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AN ACT relating to health insurer contracts with participating providers. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF SUBTITLE 17A OF KRS CHAPTER 304 3
IS CREATED TO READ AS FOLLOWS: 4
(1) An insurer offering or providing a health benefit plan shall not modify, reduce, 5
or otherwise affect a participating provider's reimbu rsement, payment 6
methodology, fee schedule, or claim adjudication terms through any provider 7
manual, policy update, or other document incorporated by reference into a 8
provider agreement. 9
(2) Any change to a material term affecting reimbursement shall be ef fective only by 10
written amendment executed by both parties. 11
(3) The requirements of this section shall be in addition to any requirement under 12
Section 2 of this Act or any other law. 13
(4) Any modification, reduction, or other change adopted in violation of this section 14
shall be void and unenforceable. 15
Section 2. KRS 304.17A-235 is amended to read as follows: 16
(1) As used in this section, unless the context requires otherwise: 17
(a) "Material change" means a change to a contract, the occurrence and timing of 18
which is not otherwise clearly identified in the contract, that decreases the 19
health care provider's payment or compensation or changes the administrative 20
procedures in a way that may reasonably be expected to significantly increase 21
the provider's administrative expense, and includes any changes to provider 22
network requirements, or inclusion in any new or modified insurance 23
products; and 24
(b) "Participating provider" means a provider that has entered into an agreement 25
with an insurer to provide health care services. 26
(2) Except as provided in Section 1 of this Act, each insurer offering a health benefit 27
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plan shall est ablish procedures for changing an existing agreement with a 1
participating provider that shall include the following requirements:[ of this 2
section.] 3
(a)[(3)] If an insurer offering a health benefit plan makes any material change to 4
an agreement it has entered into with a participating provider for the provision 5
of health care services, the insurer shall provide the participating provider 6
with at least ninety (90) days' notice of the material change. The notice of a 7
material change required under this section shall: 8
1.[(a)] Provide the proposed effective date of the change; 9
2.[(b)] Include a description of the material change; 10
3.[(c)] Include a statement that the participating provider has the option to 11
either accept or reject the proposed material change in accordance with 12
this section; 13
4.[(d)] Provide the name, business address, telephone number, and 14
email[electronic mail] address of a representative of the insurer to 15
discuss the material change, if requested by the participating provider; 16
5.[(e)] Provide no tice of the opportunity for a meeting using real -time 17
communication to discuss the proposed changes if requested by the 18
participating provider. For purposes of this subparagraph[paragraph], 19
"real-time communication" means any mode of telecommunications in 20
which all users can exchange information instantly or with negligible 21
latency and includes the use of traditional telephone, mobile telephone, 22
teleconferencing, and videoconferencing. If requested by the provider, 23
the opportunity to communicate to discuss the proposed changes may 24
occur via email[electronic mail] instead of real -time communication; 25
and 26
6.[(f)] Provide notice that upon three (3) material changes in a twelve 27
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(12) month period, the provider may request a copy of the contract with 1
material chang es consolidated into it. Provision of the copy of the 2
contract by the insurer shall be for informational purposes only and shall 3
have no effect on the terms and conditions of the contract;[.] 4
(b)[(4)] If a material change relates to the participating provi der's inclusion in 5
any new or modified insurance products, or proposes changes to the 6
participating provider's membership networks: 7
1.[(a)] The material change shall only take effect upon the acceptance of 8
the participating provider, evidenced by a written signature; and 9
2.[(b)] The notice of the proposed material change shall be sent by 10
certified mail, return receipt requested;[.] 11
(c)[(5)] For any other material change not addressed in paragraph (b) of this 12
subsection[ (4) of this section]: 13
1.[(a)] a.[1.] The material change shall take effect on the date provided in 14
the notice unless the participating provider objects to the change in 15
accordance with this paragraph; 16
b.[2.] A participating provider who objects under thi s paragraph shall do 17
so in writing and the written protest shall be delivered to the 18
insurer within thirty (30) days of the participating provider's 19
receipt of notice of the proposed material change; 20
c.[3.] Within thirty (30) days following the insurer's r eceipt of the 21
written objection, the insurer and the participating provider shall 22
confer in an effort to reach an agreement on the proposed change 23
or any counter-proposals offered by the participating provider; and 24
d.[4.] If the insurer and participating p rovider fail to reach an agreement 25
during the thirty (30) day negotiation period described in 26
subdivision c. of this subparagraph[ 3. of this paragraph] , then 27
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thirty (30) days shall be allowed for the parties to unwind their 1
relationship, provide notice to patients and other affected parties, 2
and terminate the contract pursuant to its original terms; and 3
2.[(b)] The notice of proposed material change shall be sent in an orange -4
colored envelope with the phrase "ATTENTION! CONTRACT 5
AMENDMENT ENCLOSED!" in no less than fourteen (14) point 6
boldface Times New Roman font printed on the front of the envelope. 7
This color of envelope shall be used for the sole purpose of 8
communicating proposed material changes and shall not be used for 9
other types of communication from an insurer;[.] 10
(d)[(6)] If an insurer issuing a health benefit plan makes a change to an 11
agreement that changes an existing prior authorization, precertification, 12
notification, or referral program, or changes an edit program or specific edits, 13
the insurer shall provide notice of the change to the participating provider at 14
least fifteen (15) days prior to the change; and[.] 15
(e)[(7)] Any notice required to be mailed pursuant to this section shall be sent to 16
the participating provider's point of contact, as set forth in the provider 17
agreement. If no point of contact is set forth in the provider agreement, the 18
insurer shall send the requisite notice to the provider's place of business 19
addressed to the provider. 20
Section 3. T his Act applies to contracts entered into or renewed on or after the 21
effective date of this Act. 22