A Report from Families USA
October 1998
The Best From The States II: The Text of Key State HMO Consumer Protection Provisions
Table of Contents
Credits
Introduction
Emergency Room Services
Prudent Layperson
Continued Post Stabilization Care in the Emergency Room
Access to Providers
Adequacy of Provider Network
Referral to Out-of-Network Providers
Specialists Can Be Primary Care Providers under Specified Circumstances
Standing Referrals to Specialists
Direct Access to Qualified Specialists for Women's Health Services
Continuity of Care
When a Physician Leaves the Plan
When an Individual Joins a New Plan
Prescription Drugs
Access to Non-Formulary Prescription Drugs
Appeals Procedures
Explicit Time Frames for Internal Plan Appeals for Non-Urgent Care
Expedited Review for Emergency and Urgent Care Situations
Oral Complaints/Requests for Assistance Concerning Denials, Reductions, and Terminations of Care Trigger the Appeals Process
Internal Review Made by Clinical Peers Who Were Not Associated with the Original Decision
Denial Notices
External Review by Qualified Independent Decision Maker
State-Funded, Independent Consumer Assistance Programs
Establishment of an Independent Consumer Assistant Program that Provides Education and Counseling and Assists with Appeals
Patient-Provider Relationship
Disclosure of Treatment Options and Provider Advocacy
Prohibiting Physician Financial Incentives
Plans Cannot Discriminate against Providers with High-Cost Patients
Provider Protections for Disclosure to Regulators of Health Plan Problems
Clinical Trials
Right to Participate in a Clinical Trial
Liability
Right of Members to Sue Health Plans
Utilization Review (UR)
Strict Time Frames for Making UR Decisions and Expedited Review for Urgent Care
Utilization Review Denials Made by Clinical Peers
Development and Application of UR Clinical Guidelines
Clinical Guidelines upon Which UR Decisions Are Based Must Be Available upon Request
Confidentiality
Quality Assurance
Information
Appendix: How to Order HMO Legislation
Over the past few years, states have enacted or promulgated a number of state consumer protection laws and regulations. This report looks at a variety of key consumer protection issues and provides the actual text from strong state laws and regulations addressing these issues.
For each of these protections, the report briefly discusses key issues and then excerpts provisions from state laws (legislation and regulations) addressing the issues raised. Thus, the report is an attempt to provide strong language based on what the states have done to protect managed care consumers.
The laws excerpted were not chosen based on any scientific assessment. They were chosen, however, based on a reading of all state HMO laws and regulations and an assessment of which provisions of law seemed to offer strong consumer protections. Other advocates might have chosen provisions of other laws. In a number of instances, several states' laws had similar provisions. In these cases, only one illustrative state's law was excerpted. In other instances, states had different, but often equally strong, consumer protection provisions. With few exceptions, because of space limitations, only one state's laws were excerpted.
All excerpted provisions were from laws and regulations in effect.
Although the report largely cites from states' HMO legislation, in a few instances the regulations are cited. The details of consumer protection laws can be found in both statute and regulations. Some states choose to put detailed protections in legislation rather than leave specifics to the state HMO regulatory agency. For example, New York's 1996 legislation contains detailed consumer protections of the type that are often found in regulation. However, some state legislatures may be unwilling to put the level of detail in statute, leaving it to the Commissioner of Insurance or Health to flesh out the details.
Families USA recognizes that advocates might want to see the entire laws from some states. The appendix at the end of this report lists the phone numbers of the 50 state offices where bills can be ordered. In addition, many state legislatures maintain internet web sites from which users can download actual proposed and enacted legislation. These sites permit users to search by topic (e.g., health care). The National Conference of State Legislatures also has a web site from which users can link up to the different state sites.
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State Legislation To clear up the confusion about emergency room coverage, to ensure that consumers use the emergency room during critical and life-threatening situations, and to make it possible for emergency patients to receive continued care post-stabilization, states have passed a variety of laws related to emergency room access.
Prudent Layperson - More than three-fifths of the states have passed laws requiring health plans to pay for emergency care based on a "prudent layperson" standard. This standard is met when a "prudent" or "reasonable" layperson, with an average knowledge of medical care, is experiencing the sudden onset of symptoms (including pain) so severe that he or she could reasonably believe his or her health would be in serious jeopardy without medical treatment. With this law in place, enrollees who reasonably believe their life or their health to be in serious and immediate danger can go to an emergency room and know that their health plans are required to cover screening and needed care. Georgia's statute is exemplary of the prudent layperson legislation enacted in many states.
Some states have passed legislation prohibiting health plans from requiring members to get a prior authorization before emergency care is provided. Although prohibition of prior authorization is an important consumer protection, the prudent layperson standard encompasses this requirement and goes further. Georgia's law, Ga. Code Ann. § 31-11-82 (Supp. 1998), reads as follows:
(a) Once a person with an emergency condition presents himself or herself to an emergency medical provider for emergency services, that person shall be evaluated by medical personnel. This evaluation may include diagnostic testing to assess the extent of the condition, sickness, or injury if such testing is appropriate to stabilize the patient's condition. For purposes of this Code section, the term "emergency medical provider" includes without limitation an emergency services provider.
(b) If in the opinion of the attending physician the evaluation provided under subsection (a) of this Code section warrants, he or she may initiate appropriate intervention to stabilize the condition of the patient without seeking or receiving prospective authorization by an insurer, a health maintenance organization, or a private health benefit plan. No insurer, health maintenance organization, or private health benefit plan may subsequently deny payment for an evaluation, diagnostic testing, or treatment provided as part of such intervention for an emergency condition.
Georgia's statute Ga. Code Ann. § 31-11-81 (Supp. 1998), defines an emergency condition as follows:
"Emergency condition" means any medical condition of a recent onset and severity, including but not limited to severe pain that would lead a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could result in:
(A) Placing the patient's health in serious jeopardy;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
Continued Post-Stabilization Care in the Emergency Room- Some states require that plan personnel be available 24 hours a day to handle requests for continued care following stabilization of the patient. Some states require plans to respond to all requests within a specified time period or the request for continued care will be automatically approved. Arizona's law, for example, establishes a procedure for ensuring that emergency patients receive follow-up care. Arizona's law, Ariz. Rev. Stat. Ann. § 20-2803 (West 1998), reads as follows:
(H) If within a reasonable period of time after receiving a request from a hospital emergency department for a specialty consultation a health care services plan fails to identify an appropriate specialist who is available and willing to assume the care of the enrollee, the emergency department may arrange for medically necessary emergency services by any appropriate specialist, and the plan shall not deny coverage for these services due to lack of prior authorization. A health care services plan shall not require prior authorization for specialty care.
Texas, which contains a strong protection, goes further: Texas requires plans to have a procedure for ensuring follow-up specialty care in a hospital emergency department. In Texas, approval or denial of care must occur within an appropriate time, but in no case should the decision take more than one hour. Texas' law, 25 Tex. Admin. Code § 191:52) (Supp. 1997), reads as follows:
Services originating in a hospital emergency department following treatment of stabilization of an emergency medical or dental condition as approved by the HMO. . . This provision must require the HMO to approve or deny coverage of post-stabilization care as requested by a treating physician, dentist or other provider within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient but in no case to exceed one hour. The HMO must respond to inquiries from the treating physician, dentist or other provider in compliance with this provision in the HMO's health care plan.
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State Legislation: In an effort to improve patient access to providers, states have enacted a number of consumer protections requiring plans to have adequate networks of providers, to refer outside the plan when they don't, and to ease access to specialty care.
Adequacy of Provider Network- Some states have passed laws that require plans to have sufficient providers or allow enrollees to go out-of-network for their health care. While some states have adopted vague language requiring plans to provide reasonable access, Maine is an example of a state that goes further. Maine regulations require plans to obtain the state's approval of a detailed plan for how they will ensure adequate access to providers for plan members. Maine's regulations, Code Me. R. Ch. 850, § 7(A)(1997), read as follows:
In addition to the requirements of Title 24-A, Chapter 56 and Bureau of Insurance Rule 191, a carrier operating as a health maintenance organization, as defined by 24-A M.R.S.A. § 4202-A (10), is subject to the requirements of this Section.
A. Access Plan.
In addition to the requirements of 24-A M.R.S.A. Section 4203(3) and Bureau of Insurance Rule Chapter 191 Section 6, an application for an HMO certificate of authority shall include an Access Plan. All HMOs licensed prior to the effective date of this rule must, within 6 months of the effective date of this rule, file an Access Plan for approval by the Superintendent utilizing current information. Access Plans shall, in their approved form, be fully implemented. Failure of an HMO to obtain approval of its Access Plan or to implement an approved Plan shall be ground for suspension or revocation of its certificate of authority. HMOs shall, consistent with the requirements of Section 10 of this Rule, file annual Access Plan information updates reflecting any changes to previously filed information, except that consistent with the requirements of Title 24-A M.R.S.A. §4204(8), the net loss of 5 or more primary care physicians in any county in any 30-day period must be reported within 10 days. Updated Access Plans need not be refiled in their entirety so long as updated information filed indicates the section of the originally filed Plan being updated. Access Plans must include:
1) The HMO's current enrollment in this state and projected annual enrollment for the two calendar years following the date the Plan was originally filed or updated, as applicable.
a) Current and projected enrollment shall be provided in the form of a table setting for the number of enrollees by county of residence.
2) A description of the proposed provider network including:
a) A current list of all providers and facilities and a twelve month average percentage of physicians in the network with open practices;
b) If health care services are to be provided by salaried health care professionals employed by the HMO, a description of the services to be provided;
c) The projected ratio of specialty and primary care providers to enrollees by county;
d) Written standards for access to basic health care services addressing the requirements of subsections B-F of this section;
e) A description of the HMO's basis for determining that the network is sufficient to meet basic health care services. The description must describe how enrollees with special needs will be identified, and what criteria will be used for this determination;
f) A map subdivided by town indicating the geographic distribution by service location of primary care and specialty providers and contracted facilities in the HMO's service area, each category of provider and facility to be separately identified; and,
g) Correlative data to support all requisite maps.
3) A description of the HMO's physician and health professional recruitment plan.
4) A description of the HMO's plan for providing services for rural and underserved populations and for developing relationships with essential community providers.
5) A description of the HMO's strategy to identify and address language and literacy barriers to accessing needed services:
B. Basic Health Care Services
1) Basic health care services include, at a minimum, the health care services required to be included in HMO Basic Plans pursuant to Bureau of Insurance Rule Chapter 750, and all statutorily mandated benefits applicable to HMOs.
