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SECOND REGULAR SESSION
HOUSE BILL NO. 1944
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE HRUZA.
5555H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o amend chapter 376, RSMo, by adding thereto two new sections relating to health
insurance claims settlement practices, with penalty provisions.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 376, RSMo, is amended by adding thereto two new sections, to be
2 known as sections 376.1245 and 376.1580, to read as follows:
376.1245. 1. As used in this section, the following terms mean:
2 (1) "Anesthesia time", the period during which an anesthesia practitioner is
3 pr esent with the patient, starting when the anesthesia practitioner begins to prep are the
4 patient for anesthesia services in the operating ro om or an equivalent area and ending
5 when the anesthesia practitioner is no longer furnishing anesthesia services to the
6 patient because the patient may be placed safely under postoperative or postanesthesia
7 car e. The term "anesthesia time" includes, if counted by the anesthesia practitioner ,
8 blocks of time aro und an interruption in anesthesia time pr ovided the anesthesia
9 practitioner is furnishing continuous anesthesia care within the time periods aroun d the
10 interruption;
11 (2) "Anesthesia time units", time units re cognized with appr opriate time
12 intervals that do not exceed fifteen minutes in length for each interval and that, taken
13 together , r epresent the total anesthesia time for a particular anesthesia service;
14 (3) "Excepted benefit plan", the same meaning given to the term in section
15 376.998;
16 (4) "Health benefit plan", the same meaning given to the term in section
17 376.1350. The term "health benefit plan" shall also include MO HealthNet, the
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
18 childr en's health insurance pro gram authorized under chapter 208, the Missouri
19 consolidated health car e plan established under chapter 103, and any other state-
20 sponsor ed health insurance pr ogram;
21 (5) "Health carrier", the same meaning given to the term in section 376.1350.
22 The term "health carrier" shall also include the MO HealthNet division and any
23 Medicaid managed care organization as defined in section 208.431;
24 (6) "Payment of anesthesia services", an amount paid for anesthesia services:
25 (a) Determined by using pr evailing medical coding and billing standards in the
26 pr ofessional medical billing community , such as the Curr ent Pr ocedural T erminology
27 code book published by the American Medical Association, the Medicare Claims
28 Pr ocessing Manual, or guidance fr om nationally recog nized anesthesia organizations;
29 and
30 (b) Calculated as the prod uct obtained by multiplying the following together:
31 a. The sum of the base units for the appr opriate medical code plus anesthesia
32 time units; and
33 b. An anesthesia conversion factor that is defined in the individual contract
34 between the health carrier or health benefit plan and the anesthesia practitioner or
35 gr oup.
36 2. No health carrier or health benefit plan shall establish, implement, or enforce
37 any policy , practice, or pro cedur e that imposes a time limit for the payment of
38 anesthesia services pr ovided during a medical or surgical proced ure.
39 3. No health carrier or health benefit plan shall establish, implement, or enforce
40 any policy , practice, or proc edure that res tricts or excludes all anesthesia time in
41 calculating the payment of anesthesia services.
42 4. Excepted benefit plans shall be subject to the requ irem ents of this section.
376.1580. 1. As used in this section, the following terms mean:
2 (1) "Claim", a claim for r eimbursement for a health car e service pr ovided by a
3 physician;
4 (2) "Claim Adjustment Reason Code", a code in the list of Claim Adjustment
5 Reason Codes that pr ovides the reas on for a financial adjustment specific to a particular
6 claim or health car e service ref erenced in the transmitted Accredi ted Standards
7 Committee (ASC) X12 835 standard transaction adopted by the United States
8 Department of Health and Human Services under 45 CFR 162.1602;
9 (3) "Dir ector", the dir ector of the department of commer ce and insurance;
10 (4) "Downcoding", the unilateral alteration by a health carrier of the level of
11 evaluation and management service code or other service code submitted on a claim,
12 r esulting in a lower payment on the claim;
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13 (5) "Health care service", the same meaning given to the term in section
14 376.1350;
15 (6) "Health carrier", the same meaning given to the term in section 376.1350.
