cause, policyholders to institute
124	217		suits to recover amounts due under its insurance policies or
125	218		insurance contracts by offering substantially less than the amounts
126	219		ultimately recovered in suits brought by them, when th e
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127	247		policyholders have made claims f or amounts reasonably similar to the
128	248		amounts ultimately recovered;
129		-
130	249		14. Failing to maintain a complete record of all complaints
131	250		which it has received during the preceding t hree (3) years or since
132	251		the date of its last fina ncial examination conducted or acce pted by
133	252		the Commissioner, whichever time is longer. This record shall
134	253		indicate the total number of complaints, their classification by
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136		-	ENR. S. B. NO. 557 Page 4
137	254		line of insurance, the nature of eac h complaint, the disposition of
138	255		each complaint, and the time it took to process each complaint. For
139	256		the purposes of this paragraph, “complaint” means any written
140	257		communication primarily expressing a grievance;
141		-
142	258		15. Requesting a refund of all or a portion of a payment of a
143	259		claim made to a claimant more than twelve (12) months or a health
144	260		care provider more than eighteen (18) months after the payment is
145	261		made. This paragraph shall not apply:
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147	262		a. if the payment was made because of fraud committed by
148	263		the claimant or health car e provider, or
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150	264		b. if the claimant or health care provider has otherw ise
151	265		agreed to make a refund to the insurer for overpayment
152	266		of a claim;
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154	267		16. Failing to pay, or requesting a ref und of a payment, for
155	268		health care services covered under the policy if a heal th benefit
156	269		plan, or its agent, has provided a preauthorization or
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157	297		precertification and verification of eligibility for those health
158	298		care services. This paragraph shall not apply if:
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160	299		a. the claim or payment was made because of fraud
161	300		committed by the claima nt or health care provider,
162		-
163	301		b. the subscriber had a preexisting excl usion under the
164	302		policy related to the service provided, or
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166	303		c. the subscriber or employer failed to pay the
167	304		applicable premium and all grace periods and
168	305		extensions of coverage have expired;
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170	306		17. Denying or refusing to accept an application for life
171	307		insurance, or refusing to renew, cancel, restrict or otherwise
172	308		terminate a policy of life insurance, or charge a differ ent rate
173	309		based upon the lawful travel destination of an applicant or insured
174	310		as provided in Section 40 24 of this title; or
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176	311		18. As a health insurer that provides pharmacy benefits or a
177	312		pharmacy benefits manager that administers pharmacy benefits for a
178	313		health plan, failing to include any amount paid by an enrollee or on
179		-
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181	314		behalf of an enrollee by anoth er person when calculating the
182	315		enrollee’s total contribution to an out-of-pocket maximum,
183	316		deductible, copayment, coinsurance or other cost-sharing
184	317		requirement.
185		-
186	318		However, if, under federal law, application of this paragraph
187	319		would result in health savings account ineligibility under Sect ion
188	320		223 of the federal Internal Revenue Code, as amended, this
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189	348		requirement shall apply only for health savings accounts with
190	349		qualified high-deductible health plans with respect to the
191	350		deductible of such a plan after t he enrollee has satisfied the
192	351		minimum deductible, except with respect to items or services that
193	352		are preventive care pursuant to Section 223(c)(2)(C) of the federal
194	353		Internal Revenue Code, as amended, in which case the requirements of
195	354		this paragraph shall apply regardless of whether the minimum
196	355		deductible has been satisfied.
197		-
198	356		SECTION 2. This act shall become effective November 1, 2023.
199	357
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201		-	ENR. S. B. NO. 557 Page 6
202		-	Passed the Senate the 22nd day of February, 2023.
203		-
204		-
205		-
206		-	Presiding Officer of the Senate
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208		-
209		-	Passed the House of Representatives the 27th day of April, 2023.
210		-
211		-
212		-
213		-	Presiding Officer of the House
214		-	of Representatives
215		-
216		-	OFFICE OF THE GOVERNOR
217		-	Received by the Office of the Governor this _______ _____________
218		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
219		-	By: _______________________________ __
220		-	Approved by the Governor of the State of Oklahoma this _____ ____
221		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
222		-
223		-	_________________________________
224		-	Governor of the State of Oklahoma
225		-
226		-
227		-	OFFICE OF THE SECRETARY OF STATE
228		-	Received by the Office of the Secretary of State this _______ ___
229		-	day of __________________, 20 _______, at _______ o'clock _______ M.
230		-	By: _______________________________ __
	358	+	COMMITTEE REPORT BY: COMMITTEE ON INSURANCE, dated 04/04/2023 - DO
	359	+	PASS, As Coauthored.