Kentucky Statutes 304.17A-265 – Insurer may not restrict assignment of benefits to substance abuse or mental health facility — Exceptions — Requirements for assignment — Construction
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(1) As used in this section:
(a) “Health insurance policy”:
1. Includes any health insurance policy, certificate, plan, or contract or managed care plan, as defined in KRS § 304.17A-500, regardless of whether the policy, certificate, plan, or contract was issued or delivered in this state; and
2. Does not include Medicare or Medicaid benefits; (b) “Insurer”:
1. Means any domestic, foreign, or alien insurer, self-insurer, self-insured plan, or self-insured group; and
2. Includes any domestic, foreign, or alien:
a. Health maintenance organization;
b. Limited health service organization;
c. Provider-sponsored integrated health delivery network; and
d. Nonprofit hospital, medical-surgical, dental, and health service corporation; and
(c) “Substance abuse or mental health facility” means a structurally distinct public or private health care establishment, institution, or facility located and licensed in this state that is primarily constituted, staffed, and equipped to deliver substance abuse or mental health treatment services, or both substance abuse and mental health treatment services, to the general public.
(2) To the extent permitted under federal law, an insurer or its agent:
(a) Shall not prohibit or restrict, except as provided in paragraph (b) of this subsection, an insured under a health insurance policy from making a written assignment of any substance abuse or mental health treatment benefits available under the policy to a substance abuse or mental health facility; and
(b) May require a substance abuse or mental health facility that receives a written assignment of benefits from an insured to:
1. Provide the following information to the insured prior to performing a health care service associated with the benefits:
a. A statement informing the insured that the facility, as applicable:
i. Is an out-of-network provider;
ii. May charge the insured for services not covered under the health insurance policy; and
iii. May charge the insured the balance of any bill for services that are covered under the health insurance policy;
b. A schedule of all applicable charges for the services that the facility may provide to the insured;
c. Any terms of payment that may apply to the insured; and
d. Whether interest will apply to, and the amount of interest that will be charged against, any payment owed by the insured to the facility;
2. Submit claims associated with the benefits within ninety (90) days of the date of service;
3. Maintain records of claims associated with the benefits;
4. Respond to any inquiry regarding the benefits from an investigative unit established under KRS § 304.47-080 or other similar unit; and
5. Make a good-faith effort to abide by the standards of care set forth by the following, as applicable:
a. The American Society of Addiction Medicine;
b. The American Association for Community Psychiatry’s Level of
Care Utilization System (LOCUS); or
c. The American Association for Community Psychiatry’s and the American Academy of Child and Adolescent Psychiatry’s Child and Adolescent Level of Care/Service Intensity Utilization System (CALOCUS-CASII).
(3) For an assignment of benefits made in accordance with this section: (a) The assignment shall:
1. Be valid as of the effective date contained in the assignment; and
2. Remain in effect until the earlier of the following:
a. The date the insured is discharged from the care of the substance abuse or mental health facility; or
b. The date the substance abuse or mental health facility receives written notice of the insured’s termination of the assignment; and
(b) Upon notice of the assignment, the insurer shall make payments directly to the substance abuse or mental health facility for all services rendered by the facility to the insured for the duration of the assignment.
(4) This section shall not be construed to:
(a) Provide a coverage or benefit that is not otherwise available under the health insurance policy;
(b) Prohibit an insurer from enforcing any terms or conditions of the health insurance policy that are not in conflict with this section;
(c) Relieve an insured from the contractual obligation to pay deductibles, copayments, or coinsurance;
(d) Permit a substance abuse or mental health facility to waive deductibles, copayments, or coinsurance by the notice of assignment; or
(e) Violate:
1. 29 U.S.C. § 1185a, as amended; or
2. KRS § 304.17A-660 to KRS § 304.17A-669.
Effective: June 29, 2023
History: Created 2023 Ky. Acts ch. 86, sec. 1, effective June 29, 2023.
Legislative Research Commission Note (6/29/2023). This statute was created by 2023
Ky. Acts ch. 86, sec. 1. Section 8 of that Act provides that the Act applies to health insurance policies in effect on or after June 29, 2023, and to health insurance policies issued, delivered, or renewed on or after June 29, 2023.
(a) “Health insurance policy”:
Terms Used In Kentucky Statutes 304.17A-265
- agent: includes managing general agent unless the context requires otherwise. See Kentucky Statutes 304.9-085
- Association: means an entity, other than an employer-organized association, that has been organized and is maintained in good faith for purposes other than that of obtaining insurance for its members and that has a constitution and bylaws. See Kentucky Statutes 304.17A-005
- Contract: A legal written agreement that becomes binding when signed.
