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Introduced Version Senate Bill 114 History

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Key: Green = existing Code. Red = new code to be enacted


Senate Bill No. 114

(By Senators Tomblin (Mr. President) and Sprouse
By Request of the Executive)
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[Introduced February 15, 2001; referred to the Committee on Banking and Insurance; and then to the Committee on the Judiciary.]
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A BILL to amend and reenact sections one, two and three, article twenty-five-c, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend said article by adding thereto eleven new sections, designated sections four through fourteen, inclusive, all relating to the patients' bill of rights; providing for notice of certain enrollee rights; and establishing the right to an external review of coverage denials.

Be it enacted by the Legislature of West Virginia:
That sections one, two and three, article twenty-five-c, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that said article be further amended by adding thereto eleven new sections, designated sections four through fourteen, inclusive, all to read as follows:
ARTICLE 25C. HEALTH MAINTENANCE ORGANIZATION PATIENT BILL OF RIGHTS.

§33-25C-1. Short title and purpose.

This article may be referred to as the "Patients' Bill of Rights." It is the intent of the Legislature that enrollees covered by health plans receive quality health care designed to maintain and improve their health. The purpose of this act is to ensure that health plan enrollees:
(a) Have improved access to information regarding their health plans;
(b) Have sufficient and timely access to appropriate health care services, and choice among health care providers;
(c) Are assured that health care decisions are made by appropriate medical personnel;
(d) Have access to a quick and impartial process for appealing plan decisions;
(e) Are protected from unnecessary invasions of health care privacy; and
(f) Are assured that personal health care information will be used only as necessary to obtain and pay for health care or to improve the quality of care.
§33-25C-2. Definitions.
(a) "Commissioner" or "department" means the commissioner of insurance.
(b) "Enrollee," "subscriber" or "member" is a natural person who has entered into an agreement with a health maintenance organization or prepaid limited health service organization for the provision of managed health care.
(c) "External review" means a process, independent of all affected parties, to determine if a health care service is medically necessary, medically appropriate or experimental.
(d) "Health care plan" means a plan that establishes, operates, or maintains a network of health care providers that have entered into agreements with the plan to provide health care services to enrollees to whom the plan has the ultimate obligation to arrange for the provision of or payment for services through organizational arrangements for ongoing quality assurance, utilization review programs, or dispute resolution.
For purposes of this definition, "health care plan" shall not include indemnity health insurance policies including those using a contracted provider network.
(b) (e) "Managed care plan" or "plan" means any health maintenance organization or prepaid limited health care service organization.
(c) (f) "Provider" means any physician, hospital or other person or organization which is licensed or otherwise authorized in this state to provide health care services or supplies.
§33-25C-3. Notice of certain enrollee rights.
All managed care plans must provide to subscribers on a form prescribed by the commissioner enrollees a notice of certain subscriber enrollee rights. The notice shall address the following areas be provided to enrollees on a yearly basis on a form prescribed by the commissioner and shall include, but not be limited to:
(a) The enrollee's rights to a description of his or her rights and responsibilities, plan benefits, benefit limitations, premiums, and individual cost-sharing requirements;
(1) (b) The enrollee's right to a description of the plan's grievance procedure and the ability of the subscriber right to pursue grievance and hearing procedures without reprisal from the managed care plan;
(2) How the subscriber (c) A description of the method in which an enrollee can obtain a listing of the plan's provider network, including the names and credentials of all participating providers, and the method in which an enrollee may choose providers within the plan;
(3) (d) The subscriber's enrollee's right to privacy and confidentiality;
(4) The subscriber's ability to examine and offer corrections to their own medical records;
(e) The right to full disclosure from the enrollee's health care provider of any information relating to his or her medical condition or treatment plan, and the ability to examine and offer corrections to the enrollee's medical records;
(5) (f) The subscriber's enrollee's right to be informed of plan policies and any charges for which the subscriber enrollee will be responsible;
(6) The subscriber's ability to obtain evidence of the medical credentials of a plan provider such as diploma and board certifications;
(7) (g) The right of subscriber's enrollees to have coverage denials reviewed by appropriate medical professionals consistent with plan review procedures;
(h) The enrollee's right to emergency services, pursuant to section eight-d, article twenty-five-a of this chapter, without prior authorization if a prudent layperson acting reasonably would have believed that an emergency medical condition existed, and the right to a description of procedures to obtain emergency services;
(i) The enrollee's right to the procedures for obtaining out-of-area services;
(j) The right of an enrollee to direct access, annually to an obstetrician/gynecologist for the purpose of a well woman examination without referral from her primary care physician pursuant to sections two and four, article forty-two of this chapter;