2) To the extent reasonably possible, HMOs shall maintain a minimum ratio of one full-time equivalent primary care provider to 2000 enrollees.
3) HMOs must provide coverage enabling enrollee access to medically necessary emergency and urgent services at all times. Primary care and, to the extent reasonably possible, specialty physician services shall be available and accessible twenty-four hours a day, seven days a week within the HMO's service area.
4) HMOs shall contract with or employ sufficient numbers of appropriately licensed providers of ancillary services.
5) HMOs shall contract with an adequate number of primary care providers and specialty physicians with hospital admitting privileges at one or more participating general hospitals within the HMO's service area to provide enrollees timely access to necessary admissions consistent with generally accepted practice parameters.
6) In any case where the HMO has an insufficient number or type of participating providers to provide a covered benefit, the health carrier shall ensure that the covered person obtains the covered benefit at no greater cost to the covered person than if the benefit were obtained from participating providers, or shall make other arrangements acceptable to the Superintendent.
Referral to Out-of-Network Providers - Nearly one-third of the states have passed laws that explicitly require health plans to refer outside of the plan's network when the plan does not have accessible and appropriate network providers available to meet an enrollee's medical needs. States may have qualifications on the payment amount or on who must approve the referral. Colorado's law, 1998 Colo. Sess. Laws, ch. 238, § 10-16-704(2), reads as follows:
In any case where the carrier has no participating providers to provide a covered benefit, the carrier shall arrange for a referral to a provider with the necessary expertise and ensure that the covered person obtains the covered benefit at no greater cost to the covered person than if the benefit were obtained from participating providers.
Specialists Can Be Primary Care Providers under Specified Circumstances - One out of five states has enacted laws requiring plans to allow enrollees with chronic, disabling, or life-threatening conditions to use specialists as their primary care provider. This protection not only makes it easier for enrollees with disabilities or chronic conditions to see their specialty provider, it also reduces the number of unnecessary visits to the primary care provider.New York's law, N.Y. Pub. Health Law § 4804(c) (McKinney Supp. 1998), reads as follows:
(c) An insurer shall have a procedure by which a new insured upon enrollment in a managed care product, or an insured in a managed care product upon diagnosis, with (1) a life-threatening condition or disease or (2) a degenerative and disabling condition or disease, either of which requires specialized medical care over a prolonged period of time, may receive a referral to a specialist with expertise in treating the life-threatening or degenerative and disabling disease or condition who shall be responsible for and capable of providing and coordinating the insured's primary and specialty care. If the insurer, or primary care provider in consultation with the insurer and the specialist, if any, determines that the insured's care would most appropriately be coordinated by such a specialist, the insurer shall refer the insured to such specialist. In no event shall an insurer be required to permit an insured to elect to have a non-participating specialist, except pursuant to the provisions of subsection (a) of this section. Such referral shall be pursuant to a treatment plan approved by the insurer, in consultation with the primary care provider if appropriate, the specialist, and the insured or the insured's designee. Such specialist shall be permitted to treat the insured without a referral from the insured's primary care provider and may authorize such referrals, procedures, tests and other medical services as the insured's primary care provider would otherwise be permitted to provide or authorize, subject to the terms of the treatment plan. If an insurer refers an insured to a non-participating provider, services provided pursuant to the approved treatment plan shall be provided at no additional cost to the insured beyond what the insured would otherwise pay for services received within the network.
Standing Referrals to Specialists - Almost one out of four states has passed laws requiring managed care plans, when appropriate, to allow a primary care provider to authorize a referral to a specialist for more than one visit without having to obtain the plan's approval for subsequent visits. Ohio's law, Ohio Rev. Code Ann. § 1753.14(A) (Anderson Supp. 1997), reads as follows:
A health insuring corporation that does not allow direct access to all specialists shall establish and implement a procedure by which an enrollee may receive a standing referral to a specialist. The procedure shall provide for a standing referral to a specialist if a primary care provider determines in consultation with a specialist that an enrollee needs continuing care from a specialist. The referral shall be made pursuant to a treatment plan approved by the health insuring corporation in consultation with the primary care provider, a specialist, and the enrollee. The treatment plan may limit the number of visits to the specialist, limit the period of time that the visits are authorized, or require that the specialist provide the primary care provider with regular reports on the health care provided to the enrollee.
Direct Access to Qualified Specialists for Women's Health Services- Three out of five states have passed laws allowing women at least limited direct access to an obstetrician-gynecologist (ob-gyn) without first obtaining a referral from a primary care physician. While the state laws vary, each gives women direct access to ob-gyns or other women's health providers, such as nurse midwives, for their annual visit. Some of these laws require plans to permit qualified ob-gyns to serve as primary care physicians; others allow unlimited access, or access for routine gynecological and pregnancy services only, without a referral. Alabama's law, Ala. Code § 27-49-4 (Supp. 1997), reads as follows:
(a) Each health benefit plan which is issued, delivered, issued for delivery, or renewed in this state on or after October 1, 1996, shall allow obstetricians and gynecologists as primary care physicians. This subsection shall not be construed to require an individual obstetrician or gynecologist to accept primary care physician status if the obstetrician or gynecologist does not wish to be designated as a primary care physician, nor to interfere with the credentialing and other selection criteria usually applied by a health benefit plan with respect to other physicians within its network.
(b) For women not using an obstetrician or gynecologist as their primary care physician, no health benefit plan which is issued, delivered, issued for delivery, or renewed in this state on or after October 1, 1996, shall require as a condition to the coverage of the services of a participating obstetrician or a participating gynecologist that an enrollee, subscriber, or insured first obtain a referral from another primary care physician, it being the intent of this subsection that a woman shall at all times have direct access to the services of a participating obstetrician or a participating gynecologist, or both, under any health benefit plan; provided, however, that the service covered by this subsection shall be limited to those services defined by the published recommendations of the Accreditation Council For Graduate Medical Education for training as an obstetrician or gynecologist, including, but not limited to, diagnosis, treatment and referral.
New Mexico's regulation allows direct access to a wider range of women's health providers. New Mexico's 13 NMAC. 10.13.9.7.8 and 10.13.9.7.9 (3-16-97),reads as follows:
9.7.8 The services for which an enrollee may self-refer are limited to those services defined by the published recommendations of the Accreditation Council For Graduate Medical Education for training as an obstetrician or gynecologist.
9.7.9 As used in this section, "women's health care providers" means obstetricians-gynecologists, family practitioners, certified nurse-midwives, other physicians specializing in women's health, and physician assistants or certified nurse practitioners specializing in women's health. A MHCP may also make licensed midwives available to female enrollees for prenatal care and delivery. The MHCP may assure that those providers who seek to provide the services described in 13 NMAC 10.13.9.7.8 who are not obstetricians-gynecologists or who are not practicing under the supervision of obstetricians-gynecologists have the requisite background
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State Legislation: To assure that patients who are undergoing a continuous course of treatment do not have that treatment unnecessarily interrupted, some states have adopted laws promoting continuity of care.
When a Physician Leaves the Plan - More than one-fourth of the states have passed laws requiring plans to continue paying for treatment provided by primary care or specialty providers whose contracts are not renewed for reasons other than quality of care. These laws usually apply where continuity of care is medically necessary for enrollees with life-threatening diseases or conditions, degenerative and disabling diseases or conditions, or acute conditions. Most of these state laws specify a minimum number of days plans must provide such transitional care. New Jersey has one of the longest transitions, 120 days. New Jersey's regulations, N.J. Admin. Code tit. 8, § 38-3.5(a)(4) (1997), read as follows:
(a) The HMO shall establish a policy governing termination of providers. The policy shall include at least: . . .
4. Assurance of continued coverage of services at the contract price by a terminated provider for up to 120 calendar days in cases where it is medically necessary for the member to continue treatment with the terminated provider. In cases of the pregnancy of a member, medical necessity shall be deemed to have been demonstrated and coverage of services by the terminated provider shall continue to the postpartum evaluation of the member, up to six weeks after delivery. The policy shall clearly state that the determination as to the medical necessity of a member's continued treatment with a terminated provider shall be subject to the appeal procedures set forth at N.J.A.C. 8:38-8.5 through 8.7.
New York requires that women in their second trimester be allowed to continue through the pregnancy and post-partum care with a doctor who has left a plan.New York's law, N.Y. Pub. Health Law § 4804(e) (McKinney Supp. 1998), reads as follows:
(e) (1) If an insured's health care provider leaves the insurer's in-network benefits portion of its network of providers for a managed care product for reasons other than those for which the provider would not be eligible to receive a hearing pursuant to paragraph one of subsection (b) of section forty-eight hundred three of this chapter, the insurer shall permit the insured to continue an ongoing course of treatment with the insured's current health care provider during a transitional period of (i) up to ninety days from the date of notice to the insured of the provider's disaffiliation from the insurer's network; or (ii) if the insured has entered the second trimester of pregnancy at the time of the provider's disaffiliation, for a transitional period that includes the provision of post-partum care directly related to the delivery.
(2) Notwithstanding the provisions of paragraph one of this subsection, such care shall be authorized by the insurer during the transitional period only if the health care provider agrees (i) to continue to accept reimbursement from the insurer at the rates applicable prior to the start of the transitional period as payment in full; (ii) to adhere to the insurer's quality assurance requirements and to provide to the insurer necessary medical information related to such care; and (iii) to otherwise adhere to the insurer's policies and procedures including, but not limited to procedures regarding referrals and obtaining pre-authorization and a treatment plan approved by the insurer.
When an Individual Joins a New Plan - A few states require plans to permit new enrollees to continue seeing their previous providers for up to 60 days if the enrollees have a life-threatening, degenerative, or disabling disease or condition or an acute condition. A few states allow a pregnant woman to continue seeing her doctor. New York's law,N.Y. Pub. Health Law § 4804(f) (McKinney Supp. 1998), reads as follows:
(f) If a new insured whose health care provider is not a member of the insurer's in-network benefits portion of the provider network enrolls in the managed care product, the insurer shall permit the insured to continue an ongoing course of treatment with the insured's current health care provider during a transitional period of up to sixty days from the effective date of enrollment, if (1) the insured has a life-threatening disease or condition or a degenerative and disabling disease or condition or (2) the insured has entered the second trimester of pregnancy at the time of enrollment, in which case the transitional period shall include the provision of post-partum care directly related to the delivery. If an insured elects to continue to receive care from such health care provider pursuant to this paragraph, such care shall be authorized by the insurer for the transitional period only if the health care provider agrees (A) to accept reimbursement from the insurer at rates established by the insurer as payment in full, which rates shall be no more than the level of reimbursement applicable to similar providers within the in-network benefits portion of the insurer's network for such services; (B) to adhere to the insurer's quality assurance requirements and agrees to provide to the insurer necessary medical information related to such care; and (C) to otherwise adhere to the insurer's policies and procedures including, but not limited to procedures regarding referrals and obtaining pre-authorization and a treatment plan approved by the insurer. In no event shall this subsection be construed to require an insurer to provide coverage for benefits not otherwise covered or to diminish or impair pre-existing condition limitations contained within the insured's contract.
