By Mr. Koutoujian of Waltham, petition (accompanied by bill, House, No. 3929) of Peter J. Koutoujian for legislation to prohibit insurers from retroactively terminating health insurance coverage of policyholders. Financial Services.

The Commonwealth of Massachusetts

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PETITION OF:

Peter J. Koutoujian

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In the Year Two Thousand and Seven.

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An Act to prohibit insurers from retroactively terminating a consumers health insurance coverage.

    Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 24B of chapter 175 of the General Laws, as appearing in the 2004 Official Edition, is hereby amended by adding the following new paragraph at the end of the section:

            The commissioner shall further require that no health care insurer offering insurance coverage, including any self-insured sickness, health, or welfare plan under this section shall make, enter into or renew a contract or agreement with a provider of health care services that allows said health care insurer to terminate a policyholder, subscriber or group representative’s health insurance policy for covered services or disenroll said policyholder or subscriber from their policy, contract, agreement, plan or certificate of insurance on a retroactive basis.  If a provider of health care services documents that it received verification of eligibility status of an individual’s eligibility status from such health care insurer, has reasonably complied with said health care insurer’s policies and procedures; and has provided covered services in good faith to the individual based upon the reasonable belief that such person is entitled to benefits as a policyholder or subscriber of the health care insurer; said insurer shall make payment to the provider for the covered services provided to such an individual in accordance with the payment terms of the contract between the health care provider and the health insurer.  A health care insurer offering insurance coverage, as defined under this section, shall provide at no cost to a provider a system for obtaining documented eligibility verification at the time of providing services.

            Section 2:       The commissioner of insurance shall promulgate regulations to enforce the provisions of Section 1 of this act, which shall be promulgated no later than 120 after the effective date of the act.  Such regulations shall be effective for contracts between health care insurers, so called, and providers of health care services, so called, which are entered into, renewed, or amended on or after the regulations effective date.