H.
B.
4216
(By Delegate Huntwork)
[Introduced January 31, 1994; referred to the
Committee on Select Committee on Health Care Policies then Finance.]
A BILL to amend chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article twenty-nine-e, relating to creating the "Health Care Cost Control Act of 1994"; stating purpose, scope and legislative findings; providing definitions; creating a health care cost review authority; establishing a medical advisory committee; declaring incentives to modify unsafe behavior; providing insurance and public health incentives for wellness; requiring county boards of health to make certain testing or medical procedures available to county residents; determining amounts third party payors are required to pay for testing or procedures; requiring county boards of health to provide information regarding lists of primary care physicians or other providers who are accepting new patients, together with fee schedules, general information regarding exercises, with warnings and disclaimers, general dietary information, information and education relating to childbirth and parenting and health maintenance information; establishing a uniform standard payment schedule for health care providers and health insurers; providing incentives for certain services and attempting to reduce or eliminate existing incentives for certain high cost procedures; defining circumstances when the fixed fee is to be accepted as payment in full by providers subject to specific instances; encouraging cost-based shopping and situations when the standard fee schedule is not binding on health care consumers, providers or insurers; requiring insurers to publish and distribute payment schedules for common medical services and procedures to policyholders; providing malpractice reform; providing nonjudicial remedies for substandard health care; requiring the licensing board to investigate complaints and procedure to handle such complaints; providing optional pretrial review of health related professional liability claims; creating a medical liability review commission, stating composition and qualifications of members; appointed by governor; commission to review all evidence of claim, prior to trial and render opinion, which may be introduced as evidence in trial; providing for limit on liability for noneconomic loss and periodic payment of future damages; limiting contingent attorney fees in actions for injuries alleging medical professional liability; joint and several liability limited by preexisting conditions and by good faith settlements; when punitive damages may be awarded; reducing amount of economic damages by amounts received from collateral sources; requiring certification of merit to be attached to complaint filed in medical professional liability action; providing for the prioritization of health care spending; establishing a mandatory standard health benefits plan; requiring the reporting of restricted procedures; review of cases by health care cost review authority; controlling the bureaucracy; identifying inappropriate financial incentives; prohibiting certain contingent fees and credentialing; prohibiting certain physician self-referral; promulgation of rules by HCCRA; health insurance overhead and guaranteed loss ratios; premium rate approval by insurance commissioner after the first day of January, one thousand nine hundred ninety-five; hospital reimbursement rates after the first day of January, one thousand nine hundred ninety-five; costs of education; hospital boards of directors; authority and who may serve on; control of duplicative health care services; designation of primary care providers; incentives; selection of coverage; nonpayment for duplicative services; profits from health care ventures; advertising of health care and related services; and providing civil penalties for violations, including actions against licensures and civil fines.
Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article twenty-nine-e, to read as follows:
ARTICLE 29E. THE HEALTH CARE COST CONTROL ACT OF 1994.
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16-29E-1. Short title.
This article shall be known and may be cited as the "Health Care Cost Control Act of 1994."
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16-29E-2. Purpose and scope.
(a) It is the intent of this article to control expenditures on health care in West Virginia to the extent possible without compromising the quality of health care, the availability of health care or the actual health of West Virginia residents and citizens.
(b) The scope of this article shall be the identification and mitigation of any and all expenditures on health care and related goods and services which, without significantly improving the quality or availability of health care services or the actual health of West Virginia's citizens, increase the total cost of health care in West Virginia.
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16-29E-3. Legislative findings.
The Legislature finds and declares as follows:
(a) Access to high-quality, affordable, basic health care is a right of every citizen and a primary concern of public policy.
(b) West Virginia's health care, and consequently the health of West Virginians, is in jeopardy due to the following factors:
(1) The spiraling aggregate cost of health care services;
(2) The high demand for health care services;
(3) The unavailability of affordable health insurance coverage for many West Virginians;
(4) The inaccessibility of health care services; and
(5) The state's high proportion of uncompensated and undercompensated health care.
(c) Although the price of specific health care services in West Virginia may be lower than national averages, high health care costs nevertheless contribute to the following significant hardships for our people, government and economy:
(1) Health insurance is increasingly unavailable or unaffordable to the people of West Virginia;
(2) Uninsured or underinsured health care services often result in financial catastrophe for West Virginia's families;
(3) The deferral of needed health care services or preventive health care contribute to an increased incidence of marginal to poor health among West Virginia's citizens;
(4) An increasing and unmanageable burden on the state budget due to health care costs has resulted in higher taxes and reduced government services for the people of West Virginia;
(5) The increasing cost of employee health benefits erodes the competitiveness of West Virginia's industries, jeopardizing jobs; and
(6) The increasing cost of health care benefits erodes the disposable income of West Virginia's employees, retarding economic development.
(d) The following factors, which add to the cost of health care without significantly improving the quality thereof or access thereto, must be reduced to the extent possible:
(1) Overutilization of health care services due to the poor health habits of West Virginia's citizens;
(2) Overutilization of health care services due to inappropriate provider incentives;
(3) Overutilization of health care services due to an absence of appropriate consumer restraints;
(4) Overutilization of health care services due to tort-conscious medical decisions;
(5) Inappropriate allocation of health care resources due to an absence of spending priorities;
(6) Irrational valuation of health care services, rewarding resource-intensive procedures substantially more than less costly cognitive and primary care services;
(7) Excessive administrative costs, advertising and profits in the health insurance and hospital industries;
(8) Excessive costs due to unnecessary bureaucracy, overregulation and redundancy throughout the entire health care system, both public and private;
(9) Excessive incomes of certain workers in health-related fields, including many insurance company employees, many hospital administrative personnel and many health care providers;
(10) Overlapping and redundant services being provided by practitioners in different, often competing, health care disciplines.
(e) A reduction of the unproductive health care costs identified above would be desirable regardless of the method by which health care may be financed, a separate matter requiring the attention of the Legislature of West Virginia and the Congress of the United States.
(f) Since the first and foremost cause of health care expenditures is impaired health, to the extent that good health can be maintained or restored by legislation relating to the physical, mental, environmental, or social condition of the people of West Virginia or affecting their health related behavior, it is appropriate for the Legislature to act thereon, within the framework of the constitution.
(g) Under current circumstances, "market forces" which might moderate the cost of health care rarely exist. Virtually all health care expenditures result from the decisions of health care practitioners acting with the consent of their patients. While most health care decisions are wisely and appropriately made in other respects, they are generally made without consideration of cost, because health care practitioners usually have neither incentive nor sanction to make cost a priority and because patients often lack the incentive or the knowledge to participate in cost-conscious decision making. Competition, often intense, exists among health care providers, but this rarely involves cost competition. To reduce health care costs, a cost-competitive health care marketplace must be created at the primary care level, and, whenever practicable, providers and patients must be empowered and expected to make cost-conscious health care choices.
(h) An inherent conflict of interest exists when a health care provider refers a patient to an entity in which the health care provider has an ownership or profit-sharing interest, or, conversely, when a provider is financially rewarded for withholding services. For cost control to become a consistent and appropriate consideration in medical decisions, the incentive for providers to favor one course of action over another based on greater financial reward must be eliminated.