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State Legislation In an effort to improve consumer access to needed drugs, a few states have passed legislation requiring health plans to allow access to non-formulary prescription drugs in specific circumstances.
Access to Non-Formulary Prescription Drugs - Nearly one out of six states has passed laws requiring plans to allow enrollees to obtain non-formulary prescription drugs without financial penalty when the formulary equivalent is ineffective or when the formulary drug causes, or could reasonably be expected to cause, an adverse or harmful reaction. Arkansas' law, Ark. Code Ann. § 23-99-409 (Michie Supp. 1997), reads as follows:
Prescription Drug Formulary. When a health care insurer uses a formulary for prescription drugs, such insurer shall include a written procedure whereby covered persons can obtain, without penalty and in a timely fashion, specific drugs and medications not included in the formulary when: (1) the formulary's equivalent has been ineffective in the treatment of the covered person's disease or condition; or (2) the formulary's drug causes or is reasonably expected to cause adverse or harmful reactions in the covered person.
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State Legislation States have taken a number of steps to establish appeal rights for patients wishing to contest denials, delays, and reductions of care as well as health plan refusals to pay for care.
Explicit Time Frames for Internal Plan Appeals for Non-Urgent Care - While some state laws have very general language requiring plans to develop an appeals process, other states go further and establish a specific time frame for decisions on appeals. Some of the laws establish long appeals time frames or allow decisions to be made on explicit time frames after all paperwork regarding the appeal has been received. The more protective laws require plans to respond to appeals for non-urgent care within a specified time frame, such as 30 days. Texas' law, Tex. Ins. Code Ann. art. 20A.11B (West Supp. 1998), reads as follows:
The total time for acknowledgment, investigation, and resolution of the complaint by the health maintenance organization may not exceed 30 calendar days after the date the health maintenance organization receives the written complaint or a one-page complaint form from the complainant.
Expedited Review for Emergency and Urgent Care Situations - Most states have passed laws that require health plans to have an expedited appeals process for emergency and urgent care situations. States vary in the specificity of their time frames. Some vaguely refer to the need for expedited review. Others require plans to respond to urgent care appeals within two business days or 72 hours.Nevada's law, Nev. Rev. Stat. Ann. § 695G.210 (Michie Supp. 1997), reads as follows:
If a complaint involves an imminent and serious threat to the health of the insured, the managed care organization shall inform the insured immediately of his right to an expedited review of his complaint. If an expedited review is required, the review board shall notify the insured in writing of its determination within 72 hours after the complaint is filed.
Maryland's law, 1998 Md. Laws, 111 (S.B. 401 § 15-10A-02(B)(2)(II)), which goes further, reads as follows:
. . . An internal grievance process established by a carrier under this section shall:
(I) Include an expedited procedure for use in an emergency case for purposes of rendering a grievance decision within 24 hours of the date a grievance is filed with the carrier.
Oral Complaints/Requests for Assistance Concerning Denials, Reductions, and Terminations of Care Trigger the Appeals Process - Some states have passed laws requiring plans to treat oral complaints regarding denials, reductions, and terminations of care as triggers of the appeals process. Other states require plans to have a procedure to accept oral complaints, but only for expedited appeals.Indiana's law, Ind. Code § 13-10-5 (Supp. 1998), reads as follows:
(a) An enrollee or a subscriber may file a grievance orally or in writing.
(b) A health maintenance organization shall make available to enrollees and subscribers a toll free telephone number through which grievances may be filed. The toll free number must:
(1) be staffed by a qualified representative of the health maintenance organization;
(2) be available for at least forty (40) normal business hours per week; and
(3) accept grievances in the languages of the major population groups served.
(c) A grievance is considered to be filed on the first date it is received, either by telephone or in writing.
Internal Review Made by Clinical Peers Who Were Not Associated with the Original Decision - To reduce any biases on the part of the health plan during the appeals process, some states have passed laws requiring that reviewers be medical doctors who: (1) have expertise in the clinical area being reviewed, and (2) were not involved in the original decision resulting in the appeal. Virginia's law, Va. Code Ann. § 32.1-137.15 (Supp. 1998), reads as follows:
Any case under appeal shall be reviewed by a peer of the treating health care provider who proposes the care under review or who was primarily responsible for the care under review. With the exception of expedited appeals, a physician advisor who reviews cases under appeal must be a peer of the treating health care provider, must be board certified or board eligible, and must be specialized in a discipline pertinent to the issue under review. A physician advisor or peer of the treating health care provider who renders a decision on appeal shall; (i) not have participated in the adverse decision or any prior reconsideration thereof; (ii) not be employed by or a director of the utilization review entity; and (iii) be licensed to practice in Virginia, or under a comparable licensing law of a state of the United States, as a peer of the treating health care provider.
Denial Notices - Most states require plans to provide written notice when a service is denied, reduced, or terminated. The notice must include the reason(s) for the denial of care and provide information on how to appeal the decision.Maine's regulation, Code Me. R., Ch. 850, § 9, subsection C(1)(b) (1998), reads as follows:
If the decision is adverse to the covered person, the written decision shall contain:
The names, titles and qualifying credentials of the person or persons participating in the first level grievance review process (the reviewers).
A statement of the reviewers' understanding of the covered person's grievance and all pertinent facts.
The reviewers' decision in clear terms and the basis for the decision.
A reference to the evidence or documentation used as the basis for the decision.
Notice of the covered person's right to contact the Superintendent's office. The notice shall contain the toll free telephone number and address of the Bureau of Insurance.
A description of the process to obtain a second level grievance review of a decision, the procedures and time frames governing a second level grievance review, and the rights specified in subsection D(3)(c). This requirement does not apply to carriers who do not subject benefit determinations to utilization review and do not offer managed care plans as defined by this rule.
External Review by Qualified Independent Decision Maker - Almost one out of three states has passed laws that permit enrollees to appeal a plan's adverse decision on an appeal to an independent review entity that is external to the managed care plan and has the medical expertise needed to decide the appeal. Some of the state laws require plans to pay the costs associated with such an external appeal and explicitly make the external appeal decision binding on the health plan. State laws differ considerably in specificity. Some make simple references to an outside appeals process while others provide significant details on the review process, the types of appeals eligible for review, and the process for appointing the independent review entity or the independent reviewers. Vermont's law, Vt. Stat. Ann. tit. 8, § 4089f (Supp. 1998), reads as follows:
INDEPENDENT EXTERNAL REVIEW OF HEALTH CARE SERVICE DECISIONS
(A) For the purpose of this section,
(1) "Health Benefit Plan" means a policy, contract, certificate or agreement entered into, offered or issued by a health insurer as defined in 18 V.S.A. section 9402 (7), to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services.
(2) "Insured" means the beneficiary of a health benefit plan, including the subscriber and all others covered under the plan.
(B) An insured who has exhausted all applicable internal review procedures provided by the health benefit plan shall have the right to an independent external review of a decision under a health benefit plan to deny, reduce or terminate health care coverage or to deny payment for a health care service. The independent review shall be available when requested in writing by the affected insured, provided the decision to be reviewed requires the plan to expend at least $100.00 for the service and the decision by the plan is based on one of the following reasons:
(1) The health care service is a covered benefit that the health insurer has determined to be not medically necessary.
(2) A limitation is placed on the selection of a health care provider that is claimed by the insured to be inconsistent with limits imposed by the health benefit plan and any applicable laws and regulations.
(3) The health care treatment has been determined to be experimental, investigational or an off-label drug.
(4) The health care service involves a medically-based decision that a condition is preexisting.
(C) The right to review under this section shall not be construed to change the terms of coverage under a health benefit plan.
(D) The department shall adopt rules necessary to carry out the purposes of this section. The rules shall ensure that the independent external reviews have the following characteristics:
(1) The independent external reviews shall be conducted,
(a) By independent review organizations pursuant to a contract with the department, and the reviewers shall include health care providers credentialed with respect to the health care service under review and have no conflict of interest relating to the performance of their duties under this section.
(b) In accordance with standards of decision-making based on objective clinical evidence and shall resolve all issues in a timely manner and provide expedited resolution when the decision relates to emergency or urgent health care services.
(2) An insured shall:
(a) Be provided with adequate notice of their review rights under this section.
(b) Have the right to use outside assistance during the review process and to submit evidence relating to the health care service.
(c) Pay a filing fee in an amount that reflects the administrative costs of processing a request for review under this section, which shall not be more than $25.00. The filing fee may be waived or reduced based on a determination by the commissioner that the financial circumstances of the insured warrant a waiver or reduction.
(d) Be protected from retaliation for exercising their right to an independent external review under this section.
(3) Other costs of the independent review shall be paid by the health benefit plan.
(4) The independent review organization shall issue to both parties a written review decision that is evidence-based. The decision shall be binding on the health benefit plan.
(5) The confidentiality of any health care information acquired or provided to the independent review organization shall be maintained in compliance with any applicable state or federal laws.
(6) The records of, and internal materials prepared for specific reviews by any independent review organization under this section shall be exempt from public disclosure under 1V.S.A. Section 316.
(E) Decisions relating to health care services for mental health and substance abuse conditions shall not be reviewed under this section, but shall be reviewed by the procedure provided in section 4089A of this title.
(F) Decisions relating to the following health care services shall not be reviewed under this section, but shall be reviewed by the review process provided by law:
(1) Health care services provided by the Vermont medicaid program or medicaid benefits provided through a contracted health plan.
(2) Health care services provided to inmates by the department of corrections.
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State Legislation: The establishment of independent health care consumer assistance programs for people with private insurance is a new frontier.
