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Life Health > Health Insurance > Health Insurance

La. Governor Signs LTCI Claims Bill

By Allison Bell

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Louisiana Gov. Bobby Jindal has signed state H.B. 564, a long-term care insurance (LTCI) claims bill, into law.

The law created by the bill, which was introduced by state Rep. Robert Johnson, D-Marksville, La., will require LTCI carriers to pay or deny “clean claims” within 30 business days.

The new law defines an LTCI clean claim as a “claim tht has no defect or impropriety.” A clean LTCI claim must have all “required substantiating documentation,” including “satisfactory evidence of expenses incurred or particular circumstances requiring special treatment that prevents timely payment from being made on the claim,” according to the bill text.

If an LTCI claim is not clean, the carrier must write to ask for additional information and make a decision about the claim within 30 business days of getting the additional information.

If a carrier denies an LTCI claim, it must give “the specific reason or reasons for denial,” according to the bill text.

If a carrier fails to comply with the new LTCI prompt-payment law, it must pay interest at the rate of 1% per month on the claim amount that remains unpaid 45 days after the clean claim was received, or 45 days after the information necessary to process the claim was received.

The carrier should pay the interest automatically once it pays the claim, without requiring the claim filer to file any additional claim for interest, according to the bill text.

The requirement will not apply if the insurer has a “reasonable basis supported by specific information that such claim was fraudulently submitted,” but any frequent, flagrant violations of the prompt-pay rule will be considered a violation of the unfair trade practices act, according to the bill text.

The Louisiana insurance commissioner can punish violations of the unfair trade practices act by imposing fines or taking away an insurance company’s license.

“Prompt payment” bills have been common in the acute care health insurance market. Maryland and New York are examples of states with health insurance prompt payment laws.

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