                                 CODE OF VIRGINIA

ETHICS AND FAIRNESS IN CARRIER BUSINESS PRACTICES (§ 38.2-3407.15)

A. As used in this section:
			&#8220;Carrier,&#8221; &#8220;enrollee,&#8221; and &#8220;provider&#8221;
shall have the meanings set forth in § 38.2-3407.10; however, a
&#8220;carrier&#8221; shall also include any person required to be licensed
under this title which offers or operates a managed care health insurance plan
subject to Chapter 58 (§ 38.2-5800 et seq.) or which provides or arranges for
the provision of health care services, health plans, networks or provider panels
which are subject to regulation as the business of insurance under this title.
			&#8220;Claim&#8221; means any bill, claim, or proof of loss made by or on
behalf of an enrollee or a provider to a carrier (or its intermediary,
administrator or representative) with which the provider has a provider contract
for payment for health care services under any health plan; however, a
&#8220;claim&#8221; shall not include a request for payment of a capitation or a
withhold.
			&#8220;Clean claim&#8221; means a claim that does all of the following:

   1. Identifies the provider that provided the service with industry-standard
   identification criteria, including billing and rendering provider names,
   identification numbers, and address;

   2. Identifies the patient with a carrier-assigned identification number so the
   carrier can verify the patient was an enrollee at the time of service;

   3. Identifies the service rendered using an industry-standard system of
   procedure or service coding, or, if applicable, a methodology required under
   the provider contract. The claim shall include a complete listing of all
   relevant diagnoses, procedures, and service codes, as well as any applicable
   modifiers;

   4. Specifies the date and place of service;

   5. If prior authorization is required for the services listed in the claim,
   contains verification that prior authorization was obtained in accordance with
   the provider contract for those services; and

   6. Includes additional documentation specific to the services rendered as
   required by the carrier in its provider contract.
   				Notwithstanding the above criteria, a claim shall be considered a clean
   claim if a carrier has failed timely to notify the person submitting the claim
   of any defect or impropriety in accordance with this section.
   				&#8220;Health care services&#8221; means items or services furnished to
   any individual for the purpose of preventing, alleviating, curing, or healing
   human illness, injury or physical disability.
   				&#8220;Health plan&#8221; means any individual or group health care plan,
   subscription contract, evidence of coverage, certificate, health services
   plan, medical or hospital services plan, accident and sickness insurance
   policy or certificate, managed care health insurance plan, or other similar
   certificate, policy, contract or arrangement, and any endorsement or rider
   thereto, to cover all or a portion of the cost of persons receiving covered
   health care services, which is subject to state regulation and which is
   required to be offered, arranged or issued in the Commonwealth by a carrier
   licensed under this title. Health plan does not mean (i) coverages issued
   pursuant to Title XVIII of the Social Security Act, 42 U.S.C. &#xA7; 1395 et
   seq. (Medicare), Title XIX of the Social Security Act, 42 U.S.C. &#xA7; 1396
   et seq. (Medicaid) or Title XXI of the Social Security Act, 42 U.S.C. &#xA7;
   1397aa et seq. (CHIP), 5 U.S.C. &#xA7; 8901 et seq. (federal employees), or 10
   U.S.C. &#xA7; 1071 et seq. (TRICARE); or (ii) accident only, credit or
   disability insurance, long-term care insurance, TRICARE supplement, Medicare
   supplement, or workers&#8217; compensation coverages.
   				&#8220;Provider contract&#8221; means any contract between a provider and
   a carrier (or a carrier&#8217;s network, provider panel, intermediary or
   representative) relating to the provision of health care services.
   				&#8220;Retroactive denial of a previously paid claim&#8221; or
   &#8220;retroactive denial of payment&#8221; means any attempt by a carrier
   retroactively to collect payments already made to a provider with respect to a
   claim by reducing other payments currently owed to the provider, by
   withholding or setting off against future payments, or in any other manner
   reducing or affecting the future claim payments to the provider.

B. Every provider contract entered into by a carrier shall contain specific
provisions which shall require the carrier to adhere to and comply with the
following minimum fair business standards in the processing and payment of
claims for health care services:

   1. A carrier shall pay any claim within 40 days of receipt of the claim except
   where the obligation of the carrier to pay a claim is not reasonably clear due
   to the existence of a reasonable basis supported by specific information
   available for review by the person submitting the claim that:
   				a. The claim is determined by the carrier not to be a clean claim due to a
   good faith determination or dispute regarding (i) the manner in which the
   claim form was completed or submitted, (ii) the eligibility of a person for
   coverage, (iii) the responsibility of another carrier for all or part of the
   claim, (iv) the amount of the claim or the amount currently due under the
   claim, (v) the benefits covered, or (vi) the manner in which services were
   accessed or provided; or
   				b. The claim was submitted fraudulently.
   				Each carrier shall maintain a written or electronic record of the date of
   receipt of a claim. The person submitting the claim shall be entitled to
   inspect such record on request and to rely on that record or on any other
   admissible evidence as proof of the fact of receipt of the claim, including
   without limitation electronic or facsimile confirmation of receipt of a claim.