Establishment of an Independent Consumer Assistance Program that Provides Education and Counseling and Assists Enrollees with Appeals - In response to consumers' need for more information, two states have passed laws establishing independent consumer assistance programs. Florida established an independent agency, but the program has no funding and operates only with volunteers. Florida's law, Fla. Stat. Ch. 641.60(2) (1998), reads as follows:
(2) There is created within the Agency for Health Care Administration a Statewide Managed Care Ombudsman Committee. The statewide committee shall act as a consumer protection and advocacy organization on behalf of all health care consumers receiving services through managed care programs in the state. The statewide committee shall work in conjunction with the agency in protecting the public health, safety, and welfare, as provided under this section and ss. 641.65, 641.70, and 641.75. The statewide committee shall have administrative authority over the district committees established in s. 641.65.
(3) The statewide committee shall consist of the chairpersons of the district committees.
(4) The members of the statewide committee shall elect a chairperson to a term of 1 year. A person may not serve as chairperson for more than two consecutive terms.
(5) (a) Members of the statewide committee shall receive no compensation, but may be reimbursed for travel expenses in accordance with s. 112.061.
(b) Travel expenses for the statewide committee shall be funded from the Health Maintenance Organization Trust Fund, created by s. 641.57. The statewide committee may solicit grants, gifts, donations, bequests, or other payments including money, property, or services from any governmental or public entity or private entity or person to fund other expenses of the committee and the district committees. Any such moneys received shall be deposited into a trust fund administered by the agency.
(6) The statewide committee or a member of the committee:
(a) Shall serve as a volunteer organization to protect the rights of all enrollees participating in managed care programs in this state.
(b) Shall receive complaints regarding quality of care from the agency, and may assist the agency with the investigation and resolution of complaints.
(c) May conduct site visits with the agency, as the agency determines is appropriate.
(d) May review existing and new or revised managed care quality assurance programs of the agency and make recommendations as to how the rights of managed care enrollees are affected by such programs.
(e) May submit a report to the Legislature, no later than January 1, as appropriate, concerning activities, recommendations, and complaints reviewed or developed by the statewide committee and district committees during the preceding year.
(f) Shall conduct meetings at least two times a year at the call of the chairperson and at other times at the call of the agency director or by written request of three members.
(g Shall adopt agency guidelines to carry out its purposes and responsibilities and those of the district committees.
(h) Shall monitor the district committees and provide technical assistance to members of district committees.
Vermont, in 1998, became the first state to enact an independent consumer assistance program by requiring the state to contract with a nonprofit organization that will fulfill this function. Vermont's law, Vt. Stat. Ann. tit. 8, § 4089j (1998), reads as follows:
OFFICE OF HEALTH CARE OMBUDSMAN
(a) The department shall establish the office of the health care ombudsman by contract with any nonprofit organization. The office shall be administered by the state health care ombudsman, who shall be an individual with expertise and experience in the fields of health care and advocacy.
(b) The health care ombudsman office shall:
(1) Assist health insurance consumers with health insurance plan selection by providing information, referral and assistance to individuals about means of obtaining health insurance coverage and services.
(2) Assist health insurance consumers to understand their rights and responsibilities under health insurance plans.
(3) Provide information to the public, agencies, legislators and others regarding problems and concerns of health insurance consumers and shall make recommendations for resolving those problems and concerns.
(4) Identify, investigate and resolve complaints on behalf of individual health insurance consumers and assist those consumers with the filing and pursuit of complaints and appeals.
(5) Analyze and monitor the development and implementation of federal, state and local laws, regulations and policies relating to health insurance consumers, and recommend changes it deems necessary.
(6) Facilitate public comment on laws, regulations and policies, including policies and actions of health insurers.
(7) Promote the development of citizen and consumer organizations.
(8) Ensure that health insurance consumers have timely access to the services provided by the office.
(9) Submit to the general assembly and to the governor on or before January 1 of each year a report on the activities, performances and fiscal accounts of the office during the preceding year.
(c) The state healthcare ombudsman may:
(1) Hire or contract with persons to fulfill the purposes of this subchapter
(2) Review the health insurance records of a consumer who has provided written consent. Based on the written consent of the consumer or the consumer's guardian or legal representative, a health insurer shall provide the state ombudsman access to records relating to that consumer.
(3) Pursue administrative, judicial and other remedies on behalf of any individual health insurance consumer or group of consumers.
(4) Delegate to employees and contractors of the ombudsman any part of the state ombudsman's authority.
(5) Adopt policies and procedures necessary to carry out the provisions of this subchapter.
(6) Take any other actions necessary to fulfil [sic] the purposes of this subchapter.
(d) All state agencies shall comply with reasonable requests from the state ombudsman for information and assistance. The department may adopt rules necessary to assure the cooperation of state agencies under this subsection.
(e) In the absence of written consent by a complainant or an individual utilizing the services of the office, or his or her guardian or legal representative, or court order, the state ombudsman, its employees and contractors, shall not disclose the identity of the complainant or individual.
(f) The state ombudsman, its employees and contractors shall not have any conflict of interest relating to the performance of their responsibilities under this subchapter. For the purposes of this section, a conflict of interest exists whenever the state ombudsman, its employees, contractors or a person affiliated with the state ombudsman, its employees and contractors:
(1) have direct involvement in the licensing, certification, or accreditation of a health care facility, health insurer, or a health care provider;
(2) have direct ownership interest or investment interest in a health care facility, health insurer, or a health care provider;
(3) are employed by, or participating in the management of a health care facility, health insurer, or a health care provider; or
(4) receive or have the right to receive, directly or indirectly, remuneration under a compensation arrangement with a health care facility, health insurer or health care provider.
(g) The state ombudsman shall be able to speak on behalf of the interests of health care and health insurance consumers and to carry out all duties prescribed in this subchapter without being subject to any disciplinary or retaliatory action. Nothing in this subsection shall limit the authority of personnel or other action. Nothing in this subsection shall limit the authority of the commissioner to enforce the terms of the contract.
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HEALTH CARE OMBUDSMAN IMPLEMENTION REPORT
The commissioner of banking insurance, securities and health care administration and the health care ombudsman shall report to the joint fiscal committee and the health access oversight committee on or before September 15, 1998, and periodically thereafter during 1998 at the request of either committee. The report shall provide the committees with an update on the status of implementation of the health care ombudsman program, together with a description of the manner in which the health care ombudsman is, and will in the future be coordinating his or her activities with existing ombudsman programs such as the Vermont health access plan ombudsman, and the Vermont long term care ombudsman.
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State Legislation States have enacted different kinds of rules designed to strengthen physician responsiveness to patients.
Disclosure of Treatment Options and Provider Advocacy - Virtually all states have enacted laws prohibiting health plans from penalizing providers for discussing all possible treatment options with patients. In addition, some states have passed laws that prevent health plans from prohibiting or penalizing a network provider for advocating on behalf of enrollees within the plan's utilization review or appeals process. Kansas' law, Kan. Stat. Ann. § 40-46-04 (Supp. 1997), reads as follows:
No health insurer shall prohibit or restrict any participating provider from discussing with or disclosing to any insured or other individual any medically appropriate health care information that such provider deems appropriate regarding the nature of treatment options, the risks or alternatives thereto, the process used or the decision made by such insurer to approve or deny health care services, the availability of alternate therapies, consultations, or tests, or from advocating on behalf of the insured within the utilization review or grievance processes established by the health insurer.
Prohibiting Physician Financial Incentives - Nearly two out of five states have passed legislation to ensure that physician financial incentives do not adversely affect patient care. Provisions of these laws are generally quite vague, simply prohibiting plans from using financial incentives that will result in a denial of medically necessary care.Rhode Island's law, R.I. Gen. Laws § 23-17.13-3(B)(8) (Supp. 1997), reads as follows:
Any health plan that operates a provider incentive plan shall not enter into any compensation agreement with any provider of covered services or pharmaceutical manufacturer pursuant to which specific payment is made directly or indirectly to the provider as an inducement or incentive to reduce or limit services, to reduce the length of stay or the use of alternative treatment settings or the use of a particular medication with respect to an individual patient, provided however, that capitation agreements and similar risk sharing arrangements are not prohibited.
Plans Cannot Discriminate against Providers with High-Cost Patients - Some states prohibit health plans from excluding providers from their networks simply because they serve high-cost patients--people with higher than average medical needs. Other laws require plans to take into account the medical conditions of a provider's patient mix when assessing his or her performance. Connecticut's law, 1997 Conn. Acts 97-99 § 7, reads as follows:
Each managed care organization, in developing provider profiles or otherwise measuring health care provider performance, shall:
(1) Make allowances for the severity of illness or condition of the patient mix;
(2) Make allowances for patients with multiple illnesses or conditions;
(3) Make available to the commissioner documentation of how the managed care organization makes such allowances; and
(4) Inform enrollees and participating providers, upon request, how the managed care organization considers patient mix when profiling or evaluating providers.
Provider Protections for Disclosure to Regulators of Health Plan Problems - A few states have adopted whistleblower rules to protect the rights of health care workers who speak up about managed care abuses. A New Jersey law, N.J. Stat. Ann. § 34-19-3 (West 1997), reads as follows:
An employer shall not take any retaliatory action against an employee because the employee does any the following:
a. Discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer or another employer, with whom there is a business relationship, that the employee reasonably believes is a violation of a law, or a rule or regulation promulgated pursuant to law, or, in the case of an employee who is a licensed or certified health care professional, reasonably believes constitutes improper quality or patient care;
b. Provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any violation of law, or a rule or regulation promulgated pursuant to law by the employer or another employer, with whom there is a business relationship, or, in the case of an employee who is a licensed or certified health care professional, provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into the quality of patient care; or
c. Objects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes:
(1) is in violation of a law, or a rule or regulation promulgated pursuant to law or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care;
(2) is fraudulent or criminal; or
(3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment.
Rhode Island's law, R.I. Gen. Laws § 27-41-46. (Supp. 1997), reads as follows:
§ 27-41-46. Whistleblowers protection . No health maintenance organizations pursuant to this chapter or any other insurer offering and/or insuring health services on a prepaid basis as defined in § 42-62-4(g) shall engage in any retaliation or retribution, directly or indirectly, or shall terminate or modify the terms of a medical service agreement that it maintains with a physician or other medical services provider, because the physician or other provider reports or is about to report verbally or in writing, to a public body, a regulatory agency, a subscriber or member of the insured, the family or heirs or personal representative of the subscriber or member or to any other person or public or private agency a violation by the insurer of a subscriber or membership agreement, a law, rule or regulation promulgated under the laws of this state.
