Section 38A. (a) For the purposes of this section, the following words shall have the following meanings unless the context clearly requires otherwise:

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”Behavioral health services”, as defined in section 1 of chapter 175, or ”services”.

”Provider”, (i) a mental health clinic or substance use disorder treatment program licensed by the department of public health under chapters 17, 111, 111B or 111E; or (ii) a behavioral, substance use disorder or mental health professional who is licensed under chapter 112 and accredited or certified to provide services and who has provided services under an express or implied contract or with the expectation of receiving payment, other than co-payment, deductible or co-insurance, directly or indirectly from the division or managed care entity.

”Retroactive claims denial”, the denial of a previously paid claim for services that results in: (i) the requirement to repay the claim; (ii) the imposition of a reduction in other payments; or (iii) a withholding or affects future payments owed to a provider in order to recoup payment for the denied claim.

(b) The division or an entity with which the division contracts to provide or manage health insurance benefits, including mental health and substance use disorder services, shall not impose a retroactive claims denial for behavioral health services on a provider unless: (i) less than 12 months have elapsed from the time of submission of the claim by the provider to the division or other entity responsible for payment; (ii) the division or other entity has furnished the provider with a written explanation of the reason for the retroactive claims denial and, where applicable, a description of additional documentation or any other corrective action required for payment of the claim; and (iii) where applicable, the division or other entity responsible for payment allows the provider 30 days to submit additional documentation or to take any other corrective action required for payment of the claim.

(c) Notwithstanding subsection (b), a retroactive claims denial may be allowed after 12 months if: (i) the claim was submitted fraudulently; (ii) the claim payment is subject to adjustment due to expected payment from another payer other than the division or an entity with which the division contracts to provide or manage health insurance benefits, including mental health and substance use disorder services; (iii) the claim, or services for which the claim was submitted, is the subject of legal action; (iv) the claim payment was incorrect because the provider or the insured was already paid for the services identified in the claim; (v) the services identified in the claim were not delivered by the provider; or (vi) the services were not delivered in accordance with MassHealth regulations.

(d) If a retroactive claims denial is imposed under clause (ii) of subsection (c), the division or other entity shall notify the provider not less than 15 days before imposing the retroactive claims denial. The provider shall have 12 months from the date of denial to determine whether the claim is subject to payment by a secondary insurer; provided, however, that if the claim is denied by the secondary insurer due to the insured’s transfer or termination of coverage, the division shall allow for resubmission of the claim.