16 The term "health carrier" shall also include a third-party administrator or other payer
17 r esponsible for adjudicating claims;
18 (7) "Remittance Advice Remark Code", a code in the list of Remittance Advice
19 Remark Codes that pr ovides supplemental information about a financial adjustment
20 indicated by a Claim Adjustment Reason Code or information about r emittance
21 pr ocessing.
22 2. (1) A health carrier shall not use an automated pr ocess, system, or tool to
23 downcode a claim. An automated tool includes, but is not limited to, the use of artificial
24 intelligence.
25 (2) Any downcoding decision shall be made by a physician who is licensed in this
26 state and shares the same specialty as the tr eating physician. The physician rev iewer
27 shall perform a documented r eview of the clinical information supporting the billed
28 health car e service.
29 3. A health carrier shall not downcode a claim based solely on the r eported
30 diagnosis code.
31 4. A health carrier that downcodes a claim shall notify the tr eating physician
32 using the appr opriate Claim Adjustment Reason Code and Remittance Advice Remark
33 Code to clearly indicate that the claim has been downcoded and pr ovide:
34 (1) The specific reas on for the downcoding, including ref eren ce to the clinical
35 criteria used to justify the downcoding;
36 (2) The original and r evised health car e service codes and payment amounts;
37 (3) The National Pr ovider Identifier of the physician who is r esponsible for the
38 downcoding decision as well as the physician's creden tials, board certifications, and
39 ar eas of specialty expertise and training; and
40 (4) A notice of the right to appeal as described in subsection 5 of this section.
41 5. (1) Health carriers shall pr ovide physicians with a clear and accessible
42 pr ocess for appealing downcoded claims including, but not limited to, a written or
43 electr onic notice detailing how to initiate an appeal, contact information for the
44 individual managing the appeal, r easonable timelines for submission of an appeal that
45 ar e not less than one hundred eighty days, and timelines for adjudication of an appeal.
46 (2) Physicians shall have the right to appeal in batches of similar claims
47 involving substantially similar downcoding issues without res triction.
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48 6. (1) A health carrier shall not use downcoding practices in a targeted or
49 discriminatory manner against physicians who rou tinely trea t patients with complex or
50 chr onic conditions.
51 (2) Any pattern or practice of discriminatory downcoding shall be subject to
52 enfor cement actions by the dir ector including, but not limited to, civil penalties,
53 r estitution, or suspension of the health carrier's license to operate in this state.
54 7. (1) If the dir ector determines that a health carrier has engaged, is engaging,
55 or has taken a substantial step toward engaging in an act, practice, omission, or course
56 of business constituting a violation of this section or a rule adopted or order issued in
57 accordance with this section or that a person has materially aided or is materially aiding
58 an act, practice, omission, or course of business constituting a violation of this section or
59 a rule adopted or order issued in accordance with this section, the dir ector may issue
60 such administrative orders as authorized under section 374.046. A curative order under
61 section 374.046 may include an order to rep roces s claims downcoded in violation of this
62 section and to pay any accrued interes t on the claims paid.
63 (2) If the dir ector believes that a health carrier has engaged, is engaging, or has
64 taken a substantial step toward engaging in an act, practice, omission, or course of
65 business constituting a violation of this section or a rule adopted or order issued in
66 accordance with this section or that a person has materially aided or is materially aiding
67 an act, practice, omission, or course of business constituting a violation of this section or
68 a rule adopted or order issued in accordance with this section, the dir ector may
69 maintain a civil action for r elief authorized under section 374.048.
70 (3) A violation of this section is a level four violation under section 374.049.
71 8. The director may pro mulgate all necessary rules and regul ations for the
72 administration of this section. Any rule or portion of a rule, as that term is defined in
73 section 536.010, that is crea ted under the authority delegated in this section shall
74 become effective only if it complies with and is subject to all of the provi sions of chapter
75 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable
76 and if any of the powers vested with the general assembly pursuant to chapter 536 to
77 r eview , to delay the effective date, or to disappr ove and annul a rule are subsequently
78 held unconstitutional, then the grant of rulemaking authority and any rule pr oposed or
79 adopted after August 28, 2026, shall be invalid and void.
✔
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