§ 27-41-47. Penalties and remedies . (a) Any person, firm, corporation, association or other legal entity who or which shall violate the provisions of §27-41-46 shall be guilty of a misdemeanor, and upon conviction, shall be fined in an amount of not more than one thousand dollars ($1,000), imprisonment for up to one (1) year, or by both such fine and imprisonment.
(b) In addition, to the criminal sanctions set forth in subsection (a) of this section, any person, firm, corporation, association or other legal entity who or which shall willfully or negligently violate any provision of this chapter shall be subject to a civil penalty, to be assessed by the insurance commissioner, in the maximum amount of five thousand dollars ($5,000) for each such violation, and each violation shall constitute a separate and distinct offense under this section.
§ 27-41-48. Additional relief and damages Reinstatement.
(a) A physician or other medical provider who alleges a violation of this act may bring a civil action for appropriate injunctive relief, actual and punitive damages and costs including reasonable attorney fees.
(b) An action commenced pursuant to this chapter may be brought in the superior court for the county where the alleged violation occurred, the county where the complainant resides or the county in which the insurer maintains its principal place of business.
(c) The court rendering a judgment in an action under this act shall order, as the court considers appropriate, reinstatement of the provider agreement.
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State Legislation States are beginning to require health plans to pay for the routine costs of care associated with participation in an approved clinical trial.
Right to Participate in a Clinical Trial - Two states, Maryland and Rhode Island, have passed comprehensive laws that prevent plans from prohibiting their enrollees to participate in clinical trials. The Maryland law provides for individuals with life-threatening or serious illnesses to participate in an approved clinical trial as long as there is meaningful potential for significant clinical benefit. Maryland's law, 1998 Md. Laws 118 § 1 (S.B. 137), reads as follows:
(a) (1) In this section the following words have the meanings indicated.
(2) (i) "cooperative group" means a formal network of facilities that collaborate on research projects and have an established NIH-approved peer review program operating within the group.
(ii) "cooperative group" includes:
1. The national cancer institute clinical cooperative group;
2.The national cancer institute community clinical oncology program;
3.The AIDS clinical trials group; and
4.The community programs for clinical research in AIDS.
(3) "FDA" means the federal food and drug administration.
(4) "Member" means a policyholder, subscriber, insured, or certificate holder or a covered dependent of a policyholder, subscriber, insured, or certificate holder.
(5) "Multiple project assurance contract" means a contract between an institution and the federal department of health and human services that defines the relationship of the institution to the federal department of health and human services and sets out the responsibilities of the institution and the procedures that will be used by the institution to protect human subjects.
(6) "NIH" means the national institutes of health.
(7) (i) "Patient cost" means the cost of a medically necessary health care service that is incurred as a result of the treatment being provided to the member for purposes of the clinical trial.
(ii) "patient cost" does not include:
1. The cost of an investigational drug or device;
2. The cost of non-health care services that a patient may be required to receive as a result of the treatment being provided for purposes of the clinical trial;
3. Costs associated with managing the research associated with the clinical trial; or
4. Costs that would not be covered under the patient's policy, plan, or contract for noninvestigational treatments.
(b) This section applies to:
(1) Insurers and nonprofit health service plans that provide hospital, medical, surgical, or pharmaceutical benefits to individuals or groups on an expense-incurred basis under a health insurance policy or contract issued or delivered in the state; and
(2) health maintenance organizations that provide hospital, medical, surgical, or pharmaceutical benefits to individuals or groups under contracts that are issued or delivered in the state.
(c) This section does not apply to a policy plan or contract paid for under title XVIII or title XIX of the social security act.
(d) A policy plan, or contract subject to this section shall provide coverage for patient cost to a member in a clinical trial, as a result of:
(1) treatment provided for a life-threatening condition; or
(2) prevention, early detection, and treatment studies on cancer.
(e) The coverage under subsection (d) of this section shall be required if:
(1)(i) the treatment is being provided or the studies are being conducted in a phase I, phase II, phase III, or phase IV clinical trial for cancer; or
(ii) the treatment is being provided in a phase II, phase III, or phase IV clinical trial for any other life-threatening condition;
(2) the treatment is being provided in a clinical trial approved by:
(i) one of the national institutes of health;
(ii) an NIH cooperative group or an NIH center;
(iii) the FDA in the form of an investigational new drug application;
(iv) the federal department of veterans affairs;
(v) an institutional review board of an institution in the state which has a multiple project assurance contract approved by the office of protection from research risks of the national institutes of health;
(3) the facility and personnel providing the treatment are capable of doing so by virtue of their experience, training, and volume of patients treated to maintain expertise;
(4) there is no clearly superior, noninvestigational treatment alternative; and
(5) the available clinical or preclinical data provide a reasonable expectation that the treatment will be at least as effective as the noninvestigational alternative.
(f) The coverage under subsection (d) of this section may be provided on a case by case basis if the treatment is being provided in a phase I clinical trial for any life-threatening condition other than cancer.
(g) In conjunction with the provisions of subsection (d) of this section, a policy, plan, or contract shall provide coverage for patient cost incurred for drugs and devices that have been approved for sale by the FDA whether or not the FDA has approved the drug or device for use in treating the patient's particular condition, to the extent that the drugs or devices are not paid for by the manufacturer, distributor, or provider of that drug or device.
(h) (1) An entity seeking coverage for treatment in a clinical trial approved by an institutional review board under subsection (e)(2)(v) of this section shall post electronically and keep up-to-date a list of the clinical trials meeting the requirements of subsections (d) and (e) of this section.
(2) the list shall include, for each clinical trial:
(i) the phase for which the trial is approved;
(ii) the entity approving the trial;
(iii) whether the trial is for treatment of cancer or another life-threatening disease and, if not cancer, the particular disease; and
(iv) the estimated number of participants in the trial.
(i) This section may not be construed to affect compliance with §15-804 of this subtitle regarding coverage for off-label use of drugs.
Rhode Island prohibits plans from excluding services for individuals who participate in approved clinical trials, but only for new cancer therapies. Rhode Island's law, R.I. Gen. Laws § 27-41-41.2 (Supp. 1997), reads as follows:
As provided in § 27-41-41, coverage shall be extended to new cancer therapies still under investigation when the following circumstances are present:
(a) Treatment is being provided pursuant to a Phase II, III or IV clinical trial which has been approved by the National Institutes of Health (NIH) in cooperation with the National Cancer Institute (NCI), Community clinical oncology programs; the Food and Drug Administration in the form of an Investigational New Drug (IND) exemption; the Department of Veterans' Affairs; or a qualified nongovernmental research entity as identified in the guidelines for NCI cancer center support grants; and
(b) The proposed therapy has been reviewed and approved by a qualified institutional review board (IRB); and
(c) The facility and personnel providing the treatment are capable of doing so by virtue of their experience, training, and volume of patients treated to maintain expertise; and
(d) The patients receiving the investigational treatment meet all protocol requirements; and
(e) There is no clearly superior, noninvestigational alternative to the protocol treatment; and
(f) The available clinical or preclinical data provide a reasonable expectation that the protocol treatment will be at least as efficacious as the noninvestigatonal alternative.
(g) The coverage of new cancer therapy treatment provided pursuant to a Phase II clinical trial shall not be required for only such portion of that treatment as is provided as part of the Phase II clinical trial and is otherwise funded by a national agency, such as the national cancer institute, the veteran's administration, the department of defense, or funded by commercial organizations such as the biotechnical and/or pharmaceutical industry or manufacturers of medical devices. Any portions of a Phase II trial which are customarily funded by government, biotechnical and/or pharmaceutical and/or medical device industry sources in Rhode Island or in other states shall continue to be so funded in Rhode Island and coverage pursuant to this section shall supplement, not supplant, such customary funding.
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State Legislation: Two states have passed legislation to hold plans accountable for wrongful denials or delays of health care services.
Right of Members to Sue Health Plans - Only two states--Texas and Missouri--have passed laws exempting managed care corporations from their laws against suing corporations for malpractice. Only Texas, however, has taken the additional step of creating a cause of action so individuals can sue their health plans. Texas' law, Tex. Civ. Prac. & Rem. Code Ann. § 88.001- §88.003(West 1998), reads as follows:
Sec. 88.001. Definitions.
In this chapter:
(1) "Appropriate and medically necessary" means the standard for health care services as determined by physicians and health care providers in accordance with the prevailing practices and standards of the medical profession and community.
(2) "Enrollee" means an individual who is enrolled in a health care plan, including covered dependents.
(3) "Health care plan" means any plan whereby any person undertakes to provide, arrange for, pay for, or reimburse any part of the cost of any health care services.
(4) "Health care provider" means a person or entity as defined in Section 1.03(a)(3), Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes).
(5) "Health care treatment decision" means a determination made when medical services are actually provided by the health care plan and a decision which affects the quality of the diagnosis, care, or treatment provided to the plan's insureds or enrollees.
(6) "Health insurance carrier" means an authorized insurance company that issues policies of accident and sickness insurance under Section 1, Chapter 397, Acts of the 54th Legislature, 1955 (Article 3.70-1, Vernon's Texas Insurance Code).
(7) "Health maintenance organization" means an organization licensed under the Texas Health Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance Code).
(8) "Managed care entity" means any entity which delivers, administers, or assumes risk for health care services with systems or techniques to control or influence the quality, accessibility, utilization, or costs and prices of such services to a defined enrollee population, but does not include an employer purchasing coverage or acting on behalf of employees or the employees of one or more subsidiaries or affiliated corporations of the employer or a pharmacy licensed by the State Board of Pharmacy.
(9) "Physician" means:
(A) an individual licensed to practice medicine in this state;
(B) a professional association organized under the Texas Professional Association Act (Article 1528f, Vernon's Civil Statutes) or a nonprofit health corporation certified under Section 5.01, Medical Practice Act (Article 4495b, Vernon's Texas Civil Statutes); or
(C) another person wholly owned by physicians.
(10) "Ordinary care" means, in the case of a health insurance carrier, health maintenance organization, or managed care entity, that degree of care that a health insurance carrier, health maintenance organization, or managed care entity of ordinary prudence would use under the same or similar circumstances. In the case of a person who is an employee, agent, ostensible agent, or representative of a health insurance carrier, health maintenance organization, or managed care entity, "ordinary care" means that degree of care that a person of ordinary prudence in the same profession, specialty, or area of practice as such person would use in the same or similar circumstances.