(k) A description of the method in which an enrollee can obtain access to a summary of the plan's accreditation report;
(l) The right of an enrollee over fifty years of age to colorectal examinations and laboratory tests for colorectal cancer;
(m) The right of a diabetic enrollee whose health benefit policy includes eye care benefits to direct access to an eye care provider in accordance with article twenty-five-e of this chapter;
(n) A list of any other legally mandated benefits to which the enrollee is entitled.
(o) Effective the first day of July, two thousand two, the enrollee's right to an external review of a coverage denial by an independent external review organization certified and selected by the commissioner, the cost of which is to be borne by the plan;
(p) The right of an enrollee to have medical advice or options communicated to him or her without any limitations or restrictions being placed upon the provider or primary care physician by the managed care plan;
(q) The enrollee's managed care plan may not provide to any provider or any primary care physician an incentive or disincentive plan that includes specific payment made directly or indirectly, in any form, to the provider or primary care physician as an inducement to deny, release, limit, or delay specific, medically necessary and appropriate services provided with respect to a specific enrollee or groups of enrollees with similar medical conditions; and
(8) (r) Any other areas the commissioner may by rule require.
§33-25C-4. Access to appropriate health services.
(a) Each enrollee in a health plan must have adequate choice among health care providers.
(b) Each managed care plan must allow an enrollee to choose a primary care provider who is accepting new enrollees from a list of participating providers. Enrollees also must be permitted to change primary care providers after six months with the change becoming effective no later than the beginning of the month following the enrollee's request for the change.
(c) Each managed care plan must have a process whereby an enrollee with a complex or serious medical, psychiatric, or psychological condition may receive a standing referral to a participating specialist for an extended period of time.
(d) Each managed care plan must provide for appropriate and timely referral of enrollees to a choice of specialists within the plan if specialty care is warranted. If the type of medical specialist needed for a specific condition is not represented on the specialty panel, enrollees must have access to nonparticipating specialty health care providers, and reimbursement shall be considered as in network.
(e) Each managed care plan must provide, upon the request of an enrollee, access by the enrollee to a second opinion regarding any medical diagnosis or treatment plan from a qualified participating provider of the enrollee's choice.
(f) Each managed care plan must continue to cover services of a primary care provider whose contract with the plan or whose contract with a subcontractor is being terminated by the plan or subcontractor without cause under the terms of that contract for at least sixty days following notice of termination to the enrollees or, in group coverage arrangements involving periods of open enrollment, only until the end of the next open enrollment period. The provider's relationship with the managed care plan or subcontractor must be continued on the same terms and conditions as those of the contract the plan or subcontractor is terminating, except for any provision requiring that the managed care plan assign new enrollees to the terminated provider.
(g) Each managed care plan must include in its network any physician who applies and who meets its credentialing criteria, and who is willing to accept the plan's reimbursement levels for the same type of physician.
(h) Every managed care plan shall meet the standards set forth in this section and any rules adopted by the commissioner to implement this section. In developing rules to implement this section, the commissioner shall consider relevant standards adopted by national managed care accreditation organizations and state agencies that purchase managed health care services.
§33-25C-5. Health care decisions.
(a) Managed care plans that offer a health plan shall maintain a documented utilization review program description and written utilization review criteria based on reasonable medical evidence. The program must include a method for reviewing and updating criteria. Managed care plans shall make clinical protocols, medical management standards, and other review criteria available upon request to participating providers.
(b) The commissioner shall adopt, in rule, standards for this section after considering relevant standards adopted by national managed care accreditation organizations and state agencies that purchase managed health care services.
(c) A managed care plan shall not be required to use medical evidence or standards in its utilization review of religious nonmedical treatment or religious nonmedical nursing care.
§33-25C-6. Retrospective denial of services.
(a) A managed care plan shall not retrospectively deny coverage for emergency care that complies with the prudent layperson standard set forth in section eight-d, article twenty- five-a of this chapter.
(b) A managed care plan shall not retrospectively deny nonemergency care that had prior authorization under the plan's written policies at the time the care was rendered, except in cases of fraud or misrepresentation.
(c) The commissioner may adopt, in rule, standards for this section after considering relevant standards adopted by national managed care accreditation organizations and state agencies that purchase managed health care services.
§33-25C-7. Grievance process.
