Rhode Island House Bill H5538

Rhode Island 2023 Regular Session

• Introduced: 2/15/23
• Refer: 2/15/23
• Report Pass: 4/5/23
• Engrossed: 4/18/23
• Refer: 6/15/23

Caption

Third Party Health Insurance Administrators

Impact

The potential impact of H5538 on state law revolves around regulatory efficiency and the oversight processes associated with health insurance administration. By eliminating mandatory on-site audits, the bill could facilitate more flexible operational frameworks for administrators and insurers. Advocates for the bill argue that this would promote efficiency and reduce redundant oversight. However, opponents may express concerns that such changes could lead to less rigorous scrutiny of administrators, potentially impacting the quality of service received by policyholders and the integrity of claims processing.

Summary

House Bill H5538 proposes amendments to the existing statutes governing third-party health insurance administrators in Rhode Island. Specifically, it seeks to remove the requirement that insurers conduct at least one semi-annual on-site audit of the operations of these administrators. This change is primarily aimed at streamlining administrative procedures and reducing the compliance burden on insurers while still ensuring they remain responsible for the management and oversight of benefits. The bill emphasizes that it is ultimately the insurer's responsibility to oversee competent administration of its programs, putting the onus on the insurers to manage their agreements with administrators effectively.

Contention

Notable points of contention surround the balance between reducing regulatory requirements and maintaining sufficient oversight to protect consumers. While insurers may welcome less stringent audit requirements as a means to cut costs and streamline their operations, critics of the bill argue that removing on-site audits may weaken the accountability of administrators, risking the interests of the insured. They contend that the change could undermine protections intended to ensure that claims are processed correctly and that policyholder interests are safeguarded.