Sec. 88.002. Application.
(a) A health insurance carrier, health maintenance organization, or other managed care entity for a health care plan has the duty to exercise ordinary care when making health care treatment decisions and is liable for damages for harm to an insured or enrollee proximately caused by its failure to exercise such ordinary care.
(b) A health insurance carrier, health maintenance organization, or other managed care entity for a health care plan is also liable for damages for harm to an insured or enrollee proximately caused by the health care treatment decisions made by its:
(1) employees;
(2) agents;
(3) ostensible agents; or
(4) representatives who are acting on its behalf and whom it has the right to exercise influence or control or has actually exercised influence or control which result in the failure to exercise ordinary care.
(c) It shall be a defense to any action asserted against a health insurance carrier, health maintenance organization, or other managed care entity for a health care plan that:
(1) neither the health insurance carrier, health maintenance organization, or other managed care entity, nor any employee, agent, ostensible agent, or representative for whose conduct such health insurance carrier, health maintenance organization, or other managed care entity is liable under Subsection (b),
controlled, influenced, or participated in the health care treatment decision; and
(2) the health insurance carrier, health maintenance organization, or other managed care entity did not deny or delay payment for any treatment prescribed or recommended by a provider to the insured or enrollee.
(d) The standards in Subsections (a) and (b) create no obligation on the part of the health insurance carrier, health maintenance organization, or other managed care entity to provide to an insured or enrollee treatment which is not covered by the health care plan of the entity.
(e) This chapter does not create any liability on the part of an employer, an employer group purchasing organization, or a pharmacy licensed by the State Board of Pharmacy that purchases coverage or assumes risk on behalf of its employees.
(f) A health insurance carrier, health maintenance organization, or managed care entity may not remove a physician or health care provider from its plan or refuse to renew the physician or health care provider with its plan for advocating on behalf of an enrollee for appropriate and medically necessary health care for the enrollee.
(g) A health insurance carrier, health maintenance organization, or other managed care entity may not enter into a contract with a physician, hospital, or other health care provider or pharmaceutical company which includes an indemnification or hold harmless clause for the acts or conduct of the health insurance carrier, health maintenance organization, or other managed care entity. Any such indemnification or hold harmless clause in an existing contract is hereby declared void.
(h) Nothing in any law of this state prohibiting a health insurance carrier, health maintenance organization, or other managed care entity from practicing medicine or being licensed to practice medicine may be asserted as a defense by such health insurance carrier, health maintenance organization, or other managed care entity in an action brought against it pursuant to this section or any other law.
(i) In an action against a health insurance carrier, health maintenance organization, or managed care entity, a finding that a physician or other health care provider is an employee, agent, ostensible agent, or representative of such health insurance carrier, health maintenance organization, or managed care entity shall not be based solely on proof that such person's name appears in a listing of approved physicians or health care providers made available to insureds or enrollees under a health care plan.
(j) This chapter does not apply to workers' compensation insurance coverage as defined in Section 401.011, Labor Code.
(k) An enrollee who files an action under this chapter shall comply with the requirements of Section 13.01, Medical Liability and Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas Civil Statutes), as it relates to cost bonds, deposits, and expert reports.
Sec. 88.003. Limitations on Cause of Action
(a) A person may not maintain a cause of action under this chapter against a health insurance carrier, health maintenance organization, or other managed care entity that is required to comply with the utilization review requirements of Article 21.58A, Insurance Code, or the Texas Health Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance Code), unless the affected insured or enrollee or the insured's or enrollee's representative:
(1) has exhausted the appeals and review applicable under the utilization review requirements; or
(2) before instituting the action:
(A) gives written notice of the claim as provided by Subsection (b); and
(B) agrees to submit the claim to a review by an independent review organization under Article 21.58A, Insurance Code, as required by Subsection (c).
(b) The notice required by Subsection (a)(2)(A) must be delivered or mailed to the health insurance carrier, health maintenance organization, or managed care entity against whom the action is made not later than the 30th day before the date the claim is filed.
(c) The insured or enrollee or the insured's or enrollee's representative must submit the claim to a review by an independent review organization if the health insurance carrier, health maintenance organization, or managed care entity against whom the claim is made requests the review not later than the 14th day after the date notice under Subsection (a)(2)(A) is received by the health insurance carrier, health maintenance organization, or managed care entity. If the health insurance carrier, health maintenance organization, or managed care entity does not request the review within the period specified by this subsection, the insured or enrollee or the insured's or enrollee's representative is not required to submit the claim to independent review before maintaining the action.
(d) Subject to Subsection (e), if the enrollee has not complied with Subsection (a), an action under this section shall not be dismissed by the court, but the court may, in its discretion, order the parties to submit to an independent review or mediation or other nonbinding alternative dispute resolution and may abate the action for a period of not to exceed 30 days for such purposes. Such orders of the court shall be the sole remedy available to a party complaining of an enrollee's failure to comply with Subsection (a).
(e) The enrollee is not required to comply with Subsection (c) and no abatement or other order pursuant to Subsection (d) for failure to comply shall be imposed if the enrollee has filed a pleading alleging in substance that:
(1) harm to the enrollee has already occurred because of the conduct of the health insurance carrier, health maintenance organization, or managed care entity or because of an act or omission of an employee, agent, ostensible agent, or representative of such carrier, organization, or entity for whose conduct it is liable under Section 88.002(b); and
(2) the review would not be beneficial to the enrollee, unless the court, upon motion by a defendant carrier, organization, or entity finds after hearing that such pleading was not made in good faith, in which case the court may enter an order pursuant to Subsection (d).
(f) If the insured or enrollee or the insured's or enrollee's representative seeks to exhaust the appeals and review or provides notice, as required by Subsection (a), before the statute of limitations applicable to a claim against a managed care entity has expired, the limitations period is tolled until the later of:
(1) the 30th day after the date the insured or enrollee or the insured's or enrollee's representative has exhausted the process for appeals and review applicable under the utilization review requirements; or
(2) the 40th day after the date the insured or enrollee or the insured's or enrollee's representative gives notice under Subsection (a)(2)(A).
(g) This section does not prohibit an insured or enrollee from pursuing other appropriate remedies, including injunctive relief, a declaratory judgment, or relief available under law, if the requirement of exhausting the process for appeal and review places the insured's or enrollee's health in serious jeopardy.
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State Legislation: A number of states have passed laws addressing the timeliness of UR decisions, competency of reviewers, and the adequacy of the guidelines.
Strict Time Frames for Making UR Decisions and Expedited Review for Urgent Care - Some states require explicit time limits for UR decisions generally, with shorter limits for urgent care situations. New Mexico's regulations, 13 NMAC 10.13.15.17.6 (3-16-97), read as follows:
15.17.6 A grievant may request to appear in person before the formal internal utilization management review panel (panel). A MHCP's procedures for conducting a formal internal utilization review shall include the following:
15.17.6.1 The panel shall schedule and hold a hearing as soon as possible after receiving a request from a grievant to appear before the panel: however, in any event, in the case of requests for review from determinations regarding urgent or emergent care, the panel shall attempt to hold the hearing within 24 hours after receiving a request from a grievant and within 10 days in the case of all other grievances. The grievant shall be notified either orally or in writing of the hearing date. The MHCP shall not unreasonably deny a request for postponement of the review made by the grievant.
Utilization Review Denials Made by Clinical Peers - Some states, such as Oklahoma, require that either a "licensed clinical peer" or a physician approve all adverse utilization review determinations. Others only require that denials be made by a qualified medical provider or by physicians in specified circumstances. Oklahoma's regulations, Okla. Admin. Code § 310: 655-17.3(d) (1997), read as follows:
Qualified health professionals shall supervise the utilization review program. A licensed, board-certified physician shall evaluate the appropriateness of any decision to deny coverage of a service to an enrollee.
Development and Application of UR Clinical Guidelines - Some states require that the process for the development and periodic evaluation of evidenced-based clinical guidelines be predicated on sound patient care principles and that utilization reviewers consider the individual medical needs of enrollees along with the clinical guidelines when making utilization review decisions. Virginia's law, 1998 Va. Acts ch. 32.1-137.9(A) (Michie), reads as follows:
Each entity shall establish standards and criteria to be applied in utilization review determinations with input from physician advisors representing major areas of specialty and certified by the boards of the various American medical specialties. Such standards shall be objective, clinically valid, and compatible with established principles of health care. Such standards shall further be established so as to be sufficiently flexible to allow deviations from norms when justified on a case-by-case bases [sic]. The entity shall make available to any provider, upon written request, a list of such physician advisors and their major areas of specialty, as well as the standards and criteria established in accordance with this section except as prohibited in accordance with copyright laws.
Clinical Guidelines upon Which UR Decisions Are Based Must Be Available upon Request -Rhode Island's regulations, R.I. Code R. 14-000-016-12-5.2.1 (1997), read as follows:
5.2 A review agency must maintain and provide evidence of and adherence to operational policies and procedures for utilization review determinations, including:
5.2.1 A summary of its utilization review plan which shall be provided, upon request, to patients and providers. This plan shall include a summary of the standards, procedures and methods to be used in evaluating proposed or delivered health care services.
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State Legislation In the last few years, a number of states enacted managed care legislation or promulgated regulations addressing the confidentiality issue. Most of the state laws prohibit managed care plans from selling names or identifying information about enrollees. Most of the managed care provisions relating to confidentiality are simply statements of the need to protect the confidentiality of patient records. Connecticut's law, Conn. Gen. Stat. Ann. § 38a-226c(a)(9) (West 1998), reads as follows:
(9) Each utilization review company shall comply with all applicable federal and state laws to protect the confidentiality of individual medical records. Summary and aggregate data shall not be considered confidential if it does not provide sufficient information to allow identification of individual patients.
While no state has comprehensive health privacy laws, a few states--such as Minnesota and New York--have enacted laws that are far-reaching in some respects. Minnesota's law, Minn. Stat. § 62D.14 (1997), reads as follows:
Any data or information pertaining to the diagnosis, treatment, or health of any enrollee, or any application obtained from any person, shall be private as defined in chapter 13 and shall not be disclosed to any person except (a) to the extent necessary to carry out the purposes of sections 62D.01 to 62D.30, the commissioner and a designee shall have access to the above data or information but the data removed from the health maintenance organization or participating entity shall not identify any particular patient or client by name or contain any other unique personal identifier; (b) upon the express consent of the enrollee or applicant; (c) pursuant to statute or court order for the production of evidence or the discovery thereof; or (d) in the event of claim or litigation between such person and the provider or health maintenance organization wherein such data or information is pertinent. In any case involving a suspected violation of a law applicable to health maintenance organizations in which access to health data maintained by the health maintenance organization or participating entity is necessary, the commissioner and agents, while maintaining the privacy rights of individuals and families, shall be permitted to obtain data that identifies any particular patient or client by name. A health maintenance organization shall be entitled to claim any statutory privileges against such disclosure which the provider who furnished such information to the health maintenance organization is entitled to claim.
