KRS 304.17A-235: Notice of proposed material change in health benefit plan's agreement

with participating provider.

(1) As used in this section, unless the context requires otherwise:

(a) "Material change" means a change to a contract, the occurrence and timing of

which is not otherwise clearly identified in the contract, that decreases the

health care provider's payment or compensation or changes the administrative

procedures in a way that may reasonably be expected to significantly increase

the provider's admin istrative expense, and includes any changes to provider

network requirements, or inclusion in any new or modified insurance

products; and

(b) "Participating provider" means a provider that has entered into an agreement

with an insurer to provide health care services.

(2) Each insurer offering a health benefit plan shall establish procedures for changing

an existing agreement with a participating provider that shall include the

requirements of this section.

(3) If an insurer offering a health benefit plan ma kes any material change to an

agreement it has entered into with a participating provider for the provision of

health care services, the insurer shall provide the participating provider with at least

ninety (90) days' notice of the material change. The not ice of a material change

required under this section shall:

(a) Provide the proposed effective date of the change;

(b) Include a description of the material change;

(c) Include a statement that the participating provider has the option to either

accept or reject the proposed material change in accordance with this section;

(d) Provide the name, business address, telephone number, and electronic mail

address of a representative of the insurer to discuss the material change, if

requested by the participating provider;

(e) Provide notice of the opportunity for a meeting using real -time

communication to discuss the proposed changes if requested by the

participating provider. For purposes of this paragraph, "real -time

communication" means any mode of telecommunic ations in which all users

can exchange information instantly or with negligible latency and includes the

use of traditional telephone, mobile telephone, teleconferencing, and

videoconferencing. If requested by the provider, the opportunity to

communicate to discuss the proposed changes may occur via electronic mail

instead of real-time communication; and

(f) Provide notice that upon three (3) material changes in a twelve (12) month

period, the provider may request a copy of the contract with material change s

consolidated into it. Provision of the copy of the contract by the insurer shall

be for informational purposes only and shall have no effect on the terms and

conditions of the contract.

(4) If a material change relates to the participating provider's inc lusion in any new or

modified insurance products, or proposes changes to the participating provider's

membership networks:

(a) The material change shall only take effect upon the acceptance of the

participating provider, evidenced by a written signature; and

(b) The notice of the proposed material change shall be sent by certified mail,

return receipt requested.

(5) For any other material change not addressed in subsection (4) of this section:

(a) 1. The material change shall take effect on the date provided in the notice

unless the participating provider objects to the change in accordance

with this paragraph;

2. A participating provider who objects under this paragraph shall do so in

writing and the written protest shall be delivered to the insurer within

thirty (30) days of the participating provider's receipt of notice of the

proposed material change;

3. Within thirty (30) days following the insurer's receipt of the written

objection, the insurer an d the participating provider shall confer in an

effort to reach an agreement on the proposed change or any counter -

proposals offered by the participating provider; and

4. If the insurer and participating provider fail to reach an agreement

during the thirt y (30) day negotiation period described in subparagraph

3. of this paragraph, then thirty (30) days shall be allowed for the parties

to unwind their relationship, provide notice to patients and other affected

parties, and terminate the contract pursuant to its original terms; and

(b) The notice of proposed material change shall be sent in an orange -colored

envelope with the phrase "ATTENTION! CONTRACT AMENDMENT

ENCLOSED!" in no less than fourteen (14) point boldface Times New Roman

font printed on the front of the envelope. This color of envelope shall be used

for the sole purpose of communicating proposed material changes and shall

not be used for other types of communication from an insurer.

(6) If an insurer issuing a health benefit plan makes a change to an agreement that

changes an existing prior authorization, precertification, notification, or referral

program, or changes an edit program or specific edits, the insurer shall provide

notice of the change to the participating provider at least fifteen (15 ) days prior to

the change.

(7) Any notice required to be mailed pursuant to this section shall be sent to the

participating provider's point of contact, as set forth in the provider agreement. If no

point of contact is set forth in the provider agreement, the insurer shall send the

requisite notice to the provider's place of business addressed to the provider.