   2. A carrier shall, within 30 days after receipt of a claim, notify the person
   submitting the claim of any defect or impropriety that prevents the carrier
   from deeming the claim a clean claim and request the information that will be
   required to process and pay the claim. Upon receipt of the additional
   information necessary to make the original claim a clean claim, a carrier
   shall make the payment of the claim in compliance with this section. No
   carrier may refuse to pay a claim for health care services rendered pursuant
   to a provider contract which are covered benefits if the carrier fails timely
   to notify or attempt to notify the person submitting the claim of the matters
   identified above unless such failure was caused in material part by the person
   submitting the claims; however, nothing herein shall preclude such a carrier
   from imposing a retroactive denial of payment of such a claim if permitted by
   the provider contract unless such retroactive denial of payment of the claim
   would violate subdivision 8. Beginning no later than January 1, 2026, all
   notifications and information required under this subdivision shall be
   delivered electronically.

   3. Any interest owing or accruing on a claim under &#xA7; 38.2-3407.1 or
   38.2-4306.1, under any provider contract or under any other applicable law,
   shall, if not sooner paid or required to be paid, be paid, without necessity
   of demand, at the time the claim is paid or within 60 days thereafter.

   4. A carrier shall notify the provider in the provider contract if the
   carrier, or entity completing a transaction on behalf of the carrier, uses a
   payment method that imposes a transaction or processing fee or similar charge
   on the provider, and shall offer the provider an alternative payment method in
   which the carrier, or entity completing a transaction on behalf of the
   carrier, does not impose such a fee or similar charge. If the provider elects
   to accept the alternative payment method and has provided all required
   information to the carrier to enroll in such alternative method, the carrier
   shall pay the claim using such alternative payment method.

   5. a. Every carrier shall establish and implement reasonable policies to
   permit any provider with which there is a provider contract (i) to confirm in
   advance during normal business hours by free telephone or electronic means if
   available whether the health care services to be provided are medically
   necessary and a covered benefit and (ii) to determine the carrier&#8217;s
   requirements applicable to the provider (or to the type of health care
   services which the provider has contracted to deliver under the provider
   contract) for (a) pre-certification or authorization of coverage decisions,
   (b) retroactive reconsideration of a certification or authorization of
   coverage decision or retroactive denial of a previously paid claim, (c)
   provider-specific payment and reimbursement methodology, coding levels and
   methodology, downcoding, and bundling of claims, and (d) other
   provider-specific, applicable claims processing and payment matters necessary
   to meet the terms and conditions of the provider contract, including
   determining whether a claim is a clean claim. If a carrier routinely, as a
   matter of policy, bundles or downcodes claims submitted by a provider, the
   carrier shall clearly disclose that practice in each provider contract.
   Further, such carrier shall either (1) disclose in its provider contracts or
   on its website the specific bundling and downcoding policies that the carrier
   reasonably expects to be applied to the provider or provider&#8217;s services
   on a routine basis as a matter of policy or (2) disclose in each provider
   contract a telephone or facsimile number or e-mail address that a provider can
   use to request the specific bundling and downcoding policies that the carrier
   reasonably expects to be applied to that provider or provider&#8217;s services
   on a routine basis as a matter of policy. If such request is made by or on
   behalf of a provider, a carrier shall provide the requesting provider with
   such policies within 10 business days following the date the request is
   received.
   				b. Every carrier shall make available to such providers within 10 business
   days of receipt of a request, copies of or reasonable electronic access to all
   such policies which are applicable to the particular provider or to particular
   health care services identified by the provider. In the event the provision of
   the entire policy would violate any applicable copyright law, the carrier may
   instead comply with this subsection by timely delivering to the provider a
   clear explanation of the policy as it applies to the provider and to any
   health care services identified by the provider.

   6. Every carrier shall pay a claim if the carrier has previously authorized
   the health care service or has advised the provider or enrollee in advance of
   the provision of health care services that the health care services are
   medically necessary and a covered benefit, unless:
   				a. The documentation for the claim provided by the person submitting the
   claim clearly fails to support the claim as originally authorized;
   				b. The carrier&#8217;s refusal is because (i) another payor is responsible
   for the payment, (ii) the provider has already been paid for the health care
   services identified on the claim, (iii) the claim was submitted fraudulently
   or the authorization was based in whole or material part on erroneous
   information provided to the carrier by the provider, enrollee, or other person
   not related to the carrier, or (iv) the person receiving the health care
   services was not eligible to receive them on the date of service and the
   carrier did not know, and with the exercise of reasonable care could not have
   known, of the person&#8217;s eligibility status; or
   				c. During the post-service claims process, it is determined that the claim
   was submitted fraudulently.

