By Senator Ross


Relating to health care contracts; to add Section 27-1-17.1 to the Code of Alabama 1975; to require contracts issued, amended, or renewed on and after January 1, 2017, between a health insurer or its contracted vendor or a regional care organization and a covered health care provider to include specific language stating that a provider's request that a health care plan conduct a payment transaction with the provider using a transfer of electronic funds through the Automated Clearing House network must be honored; and to allow covered health care providers to be paid through the use of alternative electronic funds transfer methods.


Section 1. Section 27-1-17.1 is added to the Code of Alabama 1975, to read as follows:


(a) As used in this section, the following words shall have the following meanings:

(1) ACH ELECTRONIC FUNDS TRANSFER. An electronic funds transfer through the Health Insurance Portability and Accountability Act (HIPPA) standard Automated Clearing House network.

(2) COVERED HEALTH CARE PROVIDER. A physician as defined in Section 34-24-50.1; a dentist as defined in Section 34-9-1; a chiropractor as defined in Section 34-24-120; an individual engaged in the practice of optometry as defined in Section 34-22-1; other licensed health care professionals as defined in Title 34; a hospital as defined in Section 22-21-20; and a health care facility, or other provider who or that is accredited, licensed, or certified and who or that is performing within the scope of that accreditation, license, or certification.

(3) HEALTH INSURANCE PLAN. Any hospital and medical expense incurred policy, health maintenance organization subscriber contract, or any other health care plan, policy, coverage, or arrangement that pays for or furnishes medical or health care services, whether by insurance or otherwise, offered in this state. The term does not include a regional care organization.

(4) HEALTH INSURER. An entity or person that offers or administers a health insurance plan in this state, or contracts with covered health care providers to furnish specified health care services to enrollees covered under a health insurance plan. The term includes corporations organized pursuant to Article 6 of Chapter 20 of Title 10A, commencing at Section 10A-20-6.01, Code of Alabama 1975, and to policies, plans, or contracts entered into, issued by, or administered by such corporations.

(5) REGIONAL CARE ORGANIZATION. An organization as defined in Section 22-6-150.

(b) Contracts issued, amended, or renewed on or after January 1, 2017, between a health insurer or its contracted vendor or a regional care organization and a covered health care provider shall include the following language, set off from other language in bold, 12-point type and in all capital letters: "If a covered health care provider requests payment under a health insurance plan from a health insurer or its contracted vendor or a regional care organization be made using ACH electronic funds transfer, that request must be honored. Furthermore, such a request may not be used to delay or reject a transaction, or attempt to adversely affect the covered health care provider."

(c) Nothing in this section prohibits or adopts any standards for other methods of electronic funds transfers outside of the Automated Clearing House network. Alternative electronic funds transfer methods, including wire transfer and payment by card or otherwise through a private card network, are expressly permitted to pay a covered health care provider.

Section 2. If any provision of this act is held by a court to be invalid, such invalidity shall not affect the remaining provisions of this act, and to this end the provisions of this act are declared severable.

Section 3. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Health Care
Health Care Providers
Health Insurance
Code Added