(i) Under certain circumstances, where it is inappropriate or unrealistic for patients to consider cost in the choice of health care, public policy should protect health care consumers by means of a binding fee schedule. Examples of such circumstances are:
(1) In true emergencies, where time rather than cost should dictate health care choices;
(2) In the pricing of hospital-based ancillary services, where patients have no meaningful control over the choice of laboratory, X ray and other services;
(3) In the care of those patients who, because of age or mental status, are incapable of making appropriate cost-based health care choices;
(4) In the care of those patients for whom, because of poverty or other hardship, any significant cost would be an obstacle to health care.
(j) Existing policies regarding medical professional liability neither adequately reduce the incidence of substandard health care services nor reliably identify and sanction substandard health care practitioners. Moreover, they have raised the aggregate cost of health care by creating a climate in which health care services are often performed to ward off malpractice claims rather than to provide optimum patient. The following are ways in which the Legislature can protect the public interest in affordable, available health care without restricting the right of a party injured by negligence or incompetence to be fully compensated for their loss:
(1) Create mechanisms to penalize patterns of substandard health care rather than catastrophic instances thereof;
(2) Create an advisory panel to present independent information and opinions to juries in professional liability cases;
(3) Restrict attorney's fees if a tort-related liability claim is settled before trial;
(4) Establish that "punitive damages" be paid into the West Virginia fund for victims of crime, rather than to the plaintiff in a specific case;
(5) Assure that collateral sources of compensation be considered in awarding economic damages;
(6) Require a "certificate of merit" before an action alleging medical professional liability may be filed.
(k) However distasteful they may be, limitations on access to health care exist in some form in every society, under every health care system. Access may be limited inappropriately by individual patients' ability to pay, by a scarcity of certain services or by overt rationing or appropriately by the rational prioritization of health care services based on costs and benefits. Unless public policy requires that health care be made available to all according to a rational assessment of the costs and benefits of specific services, the ability of individuals or communities to pay for health care services, rather than the need for those services, will continue to determine their availability.
(l) The traditional valuation of health care services creates incentives to perform high cost, hospital-based procedures rather than cognitive and primary care services. The need for an immense bureaucracy devoted to preauthorization of services, utilization review and the like results in large part from this fact. It is imperative that a payment scale be adopted which eliminates the financial incentive to perform procedures. Eliminating the major cause of unnecessary procedures would reduce the need for a major part of the massive health care bureaucracy.
(m) The profits, salaries and overhead of health insurance companies, hospital corporations and other profit-oriented health care ventures have become a substantial factor in the aggregate cost of health care. In addition to higher cost, other pervasive problems which result from the application of traditional business concepts to health care include:
(1) Marketing and advertising which create inappropriate demand for, unrealistic expectations of or misconceptions about health care services;
(2) The avoidance of responsibility for poorly remunerative patients or services;
(3) Competition for patients, facilities and services based on profitability rather than community need;
(4) A pervasive focus on the financial consequences of health care rather than the welfare of patients.
(n) Those profits which result from efficiency, economy or productivity are appropriate in health care and related services, but those profits which result from misinformation, from the artificial creation of demand, from the avoidance of community responsibility, from monopolistic practices or from strategies that select financially rewarding patients or services are not.
(o) The redundant oversight of health care by overlapping peer review organizations, private and public inspection agencies, utilization review standards, multiple insurance companies and the like create waste, duplication, inefficiency and instances of poor patient care throughout the health care system. To the extent possible, these services should be combined and simplified.
(p) It is in the public interest to maintain regulated competition in health care, both between different types of health care, such as chiropractic versus allopathic medical care, and between practitioners offering similar health care services. However, the costly practice of freely or simultaneously utilizing competing health care services or health care disciplines must be curtailed.
(q) Therefore, whereas the purpose of this enactment is to provide for a comprehensive resolution of the matters set forth above, the Legislature has determined that, insofar as they relate to or otherwise affect the overall cost of health care for the people of West Virginia, changes in the laws regulating health insurance and the health insurance industry, the laws regulating hospitals and the hospital industry, the laws regulating various classes of health care providers, the laws regulating third-party payment for certain health care services, the laws regulating the extent and nature of profits which may derive from investment in health-related ventures, the laws regulating the public behavior of West Virginia's citizens as it relates to identified health care risks, the laws regulating the pattern of utilization of health care services as it relates both to the decisions of health care providers and those of the public-at-large, and the common law and statutory rights and procedures under which our citizens may seek compensation for health care related injuries and death must be enacted together as necessary, mutual and synergistic components of the appropriate legislative response.
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16-29E-4. Definitions.
As used in this article:
(1) "Ancillary hospital services" means those hospital services such as clinical laboratory services, diagnostic imaging services, electrocardiography and other similar diagnostic services which are not directly therapeutic in nature but which are necessary to allow and support direct patient care.
(2) "Balance billing" means to submit a bill of charges for medical services which are greater than the amount allowed or established in the standard provider fee schedule created pursuant to section seven of this article.
(3) "Bank" means an institution for the custody, loan or exchange of money and regulated under the banking laws of one of the several states of the United States.
(4) "Board" means the West Virginia health care cost review authority.
(5) "Board of directors," in reference to hospitals, means that group of people, defined according to the separate bylaws of various hospitals, who exercise supervisory and managerial powers over a hospital and its employees.
(6) "CPT codes" means current common procedure terminology codes.
(7) "Calendar year" means a period of a year beginning with the first day of January, and ending with the thirty-first day of December.
(8) "Chiropractic physician" means a practitioner of chiropractic licensed by, or eligible to be licensed by the West Virginia board of chiropractic examiners.
(9) "Cognitive services" means activities related to health care which require medical knowledge or skill but which do not involve the performance of an identifiable diagnostic test or therapeutic procedure.
(10) "Collateral source" means any individual, organization, government, governmental subdivision or agency or any other legal entity that has compensated a claimant for injuries for which the claimant is alleging damages due to medical professional liability.
(11) "Commission" means the medical liability review commission established pursuant to section eight of this article.
(12) "Contingent fees" means fees for services which are dependent or conditioned on the outcome of an action.
(13) "Copayment" means a payment for health care services made by the recipient of such services which is over-and-above that payment made by a health insurer, up to the standard provider fee schedule established pursuant to section seven of this article.
(14) "Cost of living" means the cost of purchasing those goods and services which are included in an accepted federal or state index of consumption.
(15) "DRG" means diagnosis-related group.
(16) "DRG payment schedule" means a prospective payment schedule for inpatient hospital services in which uniform reimbursement rates are set for diagnosis-related groups, based on average costs, resource consumption and length-of-hospital-stay patterns.
(17) "Diagnosis related group" means one of a comprehensive classification of groups of patients based on diagnosis, resource consumption and length-of-hospital-stay patterns.
(18) "Diagnostic procedure" means a health care service which is not directly therapeutic in nature, but the purpose of which is to provide information regarding the nature of a health problem or to monitor a course of treatment.
(19) "Economic damages" means the full value of all money, property, or income lost or expended as the result of an injury, plus interest on such losses from the time such loss occurred, plus the present value of all future lost income or expenses related to such injury.
(20) "Family practice" means that health care specialty defined and certified by the American academy of family practice.
(21) "HCCRA" means the West Virginia health care cost review authority.
(22) "HMO" means a health maintenance organization.
(23) "Health care discipline" means a distinct category of health care theory and practice, such as nursing, allopathic medicine, osteopathic medicine and chiropractic.
(24) "Health maintenance organization" means a prepaid health care plan operating pursuant to article twenty-five-a, chapter thirty-three of this code.
