Michigan Laws 550.940 – Prohibited conduct generally
Current as of: 2024 | Check for updates
|
Other versions
A TPA or manager, in processing claims, shall not do any of the following:
(a) Misrepresent pertinent facts relating to coverage.
Terms Used In Michigan Laws 550.940
- Claim: means a request for payment for administering, filling, or refilling a drug or for providing a pharmacy service or a medical supply or device to an enrollee as that term is defined in section 116 of the insurance code of 1956, 1956 PA 218, MCL 500. See Michigan Laws 550.902
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- manager: means an individual responsible for conducting the daily operations of a third party administrator. See Michigan Laws 550.902
- plan: means a medical, surgical, dental, vision, or health care benefit plan and may include coverage under a policy or certificate issued by a carrier. See Michigan Laws 550.902
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- TPA: means a person that directly or indirectly processes claims under a service contract and that may also provide 1 or more other administrative services under a service contract, other than under a worker's compensation self-insurance program pursuant to section 611 of the worker's disability compensation act of 1969, 1969 PA 317, MCL 418. See Michigan Laws 550.902
(b) Fail to make a good faith effort to acknowledge promptly or to act reasonably and promptly upon communications with respect to a claim for benefits.
(c) Fail to adopt and implement reasonable standards for the prompt investigation of a claim for benefits.
(d) Refuse to process claims without conducting a reasonable investigation based upon the available information.
(e) Fail to communicate affirmation or denial of coverage of a claim for benefits within a reasonable time after a claim has been received.
(f) Fail to make a good faith effort to promptly, fairly, and equitably process a claim for benefits.
(g) Fail to promptly provide a reasonable explanation of the basis for denial or partial denial of a claim for benefits.
(h) Refuse to process claims because of race, color, creed, marital status, sex, national origin, residence, age, disability, or lawful occupation.
(i) Knowingly compel individuals covered by the plan to institute litigation to recover amounts due under a benefit plan by offering substantially less than the amounts due unless the amounts due are reasonably in dispute.
(j) For the purpose of coercing an individual covered by the plan to accept a settlement or compromise of a claim, inform the individual of a policy of the TPA of appealing judicial, arbitration, or administrative hearing decisions which are in favor of individuals covered by the plan.
(k) Delay the investigation or processing of a claim by requiring an individual covered by the plan, or the provider of services to the individual covered by the plan, to submit a preliminary claim and then requiring subsequent submission of a formal claim, seeking solely the duplication of a verification. This subdivision does not apply to the predetermination or precertification of benefits.