a) HEALTHCARE CLAIMS CONSUMER ASSISTANCE PROGRAM ESTABLISHED:

i) [IF AN EQUIVALENT PROGRAM DOES NOT ALREADY EXIST] The Healthcare Claims Consumer Assistance Program, referred to in this section as “H-CAP,” is established within the [HEALTH INSURANCE REGULATORY OR HEALTH OR SIMILAR DEPARTMENT] to provide support for consumers, including prospective consumers, of health insurance, referred to in this section as “consumers,” and to customer assistance programs and public and private health insurance assistance programs.

ii) The services provided by H-CAP may include:

1) Assisting consumers with filing complaints and appeals with a group health plan, health insurance carrier, or independent review organization and providing information about the internal and external appeal and grievance processes of a group health plan, health insurance carrier, or independent review organization;

2) Assisting consumers and health plans and/or insurers to settle health insurance conflicts, disputed claims, and claim denials;

3) Collecting, tracking, and quantifying inquiries regarding health insurance and problems encountered by consumers;

4) Educating consumers on their rights and responsibilities with respect to health insurance coverage;

5) Assisting consumers with obtaining health insurance coverage by providing information, referrals, or other assistance;

6) Assisting with obtaining federal health insurance premium tax credits under Section 36B of the United States Internal Revenue Code of 1986, as amended; and

7) Providing information to the public about the services of H-CAP through a comprehensive outreach program and a toll-free telephone number.

iii) All health plans and insurers in the state are required to place a prominent, plain-language notice about H-CAP assistance on the front page of all health insurance explanation of benefits, denials, or other plan-related communications.

iv) Contract for Operation: The [HEALTH INSURANCE REGULATORY OR HEALTH OR SIMILAR DEPARTMENT] is authorized to contract with a nonprofit, independent health insurance consumer assistance entity, which may not be a health plan or insurer or affiliate thereof, to operate the consumer assistance program.

v) The H-CAP will work with the [HEALTH, HEALTH INSURANCE REGULATORY, AND OTHER DEPARTMENTS INVOLVED IN HEALTH DATA] to fulfill the data collection and reporting requirements set forth in Section iii and iv of this chapter.

b) LIABILITY:

i) It shall be unlawful for a health plan or insurer in [STATE] to wrongfully deny or insufficiently cover a valid consumer insurance claim. The [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] is authorized to take disciplinary measures, including the imposition of civil penalties and awarding of damages against injured consumers, against a licensee when the [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] determines that the licensee has committed an act or omission constituting grounds for disciplinary action, as specified. The [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] may also refer violations to [STATE ATTORNEY GENERAL] for civil enforcement under [STATE] consumer protection and insurance laws. 

ii) The [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall promulgate rules and guidance to meet the requirements of this section.

c) ENFORCEMENT: In the event that the [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] or a court finds that a health plan or insurer has wrongfully denied or insufficiently covered a valid consumer insurance claim:

i) Compensation to Policyholder:

1) The health plan or insurer shall automatically be liable to pay the policyholder double the amount it is found to have wrongfully denied or insufficiently covered plus all reasonable attorney’s fees incurred to pursue a regulatory complaint or litigation for the pursuit of action against the health plan or insurer; 

2) The [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] or a court may assess an additional amount in damages to the health plan or insurer, the entirety of which must be paid to the policyholder, if the [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] or a court assesses that the harm to the policyholder caused by the wrongful claim denial is severe. When assessing an additional amount in damages against a health plan or insurer, the [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] or a court shall determine the appropriate amount in damages payable to the policyholder based on one or more factors, as applicable, including:

(a) The nature, scope, and gravity of the violation; 

(b) The severity of the potential harm to the policyholder in terms of loss of life, loss of health, emotional distress, or financial harm; 

(c) The nature and extent to which the plan cooperated with the [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT];

(d) The nature and extent to which the plan aggravated or mitigated any injury or damage caused by the violation; and

(e) The nature and extent to which the plan has taken corrective action to ensure the violation will not recur.

3) The [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall promulgate rules and guidance to meet the requirements of this section.

ii) VIOLATOR PENALTIES TO HEALTH PLAN OR INSURER

1) The [HEALTH INSURANCE REGULATORY OR SIMILAR ENFORCEMENT DEPARTMENT], after appropriate notice and opportunity to remedy violations, is authorized to issue a civil penalty of up to $25,000 for each violation to a health plan or insurer in the state, who wrongfully denied a valid consumer insurance claim or insufficiently covers a valid consumer insurance claim;

2) The [HEALTH INSURANCE REGULATORY OR SIMILAR ENFORCEMENT DEPARTMENT] is authorized to issue additional penalties to the health plan or insurer if it is found to be continuously violating coverage laws in the state. 