Each managed care plan that offers a health plan must have a fully operational, comprehensive grievance process that complies with the requirements of section twelve, article twenty-five-a, chapter thirty-three of the code and any rules adopted by the commissioner to implement this section. For the purposes of this section, the commissioner shall consider grievance process standards adopted by national managed care accreditation organizations and state agencies that purchase managed health care services.
§33-25C-8. Independent review of health care disputes.
(a) There is a need for a process for the fair consideration of disputes relating to decisions by managed care plans that offer a health plan to deny, modify, reduce, or terminate coverage of or payment for health care services for an enrollee.
(b) An enrollee may seek review by a certified independent review organization of a managed care plan's decision to deny, modify, reduce, or terminate coverage of or payment for a health care service, after exhausting the managed care plan's grievance process and receiving a decision that is unfavorable to the enrollee, or after the managed care plan has exceeded the timelines for grievances provided in section twelve, article twenty-five-a of this chapter, without good cause and without reaching a decision.
(c) The commissioner must establish and use a rotational registry system for the assignment of a certified independent review organization to each dispute. The system should be flexible enough to ensure that an independent review organization has the expertise necessary to review the particular medical condition or service at issue in the dispute.
(d) Managed care plans must provide to the appropriate certified independent review organization, not later than the third business day after the date the managed care plan receives a request for review, a copy of:
(1) Any medical records of the enrollee that are relevant to the review;
(2) Any documents used by the managed care plan in making the determination to be reviewed by the certified independent review organization;
(3) Any documentation and written information submitted to the managed care plan in support of the appeal; and
(4) A list of each physician or health care provider who has provided care to the enrollee and who may have medical records relevant to the appeal. Health information or other confidential or proprietary information in the custody of a managed care plan may be provided to an independent review organization, subject to rules adopted by the commissioner.
(e) The medical reviewers from a certified independent review organization will make determinations regarding the medical necessity or appropriateness of, and the application of health plan coverage provisions to, health care services for an enrollee. The medical reviewers' determinations must be based upon their expert medical judgment, after consideration of relevant medical, scientific, and cost-effectiveness evidence. Except as provided in this subsection, the certified independent review organization must ensure that determinations are consistent with the scope of covered benefits as outlined in the medical coverage agreement. Medical reviewers may override the health plan's medical necessity or appropriateness standards if the standards are determined upon review to be unreasonable or inconsistent with sound, evidence- based medical practice.
(f) Once a request for an independent review determination has been made, the independent review organization must proceed to a final determination, unless requested otherwise by both the managed care plan and the enrollee or the enrollee's representative.
(g) Any party aggrieved by the decision of the external review organization may appeal to the commissioner pursuant to section fourteen, article two of this chapter.
(h) Managed care plans must timely implement the certified independent review organization's determination, and must pay the certified independent review organization's charges.
(i) When an enrollee requests independent review of a dispute under this section, and the dispute involves a managed care plan's decision to modify, reduce, or terminate an otherwise covered health service that an enrollee is receiving at the time the request for review is submitted and the managed care plan's decision is based upon a finding that the health service, or level of health service, is no longer medically necessary or appropriate, the managed care plan must continue to provide the health service if requested by the enrollee until a determination is made under this section. If the determination affirms the managed care plan's decision, the enrollee may be responsible for the cost of the continued health service.
(j) A certified independent review organization may notify the office of the insurance commissioner if, based upon its review of disputes under this section, it finds a pattern of substandard or egregious conduct by a managed care plan.
(k) (1) The commissioner shall adopt rules to implement this section after considering relevant standards adopted by national managed care accreditation organizations.
(2) This section is not intended to supplant any existing authority of the commissioner under this title to oversee and enforce managed care plan compliance with applicable statutes and rules.
§33-25C-9. Independent review organizations.
(a) The department shall adopt rules providing a procedure and criteria for certifying one or more organizations to perform independent review of health care disputes described in section eight of this act.
(b) The rules must require that the organization ensure:
(1) The confidentiality of medical records transmitted to an independent review organization for use in independent reviews;
(2) That each health care provider, physician, or contract specialist making review determinations for an independent review organization is qualified. Physicians, other health care providers, and, if applicable, contract specialists must be appropriately licensed, certified, or registered. Reviewers may be drawn from nationally recognized centers of excellence, academic institutions, and recognized leading practice sites. Expert medical reviewers should have substantial, recent clinical experience dealing with the same or similar health conditions. The organization must have demonstrated expertise and a history of reviewing health care in terms of medical necessity, appropriateness, and the application of other health plan coverage provisions;
