A BILL TO BE ENTITLED
AN ACT TO PROVIDE FOR PROMPT PAYMENT OF INVOICES SUBMITTED BY HEALTH CARE FACILITIES AND HEALTH CARE PROVIDERS FOR SERVICES RENDERED UNDER CONTRACT WITH AREA AUTHORITIES OR COUNTY PROGRAMS.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 2 of Article 4 of Chapter 122C of the General Statutes is amended by adding the following new section to read:
"§ 122C-123.2. Area authority and county program prompt payment of claims from service providers.
(a)	As used in this section:
(1)	"Claimant" includes a health care provider or facility that provides services under contract with the area authority or county program. 
(2)	"Health care facility" means a facility that is licensed under this Chapter or Chapter 131E of the General Statutes or is owned or operated by the State of North Carolina in which health care services are provided to patients.
(3)	"Health care provider" means an individual who is licensed, certified, or otherwise authorized under Chapter 90 or 90B of the General Statutes or under the laws of another state to provide health care services in the ordinary course of business or practice of a profession or in an approved education or training program.
(b)	An area authority or county program shall, within 30 calendar days after receipt of an invoice for services rendered, send by electronic or paper mail to the claimant:
(1)	Payment of the invoice.
(2)	Notice of denial of the invoice.
(3)	Notice that the invoice is incomplete.
For purposes of this section, an area authority or county program is presumed to have received a written invoice five business days after the invoice has been placed first-class postage prepaid in the United States mail addressed to the area authority or county program or an electronic invoice transmitted to the area authority or county program on the day the invoice is electronically transmitted. The presumption may be rebutted by sufficient evidence that the invoice was received on another day or not received at all.
(c)	If the invoice is denied, the notice shall include all of the specific good faith reason or reasons for the denial. If the invoice is contested or cannot be paid because the 
information necessary to pay the invoice is incomplete, or not paid pending receipt of requested additional information, the notice shall contain the specific good faith reason or reasons why the invoice has not been paid and an itemization or description of all of the information needed by the area authority or county program to complete the processing of the invoice. If an invoice is denied or contested in part, the area authority or county program shall pay the undisputed portion of the invoice within 30 calendar days after receipt of the invoice and send the notice of the denial or contested status within 30 days after receipt of the invoice. Upon receipt of additional information requested in its notice to the claimant, the area authority or county program shall continue processing the invoice and pay or deny the invoice within 30 days after receiving the additional information.
(d)	If an area authority or county program requests additional information under subsection (c) of this section and does not receive the additional information within 90 days after the request was made, the area authority or county program shall deny the invoice and send the notice of denial to the claimant in accordance with subsection (c) of this section. The area authority or county program shall include the specific reason or reasons for denial in the notice, including the fact that information that was requested was not provided. The area authority or county program shall inform the claimant in the notice that the invoice will be reopened if the information previously requested is submitted to the area authority or county program within one year after the date of the denial notice closing the invoice.
(e)	Payments for services provided by a claimant under the contract with the area authority or county program that are not made in accordance with this section shall bear interest at the annual percentage rate of eighteen percent (18%) beginning on the date following the day on which the invoice should have been paid. If additional information was requested by the area authority or county program under subsection (b) of this section, interest on invoice payments shall begin to accrue on the 31st day after the area authority or county program received the additional information. A payment is considered made on the date upon which a check, draft, or other valid negotiable instrument is placed in the United States Postal Service in a properly addressed, postpaid envelope, or, if not mailed, on the date of the electronic transfer or other delivery of the payment to the claimant. This subsection does not apply to claims for services that are not part of the contract between the area authority or county program; nor does this subsection apply to payments or other amounts for which the area authority or county program is not liable.
(f)	An area authority or county program may require that claims be submitted within 180 days after the date of the services rendered by the health care provider and, in the case of health care provider facility claims, within 180 days after the date of the patient's discharge from the facility. However, an area authority or county program may not limit the time in which invoices may be submitted to fewer than 180 days. Unless otherwise agreed to by the area authority or county program and the claimant, failure to submit an invoice within the time required does not invalidate or reduce any invoice if it was not reasonably possible for the claimant to file the invoice within that time, provided that the invoice is submitted as soon as reasonably possible and in no event, later than one year from the time submittal of the invoice is otherwise required.
 (g)	To the extent permitted by the contract between the area authority or county program and the health care provider or health care facility, the area authority or county program may recover overpayments made to the health care provider or health care facility by making demands for refunds and by offsetting future payments. Any such recoveries may also include related interest payments that were made under the requirements of this section. Recoveries by the area authority or county program must be accompanied by the specific reason and adequate information to identify the specific invoice. To the extent permitted by the contract between the area authority or county program and the health care provider or health care facility, the health care provider or health care facility may recover underpayments or nonpayments by the area authority or county program by making demands for refunds. Any such recoveries by the health care provider or health care facility of underpayments or nonpayment by the area authority or county program may include applicable interest under this section. The period for which such recoveries may be made may be specified in the contract between the area authority or county program and health care provider or health care facility.
(h)	Every area authority or county program shall maintain written or electronic records of its activities under this section, including records of when each invoice was received, paid, denied, or pended, and the area authority's or county program's review and handling of each invoice under this section, sufficient to demonstrate compliance with this section.
(i)	An area authority or county program is not in violation of this section nor subject to interest payments under this section if its failure to comply with this section is caused in material part by (i) the person submitting the invoice, or (ii) by matters beyond the area authority's or county program's reasonable control, including an act of God, insurrection, strike, fire, or power outages. In addition, an area authority or county program is not in violation of this section or subject to interest payments to the claimant under this section if the area authority or county program has a reasonable basis to believe that the invoice was submitted fraudulently and notifies the claimant of the alleged fraud.
(j)	Nothing in this section limits or impairs a client's or patient's liability under existing law for payment for services rendered."
SECTION 2. This act is effective when it becomes law.