Revision: March 26, 2020, 4:12 p.m.
SB 622-FN - AS AMENDED BY THE SENATE
03/11/2020 1057s
2020 SESSION
20-3047
01/04
SENATE BILL 622-FN
AN ACT establishing minimum standards for insurance claim review and settlement practices.
SPONSORS: Sen. Sherman, Dist 24; Sen. Feltes, Dist 15; Sen. Rosenwald, Dist 13; Rep. Keans, Straf. 23; Rep. Van Houten, Hills. 45; Rep. Marsh, Carr. 8
COMMITTEE: Commerce
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ANALYSIS
This bill establishes minimum standards for insurance claim review and settlement practices. This bill also establishes a private right of action for violation of such standards.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/11/2020 1057s 20-3047
01/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty
AN ACT establishing minimum standards for insurance claim review and settlement practices.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraphs; Standards for Accident and Health Insurance; Minimum Standards for Claim Review. Amend RSA 415-A:4-a by inserting after paragraph V the following new paragraphs:
VI. Any carrier requiring prior authorization or a pre-service claim to be filed for a covered benefit or service deemed medically necessary by a licensed health care provider which delays a claimant’s receipt of the covered benefit or service and results in harm to the claimant, will be considered to have engaged in an unfair claim settlement practice by an insurer under RSA 417:4, XV.
VII. In any request for a pre- or post-service claim or benefit determination by a claimant or a physician, if the carrier fails to follow the provisions of this statute or denies a medical benefit claim for a covered service that a licensed health care provider as defined in RSA 420-J:3, XXI has determined to be medically necessary, without reasonable grounds for doing so, it will be considered an unfair claim settlement practice by an insurer under RSA 417:4, XV.
2 New Section; Private Right of Action. Amend RSA 415-A by inserting after section 7 the following new section:
415-A:7-a Private Right of Action. Any person injured by an action or unfair claim settlement practice declared unlawful under this chapter may bring an action for damages and for such equitable relief, including an injunction, as the court deems necessary and proper. If the court finds for the plaintiff, recovery shall be in the amount of actual damages or $1,000, whichever is greater. If the court finds that the use of the method of competition or the act or practice was a willful or knowing violation of this chapter, it shall award as much as 3 times, but not less than 2 times, such amount. In addition, a prevailing plaintiff shall be awarded the costs of the suit and reasonable attorney's fees, as determined by the court. Any attempted waiver of the right to the damages set forth in this paragraph shall be void and unenforceable. Injunctive relief shall be available to private individuals under this chapter without bond, subject to the discretion of the court. Upon commencement of any action brought under this section, the clerk of the court shall mail a copy of the complaint or other initial pleadings to the insurance commissioner and, upon entry of any judgment or decree in the action, shall mail a copy of such judgment or decree to the commissioner.
3 Effective Date. This act shall take effect January 1, 2021.
20-3047
Amended 3/26/20
SB 622-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2020-1057s)
AN ACT establishing minimum standards for insurance claim review and settlement practices.
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
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STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $0 | Indeterminable | Indeterminable | Indeterminable |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ ] Other | |||
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COUNTY: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | Indeterminable | Indeterminable | Indeterminable |
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LOCAL: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | Indeterminable | Indeterminable | Indeterminable |
METHODOLOGY:
This bill establishes minimum standards for insurance claim review and settlement practices and establishes a private right of action for violation of such standards. The Insurance Department collects insurance premium tax. It’s unclear how this will impact the premium tax, as insurers and purchasers may respond by buying down the richness of benefit design. Further, this bill only impacts fully insured products. It does not impact self-funded plans, and this bill may impact the distribution of employers choosing to self-insure. A greater share of employers choosing to self-fund will also bring down premium tax revenue.
The Judicial Branch indicates this bill would allow a private right of action to a person injured by an action or unfair claim settlement practice of an accident or health insurance company. The private right of action could include damages and/or equitable relief including costs and reasonable attorney’s fees. Depending upon the remedies sought, these actions could be complex civil cases or complex equity cases in the superior court. The Branch has no information on how many additional cases may be brought as a result of this bill. The Branch does have information on the estimated average cost of such cases in the superior court. The estimated cost to the judicial branch of an average complex civil case in the superior court in fiscal year 2021 is $782 ($279 in judicial time plus $360 in clerical time plus $109 to account for the cost of the jury plus $34 to account for the cost of a bailiff). That cost in fiscal year 2022 is $789. The estimated cost to the judicial branch of an average complex equity case in fiscal year 2021 is $788 in the trial court ($600 in judicial time plus $188 in clerical time). That cost in fiscal year 2022 is $794. These numbers do not consider the cost of any appeals that may be taken following trial. The estimates are based on studies of judicial and clerical weighted caseload times for processing the average case. These studies are now more than fourteen years old for judicial time and over twelve years old for clerical time. In addition, changes have occurred during that time span with respect to processing these types of cases. More self-represented litigants are now involved in presenting their own cases. In addition, changes could have occurred in the length of the average trial or in the percentages of cases that are tried. In 2014, the judicial branch began the implementation of the NH e-Court Project. As various case types come to be filed and processed electronically, without a paper record, the clerical, and possibly the judicial, times involved in processing cases are likely to be affected. The Branch notes that funds have been appropriated in the operating budget for new weighted caseload studies.
AGENCIES CONTACTED:
Insurance Department and Judicial Branch