(25) "Home health services" means in-home health care provided for home-bound patients by employees of home health agencies.
(26) "Imaging procedure" means a diagnostic procedure intended to provide information in visual form regarding the presence or absence of abnormal anatomic or physiologic conditions.
(27) "Immunization" means the administration of vaccines or other measures to create a condition of immunity or resistance to infections or infectious diseases.
(28) "Incentive" means something which tends to incite or to influence actions.
(29) "Indication" means a specific circumstance that makes or tends to make a particular medical decision or action necessary or advisable.
(30) "Inpatient hospital services" means health care services which are provided to a person who has been admitted to and is under the observation and care of a licensed hospital.
(31) "Insurance commissioner" means the insurance commissioner of West Virginia.
(32) "Insurer" means any entity transacting individual or group health and accident insurance pursuant to chapter thirty-three of this code.
(33) "Intentional" means done voluntarily, purposefully and by design.
(34) "Internal medicine" means that medical specialty defined and certified by the American board of internal medicine.
(35) "Investment interest" means ownership or partial ownership, except ownership of registered securities or shares of publicly owned corporations.
(36) "Laboratory test" means a diagnostic procedure generally performed by a clinical laboratory.
(37) "Loss ratio" means the ratio of incurred claims to earned premiums.
(38) "Malpractice" means medical professional liability.
(39) "Malpractice carrier" means an insurer indemnifying against losses for medical professional liability.
(40) "Medicaid" means the federal medicaid program and any state agencies or programs created pursuant thereto.
(41) "Medical advisory committee" means that committee created pursuant to subsection (b), section five of this article.
(42) "Medical physician" means a medical doctor licensed by, or eligible to be licensed by the West Virginia board of medicine.
(43) "Medical professional liability" means any liability for damages resulting from the death or injury of a person for any tort or breach of contract based on health care services rendered, or which should have been rendered, by a health care provider or health care facility to a patient.
(44) "Medicare" means the federal medicare program.
(45) "Negligent" means marked by neglect or carelessness.
(46) "Noneconomic loss" means losses including, but not limited to, pain, suffering, mental anguish and grief.
(47) "Nonprofit hospital" means a hospital organized and licensed as a nonprofit hospital or hospital corporation.
(48) "Obstetrics" means that medical discipline dealing with pregnancy, labor and delivery and generally defined and certified by the American board of obstetrics and gynecology.
(49) "Operation" means a surgical procedure carried out on a living body, generally involving the use of instruments, anesthesia and sterile technique.
(50) "Operative procedure" means an operation.
(51) "Osteopathic physician" means a practitioner of osteopathic medicine licensed by, or eligible to be licensed by, the West Virginia board of osteopathy.
(52) "Pediatrics" means a health care specialty dealing with the health care of children, and generally defined and certified by the American board of pediatrics.
(53) "Peer review" means critical review of the medical records or the services of health care providers by similar providers who were uninvolved in those records or care.
(54) "Physical therapy" means that health care practice dealing with the evaluation and treatment of disease processes and trauma by the use of physical agents, the education for which is generally defined and certified by the American physical therapy association.
(55) "Practitioner" means a person providing health care services.
(56) "Preauthorization" means prior approval.
(57) "Present value of future damages" means an estimation of future losses resulting from an injury, assuming that their dollar value will remain constant.
(58) "Primary care" means a health care service dealing with a wide range of common health care problems, and serving as a source of referral when specialty health care services are necessary.
(59) "Primary care physician" means a physician providing primary care services.
(60) "Primary care provider" means any health care provider engaged in primary care services.
(61) "Privilege" means permission granted to a health care practitioner to render specific patient care services in a hospital, including access to the hospital, its facilities and personnel.
(62) "Probable cause" means facts or circumstances that would lead a reasonable person to conclude that a charge or accusation is well-founded.
(63) "Procedure" means a specific, defined health care service.
(64) "Professional service" means a procedure or function performed by a licensed health care provider in the course of practicing his or her profession.
(65) "Progressive copayments" means a schedule of copayments whose dollar amount becomes greater with increasing personal income.
(66) "Provider" means a licensed health care practitioner performing medical procedures and services.
(67) "Public roadway" means any road or right-of-way accessible to members of the general public.
(68) "Punitive damages" means exemplary or vindictive damages awarded against a party in a civil action to penalize egregious behavior and to provide deterrence against similar future conduct by any party. Punitive damages do not include damages awarded for injury or loss.
(69) "Radiation therapy" means that medical practice dealing with the treatment of disease by means of radiation and radioactivity.
(70) "Rebate" means a return of part of a payment, specifically a return of part of a health care premium in return for healthy behavior.
(71) "Rehabilitative services" means health care services involving multiple health care providers and disciplines in a single setting for the purpose of assisting patients to recover independence after catastrophic injuries or diseases.
(72) "Reinsurance" means insurance purchased by an insurer to indemnify that insurer against unanticipated losses due to claims made.
(73) "Responsible provider" means that health care provider who made the decision to perform a restricted procedure.
(74) "Seat belt" means a system of straps or other restraints designed to reduce injury in case of a motor vehicle accident, approved for that purpose by the national highway traffic safety administration, and used according to the manufacturer's instructions.
(75) "Severity of disease" means a degree of illness creating an atypical consumption of services or length-of-stay.
(76) "Single payor" means a government agency acting as a single statewide insurer.
(77) "Skilled nursing services" means a level of nursing care requiring the services of professional licensed and registered nurses.
(78) "Specialty service" means a health care service intended to provide care for particular types of patients or diseases or to perform particular health care procedures.
(79) "Statistical records" means collections of numerical or quantitative data and the mathematical analysis thereof.
(80) "Standard fees" means fees established pursuant to section seven of this article.
(81) "Substandard care" means health care which does not exhibit that degree of care, skill and learning required or expected of a reasonable, prudent health care provider in the profession or class to which the health care provider belongs, acting in the same or similar circumstances.
(82) "Surgery" means that specialty of medicine concerned with diseases and conditions requiring or amenable to operative procedures.
(83) "Surgical" means of or pertaining to surgery.
(84) "X ray studies" means diagnostic imaging procedures involving the use of X rays.
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16-29E-5. Health care cost review authority.
(a) In addition to its rights and duties under article twenty-nine-b, chapter sixteen of this code, the West Virginia health care cost review authority, hereinafter referred to as the board or as HCCRA, shall assume the rights and duties created under this article. Unless specifically so stated, the additional requirements of this article shall not in any way modify the existing activities, procedures or obligations of the board.
(b) The HCCRA medical advisory committee is hereby established. The HCCRA medical advisory committee shall consist of seven members, all of whom shall be health care providers licensed to practice in the state of West Virginia. One such member shall be selected by the dean of the West Virginia University School of Medicine, one shall be appointed by the dean of the Marshall University School of Medicine, one shall be appointed by the dean of the West Virginia School of Osteopathic Medicine, one shall be appointed by the West Virginia State Medical Association, one shall be appointed by the West Virginia Osteopathic Association and two shall be appointed by the board.
The board shall consult with and receive the opinion of the medical advisory committee prior to taking action on any matter for which that committee's advice is required under this article.
Actions or policies established by HCCRA in accordance with this article shall consider rules subject to the provisions of article three, chapter twenty-nine-a of this code.
