376.778.  Payment direct to public hospitals or clinics with or without assignment, when — provisions required in contracts. — 1.  As used in this section, the following words mean:

  (1)  "Assignment", authorization by an insured to pay health insurance benefits directly to the provider of services;

  (2)  "Claim", forms, bills, itemized charges and other documents required by an insurance company or health services corporation to pay benefits under a contract, and a notice that direct payment is demanded pursuant to this section;

  (3)  "Contract", an individual or group health insurance policy or contract providing coverage on an expense incurred basis issued by an insurance company or a health services corporation doing business in this state;

  (4)  "Insured", a person covered under a contract issued by an insurance company or health services corporation.

  2.  Every contract subject to this section shall contain a provision whereby the benefits payable thereunder to an insured shall be paid, with or without an assignment from the insured, to public hospitals or clinics for services and supplies provided to the insured if a proper claim is submitted by the public hospital or clinic.  No benefits shall be paid under this section to the public hospital or clinic if such benefits have been paid to the insured prior to receipt of the claim by the insurance company or health services corporation.  Payment to the public hospital or clinic of benefits pursuant to this section shall discharge the insurance company or health services corporation from all liability to the insured to the extent of the benefits so paid.  Nothing in this section shall be construed to require payment of benefits for the same services or supplies to both the insured and the public hospital or clinic.

  3.  This section shall apply to every contract issued, amended, or renewed after September 28, 1983, by an insurance company or a health services corporation doing business in this state.