AN ACT relating to Medicaid managed care organizations.

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AN ACT relating to Medicaid managed care organizations. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 205.533 is amended to read as follows: 3
(1) [By January 1, 2019, ] A managed care organization shall maintain[establish] an 4
interactive website[Web site] , operated by the managed care organization, that 5
allows providers to file griev ances, appeals, and supporting documentation 6
electronically in an encrypted format that complies with federal law and that allows 7
a provider to review the current status of a matter relating to an appeal or a 8
grievance filed concerning a submitted claim. 9
(2) Each managed care organization's website, established in accordance with 10
subsection (1) of this section shall include, in a highly visible and easily 11
accessible manner, the following: 12
(a) The names of the managed care organization's: 13
1. Provider relations representatives for behavioral health; 14
2. Provider relations representatives for physical health; and 15
3. Provider contract representatives for provider contract changes; 16
(b) The email address and telephone number for each individual desc ribed in 17
paragraph (a) of this subsection; and 18
(c) A detailed explanation, written in plain and simple to understand language, 19
of the managed care organization's process for: 20
1. Internal appeals; and 21
2. Providers to request an external, independent third-party review. 22
(3) Information required to be accessible on a managed care organization's website 23
pursuant to subsection (2) of this section shall be kept current and updated within 24
thirty (30) days of any change to the information. 25
Section 2. KRS 205.534 is amended to read as follows: 26
(1) A Medicaid managed care organization with whom the department contracts for 27
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the delivery of Medicaid services shall: 1
(a) Provide: 2
1. A toll-free telephone line for providers to contact th e insurer for claims 3
resolution for forty (40) hours a week during normal business hours in 4
this state; 5
2. A toll -free telephone line for providers to submit requests for 6
authorizations of covered services during normal business hours and 7
extended hours in this state on Monday and Friday through 6 p.m., 8
including federal holidays; 9
3. With regard to any adverse payment or coverage determination, copies 10
of all documents, records, and other information relevant to a 11
determination, including medical necessity c riteria and any processes, 12
strategies, or evidentiary standards relied upon, if requested by the 13
provider. Documents, records, and other information required to be 14
provided under this paragraph shall be provided at no cost to the 15
provider; and 16
4. For any a dverse payment or coverage determination, a written reply in 17
sufficient detail to inform the provider of all reasons for the 18
determination. The written reply shall include information about the 19
provider's right to request and receive at no cost to the prov ider 20
documents, records, and other information under subparagraph 3. of this 21
paragraph; 22
(b) Afford each participating provider the opportunity for an in -person meeting 23
with a representative of the managed care organization on: 24
1. Any clean claim that remai ns unpaid in violation of KRS 304.17A -700 25
to 304.17A-730; and 26
2. Any claim that remains unpaid for forty -five (45) days or more after the 27
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date the claim is received by the managed care organization and that 1
individually or in the aggregate exceeds two tho usand five hundred 2
dollars ($2,500); 3
(c) Reprocess claims that are incorrectly paid or denied in error, in compliance 4
with KRS 304.17A-708. The reprocessing shall not require a provider to rebill 5
or resubmit claims to obtain correct payment. A[ No] claim s hall not be 6
denied for timely filing if the initial claim was timely submitted;[ and] 7
(d) Establish processes for internal appeals, including provisions for: 8
1. Allowing a provider to file any grievance or appeal related to the 9
reduction or denial of the c laim within one hundred twenty (120) [sixty 10
(60)] days of confirmed receipt of a notification from the managed care 11
organization that payment for a submitted claim has been reduced or 12
denied;[ and] 13
2. a. Ensuring the timely consideration and disposition of any grievance 14
or any appeal within thirty (30) days from the date the grievance or 15
appeal is filed with the managed care organization by a provider 16
under this paragraph. 17
b. Failure of the managed care organization to comply with 18
subdivision a. of this subparagraph shall result in: 19
i. A fine or penalty as provided for in subsection (6) of this 20
section; or 21
ii. If related to an unresolved appeal, granting the provider's 22
appeal to reimburse and reversal of the managed care 23
organization's reduction or denial of the claim; and 24
3. Ensuring that, following the resolution of an appeal that results in a 25
determination that a monetary amount is owed to a provider, payment 26
is made in full to the provider within thirty (30) days from the date on 27
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which the appeal was resolved. Payments required under this 1
subparagraph shall include: 2
a. The monetary amount determined to be owed to the provider plus 3
interest in accordance with KRS 304.17A-730; and 4
b. If applicable, reasonable attorney's fees incurred by the provider 5
to appeal the managed care organization's denial; and 6
(e) With regard to provider audits: 7
1. a. Ensure, except as provided in subdivision b. of this 8
subparagraph, that audit requests are reasonable in regard to the 9
number of providers being audited, the number of records being 10
audited, and the timeframe audit records cover by utilizing a 11
valid sampling methodology to determine which providers may 12
be audited, the number of records that may be audited, and the 13
timeframe covered by records that may be audited. 14
b. The requirement in subdivision a. of this subparagraph that 15