(c) The additional funding requirements created by this article shall be met by an assessment on the health care providers, accident and sickness insurers and health maintenance organizations regulated herein, on a pro rata basis using the gross revenues of each provider and insurer. The amount of this assessment shall be determined by the board, but in no case may any obligation exceed one tenth of one percent of the gross revenues of any entity. Such fees shall be paid to the state tax department on or before the first day of July in each year and shall be deposited into that special fund designated as the "health care cost review fund," with the moneys so collected being expendable after appropriation by the Legislature for purposes consistent with this article. The state tax department shall make deposits as an aggregate and shall not disclose or make public the separate payments or gross revenues of the providers regulated under this article.
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16-29E-6. Insurance and public health incentives for wellness.
(a) After consultation with the medical advisory committee, the board shall prepare, publish and update as necessary a listing of those laboratory tests, X ray studies, other diagnostic procedures, immunizations and other disease-prevention procedures, along with recommended frequencies for those tests, studies and procedures, which it deems necessary and cost-effective for routine health monitoring or disease prevention, taking into account the diverse needs of the various subdivisions of the population due to age, gender, occupation, geographical location and the like.
The board shall further, on an annual basis, perform a market study to determine and establish appropriate pricing for each study and procedure so listed.
Each county board of health shall make testing or procedures available to any resident of the county or counties which it serves at the prices determined by the health care cost review authority. County boards of health may separately or collectively designate or contract with private or public health services, laboratories or the like to perform such testing. The results of the testing shall be given directly to the person tested, and shall not otherwise be released. County boards of health shall not be obligated to provide medical advice regarding such health maintenance testing or procedures except as provided in subdivision (b) of this section.
All third-party payors shall, without deductibles or copayments, reimburse for the procedures so listed at the prices so determined, within the frequencies so recommended.
If disease-prevention testing or procedures be performed by health care facilities or providers other than county boards of health or their designees, there shall be no obligation on third party payors to reimburse for such services more than the amounts determined by the board or at frequencies greater than those designated by the board, nor is any third-party payor obligated to pay for any disease-prevention service which is not listed by HCCRA as necessary for that purpose.
(b) County boards of health shall make available to the residents of the county or counties which they serve certain types of generic medical information, as determined and distributed by the health care cost review authority after consultation with the medical advisory committee. The information may be in written, audio or visual form, and may be disseminated as determined by HCCRA or the county boards of health, including advertisements, mailings, literature displays, classes, public forums or individual counseling.
HCCRA and the several county boards of health may provide such health-related information as they deem appropriate, but, after consultation with the medical advisory committee, shall, at a minimum, provide information regarding the following topics:
(1) A list of primary care physicians or other primary care providers who are accepting new patients within or near the county served by that board of health, along with those providers' education, board certification, hospital affiliations and fee schedules, as reported under the requirements of section seven of this article;
(2) General information regarding exercise for cardiovascular fitness, including specific fitness activities with appropriate warnings and disclaimers;
(3) General dietary information, including, at a minimum, information on calorie restriction for the purpose of weight control, dietary guidelines for control of salt intake and dietary guidelines for the control of cholesterol;
(4) Information and education regarding prenatal maternal and fetal health, childbirth and parenting;
(5) Information regarding health-maintenance testing and procedures as recommended in this section, including the list of the procedures so recommended, the general reasons for each test or procedure and, in general terms, appropriate responses to the results thereof.
(c) After consultation with the medical advisory committee, the board shall establish a health insurance rebate program to reward individuals who maintain healthy habits and lifestyles. The rebates shall be up to one hundred dollars per year for any individual, and shall be based on objective criteria indicative of beneficiaries' health-related behavior rather than their actual state of health. The criteria shall include control of existing health problems, participation in exercise programs, currency of vaccinations, control of body weight, avoidance of substance abuse, tobacco usage, and motor vehicle violations and such additional factors as the board may establish.
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16-29E-7. Fee and payment schedules.
(a) Establishment of a standard payment schedule for health care providers and health insurers:
(1) The board shall establish and publish a standard provider reimbursement schedule. This schedule shall establish standard fees for all health care procedures covered by the mandatory standard health benefits plan created pursuant to subsection (a), section nine of this article. In establishing this schedule, the board shall consider the following factors:
(A) The payment schedule shall be uniform statewide and should provide similar reimbursement for similar services provided by practitioners of similar experience, training and skill;
(B) The payment schedule shall provide additional incentives for primary care, particularly in underserved areas;
(C) To the extent possible without reducing the availability of specialty and surgical health care services within the state, the payment schedule shall attempt to reduce or eliminate existing incentives to perform operative and other high cost procedures;
(D) The payment schedule shall not be so low as to reduce or discourage the availability of health care under the circumstances defined in subdivision (2) of this subsection, in which balance billing is unlawful.
(2) Under the following circumstances, the payment schedule determined pursuant to subdivision (1) of this subsection shall be the fixed fee which providers must accept as payment in full, and copayments or balance billing is unlawful except as noted:
(A) For health care delivered in true emergencies, defined as follows, the payment schedule is mandatory.
After consultation with the medical advisory committee, the board shall develop and publish a list of those health problems and circumstances which it deems to constitute true medical emergencies. It is presumed that under the defined emergency circumstances there should exist no cost-related obstacle to health care, that health care consumers may consider time rather than cost in the selection of health care services and that health care providers and facilities should cooperate rather than compete to assure the delivery of timely health care;
(B) For health care services provided to individuals who are not mentally competent because of age or any other reason to make informed, cost-conscious health care choices, the standard payment schedule is mandatory;
(C) For health care services provided to individuals whose family income is less than twice the defined federal poverty level, any payment beyond carefully defined, progressive copayments may constitute a barrier to health care. Under those circumstances, the standard payment schedule developed pursuant to this subsection is mandatory:
Provided,
That the board may allow or require small copayments or deductibles, but balance-billing beyond the standard fees and copayments so established is prohibited;
(D) For professional fees for ancillary hospital services, both inpatient and outpatient, including, specifically, fees for the interpretation of imaging procedures, electrocardiograms, laboratory services and other services for which a professional service by other than the attending physician is required by hospital policy, regulation or law, the standard payment schedule developed pursuant to subdivision (1) of this subsection is mandatory.
(3) In order to encourage appropriate cost-based shopping by health-care consumers, under no circumstances other than those specifically stated in this article may the standard fee schedule established pursuant to subdivision (1) of this subsection be binding upon health care consumers, providers or insurers.
(b) Reporting and publishing of provider fees and third-party reimbursement rates:
(1) On or before the first day of January of each year, all insurers shall publish and distribute to all policyholders their payment schedules for common medical services and procedures, and shall additionally make this information available to any member of the public upon request. The payments shall be uniform throughout the state of West Virginia for providers of similar training and skill. Additionally, insurers shall upon request advise policyholders of their payment for any procedure. The payments shall be at least equal to the standard fee developed by the board, less any policy-specific cost-sharing adjustment;
(2) On or before the first day of January, one thousand nine hundred ninety-five, and before the first day of January of each year thereafter, each health care provider licensed in the state of West Virginia shall furnish to the board, and make available to any member of the public upon request, the CPT codes and fees for the twenty-five procedures he or she most frequently performed during the previous calendar year. Additionally, each provider shall furnish to the board his or her fees for such other services as the board may request and shall, upon the request of any patient, advise that patient of the fee for any contemplated procedure or service not so reported. Fees may be lowered for selected patients, but providers may charge no patient more for any procedure than the fee reported to the board for that procedure during the applicable calendar year;
(3) The board shall compile the information it receives pursuant to this subsection and shall distribute to all libraries, to all county boards of health, to all hospitals within the state and to any member of the general public upon request such fee information as the board deems appropriate, based on regions of the state, types of services offered and the like. Additionally, the board shall develop useful price indices--such as the total fees for a standard surgical procedure or the fees for a week of hospital care to treat a nonsurgical medical problem--appropriate to various types and specialties of health care providers, so that members of the public may have meaningful information regarding out-of-pocket cost differences between specific health care providers.