   7. In the case of an invasive or surgical procedure, if the carrier has
   previously authorized a health care service as medically necessary and during
   the procedure the health care provider discovers clinical evidence prompting
   the provider to perform a less or more extensive or complicated procedure than
   was previously authorized, then the carrier shall pay the claim, provided that
   the additional procedures were (i) not investigative in nature, but medically
   necessary as a covered service under the covered person&#8217;s benefit plan;
   (ii) appropriately coded consistent with the procedure actually performed; and
   (iii) compliant with a carrier&#8217;s post-service claims process, including
   required timing for submission to carrier.

   8. No carrier shall impose any retroactive denial of a previously paid claim
   or in any other way seek recovery or refund of a previously paid claim unless
   the carrier specifies in writing the specific claim or claims for which the
   retroactive denial is to be imposed or the recovery or refund is sought, the
   carrier has provided a written explanation of why the claim is being
   retroactively adjusted, and (i) the original claim was submitted fraudulently,
   (ii) the original claim payment was incorrect because the provider was already
   paid for the health care services identified on the claim or the health care
   services identified on the claim were not delivered by the provider, or (iii)
   the time which has elapsed since the date of the payment of the original
   challenged claim does not exceed 12 months. Notwithstanding the provisions of
   clause (iii), a provider and a carrier may agree in writing that recoupment of
   overpayments by withholding or offsetting against future payments may occur
   after such 12-month limit for the imposition of the retroactive denial. A
   carrier shall notify a provider at least 30 days in advance of any retroactive
   denial or recovery or refund of a previously paid claim.
   				Beginning no later than January 1, 2026, all written communications,
   explanations, notifications, and related provider responses applicable to this
   subdivision shall be delivered electronically. The electronic method and
   location for delivery shall be agreed upon by the carrier and provider and
   included in the provider contract.

   9. No provider contract shall fail to include or attach at the time it is
   presented to the provider for execution (i) the fee schedule, reimbursement
   policy, or statement as to the manner in which claims will be calculated and
   paid that is applicable to the provider or to the range of health care
   services reasonably expected to be delivered by that type of provider on a
   routine basis and (ii) all material addenda, schedules, and exhibits thereto
   and any policies (including those referred to in subdivision 5) applicable to
   the provider or to the range of health care services reasonably expected to be
   delivered by that type of provider under the provider contract.

   10. No amendment to any provider contract or to any addenda, schedule, exhibit
   or policy thereto (or new addenda, schedule, exhibit, or policy) applicable to
   the provider (or to the range of health care services reasonably expected to
   be delivered by that type of provider) shall be effective as to the provider,
   unless the provider has been provided with the applicable portion of the
   proposed amendment (or of the proposed new addenda, schedule, exhibit, or
   policy) at least 60 calendar days before the effective date and the provider
   has failed to notify the carrier within 30 calendar days of receipt of the
   documentation of the provider&#8217;s intention to terminate the provider
   contract at the earliest date thereafter permitted under the provider
   contract.

   11. In the event that the carrier&#8217;s provision of a policy required to be
   provided under subdivision 9 or 10 would violate any applicable copyright law,
   the carrier may instead comply with this section by providing a clear, written
   explanation of the policy as it applies to the provider.

   12. All carriers shall establish, in writing, their claims payment dispute
   mechanism and shall make this information available to providers. If a
   carrier&#8217;s claim denial is overturned following completion of a dispute
   review, the carrier shall, on the day the decision to overturn is made,
   consider the claims impacted by such decision as clean claims. All applicable
   laws related to the payment of a clean claim shall apply to the payments due.

   13. Every carrier shall include in its provider contracts a provision that
   prohibits a provider from discriminating against any enrollee solely due to
   the enrollee&#8217;s status as a litigant in pending litigation or a potential
   litigant due to being involved in a motor vehicle accident. Nothing in this
   subdivision shall require a health care provider to treat an enrollee who has
   threatened to make or has made a professional liability claim against the
   provider or the provider&#8217;s employer, agents, or employees or has
   threatened to file or has filed a complaint with a regulatory agency or board
   against the provider or the provider&#8217;s employer, agents, or employees.

   14. Beginning July 1, 2025, every carrier shall make available through
   electronic means a way for providers to determine whether an enrollee is
   covered by a health plan that is subject to the Commission&#8217;s
   jurisdiction.