audit decisions be based on a valid sampling metho dology shall 16
not apply to cases in which an allegation of fraud, willful 17
misrepresentation, or abuse is made by the managed care 18
organization. 19
c. A managed care organization shall notify the department of any 20
allegations of fraud, willful misrepresentation , or abuse prior to 21
initiating a provider audit; 22
2. Provide written notification to a provider that he or she is being 23
audited. The written notification shall include: 24
a. The date the written notification was sent to the provider; 25
b. An explanation of the purpose of the audit; 26
c. The number of records being audited; 27
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d. The timeframe covered by the records being audited; 1
e. The number of calendar days the provider shall be allowed, in 2
accordance with subparagraph 3. of this paragraph, to provide 3
or grant access to the requested records; 4
f. The managed care organization's or, if the managed care 5
organization has contracted with a third -party entity to conduct 6
the audit, the third -party entity's point of contact for the audit, 7
including the individual's name, t elephone number, mailing 8
address, email address, and fax number; and 9
g. Complete written instructions for filing an appeal including how 10
the appeal shall be submitted by the provider to the managed 11
care organization or, if the managed care organization has 12
contracted with a third -party entity to conduct the audit, the 13
third-party entity; 14
3. Allow at least thirty (30) calendar days for a provider to provide or 15
grant access to the requested records, except that a provider shall be 16
allowed: 17
a. A minimum of six ty (60) calendar days if more than thirty (30) 18
records are being requested or if the timeframe the records cover 19
is more one (1) year; and 20
b. Additional time beyond the minimally required thirty (30) or 21
sixty (60) calendar days if the provider provides jus tification for 22
the need for additional time; 23
4. Limit the timeframe of records requested as part of an audit to not 24
more than two (2) years from the date on which a claim was submitted 25
for payment, except that a longer timeframe shall be permitted if 26
allowed under federal law or if there is a credible allegation of fraud. 27
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If evidence of fraud exists, the managed care organization shall notify 1
the department of the evidence of fraud prior to initiating a provider 2
audit; 3
5. Complete an audit within one hundre d eighty (180) calendar days 4
from the date on which the written audit notification required under 5
subparagraph 2. of this paragraph was sent to the provider; 6
6. Deliver written findings of a completed audit to the provider within 7
thirty (30) calendar days of date on which the audit was completed. 8
Written audit findings shall: 9
a. Include the name, phone number, mailing address, email 10
address, and fax number of the managed care organization's or, 11
if the managed care organization has contracted with a third -12
party entity to conduct the audit, the third -party entity's point of 13
contact responsible for the audit findings; 14
b. Provide claims-level detail of the amounts and reasons for each 15
claim recovery found to be due; and 16
c. Clearly state if no amounts have been found to be due; 17
7. a. Exempt, as provided in subparagraph 8. of this paragraph, a 18
provider from recoupment of funds if an audit results in the 19
identification of any clerical or recordkeeping errors, including 20
typographical errors, scrivener's errors, omissions, or computer 21
errors, unless the auditing entity provides proof of intent to 22
commit fraud or the error results in an actual overpayment to the 23
provider. 24
b. If an auditing entity discovers or is otherwise in possession of 25
proof of intent to commit fraud, the auditing entity shall 26
immediately notify the department; 27
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8. Allow the provider to submit amended claims within thirty (30) 1
calendar days of the discovery of a clerical or recordkeeping error in 2
lieu of recoupment if the services were otherwise provided in 3
accordance with state and federal law; 4
9. Not receive payment based on the amount recovered in the audit; 5
10. a. Only recoup denied payments or issue a demand for payment 6
from a provider upon the final disposition of the audit including 7
the appeals process as established in KRS 205.646; and 8
b. Reimburse the provider any recouped payments plus twenty -five 9
percent (25%) interest on the recouped payments if: 10
i. The managed care organization recoups payments prior to 11
the final disposition of the audit including the appeals 12
process as established in KRS 205.646; and 13
ii. The final disposition of the audit including any appeal 14
conducted in accordance with KRS 205.646 results in a 15
finding in favor of the provider; 16
11. Base recoupment of claims on the actual overpayment or 17
underpayment of claims unless the provider agrees to a settlement to 18
the contrary; and 19
12. When feasible, structure the recoupment of claims or demand for 20
payment in a manner that does not cause a substantial reduction in 21
cash flow for the provider. 22
(2) (a) For the purposes of this subsection: 23
1. "Timely" means that an authorization or preauthorization request shall 24
be approved: 25
a. For an expedited authorization request, within seventy -two (72) 26
hours after receipt of the request. The timeframe for an expedited 27
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authorization request may be extended by up to fourteen (14) days 1
if: 2
i. The enrollee requests an extension; or 3
ii. The Medicaid managed care organization justifies to the 4
department a need for additional information and how the 5
extension is in the enrollee's interest; and 6
b. For a standard authorization request, within two (2) business days. 7
The timeframe for a standard authorization request may be 8
extended by up to fourteen (14) additional days if: 9
i. The provider or enrollee requests an extension; or 10