3) When assessing penalties against a health plan or insurer, the [HEALTH INSURANCE REGULATORY OR SIMILAR ENFORCEMENT DEPARTMENT] shall determine the appropriate amount of the penalty for each violation of this chapter based upon one or more factors, including, but not limited to, the following:

(a) The nature, scope, and gravity of the violation;

(b) The good or bad faith of the health plan or insurer ;

(c) The health plan or insurer’s history of violations;

(d) The willfulness of the violation;

(e) Whether the violation is an isolated incident;

(f) The nature and extent to which the health plan or insurer cooperated with the [HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT];

(g) The nature and extent to which the health plan or insurer aggravated or mitigated any injury or damage caused by the violation;

(h) The nature and extent to which the health plan or insurer has taken corrective action to ensure the violation will not recur;

(i) The financial status of the health plan or insurer, including reserves, financial solvency, revenues in excess of expenditures and other factors relating to the financial status of the domestic corporation and any parent company, subsidiary, affiliate, or other financially connected entity, if any;

(j) The financial cost of the health care service that was denied, delayed, or modified, including whether the penalty is commensurate with or exceeds the avoided cost based on the number of enrollees estimated to be affected;

(k) The number of enrollees estimated to be affected;

(l) The frequency of the violation based on the number of days for a continuous violation or the estimated number of incidents with potential harm to enrollees;

(m) The severity of the potential harm in terms of loss of life, loss of health, emotional distress, or financial harm to the enrollee; and

(n) The amount of the penalty necessary to deter similar violations in the future.

4) The [HEALTH INSURANCE REGULATORY OR SIMILAR ENFORCEMENT DEPARTMENT] may, after appropriate notice and opportunity to remedy violations, by order suspend or revoke any license issued under this chapter to a health plan or insurer, or assess administrative penalties if the [HEALTH INSURANCE REGULATORY OR SIMILAR ENFORCEMENT DEPARTMENT] determines that the licensee has committed any of the acts or omissions constituting a violation of this Act;

5) Commencing [ONE YEAR AFTER ENACTMENT], and every year thereafter, the penalty amounts specified in this section shall be adjusted based on whichever is the higher of: 

(a) The average rate of change in premium rates for the individual and small group markets, weighted by enrollment since the previous adjustment; OR

(b) Adjustment based on inflation. 

d) DATA COLLECTION

i) The [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall keep record of wrongful claim denials brought to H-CAP and require private health plans and insurers to disclose data on denied claims to [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT], including, but not limited to:

1) Number, percentage, and type of denied claims; and

2) Number, percentage, and type of wrongfully denied claims. 

ii) The [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall require private health plans and insurers to provide the data enumerated in section iii) 1) to [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] in a machine-readable file. 

iii) The [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] is authorized to investigate health plans and insurers for violations of coverage laws. 

iv) If upon review, a health plan or insurer is found to be in violation of coverage laws in more than the median percentage of wrongful denials in the previous year, the [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall review violations considering one or more factors enumerated in Section ii) 3) on penalties. The [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall report these violations to the Attorney General, Governor, and the Majority and Minority leaders of both chambers in the Legislature.

e) REPORTING REQUIREMENTS

i) Commencing [ONE YEAR FOLLOWING ENACTMENT], and every year thereafter, the [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] is required to report to the state Attorney General, Governor, and minority and majority leaders in both chambers of the Legislature, and publish a report to its public website, with data on:

1) Number and type of denied claims, including raw numbers and numbers as a percent of total claims;  

2) Number and type of wrongfully denied claims, including raw numbers and numbers as a percent of total claims; 

3) Number and type of denied claim appeals reported to H-CAP;

4) Of denied claims appeals brought to H-CAP, the number, type, and percentage of denied claims that are found to be wrongful by each health plan and/or insurer; and

5) Information and outcomes of any investigations conducted by the [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] for health plan or insurer violations of coverage laws; 

6) The [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall post the report on their  website in a machine-readable format.

ii) The [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] shall annually assess data reporting requirements as outlined in section iv) 1) and update health plan and insurer data reporting requirements based on [HEALTH OR HEALTH INSURANCE REGULATORY OR SIMILAR DEPARTMENT] needs to fulfill the requirements of this Act.

f) [State] has a compelling interest in protecting privacy and the protection of personal information. In administering this Act, state and local agencies, businesses, and any other entity, shall only request data necessary to administer this Act and retain it only as required to administer and achieve the purposes of the Act. Any personal information or data collected or obtained in the course of administering this Act shall be shared only in a manner that has been deidentified and aggregated to the greatest extent allowable while still in compliance with federal eligibility requirements and every allowable effort shall be made to revoke access to such data should programs be eliminated or should there be an ineligibility determination. Personal information or data collected or obtained in the course of administering this Act shall not be otherwise disclosed without the informed consent of the individual, a warrant signed by a [state] judge or federal judge, lawful court order administered within [state] or a lawful federal court order, or subpoena administered within [state] or federal subpoena, or unless otherwise required by federal or state statute. Personal information or data may be considered deidentified if it cannot reasonably be used to infer information about, or otherwise be linked to, a particular individual or household.

g) SEVERABILITY: The provisions of this Act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.