§
16-29E-8. Malpractice reform.
(a) Nonjudicial remedies for substandard health care.
(1) Upon the written complaint of any person, professional organization, hospital administrator, hospital board of directors, peer review organization, peer review committee, health insurance company or health-related government agency to any health care licensing board alleging that a health care practitioner licensed thereby has failed to exercise that degree of care, skill and learning required or expected of a reasonable, prudent health care provider in the profession or class to which the health care provider belongs, that licensing board shall investigate the complaint in sufficient detail to determine whether there is probable cause to believe that a failure occurred.
To make a determination under this article that a provider has failed to follow the accepted standard of care, it is not relevant whether the failure resulted in injury to or the death of any patient. In making a determination, the licensing board may employ the assistance, advice and council of such persons as it deems necessary for the proper evaluation of the complaint. Additionally, the licensing board may obtain medical records from such sources as it deems necessary for the proper evaluation of a complaint.
Any physician-patient privilege does not apply in any investigation under this subsection while a licensing board is acting within the scope of its authority:
Provided,
That the disclosure of any information under this subsection may not be considered a waiver of any privilege in any other proceeding:
Provided,
however,
That any medical records which pertain to a person who has not expressly waved his or her rights to the confidentiality of records may not be open to the public.
Upon the determination that there is probable cause to believe that substandard care has occurred, the licensing board shall notify the practitioner of the determination. The practitioner has fifteen days to provide written comments on the findings of the board, which comments shall remain part of any record regarding the complaint. After review of the comments, the board may uphold, revise or reverse its determination.
The complaints to, and records of any licensing board pursuant to this subsection, are not open to the public nor may any determination based on the complaint or its investigation be the basis of any disciplinary action except, for physicians and podiatrists, through subsequent disciplinary procedures specified in section fourteen, article three, chapter thirty of this code, and for other practitioners under the established disciplinary procedures of their respective licensing boards.
(2) Upon the basis of any complaint, a licensing board may further investigate the professional competence of any health care practitioner licensed by that board, according to the procedures specified within this subsection or according to the procedures of section fourteen, article three, chapter thirty of this code. If any licensing board finds probable cause to believe that a violation of the standard of care specified in subdivision (1) of this subsection has occurred in three separate complaints regarding any licensee of that board during the most recent five-year period, or if three or more judgments arising from medical professional liability have been rendered or made against any health care practitioner during the most recent five-year period, that licensing board shall initiate an investigation according to the procedures specified within this subsection.
(3) Further investigation by any licensing board under this subsection shall be to determine whether a health care provider generally exercises that degree of care, skill and learning required or expected of a reasonable, prudent health care provider in the profession or class to which the health care provider belongs, acting in the same or similar circumstances.
In an investigation under this subdivision, the licensing board shall obtain and review records relevant to a provider's services within the most recent six-month period. The records shall include any disciplinary actions by peer review organizations, hospitals, professional societies and malpractice carriers. Additionally, the licensing board shall review a sufficient number of randomly selected hospital or outpatient medical records to ascertain the scope of practice and practice habits of the subject provider.
In an investigation, the licensing board may employ such persons as it deems necessary to compile and evaluate the information so obtained. At a minimum, the records so obtained shall be reviewed by a health care provider who is actively practicing in the same or an essentially similar medical field as the subject health care provider.
If, after a review of the above information, the licensing board determines that the provider under investigation generally fails to meet the accepted standard of care, resulting in unnecessary or unusual risks or injuries to patients, it shall so advise the subject provider, including a specific listing of the alleged deficiencies. The subject provider has thirty days from the receipt of notification to respond to the findings of the board.
If the subject provider accepts the findings of the licensing board, the board shall immediately impose appropriate sanctions upon the provider within the scope of its authority under article three, chapter thirty of this code, in the case of physicians and podiatrists, or under the applicable laws referable to other licensing boards.
If the subject provider disputes the conclusions of the board, the board shall consider the provider's written response to the alleged deficiency or deficiencies. If, after consideration, the board continues to find disputed deficiencies, it shall initiate formal disciplinary proceedings, which, for physicians or podiatrists shall be under section fourteen, article three, chapter thirty of this code, charging the subject provider with professional incompetence.
(b) Optional pretrial review of health-related professional liability claims.
(1) Medical liability review commission created:
(A) There is hereby created a medical liability review commission as an independent agency within the executive branch. The commission shall consist of five members, of whom one shall be a medical or osteopathic physician licensed to practice in the state of West Virginia, and one shall be a registered nurse licensed to practice in the state of West Virginia. Members shall be compensated as provided in the state budget from that fund created in subdivision (D) of this subsection, and known as the medical liability review fund.
(B) Members shall be appointed by the governor with the advice and consent of the Senate from the list of candidates submitted by the nominating bodies specified in subdivision (C) of this subsection. The governor shall designate one member whose initial term of office shall be one year, one member whose initial term shall be two years, one member whose initial term shall be three years, one member whose initial term shall be four years and one member whose initial term shall be five years. Upon the completion of any member's term, that member shall be replaced by a nominee of the same body as nominated the member whose term expired. After the initial appointments, the term of office of all members shall be five years. Members shall be eligible for reappointment and shall be removable by the governor for neglect of duty or malfeasance in office, but for no other cause. Annually, the governor shall designate one of the members to serve as the chairperson of the commission. The chairperson shall assume such additional powers and duties as the commission determines, except that the chairperson may exercise no more than one vote on any matter before the commission.
(C) Nominations for appointment to the commission shall be as follows: For one position on the board, the West Virginia State Medical Association shall nominate two persons, of whom thE governor may appoint one, with the advice and consent of the Senate; for one position, the West Virginia Nursing Association shall nominate two persons, of whom the governor may appoint one, with the advice and consent of the Senate; for the remaining three positions, the governor shall appoint such persons as he may, subject to the advice and consent of the Senate.
(D) There is hereby created in the state treasury a fund known as the medical liability review fund. The funding requirements of the medical liability review commission shall be met by a tax of one tenth of one percent on all health care related liability insurance providing coverage within the state of West Virginia, plus such fees as the commission may assess for its services and such funds as may be appropriated for this purpose by the Legislature, all of which shall be placed into the medical liability review fund, the moneys in which may be expended by the commission after appropriation by the Legislature for purposes consistent with this subsection.