ii. The Medicaid managed care organization justifies to the 11
department a need for additional information and how the 12
extension is in the enrollee's interest; and 13
2. a. "Expedited authorization request" means a request for 14
authorization or preauthorization where the provider determines 15
that following the standard [ a] timeframe could seriously 16
jeopardize an enrollee's life or health, or ability to attain, maintain, 17
or regain maximum function.[; and] 18
b. A request for authorization or preauthorization for treatment o f an 19
enrollee with a diagnosis of substance use disorder shall be 20
considered an expedited authorization request by the provider and 21
the managed care organization. 22
(b) A decision by a managed care organization on an authorization or 23
preauthorization request for physical, behavioral, or other medically necessary 24
services shall be made in a timely and consistent manner so that Medicaid 25
members with comparable medical needs receive a comparable, consistent 26
level, amount, and duration of services as supported by the member's medical 27
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condition, records, and previous affirmative coverage decisions. 1
(3) (a) Each managed care organization shall report on a monthly basis to the 2
department: 3
1. The number and dollar value of claims received that were denied, 4
suspended, or approved for payment; 5
2. The number of requests for authorization of services and the number of 6
such requests that were approved and denied; 7
3. The number of internal appeals and grievances filed by members and by 8
providers and the type of service related to the grievance or appeal, the 9
total dollar amount of all denials being appealed, the time of 10
resolution, the number of internal appeals and gr ievances where the 11
initial denial was overturned and the type of service and dollar amount 12
associated with the overturned denials;[ and] 13
4. For each internal appeal or grievance not resolved within sixty (60) 14
calendar days, the name of the provider who fil ed the unresolved 15
internal appeal or grievance, the dollar amount of the claim that was 16
denied if a denial is being appealed, the reason for the delay in 17
resolving the internal appeal or grievance, the current status of the 18
internal appeal or grievance, an d the outcome determination if 19
rendered prior to the filing of the report; and 20
5. Any other information required by the department. 21
(b) The data required in paragraph (a) of this subsection shall be separately 22
reported by provider category, as prescribed b y the department, and shall at a 23
minimum include inpatient acute care hospital services, inpatient psychiatric 24
hospital services, outpatient hospital services, residential behavioral health 25
services, and outpatient behavioral health services. 26
(4) On a monthly basis, the department shall transmit to the Department of Insurance a 27
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report of each corrective action plan, fine, or sanction assessed against a Medicaid 1
managed care organization for violation of a Medicaid managed care organization's 2
contract relating to prompt payment of claims. The Department of Insurance shall 3
then make a determination of whether the contract violation was also a violation of 4
KRS 304.17A-700 to 304.17A-730. 5
(5) By December 15 of each year beginning in 2026, the department shall su bmit to 6
the Legislative Research Commission for referral to the Interim Joint Committee 7
on Health Services and the Legislative Oversight and Investigations Committee a 8
report containing the following information for the previous state fiscal year and 9
reported separately for each managed care organization with whom the 10
department has contracted for the delivery of Medicaid services: 11
(a) The number and dollar value of all claims that were received by the 12
managed care organization and the number of dollar valu e of those claims 13
that were approved for payment, denied, or suspended; 14
(b) The number of requests for authorization of services received and the 15
number of those requests that were approved or denied; 16
(c) The number of internal appeals and grievances filed by Medicaid members 17
and by providers, the types of services to which the internal appeals and 18
grievances relate, the total dollar amount of denials that were appealed, the 19
average length of time to resolution, the number of internal appeals and 20
grievances where the initial denial was overturned, and the types of services 21
and dollar amount of overturned denials; and 22
(d) The number of internal appeals and grievances not resolved within sixty 23
(60) calendar days, the ten (10) most common reasons given for dela ys, the 24
total dollar amount when a denial is being appealed, and the number of 25
final determinations made in favor of a provider. 26
(6) Any Medicaid managed care organization that fails to comply with subsection 27
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(1)(d)2. of this section, KRS 205.522, 205.532 to 205.536, and 304.17A -515 may 1
be subject to fines, penalties, and sanctions, up to and including termination, as 2
established under its Medicaid managed care contract with the department. 3
(7) The department may promulgate administrative regulations in acc ordance with 4
KRS Chapter 13A to implement and enforce this section. 5
Section 3. If the Cabinet for Health and Family Services or the Department for 6
Medicaid Services determines that a state plan amendment, waiver, or any other form of 7
authorization or approval from any federal agency to implement Section 1 or 2 of this Act 8
is necessary to prevent the loss of federal funds or to comply with federal law, the cabinet 9
or department: 10
(1) Shall, within 90 days after the effective date of this section, request the 11
necessary federal authorization or approval to implement Sections 1 and 2 o f this Act; 12
and 13
(2) May only delay implementation of the provisions of Sections 1 and 2 of this 14
Act for which federal authorization or approval was deemed necessary until the federal 15
authorization or approval is granted. 16