New York's law, N.Y. Pub. Health Law § 4410 (McKinney Supp. 1998), reads as follows:
1. The provision of comprehensive health services directly or indirectly, by a health maintenance organization through its comprehensive health services plan shall not be considered the practice of the profession of medicine by such organization or plan. However, each member, employee or agent of such organization or plan shall be fully and personally liable and accountable for any negligent or wrongful act or misconduct committed by him or any person under his direct supervision and control while rendering professional services on behalf of such organization or plan.
2. Unless the patient waives the right of confidentiality, a health maintenance organization or its comprehensive health services plan shall not be allowed to disclose any information which was acquired by such organization or plan in the course of the rendering to a patient of professional services by a person authorized to practice medicine, registered professional nursing, licensed practical nursing, or dentistry, and which was necessary to acquire to enable such person to act in that capacity, except as may be otherwise required by law. A non-participating provider shall provide an enrollee's organization with such patient information as is reasonably required by the organization to administer its plan. In making such disclosure a provider shall comply with the provisions of subdivision six of section eighteen of this chapter concerning the disclosure of patient information to third parties provided, however, that with respect to a protected individual as defined in subdivision six of section twenty-seven hundred eighty of this chapter, disclosure shall be made only pursuant to an enrollee's written authorization and shall otherwise be consistent with the requirements of such section and rules and regulations promulgated pursuant thereto.
3. Notwithstanding the provisions of this section, the provisions of section four hundred twenty-two of the social services law shall apply to any information or reports submitted by a health maintenance organization to the statewide central register of child abuse and maltreatment reports.
4. (a) The commissioner shall have access to patient-specific medical information, including encounter data, maintained by a health maintenance organization or other organization certified pursuant to this article for the purposes of quality assurance and oversight, subject to any other limitations of federal and state law regarding disclosure thereof to third parties and subject to the provisions of this subdivision. The provisions of sections thirty-one hundred one, and forty-five hundred four, forty-five hundred seven and forty-five hundred eight of the civil practice law and rules, subdivision three of this section and section 33.13 of the mental hygiene law, shall not bar disclosure by the health maintenance organization to the commissioner for such purposes.
(b) The commissioner may only obtain enrollee information subject to the establishment of protocols that will ensure that such patient-specific information is not disclosed to third parties other than to entities serving as agents of the state for the purposes of quality assurance and oversight. Such protocols shall be developed in consultation with representatives of health maintenance organizations, health care provider organizations and consumer organizations and shall, where possible, include the development of a unique confidential identifier to be used in connection with patient-specific data. These protocols shall address issues relating to the collection, maintenance, and disclosure of such patient-specific information. Such protocols shall be promulgated as regulations, provided however, that protocols or regulations in use prior to the effective date of this subdivision shall remain in effect until the regulations developed hereunder are promulgated.
(c) In addition to any other sanction or penalty as provided by law, any employee of the department who willfully violates this regulation or any other rule or procedure pertaining to the disclosure of any material collected pursuant to this subdivision shall be deemed to have committed an act of misconduct and shall be disciplined in accordance with the provisions of the civil service law.
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State Legislation: Some states have passed laws requiring health plans to implement quality assurance programs. Some laws establish detailed requirements for such programs. Minnesota's regulations, Minn. R. 4685.1110 (1997), read as follows:
Written quality assurance plan. The health maintenance organization shall have a written quality assurance plan that includes the following:
A. Mission statement;
B. Philosophy;
C. Goals and objectives;
D. Organizational structure;
E. Staffing and contractual arrangements;
F. A system for communicating information regarding quality assurance activities;
G. The scope of the quality assurance program activities; and
H. A description of peer review activities.
Documentation of responsibility. Quality assurance authority, function, and responsibility shall be delineated in specific documents, including documents such as by-laws, board resolutions, and provider contracts. These documents shall demonstrate that the health maintenance organization has assumed ultimate responsibility for the evaluation of quality of care provided to enrollees, and that the health maintenance organization's governing body has periodically reviewed and approved the quality assurance program activities.
Appointed entity. The governing body shall designate a quality assurance entity that may be a person or persons to be responsible for operation of quality assurance program activities. This entity shall maintain records of its quality assurance activities and shall meet with the governing body at least quarterly.
Physician participation. A physician or physicians designated by the governing body shall advise, oversee and actively participate in the implementation of the quality assurance program.
Staff resources. There must be sufficient administrative and clinical staff with knowledge and experience to assist in carrying out quality assurance activities. In determining what is sufficient staff support, the commissioner shall consider the number of enrollees, types of enrollees, numbers of providers, the variety of health care services offered by the health maintenance organization, the organizational structure of the health maintenance organization, and the quality assurance staffing levels used by other health care organizations that perform similar health care functions.
Delegated activities. The health maintenance organization may delegate quality assurance activities to providers, review organizations, or other entities. If the health maintenance organization contracts with another organization to conduct quality assurance activities, the health maintenance organization shall have review and reporting requirements developed and implemented to ensure that the organization contracting with the health maintenance organization is fulfilling all delegated quality assurance responsibilities.
Information system. The data collection and reporting system shall support the information needs of the quality assurance program activities. The quality assurance program shall have prompt access to necessary medical record data including data by diagnoses, procedure, patient and provider.
Program evaluation. An evaluation of the overall quality assurance program shall be conducted at least annually. The results of this evaluation shall be communicated to the governing body. The written quality assurance plan shall be amended when there is no clear evidence that the program continues to be effective in improving care.
Complaints. The quality assurance program shall conduct ongoing evaluation of enrollee complaints that are related to quality of care. Such evaluations shall be conducted according to the steps in part 4685.1120. The data on complaints related to quality of care shall be reported to the appointed quality assurance entity at least quarterly.
Utilization review. The data from the health maintenance organization's utilization review activities shall be reported to the quality assurance program for analysis at least quarterly.
Provider qualifications and selection. The health maintenance organization shall have policies and procedures for provider selection and qualifications. The health maintenance organization shall have policies and procedures for contracting with or hiring staff and providers that are accredited or appropriately trained for their positions or, as in the case of durable medical equipment, offer products that meet standards generally accepted by the medical community.
Qualifications. Any health maintenance organization staff or contractees conducting quality assurance activities must be qualified by virtue of training and experience.
Medical records. The quality assurance entity appointed under subpart 3 shall conduct ongoing evaluation of medical records.
A. The health maintenance organization shall implement a system to assure that medical records are maintained with timely, legible, and accurate documentation of all patient interactions. Documentation must include information regarding patient history, health status, diagnosis, treatment, and referred serviced notes.
B. The health maintenance organization shall maintain a medical record retrieval system that ensures that medical records, reports, and other documents are readily accessible to the health maintenance organization.
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Activities
Ongoing quality evaluation. The health maintenance organization, through the health maintenance organization staff or contracting providers, shall conduct quality evaluation activities...
Scope. The components of the health maintenance organization subject to evaluation include the following:
A. Clinical components that include the following services:
1. Acute hospital services;
2. Ambulatory health care services;
3. Emergency services;
4. Mental health services
5. Preventive health care services;
6 Pharmacy services;
7. Chemical dependency services;
8. Other professional health care services provided to enrollees, such as chiropractic, occupational therapy, and speech therapy;
9. Home health care, as applicable;
10.Durable medical equipment, as applicable; and
11.Skilled nursing care, as applicable.
B. Organizational components which are the aspects of the health plan that affect accessibility, availability, comprehensiveness, and continuity of health care, and which include the following:
1. Referrals;
2. Case management;
3. Discharge planning;
4. Appointment scheduling and waiting periods for all types of health care services;
5. Second opinions, as applicable;
6 Prior authorizations, as applicable;
7. Provider reimbursement arrangements; and
8. Other systems, procedures, or administrative requirements used by the health maintenance organization that affect delivery of care.
C. Consumer components which are the enrollees' perceptions regarding all aspects of the quality of the health plan's services, and which include:
1. Enrollee surveys;
2. Enrollee complaints; and
3. Enrollee written or verbal comments or questions.
Quality Evaluation Steps
Problem identification. The health maintenance organization shall identify the existence of actual or potential quality problems or identify opportunities for improving care through:
A. Ongoing monitoring of process, structure, and outcomes of patient care or clinical performance....
B. Evaluation of the data collected from ongoing monitoring activities to identify problems or potential problems in patient care or clinical performance using criteria developed and applied by health care professionals.
Problem selection. The health maintenance organization shall select problems or potential problems of corrective action or focused study based on the prevalence of the problem and its impact on patient care and professional practices.
Corrective action. The health maintenance organization shall identify and document any recommendations for corrective action designed to address the problem. The documentation of corrective action shall include:
A. Measurable objectives for each action, including the degree of expected change in persons or situations:
B. Timeframes for corrective action; and
C. Persons responsible for implementation of corrective action.
Evaluation of corrective action.The quality assurance entity shall monitor the effectiveness of corrective actions until problem resolution occurs. Results of the implemented corrective action must be documented and communicated to the governing body and involved providers.
Focused Study Steps
Focused studies. As part of its overall quality evaluation activities, the health maintenance organization shall conduct focused studies to acquire information relevant to quality of care. The focused study must be directed at problems, potential problems, or areas with potential for improvements in care. The focused studies shall be included as part of the health maintenance organization's problem identification and selection activities.
Topic identification and selection. The health maintenance organization shall select topics for focused study that must be justified based on any of the following considerations:
A. Areas of high volume;
B. Areas of high risk;
C. Areas where problems are expected or where they have occurred in the past;
D. Areas that can be corrected or where prevention may have an impact;
E. Areas that have potential adverse health outcomes; and
F. Areas where complaints have occurred.
Study. The health maintenance organization shall document the study methodology employed, including:
A. The focused study question;
B. The sample selection;
C. Data collection;
D. Criteria; and
E. Measurement techniques...
Other studies. An activity in which the health maintenance organization participates that meets any of the criteria in subparts 2 to 4 may satisfy in part or in total the focused study requirements. Examples of other activities that may satisfy the focused study requirements include external audits conducted by the professional review organization or the community.