(2) In addition to any other rights or duties created herein, the medical liability review commission may:
(A) Adopt, amend and repeal necessary, appropriate and lawful policy guidelines and rules in accordance with article three, chapter twenty-nine-a of this code;
(B) Meet, hold hearings, file complaints with health provider licensing boards, and subpoena records, papers and documents in connection therewith. The board may administer oaths or affirmations in connection with any matter under its jurisdiction;
(C) Rent, purchase, maintain, sell, equip and assign rights or dispose of any property consistent with the objectives of the commission, subject to the approval of the Legislature;
(D) Contract and be contracted with and execute all instruments necessary or convenient in carrying out the commission's functions and duties;
(E) Appoint such attorneys, claim reviewers, investigators and other employees as are necessary for the proper performance of its duties;
(F) Delegate any of its powers to one or more of its members or to one of its employees:
Provided,
That no opinion regarding a specific legal action before it may be issued without an affirmative vote thereon by at least three members of the commission;
(G) Apply for, receive, accept and expend on purposes consistent with this subsection, gifts, payments and other funds and advances from the United States, the state or any other governmental body, agency or agencies or from any other private or public corporation or person (with the exception of any person, corporation, foundation or political action group involved in the practice of medicine or law or primarily identified or associated with legal or medical concerns) and enter into agreements with respect thereto, including the undertaking of studies, plans, demonstrations or projects:
Provided,
That no such funds may inure in any respect to the private benefit of any member of the commission;
(H) Exercise all other powers which are reasonably necessary to effect the express objectives of this article.
(3) Additional legislative directives:
(A) Upon the request of any party involved in a health-related professional liability action, the commission shall, within fifteen days, notify all parties to the action, plaintiff and defendant, of its involvement therein;
(B) Within thirty days of such notification, each party so notified shall acknowledge such notification and shall provide the commission with a summary of its position on the matter, along with the medical records, expert testimony and other evidence it has developed in support of its position, and shall from time to time update the information so provided if substantial changes therein occur;
(C) At any time that the commission determines that additional facts or records concerning the matter in dispute are needed, it may require, by subpoena, deposition or hearing, any party to the action, or any third party, to provide that information;
(D) At any time, the commission may determine that it has sufficient information to render an opinion about a matter before it, whereupon it may issue an opinion subject to subdivision (4) of this subsection;
(E) The commission shall be notified within forty-eight hours if a trial date be set on any matter which is before the commission. In any matter before the commission, at least sixty days shall be allowed between such notification and the trial date. Upon notification, the commission shall require from all parties to the case any evidence not previously provided which may be considered at trial;
(F) At least fourteen days prior to a trial date for any matter before it, the commission shall render an opinion on the matter, subject to the provisions of subdivision (4) of this subsection;
(G) An opinion of the medical liability advisory commission may be introduced as evidence at any trial deciding any matter which has come before the commission by any party to the action, defendant or plaintiff. If it is introduced, it shall be introduced in its entirety, along with any supporting material supplied by the commission. The failure of a majority of the commission to agree on any specific matter shall not be made known to the jury.
(4) Opinions of the commission may not be issued without the affirmative vote of at least three members of the commission. The opinions shall include a statement that the commission was created by the Legislature to assure that juries adjudicating malpractice cases have access to objective medical information, and shall further include the names, occupations and method of appointment of the members of the commission and the fact that the commission's opinion is advisory in nature, the actual decision being entirely the jury's. The opinion shall further include a statement as to the percentage of cases in which the commission's opinion has favored the plaintiff in an action, the percentage which has favored the defendant and the percentage in which the commission has been unable to render an opinion. Additionally, the opinion may include any, or all, of the following:
(A) Answers to specific questions asked by any party to the action;
(B) An opinion supporting the position of any of the parties to the action;
(C) Recommendations as to the nature and extent of economic damages suffered by any party to a case;
(D) Recommendations as to the merit of any claim for punitive damages;
(E) Information in written, printed, audio or visual form bearing on any question which the board considers important to the matter in dispute, including any explanatory remarks concerning information which the board may see fit to attach thereto.
(5) Any member of, employee of, person under contract with or person providing information to the commission, if acting in good faith, is immune from suit under any law of this state or political subdivision thereof for any act or decision made in that capacity.
(6) Pursuant to the provisions of section four, article ten, chapter four of this code, the medical liability review committee shall continue to exist until the first day of July, one thousand nine hundred ninety-eight, to allow for a completion of an audit by the joint committee on government operations.
(c) Limitation of contingent attorney fees:
In actions for injuries alleging medical professional liability, contingent attorney fees are limited if an action is settled before or during trial, the plaintiff may not be required to pay contingent attorney fees in excess of twenty percent of any settlement, after reasonable expenses have been deducted.
(d) Punitive damages:
(1) Punitive damages may be awarded in medical professional liability actions only for egregious behavior that is truly shocking, and where the evidence leaves no serious or substantial doubt that the defendant in the action acted with intent to cause serious injury to the plaintiff or acted with a flagrant indifference to the rights of the plaintiff and with an awareness that the conduct would result in serious injury to the plaintiff.
(2) If punitive damages are assessed in any medical professional liability action, only the first ten thousand dollars thereof may be awarded to the plaintiff in that action. Any punitive damages in excess of ten thousand dollars shall be deposited into that special fund of the state of West Virginia known as the "crime victims compensation fund," to be expended as appropriated by the Legislature.
(e) Collateral sources:
(1) In any action finding medical professional liability, the amount of economic damages shall be reduced by the total of all amounts which have been paid or shall be paid for the benefit of the claimant or which are otherwise available to him or her as a result of the injury, from all collateral sources.
(2) Except for payments out of earned income to the United States government pursuant to the federal Social Security Act, any reduction because of sums paid to the claimant by a collateral source shall be offset by any amount which has been paid, contributed or forfeited to the collateral source by the claimant in order to secure the claimant's rights to the sums paid by the collateral source.
(f) Filing requirement of certification of merit:
Upon the filing of a medical professional liability action against a health care provider, the attorney bringing the action on behalf of the patient or his or her representative shall attach to the complaint an affidavit stating that a qualified health care practitioner practicing in the same or similar field of medicine as each defendant health care provider has prepared a written report which reflects his or her belief that there is a "reasonable and meritorious cause for filing the action" and a copy of the report shall be attached thereto.
§
16-29E-9. Prioritization of health care spending.
(a) Mandatory standard health benefits plan.
After consultation with the medical advisory committee and the insurance commissioner of West Virginia, HCCRA shall establish and periodically update a standard health benefits plan which shall apply to every health insurance program and prepaid health care plan operating within the state of West Virginia and subject to the regulatory authority thereof. The standard plan shall include alternatives of approximately equal cost per covered individual, to allow the consumer choices specified in section fourteen of this article. The plan shall include all of the following:
(1) A listing of those services and circumstances for which there shall be full payment without deductibles, copayments or other contribution by insurees, which shall be those services and circumstances specified previously in this article or elsewhere within the code of West Virginia. For any service so specified, the board may stipulate the price thereof, which shall be binding on all health care providers and institutions within the state of West Virginia unless otherwise noted in this article;
(2) A listing of other covered services and benefits, including limitations on total payments, number of visits, number of inpatient days and the like as the board may stipulate;
(3) A progressive scale of copayments and other contributions by insurees for health care services not covered under subdivision (1) of this subsection, based on family income. The payments shall be sufficiently large to encourage serious consideration before seeking such health care services, but shall not be so onerous as to create serious financial injury to prudent beneficiaries. The copayments shall be made to the insurance carrier rather than to the health care provider. The copayments shall be so structured as to encourage less costly health care choices, such as higher copayments for emergency room services, for name brand drugs or otherwise more costly medications, and the like;
(4) A list of services which are not covered under any circumstances, or under limited circumstances. In the case of procedures approved under limited circumstances, those circumstances shall be specifically enumerated by the board, shall be based on specific objective criteria and shall be subject to the reporting requirements of this section;
(5) A list of services, in a specific order of priority, which the board deems to be marginally cost-effective compared with alternative health care expenditures. If the board determines that insurance coverage of any or all procedures compromises the delivery of more cost-effective health care services, the board may, after consultation with the medical advisory committee, by rule of emergency rule, discontinue coverage of the procedures, according to the order of priority so established, subject to the provisions of article three, chapter twenty-nine-a of this code;
(6) Nothing contained herein may be construed to prevent any insurer from offering coinsurance which provides for the coverage of services limited or excluded under the standard health benefits plan created herein.