(3) That any physician, health care provider, or contract specialist making a review determination in a specific review is free of any actual or potential conflict of interest or bias. Neither the expert reviewer, nor the independent review organization, nor any officer, director, or management employee of the independent review organization may have any material professional, familial, or financial affiliation with any of the following: The managed care plan; professional associations of managed care plans and providers; the provider; the provider's medical or practice group; the health facility at which the service would be provided; the developer or manufacturer of a drug or device under review; or the enrollee;
(4) The fairness of the procedures used by the independent review organization in making the determinations;
(5) That each independent review organization make its determination:
(A) Not later than the earlier of:
(i) The fifteenth day after the date the independent review organization receives the information necessary to make the determination; or
(ii) The twentieth day after the date the independent review organization receives the request that the determination be made. In exceptional circumstances, when the independent review organization has not obtained information necessary to make a determination, a determination may be made by the twenty-fifth day after the date the organization received the request for the determination; and
(B) In cases of a condition that could seriously jeopardize the enrollee's health or ability to regain maximum function, not later than the earlier of:
(i) Seventy-two hours after the date the independent review organization receives the information necessary to make the determination; or
(ii) The eighth day after the date the independent review organization receives the request that the determination be made;
(6) That timely notice is provided to enrollees of the results of the independent review, including the clinical basis for the determination;
(7) That the independent review organization has a quality assurance mechanism in place that ensures the timeliness and quality of review and communication of determinations to enrollees and managed care plans, and the qualifications, impartiality, and freedom from conflict of interest of the organization, its staff, and expert reviewers; and
(8) That the independent review organization meets any other reasonable requirements of the department directly related to the functions the organization is to perform under this section and section eight of this act.
(c) To be certified as an independent review organization under this chapter, an organization must submit to the department an application in the form required by the department. The application must include:
(1) For an applicant that is publicly held, the name of each stockholder or owner of more than five percent of any stock or options;
(2) The name of any holder of bonds or notes of the applicant that exceed one hundred thousand dollars;
(3) The name and type of business of each corporation or other organization that the applicant controls or is affiliated with and the nature and extent of the affiliation or control;
(4) The name and a biographical sketch of each director, officer, and executive of the applicant and any entity listed under subdivision (3) of this subsection and a description of any relationship the named individual has with:
(A) A managed care plan;
(B) A utilization review agent;
(C) A nonprofit or for-profit health corporation;
(D) A health care provider;
(E) A drug or device manufacturer; or
(F) A group representing any of the entities described by (4)(A) through (E) of this subsection;
(5) The percentage of the applicant's revenues that are anticipated to be derived from reviews conducted under section eight of this act;
(6) A description of the areas of expertise of the health care professionals and contract specialists making review determinations for the applicant; and
(7) The procedures to be used by the independent review organization in making review determinations regarding reviews conducted under section eight of this act.
(d) If at any time there is a material change in the information included in the application under subsection (c) of this section, the independent review organization shall submit updated information to the department.
(e) An independent review organization may not be a subsidiary of, or in any way owned or controlled by, a managed care plan or a trade or professional association of health care providers or managed care plans.
(f) An independent review organization, and individuals acting on its behalf, are immune from suit in a civil action when performing functions under this act. However, this immunity does not apply to an act or omission made in bad faith or that involves gross negligence.
(g) Independent review organizations must be free from interference by state government in its functioning except as provided in subsection (h) of this section.
(h) The rules adopted under this section shall include provisions for terminating the certification of an independent review organization for failure to comply with the requirements for certification. The department may review the operation and performance of an independent review organization in response to complaints or other concerns about compliance.
(i) In adopting rules for this section, the department shall take into consideration standards for independent review organizations adopted by national accreditation organizations. The department may accept national accreditation or certification by another state as evidence that an organization satisfies some or all of the requirements for certification by the department as an independent review organization.
