Committee clarifies employer audit rights, unanimously backs bill to let sponsors audit high-cost claims

The Health Coverage, Insurance and Financial Services Committee voted unanimously to report LD 378 "ought to pass as amended," clarifying that entities acting as plan administrators—including insurers operating administrative services for self-funded plans—must comply with statutory plan-sponsor audit rights.

Staff analysis reviewed sponsor amendments intended to resolve ambiguity created by Public Law 2025, chapter 487 and the definition of "administrator" in Title 24-A, chapter 18. The amended language makes explicit that administrators who receive premiums, settle claims or otherwise adjust claims on behalf of plan sponsors are covered by the statutory audit provisions.

Members also clarified what constitutes a "high-cost claim." The analyst told the committee the statute, as drafted and as amended in committee, treats a high-cost claim as a single claim for an individual that "exceeds $100,000," and that the relevant measure for the threshold would be the allowed amount (the sum of plan payment plus member responsibility) unless parties contract otherwise. The committee's sponsor and stakeholders agreed to edits to the non-disclosure/data-use provisions to limit auditors' use of data to the sole purpose of conducting the audit and to add breach and unpermitted-disclosure notification requirements.

Anthem and other carriers urged protections against administrative burdens: carriers noted that responding to large, repeated audit requests could be onerous and proposed a tiered audit approach (auditing an initial sample, expanding if error rates exceed thresholds). Plan sponsors and some consumer advocates opposed a hard cap on audit scope, arguing sponsors need access to sufficient claims to verify claims-handling. The committee's compromise retained sponsor audit rights, added limited cost recovery language (reasonable and justifiable expenses that may be passed to plan sponsors), clarified timelines for responses and strengthened confidentiality and breach-notification language.

In the work session the committee approved the amendment package by voice and recorded roll-call: 11-0 in the affirmative. The amendment clarifies high-cost claim scope, adds data-use/non-disclosure agreement expectations and breach-disclosure rules, and instructs the department and stakeholders to further refine definitions if necessary in subsequent drafting.

Why it matters: LD 378 impacts self-funded plans and employer plan sponsors by strengthening statutory access to claims and related records for high-cost claims and audits; it balances employers' ability to verify spending and carriers' operational burdens by authorizing cost recovery subject to reasonable limits.

Next step: LD 378 will be reported out of committee "ought to pass as amended" and proceed through the legislative process. The committee directed staff to incorporate the agreed drafting clarifications.