Senate committee advances bill limiting insurer recoupments to 18 months

Senator Sydney Davis, the bill sponsor, told the Senate Health and Human Services Committee HB1292 would ‘‘place reasonable guard rails’’ on when health carriers can retroactively deny or recoup previously paid claims, proposing an 18-month lookback period while excluding suspected fraud.

The measure, Davis said, aims to protect small and rural providers from sudden financial disruption when insurers reopen closed patient accounts years after a claim was paid: ‘‘For a small or rural healthcare provider, that kind of retroactive takeback that is two, three, or maybe even five years later creates a real financial disruption and a lot of uncertainty,’’ she said.

Monument Health representative Alan Solano and witnesses from Sanford Health and the South Dakota Association of Healthcare Organizations supported the bill, telling the committee the proposal would require payers to notify providers before a recoupment and would limit how far back audits may recover payments. Solano described the practical burden on providers of tracing hundreds or thousands of claim lines years after payment.

During questioning, committee members asked how the 18-month period was selected. Davis responded that the timeframe tracks a middle ground among other states — noting some states use 12 months while others allow up to 30 — and called 18 months a reasonable compromise for audit operations.

Senator Reid moved HB1292 to the floor with a due-pass motion; Senator Perry seconded. The secretary’s roll call produced seven affirmative votes, and the committee certified the bill for consent to the floor.

The committee closed without opposition testimony recorded in the room or online. The bill’s next step is consideration on the Senate floor.