The amendment dramatically weakens the bill by gutting the dispute resolution process—it eliminates the 30-day advance notice requirement, the six-month refund period, the provider's ability to contest denials, and the mandatory Division of Insurance review process that previously protected providers. The revised version now allows health carriers to recoup claims within 18 months with minimal procedural protections, and it adds a carve-out excluding dental, pharmaceutical, and prescription drug services from coverage.
26.170.35 26.170.36 101st Legislative Session 1292 2026 South Dakota Legislature House Bill 1292 HOUSE COMMERCE AND ENERGY ENGROSSED Introduced by: Representative Heermann Underscores indicate new language. Overstrikes indicate deleted language. An Act to limit the ability of a health carrier to recoup, recover, or retroactively deny 1 previously paid claims. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That a NEW SECTION be added to chapter 58-17H: 4 Except as otherwise provided in this section, a previously paid claim may be 5 recouped, recovered, or retroactively denied by the health carrier only within eighteen 6 months 6 year from the date the claim payment was made, if the health carrier has provided 7 written 7 notice of the reason to the provider. This limitation does not apply to a previously 8 paid claim that: 8 9 (1) Was determined by the health carrier to have been submitted fraudulently; 9 fraudulently or to 10 involve waste or abuse; 11 (2) Is the subject of an adjustment with a different health carrier, administrator, or 10 12 payor, and the adjustment is not affected by a contractual relationship, association, 11 13 or affiliation involving claims payment, processing, or pricing; 12 14 (3) Was for medical services covered by casualty insurance, as defined by §§ 58-9-11 13 15 to 58-9-27, inclusive; 14 16 (4) Was for medical services covered by a self-insured health plan governed by the 15 17 Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 to 16 18 1461, inclusive (July 6, 2012); 17 19 (5) Was for medical services covered under medicare, 42 U.S.C. §§ 1395-1395lll, 18 20 inclusive (March 15, 2025), medicaid, 42 U.S.C. §§ 1396 to 1396w-6, inclusive 19 21 (July 4, 2025), or any other federal law; 20 22 (6) Was for medical services covered by workers' compensation, as provided for in title 21 23 62; or 22 24 (7) Was incorrect because the provider or the member was already paid for the medical 23 25 services identified in the claim. 24 26 26.170.36 2 1292 Underscores indicate new language. Overstrikes indicate deleted language. A violation of this section is subject to enforcement by the Division of Insurance 25 1 under title 58. 26 26.170.35 2 1292 Underscores indicate new language. Overstrikes indicate deleted language. For purposes of this section, "medical services," do not include dental services, 3 pharmaceutical services, or the provision of prescription drug products or supplies. 4 For purposes of this section, "retroactively deny a previously paid claim" means to 1 5 retroactively collect claim payments made to a provider by requiring repayment of the 2 6 payments, reducing other payments currently owed to the provider, withholding or setting 3 7 off against future payments, or reducing or affecting the future claim payments to the 4 8 provider in any other manner. 5 9 Section 2. That a NEW SECTION be added to chapter 58-17H: 6 A health carrier shall notify a provider, in writing, at least thirty days in advance of 7 retroactively denying a previously paid claim, as defined in section 1 of this Act. 8 The provider has six months from the date of notification under this section to 9 refund the claim payment at issue, unless the provider determines and notifies the health 10 carrier that an exception set forth in section 1 of this Act is applicable. 11 The health carrier has thirty days after receipt of the notice to respond in writing 12 to the provider. If the health carrier objects to the provider's determination, the health 13 carrier must state the basis for the objection. If the health carrier fails to respond to the 14 provider's determination within the time required, the matter is deemed to be resolved 15 and the carrier may take no additional action in furtherance of a claim denial. 16 If a dispute between the provider and the health carrier concerning the claim 17 payment at issue persists, either may, within thirty days of the provider's receipt of the 18 health carrier's response to the provider's determination, file with the Division of Insurance 19 a request for a mandatory review of the ongoing claim payment dispute. Upon receipt of 20 all necessary documentation, the division shall provide a recommendation for a resolution. 21 No legal action may be commenced during the pendency of the review. 22 Within thirty days after the division has submitted its recommendation to the health 23 carrier and the provider, either party may commence legal action for a resolution of the 24 dispute by a court of competent jurisdiction in this state. Nothing in this section preempts 25 or limits any other right or remedy available to a health carrier or provider under law, 26 except to the extent that such right or remedy is inconsistent with this section. 27 If legal action is not commenced as provided for in this section, the provider must 28 refund the claim payment at issue. 29 A payment remitted by the provider to the health carrier carrier, as provided for in section 11 1 of this Act, must be in the amount 30 originally paid by the carrier and may not include any 12 additional fees, penalties, or interest. 31 13 Section 3. This Act is applicable to claims for health care services, as defined in § 58-17H-1, 32 which are medical services provided on or after July 1, 14 2026. 33 15