Senate Bill 518 History
OTHER VERSIONS -
Committee Substitute (1)
Senate Bill No. 518
(By Senators Tucker and Plymale)
[Introduced March 13, 2013; referred to the Committee on Banking
and Insurance; and then to the Committee on the Judiciary .]
A BILL to repeal §33-25C-5, §33-25C-6, §33-25C-7, §33-25C-9 and
§33-25C-11 of the Code of West Virginia, 1931, as amended; and
to amend said code by adding thereto a new article, designated
§33-16H-1, §33-16H-2, §33-16H-3 and §33-16H-4, all relating to
adverse benefit determinations by insurance companies and
managed care organizations; mandating utilization review and
internal grievance processes; providing for external review of
adverse determinations; defining terms; providing for judicial
review of certain decisions; providing that a decision
rendered by an independent review organization that is adverse
to the issuer is binding on the issuer and not subject to
further review; preserving other causes of action; deleting
similar provisions applicable to only health maintenance
organizations; and directing promulgation of emergency rules
and proposal of legislative rules.
Be it enacted by the Legislature of West Virginia:
That §33-25C-5, §33-25C-6, §33-25C-7, §33-25C-9 and §33-25C-11
of the Code of West Virginia, 1931, as amended, be repealed; and
that said code be amended by adding thereto a new article,
designated §33-16H-1, §33-16H-2, §33-16H-3 and §33-16H-4, all to
read as follows:
ARTICLE 16H. REVIEW OF ADVERSE DETERMINATIONS.
As used in this article:
(1) "Adverse determination" means a decision by or on behalf
of an issuer to:
(A) Rescind coverage; or
(B) Deny, reduce or terminate payment for a benefit, or fail
to make payment, in whole or in part, for a benefit, based on a
(i) The benefit is not covered;
(ii) The benefit is experimental, investigational or does not
meet the issuer's requirements for medical necessity,
appropriateness, health care setting, level of care or
(iii) The claimant is not eligible to participate in the
health benefit plan.
(2) "External review" means a review of an adverse
determination by an independent review organization.
(3) "Final adverse determination" means an adverse
determination that has been upheld by the issuer at the completion
of the internal appeals process or an adverse determination with
respect to which the internal appeals process has been deemed
(4) "Health plan issuer" or "issuer" means an entity required
to be licensed under this chapter that contracts, or offers to
contract to provide, deliver, arrange for, pay for, or reimburse
any of the costs of health care services under a health benefit
plan, including an accident and sickness insurance company, a
health maintenance corporation, a health care corporation, a health
or hospital service corporation, and a fraternal benefit society.
(5) "Health benefit plan" means a policy, contract,
certificate or agreement entered into, offered or issued by an
issuer to provide, deliver, arrange for, pay for, or reimburse any
of the costs of health care services, including short-term and
catastrophic health insurance policies and policies that pay on a
cost-incurred basis, and excluding policies, contracts,
certificates or agreements excluded by rules promulgated pursuant
to section four of this article.
(6) "Independent review organization" means an entity approved
by the commissioner to conduct external reviews of final adverse
(7) "Utilization review" means a system for the evaluation of the necessity, appropriateness and efficiency of the use of health
care services, procedure and facilities.
(8) "Rescission" means a cancellation or discontinuance of
coverage under a health benefit plan that has a retroactive effect.
The term does not include a cancellation or discontinuation that is
attributable to a failure to timely pay required premiums or
contributions towards the cost of coverage.
§33-16H-2. Issuer requirements.
An issuer shall, in accordance with rules promulgated pursuant
to section four of this article, develop processes for utilization
review and internal appeals and shall make external review
available with respect to all adverse determinations.
§33-16H-3. Binding nature of an independent review organization
decision; judicial review; enforcement; rules.
(a) To the extent a decision rendered by an independent review
organization in accordance with the rules promulgated pursuant to
section four of this article is adverse to the issuer, it is
binding on the issuer, not subject to further review in any
judicial or administrative forum except for fraud on the part of
the claimant, and may be enforced by the commissioner in the same
manner as a decision issued by the commissioner.
(b) A claimant may seek judicial review of a final decision
rendered by an independent review organization by filing a
petition, at the election of the petitioner, in either the circuit court of Kanawha County, or in the circuit court of the county in
which the petitioner resides, within thirty days after he or she
receives notice of the decision.
(c) This section does not create any new cause of action or
eliminate any presently existing cause of action.
§33-16H-4. Rule-making authority; emergency rules; applicability.
(a) The commissioner shall promulgate emergency rules and, in
accordance with the provisions of article three, chapter
twenty-nine-a of this code, shall propose legislative rules for
approval by the Legislature, to implement the provisions of this
article, including, but not limited to, rules to:
(1) Define the scope of the applicability of this article;
(2) Establish requirements for all issuers with regard to
utilization review and for internal appeals and external review of
adverse determinations, which rules shall be based on the
corresponding model acts adopted by the National Association of
Insurance Commissioners and, with respect to external review, shall
meet or exceed the minimum consumer protections established by the
federal Patient Protection and Affordable Care Act (Public Law
111-148), as amended by the federal Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152); and
(3) Provide for judicial review pursuant to subsection (b),
section three of this article, which rules shall be based on the
provisions of this code and rules governing judicial review of contested cases under the state administrative procedures act.
(b) Notwithstanding the provisions of section one, article
twenty-three of this chapter; section four, article twenty-four of
this chapter; section six, article twenty-five of this chapter; and
section twenty-four, article twenty-five-a of this chapter, this
article and the rules promulgated under this article are applicable
to all health benefits plans and supersede any provisions to the
contrary in this chapter or in any rules promulgated under this
NOTE: The purpose of this bill is to authorize the Insurance
Commissioner to propose legislative rules and to adopt emergency
rules to provide for review of adverse determinations by insurance
companies and for utilization review and internal appeals of the
This article is new; therefore underscoring and
strike-throughs have been omitted.