SB291 Alabama 2016 Session

Summary

Primary Sponsor

Quinton Ross

Democrat

Session

Regular Session 2016

Title

Contracts, health care services, payment through Automated Clearing House (ACH) electronic fund transfers must be honored, language required in contract, Sec. 27-1-17.1 added

Summary

SB291 requires certain health care contracts to honor ACH payments requested by providers and allows other electronic payment methods.

What This Bill Does

For 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, the bill requires a specific clause stating that an ACH payment request must be honored. The clause also states that such a request cannot be used to delay or adversely affect the provider. The act also explicitly allows payments to be made by other electronic funds transfer methods, such as wire transfers or card payments, and provides definitions for key terms used in the law. The law becomes effective immediately after the Governor signs it.

Who It Affects

• Covered health care providers (such as physicians, dentists, chiropractors, optometrists, hospitals, and licensed health care facilities) who may request ACH payments and must be paid when requested.
• Health insurers, their contracted vendors, and regional care organizations, who must include the required ACH-honor language in applicable contracts and may use other EFT methods to pay providers.

Key Provisions

• Adds new Code section 27-1-17.1 requiring contracts issued, amended, or renewed after January 1, 2017 between health insurers, their contracted vendors, or regional care organizations and covered providers to include the mandated language.
• The mandated language, presented in bold uppercase type, states that an ACH EFT payment request must be honored and may not be used to delay or adversely affect the provider.
• Contracts may also use alternative electronic funds transfer methods (e.g., wire transfers or card payments) to pay providers.
• Defines terms: ACH electronic funds transfer, covered health care provider, health insurance plan, health insurer, and regional care organization.
• Effective date: immediately after the Governor signs the act; severability clause ensures remaining provisions stay in effect if any part is invalid.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Contracts