(b) Reporting of restricted procedures.
(1) HCCRA shall create a list of technologies and procedures deemed to be so costly or so subject to overutilization as to require specific monitoring and control, including those procedures listed pursuant to subdivision (4), subsection (a) of this section. After consultation with the medical advisory committee, the board shall establish a list of specific indications for the use of any technology or the performance of any procedure so indicated, the indications to be based on specific, objective criteria rather than vague concepts such as "medical necessity." Any technology or procedure so identified shall be subject to the reporting requirement of this section.
(2) HCCRA shall promulgate and distribute a form for the reporting of restricted procedures or the use of restricted technologies, as specified in subdivision (4), subsection (a) and subdivision (1) of this subsection of this section. The form shall be no larger than 8 1/2"x11". It shall be used by all providers and all insurers to report all procedures restricted under this article, except as provided herein.
(3) Prior to the performance of any procedure restricted under subdivision (1) or (4), subsection (a) of this section, the provider responsible for the performance of such procedure shall complete the form created in subdivision (2) of this subsection, and shall upon the form provide an initial statement specifying the applicable indication for the procedure as established by HCCRA. The responsible provider shall assure that the form is forwarded to HCCRA, by mail or otherwise. Additionally, a copy of the completed form and attachments thereto shall accompany any request for payment for the restricted service.
It may not be required that the initial statement specifying the applicable indication for the restricted procedure include documentation of the indication, nor may it be required that the statement include any other medical history or medical records. Unless otherwise expressly permitted or required by law, no party may require preauthorization for the restricted procedures or withhold payment for the procedures pending the receipt or review of medical records or other documentation, nor may preauthorization be required for any covered service not subject to restriction under this section, by any insurer. No person or insurer may be required to pay for the performance of any restricted procedure until that person or insurer has received a copy of the completed restricted procedure reporting form.
(4) If a health care provider believes that a restricted procedure should be performed for reasons other than an indication recognized by HCCRA, the health care provider may request preauthorization for that procedure from a reviewing authority which HCCRA shall designate for that purpose.
(5) A restricted procedure may not be performed for reasons other than an indication recognized by HCCRA without preauthorization unless the patient has knowingly signed a consent form acknowledging that the procedure is being performed for reasons inconsistent with the health care policies of the state of West Virginia and that no third party payor may reimburse for the services.
(6) HCCRA shall keep statistical and other records on all health care providers reporting restricted procedures, and shall review a sufficient number of cases involving restricted procedures to assure general compliance with this article. In so doing, HCCRA shall:
(A) Review in detail a small number of randomly selected cases;
(B) Review cases regarding which a specific complaint has been received:
Provided,
That the cost for the investigation may be imposed on the person or entity so complaining if the complaint is not found by the board to be valid;
(C) Review cases chosen because of any pattern, statistical or otherwise, which the board feels may indicate improper utilization of restricted procedures by any provider.
(7) In reviewing any case under this article, the board shall obtain from any source such medical records and reports as it requires to ascertain whether the responsible provider's statement specifying the approved indication for the restricted procedure was factual. Any physician-patient privilege does not apply in any investigation under this section while the board is acting within the scope of its authority:
Provided,
That the disclosure of any information under this section may not be considered a waiver of any privilege in any other proceeding:
Provided,
however,
That any medical records which pertain to a person who has not expressly waived his or her rights to the confidentiality of the records may not be open to the public. If it is determined that the responsible provider's statement was substantially accurate, the review shall be complete. In making this determination, the benefit of any reasonable doubt shall go to the subject health care provider.
If it is determined that the responsible provider's statement was inaccurate, the board shall notify the subject provider of a finding of noncompliance and shall review such additional cases as are necessary to determine whether a pattern exists indicating intentional or negligent abuse of restricted procedures by the subject provider. If, in the opinion of the board, such a pattern exists, or if, after the first notice of noncompliance, repeated instances thereof are detected, HCCRA may file a complaint with the appropriate licensing board, to suspend the subject provider's prerogative to order or perform restricted procedures pending disciplinary procedures by the licensing board, or to pursue civil remedies specified in section seventeen of this article.
(8) In the absence of an approved indication to perform any procedure restricted by HCCRA under this section the failure to perform the procedure may not be considered negligence in any action alleging medical professional liability:
Provided,
That in the action, the question of whether such an indication actually existed is an open question of fact.
(c) Control of bureaucracy.
HCCRA shall undertake a study of the potential cost savings which may result from consolidating the various bureaucratic functions that regulate and control health care activities. The study shall include:
(1) The potential cost savings which may result from the development of a single-payer reimbursement system within the state of West Virginia;
(2) The extent to which the regulations of medicare, medicaid and private regulatory agencies could be combined into a single set of rules, and the savings potentially resulting therefrom;
(3) The extent to which the inspections required by various public agencies and private groups could be performed by the same group of inspectors or during the same period of time, and the savings potentially resulting therefrom;
(4) The extent to which peer review activities in West Virginia could be consolidated under a single agency and redirected towards the identification and mitigation of serious breeches of a standard of care rather than technical deficiencies;
(5) The identification of other potential cost savings or improved quality control that might result from the mitigation of redundancy, conflicting regulations or waste in the health care bureaucracy;
(6) Specific recommendations for legislation to effect such potential savings or improvements, if any, such recommendations to be made to the Legislature on or before the first day of January, one thousand nine hundred ninety-five;
(7) Specific recommendations as to the collection of statistical and other information about individual provider's practice patterns, including their performance of procedures and their utilization of ancillary services, along with recommendations as to appropriate methods of investigating, educating or sanctioning statistical outliers.
§
16-29E-10. Inappropriate financial incentives.
(a) Contingent fees; financial credentialing.
No entity may employ, contract with, otherwise remunerate, or grant benefits or privileges to any health care practitioner for professional services, nor may any health care practitioner knowingly enter into any such relationship, where the employment, contract, remuneration, benefit or privilege, or the level thereof, is contingent in any way upon the ordering or performance by the practitioner of particular types, numbers or quotas of laboratory, diagnostic, surgical or other procedures or services based on their dollar value, profitability or other economic consideration, or where the level of compensation is contingent in any way on the withholding of the procedures or services, except that the remuneration or compensation of health care providers based on the number of hours worked, the number of patients treated, or the fees for professional services which are personally performed by the health care practitioner are not affected by this section.
(b) Physician self-referral prohibited.
(1) Except as provided in subdivision (4) of this subsection, no health care practitioner may refer any patient for any service designated in subdivision (3) of this subsection to any entity in which the health care practitioner has an investment interest or other interest such that the referral of that patient would financially benefit the health care practitioner other than by the payment of fees for professional services personally performed by the practitioner.