Filed Written Plan and Work Plan
Written plan. The health maintenance organization shall file its written quality assurance plan...
Annual work plan. The health maintenance organization shall annually file a proposed work plan with the commissioner on or before November 1 of every year. The proposed work plan must meet the requirements of items A and B.
A. The workplan shall give a detailed description of the proposed quality evaluation activities that will be conducted in the following year...
In determining the level of quality evaluation activities necessary to address each of the components of the health plan, the commissioner shall consider the number of enrollees, the number of providers, the age of the health plan and the level of quality evaluation activities conducted by health care organizations that perform similar functions.
B. The workplan shall give a description of the proposed focused studies to be conducted in the following year... The description of the proposed studies shall include the following elements:
1. Topic to be studied;
2. Rationale for choosing topic for study;
3. Benefits expected to be gained by conducting the study;
4. Study methodology;
5. Sample size and sampling methodology;
6. Criteria to be used for evaluation; and
7. Approval by the health maintenance organization's medical director or qualified director of health services designated by the governing body.
Each health maintenance organization shall annually complete a minimum of three focused studies. The focused study sample shall be representative of all health maintenance organization enrollees who exhibit characteristics of the issue being studied...
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State Legislation: Many states have passed legislation requiring health plans to give enrollees information about their plans. New York is among the strongest in meeting the needs of consumers. New York's law, N.Y. Pub. Health Law § 4324 (McKinney Supp. 1998), reads as follows:
§ 4324. Disclosure of information. The requirements of this section shall apply to all comprehensive, expense-reimbursed contracts; managed care products; or any other contract or product for which the superintendent deems such disclosure appropriate.
(a) Each health service, hospital service, or medical expense indemnity corporation subject to this article shall supply each subscriber, and upon request each prospective subscriber prior to enrollment, written disclosure information, which may be incorporated into the subscriber contract or certificate, containing at least the information set forth below. In the event of any inconsistency between any separate written disclosure statement and the subscriber contract or certificate, the terms of the subscriber contract or certificate shall be controlling. The information to be disclosed shall include at least the following:
(1) a description of coverage provisions; health care benefits; benefit maximums, including benefit limitations; and exclusions of coverage, including the definition of medical necessity used in determining whether benefits will be covered;
(2) a description of all prior authorization or other requirements for treatments and services;
(3) a description of utilization review policies and procedures, used by the corporation, including:
(A) the circumstances under which utilization review will be undertaken;
(B) the toll-free telephone number of the utilization review agent;
(C) the time frames under which utilization review decisions must be made for prospective, retrospective and concurrent decisions;
(D) the right to reconsideration;
(E) the right to an appeal, including the expedited and standard appeals processes and the time frames for such appeals;
(F) the right to designate a representative;
(G) a notice that all denials of claims will be made by qualified clinical personnel and that all notices of denials will include information about the basis of the decision;
[Section (H) is effective 7/1/99]
(H) a notice of the right to an external appeal together with a description, jointly promulgated by the superintendent and the commissioner of health as required pursuant to subsection (e) of section four thousand nine hundred fourteen of this chapter, of the external appeal process established pursuant to title two of article forty-nine of this chapter and the time frames for such appeals; and
(I) further appeal rights, if any;
(4) a description prepared annually of the types of methodologies the corporation uses to reimburse providers, specifying the type of methodology that is used to reimburse particular types of providers or reimburse for the provision of particular types of services; provided, however, that nothing in this paragraph should be construed to require disclosure of individual contracts or the specific details of any financial arrangement between a corporation and a health care provider;
(5) an explanation of a subscriber's financial responsibility for payment of premiums, coinsurance, co-payments, deductibles and any other charges, annual limits on a subscriber's financial responsibility, caps on payments for covered services and financial responsibility for non covered health care procedures, treatments or services;
(6) an explanation, where applicable, of a subscriber's financial responsibility for payment when services are provided by a health care provider who is not part of the corporation's network of providers or by any provider without required authorization;
(7) a description of the grievance procedures to be used to resolve disputes between the corporation and a subscriber, including: the right to file a grievance regarding any dispute between the corporation and a subscriber; the right to file a grievance orally when the dispute is about referrals or covered benefits; the toll-free telephone number which subscribers may use to file an oral grievance; the timeframes and circumstances for expedited and standard grievances; the right to appeal a grievance determination and the procedures for filing such an appeal; the timeframes and circumstances for expedited and standard appeals; the right to designate a representative; a notice that all disputes involving clinical decisions will be made by qualified clinical personnel and that all notices of determination will include information about the basis of the decision and further appeal rights, if any;
(8) a description of the procedure for obtaining emergency services. Such description shall include a definition of emergency services, notice that emergency services are not subject to prior approval, and shall describe the subscriber's financial and other responsibilities regarding obtaining such services including when such services are received outside the corporation's service area, if any;
(9) where applicable, a description of procedures for subscribers to select and access the corporation's primary and specialty care providers, including notice of how to determine whether a participating provider is accepting new patients;
(10) where applicable, a description of the procedures for changing primary and specialty care providers within the corporation's network of providers;
(11) where applicable, notice that a subscriber enrolled in a managed care product offered by the corporation may obtain a referral to a health care provider outside of the corporation's network or panel when the corporation does not have a health care provider with appropriate training and experience in the network or panel to meet the particular health care needs of the subscriber and the procedure by which the subscriber can obtain such referral;
(12) where applicable, notice that a subscriber enrolled in a managed care product offered by the corporation with a condition which requires ongoing care from a specialist may request a standing referral to such a specialist and the procedure for requesting and obtaining such a standing referral;
(13) where applicable, notice that a subscriber enrolled in a managed care product offered by the corporation with (i) a life-threatening condition or disease, or (ii) a degenerative and disabling condition or disease, either of which requires specialized medical care over a prolonged period of time may request a specialist responsible for providing or coordinating the subscriber's medical care and the procedure for requesting and obtaining such a specialist;
(14) where applicable, notice that a subscriber enrolled in a managed care product offered by the corporation with (i) a life-threatening condition or disease, or (ii) a degenerative and disabling condition or disease, either of which requires specialized medical care over a prolonged period of time may request access to a specialty care center and the procedure by which such access may be obtained;
(15) a description of how the corporation addresses the needs of non English speaking subscribers;
(16) notice of all appropriate mailing addresses and telephone numbers to be utilized by subscribers seeking information or authorization;
(17) where applicable, a listing by specialty, which may be in a separate document that is updated annually, of the name, address, and telephone number of all participating providers, including facilities, and in addition, in the case of physicians, board certification; and
(18) a description of the mechanisms by which subscribers may participate in the development of the policies of the corporation.
(b) Each health service, hospital service, or medical expense indemnity corporation subject to this article, upon request of a subscriber or prospective subscriber shall:
(1) provide a list of the names, business addresses and official positions of the membership of the board of directors, officers, and members of the corporation;
(2) provide a copy of the most recent annual certified financial statement of the corporation, including a balance sheet and summary of receipts and disbursements prepared by a certified public accountant;
(3) provide a copy of the most recent individual, direct pay subscriber contracts;
(4) provide information relating to consumer complaints compiled pursuant to section two hundred ten of this chapter;
(5) provide the procedures for protecting the confidentiality of medical records and other subscriber information;
(6) where applicable, to allow subscribers and prospective subscribers to inspect drug formularies used by such corporation; and provided further, that the corporation shall also disclose whether individual drugs are included or excluded from coverage to a subscriber or prospective subscriber who requests this information;
(7) provide a written description of the organizational arrangements and ongoing procedures of the corporation's quality assurance program, if any;
(8) provide a description of the procedures followed by the corporation in making decisions about the experimental or investigational nature of individual drugs, medical devices or treatments in clinical trials;
(9) provide individual health practitioner affiliations with participating hospitals, if any;
(10) upon written request, provide specific written clinical review criteria relating to a particular condition or disease and, where appropriate, other clinical information which the corporation might consider in its utilization review and the corporation may include with the information a description of how it will be used in the utilization review process; provided, however, that to the extent such information is proprietary to the corporation, the subscriber or prospective subscriber shall only use the information for the purposes of assisting the subscriber or prospective subscriber in evaluating the covered services provided by the organization;
(11) where applicable, provide the written application procedures and minimum qualification requirements for health care providers to be considered by the corporation for participation in the corporation's network for a managed care product; and
(12) disclose such other information as required by the superintendent, provided that such requirements are promulgated pursuant to the state administrative procedure act.
(c) Nothing in this section shall prevent a corporation from changing or updating the materials that are made available to subscribers.
(d) As to any program where the subscriber must select a primary care provider, if a participating primary care provider becomes unavailable to provide services to a subscriber, the corporation shall provide written notice within fifteen days from the time the corporation becomes aware of such unavailability to each subscriber who has chosen the provider as their primary care provider. If a subscriber is enrolled in a managed care product and is in an ongoing course of treatment with any other participating provider who becomes unavailable to continue to provide services to such subscriber, and the corporation is aware of such ongoing course of treatment, the corporation shall provide written notice within fifteen days from the time the corporation becomes aware of such unavailability to such subscriber. Each notice shall also describe the procedures for continuing care pursuant to subsections (e) and (f) of section forty-eight hundred four of this chapter and for choosing an alternative provider.
(e) For purposes of this section, a "managed care product" shall mean a contract which requires that all medical or other health care services covered under the contract, other than emergency care services, be provided by, or pursuant to a referral from, a designated health care provider chosen by the subscriber (i.e. a primary care gatekeeper), and that services provided pursuant to such a referral be rendered by a health care provider participating in the corporation's managed care
provider network. In addition, in the case of (i) an individual health insurance contract, or (ii) a group health insurance contract covering no more than three hundred lives, imposing a coinsurance obligation of more than twenty-five percent upon services received outside of the corporation's managed care provider network, and which has been sold to five or more groups, a managed care product shall also mean a contract which requires that all medical or other health care services covered under the contract, other than emergency care services, be provided by, or pursuant to a referral from, a designated health care provider chosen by the subscriber (i.e. a primary care gatekeeper), and that services provided pursuant to such a referral be rendered by a health care provider participating in the corporation's managed care provider network, in order for the subscriber to be entitled to the maximum reimbursement under the contract.
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