C. A provider shall not file a complaint with the Commission for failure to pay
claims in accordance with subdivision B 1 unless:

   1. Such provider has made a reasonable effort to confer with the carrier in
   order to resolve the issues related to all claims that are under dispute. Any
   request to confer shall be made to the contact listed for such purpose in the
   provider contract and shall include supporting documentation sufficient for
   the carrier to identify the claims in question; and

   2. At least 30 calendar days have passed from the date of the request provided
   that the carrier has been responsive to the provider&#8217;s request to
   confer. However, if in the judgment of the provider, the carrier has not been
   responsive to such request, the provider shall not be required to wait at
   least 30 calendar days to file the complaint.
   				The provider shall attest in any such complaint that it has satisfied the
   provisions of this subsection.

D. If the Commission has cause to believe that any provider has engaged in a
pattern of potential violations of subdivision B 13, with no corrective action,
the Commission may submit information to the Board of Medicine or the
Commissioner of Health for action. Prior to such submission, the Commission may
provide the provider with an opportunity to cure the alleged violations or
provide an explanation as to why the actions in questions were not violations.
If any provider has engaged in a pattern of potential violations of subdivision
B 13, with no corrective action, the Board of Medicine or the Commissioner of
Health may levy a fine or cost recovery upon the provider and take other action
as permitted under its authority. Upon completion of its review of any potential
violation submitted by the Commission or initiated directly by an enrollee, the
Board of Medicine or the Commissioner of Health shall notify the Commission of
the results of the review, including where the violation was substantiated, and
any enforcement action taken as a result of a finding of a substantiated
violation.

E. Without limiting the foregoing, in the processing of any payment of claims
for health care services rendered by providers under provider contracts and in
performing under its provider contracts, every carrier subject to regulation by
this title shall adhere to and comply with the minimum fair business standards
required under subsection B, and the Commission shall have the jurisdiction to
determine if a carrier has violated the standards set forth in subsection B by
failing to include the requisite provisions in its provider contracts and shall
have jurisdiction to determine if the carrier has failed to implement the
minimum fair business standards set out in subdivisions B 1 and 2 in the
performance of its provider contracts.

F. No carrier shall be in violation of this section if its failure to comply
with this section is caused in material part by the person submitting the claim
or if the carrier&#8217;s compliance is rendered impossible due to matters
beyond the carrier&#8217;s reasonable control (such as an act of God,
insurrection, strike, fire, or power outages) which are not caused in material
part by the carrier.

G. Any provider who suffers loss as the result of a carrier&#8217;s violation of
this section or a carrier&#8217;s breach of any provider contract provision
required by this section shall be entitled to initiate an action to recover
actual damages. If the trier of fact finds that the violation or breach resulted
from a carrier&#8217;s gross negligence and willful conduct, it may increase
damages to an amount not exceeding three times the actual damages sustained.
Notwithstanding any other provision of law to the contrary, in addition to any
damages awarded, such provider also may be awarded reasonable attorney fees and
court costs. Each claim for payment which is paid or processed in violation of
this section or with respect to which a violation of this section exists shall
constitute a separate violation. The Commission shall not be deemed to be a
&#8220;trier of fact&#8221; for purposes of this subsection.

H. No carrier (or its network, provider panel or intermediary) shall terminate
or fail to renew the employment or other contractual relationship with a
provider, or any provider contract, or otherwise penalize any provider, for
invoking any of the provider&#8217;s rights under this section or under the
provider contract.

I. Except where otherwise provided in this section, beginning no later than July
1, 2025, carriers shall deliver provider contracts, related amendments, and
notices exclusively to providers in an electronic format other than electronic
facsimile. Beginning no later than January 1, 2026, the provider shall submit
provider contracts, amendments, and notices to carriers exclusively in an
electronic format other than electronic facsimile. The electronic method and
location for delivery shall be agreed upon by the carrier and provider and
included in the provider contract.

J. This section shall apply only to carriers subject to regulation under this
title and shall apply to the carrier and provider, regardless of any vendors,
subcontractors, or other entities that have been contracted by the carrier or
the provider to perform duties applicable to this section.

K. Pursuant to the authority granted by &#xA7; 38.2-223, the Commission may
promulgate such rules and regulations as it may deem necessary to implement this
section.

L. The Commission shall have no jurisdiction to adjudicate individual
controversies arising out of this section.

HISTORY: 1999, cc. 709, 739; 2004, c. 425; 2005, c. 349; 2014, cc. 157, 417;
2015, c. 709; 2019, c. 683; 2021, Sp. Sess. I, c. 72; 2024, cc. 244, 270; 2025,
cc. 236, 242.