Insurance: health insurers; timeframe to retrieve payment; limit. Amends sec. 2006 of 1956 PA 218 (MCL 500.2006).
HB5478 amends section 2006 of the Michigan Insurance Code to revise the rules governing timely payment of insurance claims and health care claims. For general insurance claims, it preserves the requirement that insurers pay benefits on a timely basis or owe 12% simple interest, and it clarifies when claims are considered timely, when proof of loss must be specified, and when interest applies. It also continues to address third-party tort claims, reinsurers, and exceptions for workers’ compensation and certain Medicaid claims.
A major portion of the bill focuses on health plan claims paid to health professionals, health facilities, home health care providers, and durable medical equipment providers. It establishes a clean-claim process, requires payment within 45 days, requires notice of defects within 30 days, allows providers time to correct defects, and imposes 12% interest on late clean claims. The bill also limits claim resubmissions, addresses ACA grace-period claims, requires partial payment of payable services on mixed claims, and prohibits retaliation against providers who assert violations. It further restricts health plans from recouping payments after 90 days except in cases involving fraudulent claims, and requires specific notice information when recoupment is sought.
The bill would amend MCL 500.2006 in the Insurance Code and would directly affect insurers, health plans, providers, and claimants by tightening and clarifying claim-processing deadlines, interest penalties, and recoupment rules. It would reinforce existing prompt-payment obligations while adding detailed procedures for health care billing and payment, including clean-claim standards, notice requirements, and administrative complaint rights before the insurance director. It also preserves carve-outs for workers’ compensation and certain Medicaid claims, and it extends application to nonprofit dental care corporations after the specified date.
The bill appears generally pro-provider and pro-claimant, with its structure favoring faster payment, clearer notice, and stronger penalties for late payment or improper recoupment. The absence of recorded committee testimony or votes makes it difficult to identify formal support or opposition, but the policy direction suggests support from health care providers and insureds who benefit from prompt payment protections. Health plans and insurers may view the bill more cautiously because it increases compliance obligations, interest exposure, and limits on post-payment recovery.
The main points of contention are likely to be the 45-day clean-claim deadline, the 12% interest penalty for late payment, and the 90-day restriction on payment retrieval, all of which increase financial and administrative pressure on health plans. Insurers may also object to the detailed notice and partial-payment requirements, while providers are likely to support them as protections against delayed reimbursement and retroactive recoupment. Another potential issue is the bill’s broad definition of health plans and its application to multiple provider types, which could raise concerns about scope and implementation.