- Domestic: when applied to a corporation, partnership, business trust, or limited liability company, means all those incorporated or formed by authority of this state. See Kentucky Statutes 446.010
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Foreign: when applied to a corporation, partnership, limited partnership, business trust, statutory trust, or limited liability company, includes all those incorporated or formed by authority of any other state. See Kentucky Statutes 446.010
- Health care service: means health care procedures, treatments, or services
rendered by a provider within the scope of practice for which the provider is licensed. See Kentucky Statutes 304.17A-005 - Insurer: means any insurance company. See Kentucky Statutes 304.17A-005
- Managed care: means systems or techniques generally used by third-party payors or their agents to affect access to and control payment for health care services and that integrate the financing and delivery of appropriate health care services to covered persons by arrangements with participating providers who are selected to participate on the basis of explicit standards for furnishing a comprehensive set of health care services and financial incentives for covered persons using the participating providers and procedures provided for in the plan. See Kentucky Statutes 304.17A-005
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- provider: means any:
(a) Advanced practice registered nurse licensed under KRS Chapter 314. See Kentucky Statutes 304.17A-005 - Provider-sponsored integrated health delivery network: means any provider- sponsored integrated health delivery network created and qualified under KRS
304. See Kentucky Statutes 304.17A-005 - Self-insured plan: means a group health insurance plan in which the sponsoring organization assumes the financial risk of paying for covered services provided to its enrollees. See Kentucky Statutes 304.17A-005
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Statute: A law passed by a legislature.
- Treatment: when used in a criminal justice context, means targeted interventions
that focus on criminal risk factors in order to reduce the likelihood of criminal behavior. See Kentucky Statutes 446.010 - Violate: includes failure to comply with. See Kentucky Statutes 446.010
1. Includes any health insurance policy, certificate, plan, or contract or managed care plan, as defined in KRS § 304.17A-500, regardless of whether the policy, certificate, plan, or contract was issued or delivered in this state; and
2. Does not include Medicare or Medicaid benefits; (b) “Insurer”:
1. Means any domestic, foreign, or alien insurer, self-insurer, self-insured plan, or self-insured group; and
2. Includes any domestic, foreign, or alien:
a. Health maintenance organization;
b. Limited health service organization;
c. Provider-sponsored integrated health delivery network; and
d. Nonprofit hospital, medical-surgical, dental, and health service corporation; and
(c) “Substance abuse or mental health facility” means a structurally distinct public or private health care establishment, institution, or facility located and licensed in this state that is primarily constituted, staffed, and equipped to deliver substance abuse or mental health treatment services, or both substance abuse and mental health treatment services, to the general public.
(2) To the extent permitted under federal law, an insurer or its agent:
(a) Shall not prohibit or restrict, except as provided in paragraph (b) of this subsection, an insured under a health insurance policy from making a written assignment of any substance abuse or mental health treatment benefits available under the policy to a substance abuse or mental health facility; and
(b) May require a substance abuse or mental health facility that receives a written assignment of benefits from an insured to:
1. Provide the following information to the insured prior to performing a health care service associated with the benefits:
a. A statement informing the insured that the facility, as applicable:
i. Is an out-of-network provider;
ii. May charge the insured for services not covered under the health insurance policy; and
iii. May charge the insured the balance of any bill for services that are covered under the health insurance policy;
b. A schedule of all applicable charges for the services that the facility may provide to the insured;
c. Any terms of payment that may apply to the insured; and
d. Whether interest will apply to, and the amount of interest that will be charged against, any payment owed by the insured to the facility;
2. Submit claims associated with the benefits within ninety (90) days of the date of service;
3. Maintain records of claims associated with the benefits;
4. Respond to any inquiry regarding the benefits from an investigative unit established under KRS § 304.47-080 or other similar unit; and
5. Make a good-faith effort to abide by the standards of care set forth by the following, as applicable:
a. The American Society of Addiction Medicine;
b. The American Association for Community Psychiatry’s Level of
Care Utilization System (LOCUS); or
c. The American Association for Community Psychiatry’s and the American Academy of Child and Adolescent Psychiatry’s Child and Adolescent Level of Care/Service Intensity Utilization System (CALOCUS-CASII).
(3) For an assignment of benefits made in accordance with this section: (a) The assignment shall:
1. Be valid as of the effective date contained in the assignment; and
2. Remain in effect until the earlier of the following:
a. The date the insured is discharged from the care of the substance abuse or mental health facility; or
b. The date the substance abuse or mental health facility receives written notice of the insured’s termination of the assignment; and
(b) Upon notice of the assignment, the insurer shall make payments directly to the substance abuse or mental health facility for all services rendered by the facility to the insured for the duration of the assignment.
(4) This section shall not be construed to:
(a) Provide a coverage or benefit that is not otherwise available under the health insurance policy;
(b) Prohibit an insurer from enforcing any terms or conditions of the health insurance policy that are not in conflict with this section;
(c) Relieve an insured from the contractual obligation to pay deductibles, copayments, or coinsurance;
(d) Permit a substance abuse or mental health facility to waive deductibles, copayments, or coinsurance by the notice of assignment; or
(e) Violate:
1. 29 U.S.C. § 1185a, as amended; or
2. KRS § 304.17A-660 to KRS § 304.17A-669.
Effective: June 29, 2023
History: Created 2023 Ky. Acts ch. 86, sec. 1, effective June 29, 2023.
Legislative Research Commission Note (6/29/2023). This statute was created by 2023
Ky. Acts ch. 86, sec. 1. Section 8 of that Act provides that the Act applies to health insurance policies in effect on or after June 29, 2023, and to health insurance policies issued, delivered, or renewed on or after June 29, 2023.