§33-25C-10. Managed care plan liability.
(a)(1) A managed care plan shall adhere to the accepted standard of care for health care providers under West Virginia common law when arranging for the provision of medically necessary health care services to its enrollees. A managed care plan shall be liable for any and all harm proximately caused by its failure to follow that standard of care when the failure resulted in the denial, delay, or modification of the health care service recommended for, or furnished to, an enrollee.
(2) A managed care plan is also liable for damages under subdivision (1) of this subsection for harm to an enrollee proximately caused by health care treatment decisions that result from a failure to follow the accepted standard of care made by its:
(A) Employees;
(B) Agents; or
(C) Ostensible agents who are acting on its behalf and over whom it has the right to exercise influence or control or has actually exercised influence or control.
(b) A managed care plan 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 managed care plan. Any such indemnification of hold harmless clause in an existing contract is hereby declared void.
(c) This section does not create any new cause of action, or eliminate any presently existing cause of action, with respect to health care providers and health care facilities.
(d) It is a defense to any action or liability asserted under this section against a managed care plan that:
(1) The health care service in question is not a benefit provided under the plan or the service is subject to limitations under the plan that have been exhausted;
(2) Neither the managed care plan, nor any employee, agent, or ostensible agent for whose conduct the managed care plan is liable under subdivision (1), subsection (b) of this section, controlled, influenced, or participated in the health care decision; or
(3) The managed care plan did not deny or unreasonably delay payment for treatment prescribed or recommended by a participating health care provider for the enrollee.
(e) This section does not create any liability on the part of an employer, government agency, or an employer group purchasing organization that purchases coverage or assumes risk on behalf of its employers, or employees, or a governmental agency that purchases coverage on behalf of individuals and families.
(f) Nothing in any law of this state prohibiting a managed care plan from practicing medicine or being licensed to practice medicine may be asserted as a defense by the managed care plan in an action brought against it under this section.
(g)(1) A person may not maintain a cause of action under this section against a managed care plan unless:
(A) The affected enrollee has suffered substantial harm. As used in this subsection, "substantial harm" means loss of life, loss or significant impairment of limb, bodily or cognitive function, significant disfigurement, or severe or chronic physical pain; and
(B) The affected enrollee or the enrollee's representative has exercised the opportunity established in section eight of this act to seek independent review of the health care treatment decision.
(2) This subsection (g) does not prohibit an enrollee from pursuing other appropriate remedies, including injunctive relief, a declaratory judgment, or other relief available under law, if its requirements place the enrollee's health in serious jeopardy.
(h) In an action against a managed care plan, a finding that a health care provider is an employee, agent, or ostensible agent of such a managed care plan shall not be based solely on proof that the person's name appears in a listing of approved physicians or health care providers made available to enrollees under a health plan.
(i) Any action under this section shall be commenced within two years of the completion of the independent review process: Provided, That a minor or persons under legal disability may commence action within the time period prescribed in section fifteen, article two, chapter fifty-five of this code.
(j) This section does not apply to workers' compensation insurance under article two, chapter twenty-three of the code.
§33-25C-11. Delegation of duties.
Each managed care plan is accountable for and must oversee any activities required by this act that it delegates to any subcontractor. No contract with a subcontractor executed by the managed care plan or the subcontractor may relieve the managed care plan of its obligations to any enrollee for the provision of health care services or of its responsibility for compliance with statutes or rules.
§33-25C-12. Rules.

The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code:
(a) To establish further standards for external review procedures to be implemented by managed care plans;
(b) To establish further standards for certification of independent external review organizations; and
(c) To further effectuate the purposes of this article.
§33-25C-13. Effective date.
This article shall apply to all contracts issued or renewed on or after the first day of July, two thousand one.
§33-25C-14. Construction.

(a) To the extent permitted by law, if any provision of this act conflicts with state or federal law, such provision must be construed in a manner most favorable to the enrollee.
(b) If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.



NOTE: The purpose of this patients' bill of rights is to put medical decisions into the hands of patients and their medical providers. Among the provisions are sections which ensure the right to a speedy internal and external review of denial of claims by health insurers, the right to know what is in the contracts between health care providers and insurance companies, and the right to sue an insurer if harmed.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§§33-25c-4 through 14 are new; therefore, strike-throughs and underscoring have been omitted.
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