(2) Except as provided in subdivision (4) of this subsection, no health care provider may profit from or enjoy any other personal financial gain, directly or indirectly, from any service performed by or at the instigation of or upon the order of that provider and designated in subdivision (3) of this subsection.
(3) The services subject to the prohibitions of this subsection are:
(A) Physical therapy services;
(B) Rehabilitative services;
(C) Clinical laboratory services;
(D) Diagnostic imaging services; and
(E) Radiation therapy services.
(4) The following services and circumstances are exempt from the provisions of this section:
(A) A health care practitioner may receive compensation for procedures and services which are personally performed by the health care practitioner;
(B) Radiologists may receive compensation for diagnostic imaging services which are performed by or under the supervision of that radiologist if they are performed pursuant to a consultation requested by another physician;
(C) A pathologist may receive compensation for diagnostic clinical laboratory tests and pathological examination services, if the tests and services are furnished by or under the supervision of the pathologist pursuant to a consultation from another physician;
(D) Recognizing the convenience and utility of having available within practitioners' offices the services prohibited herein, practitioners may provide services or contract for the services to be performed within their offices:
Provided,
That the office is physically separate from any facility offering similar services, that the practitioner's aggregate profit or other financial benefit from all such services taken together may be no more than five thousand dollars per annum, and that, for services billed by the physician but performed by an entity outside of the physician's practice, the physician may not charge an amount above his or her cost for the services, except for a five-dollar fee for phlebotomy services and a two-dollar fee for the handling of other specimens;
HCCRA shall promulgate rules and require separate accounting of financial activities related to restricted services necessary to assure compliance with these provisions, subject to article three, chapter twenty-nine-a of this code; and
(E) Physicians who are currently referring to entities in which they have an investment interest or who are providing services restricted by this section may continue to refer to these entities and provide these services until the first day of January, one thousand nine hundred ninety-seven, but no physician may enter into any new referral pattern or begin to provide any such service after the first day of January, one thousand nine hundred ninety-five.
(c) Using the rate setting powers and other powers granted herein, HCCRA, after consulting with the insurance commissioner, the various health care provider organizations and the deans of West Virginia's schools of medicine and osteopathy, shall reduce to the extent possible the financial incentives for health care providers to enter certain specialties rather than others, to locate in certain areas rather than others and to make certain diagnostic and therapeutic choices rather than others. Pursuant to these objectives and recognizing that fees for various medical services are subject to nation-wide pricing patterns beyond the control of this state or any of its agencies, and that the consequences of driving these services from West Virginia would be catastrophic, including the loss of the economic activity created by the services and the exodus from West Virginia of residents seeking such services, HCCRA shall:
(1) Adjust the standard fee schedule so as to minimize the financial incentives for particular classes of health care providers to perform certain procedures as opposed to cognitive and other services. The fee adjustments shall be based on the time required for given classes of providers to perform various services, and shall include a combination of reduced fees for procedures and increased fees for cognitive and other nonsurgical services;
(2) Create incentives for primary care, including family practice, internal medicine, pediatrics and obstetrics, especially in underserved areas of West Virginia, by means of:
(A) Enhanced fee schedules for certain services in certain areas, the provisions of paragraph (A), subdivision (1), subsection (a), section seven of this article notwithstanding;
(B) Recruitment of physicians into underserved areas, including income guarantees, provision of office space, malpractice insurance coverage and such other incentives as may be necessary;
(C) Relief from the provisions of the physician self-referral and restricted services profit limitations created above.
(3) By any appropriate means, subject to article three, chapter twenty-nine-a of this code to:
(A) Inform the public of its rights under this article;
(B) Educate the public in the use of the reimbursement schedules and fee schedules created herein to make cost-conscious health care decisions;
(C) Encourage the public to make use of the wellness incentives created herein, including the cost-free procedures and medical information available through the various county health departments;
(D) Make the public aware of less costly alternatives in health care services, including hospital rates, practitioner's fees, alternative types of treatment and alternative health care disciplines.
§
16-29E-11. Health insurance overhead; guaranteed loss ratios.
(a) Premium rate approval.
After the first day of January, one thousand nine hundred ninety-five, the insurance commissioner shall disapprove any application for premium rate charges for any individual or group accident and sickness insurance policy issued by any insurer pursuant to chapter thirty-three of this code, or for any contract or coverage issued by any health maintenance organization pursuant to chapter thirty-three of this code, if the overall premium rate structure for all health and accident insurance or coverage issued within West Virginia by the insurer or health maintenance organization making such application is not in compliance with the following requirements:
(1) The expected ratio of claims incurred to premiums earned by the insurer or health maintenance organization must be ninety percent or greater. Any taxes on earned premiums and any costs for reinsurance shall first be subtracted from the premiums received before calculating this ratio. Also before calculating this ratio, any insurer or health maintenance organization which directly provides health care services to its policy holders, which employs health care practitioners, and which owns and maintains facilities and equipment to provide health care services, may include in the total of claims incurred the wages and benefits of the health care practitioners, and the costs of owning and maintaining the facilities and equipment, to the extent that the employees, facilities and equipment are used to provide direct health care services to policyholders;
(2) The highest premium rate per covered beneficiary for any individual or group accident and sickness insurance policy issued in West Virginia by any insurer or health maintenance organization must not exceed one hundred twenty percent of the lowest premium rate for a policy providing a similar benefit package issued in West Virginia by that insurer or health maintenance organization;
(3) Each insurer of HMO must agree to accept all applicants immediately upon payment of premiums or fees, except those for whom a specific preexisting disqualifying medical condition exists. "Disqualifying medical conditions" shall be determined and published by the insurance commissioner and shall consist of those medical conditions which pose a high risk of extraordinary expense to the insurer of HMO. The conditions so determined shall apply to all insurers. Each insurer or HMO must further agree to accept medically disqualified individuals upon assignment by the insurance commissioner, who shall randomly assign to all insurers and HMO's those individuals denied coverage because of a "disqualifying medical condition." To protect insurers from unanticipated expenditures, the insurance commissioner may allow a period of exclusion for preexisting conditions in individuals who do not have health insurance coverage at the time of application.
(b) Except as provided in subsection (c) of this section, after the first day of January, one thousand nine hundred ninety-five, no insurer may transact any individual, group or employer group accident and sickness insurance, or operate any health maintenance organization or other prepaid health care plan pursuant to chapter thirty-three of this code, without the expressed approval of the insurance commissioner of the premium rates for the coverage.
(c) Any insurer may apply to the insurance commissioner to operate on a guaranteed loss ratio basis, pursuant to article six-c, chapter thirty-three of this code:
Provided,
That after the first day of January, one thousand nine hundred ninety-five, the guaranteed loss ratio shall not be less than ninety percent.
§
16-29E-12. Hospital reimbursement rates.
After the first day of January, one thousand nine hundred ninety-five, reimbursement for all inpatient hospital services provided in the state of West Virginia to the beneficiaries of individual or group health and accident insurance policies issued in West Virginia, or to the enrollees of any health maintenance organization, or to the beneficiaries of any employee benefit plan covering hospital services, shall be based on and determined by reference to a system of diagnosis related groups (DRG's) as established by HCCRA, subject to article three, chapter twenty-nine-a of this code. The DRG's and the reimbursement rates therefor shall further be subject to the following:
(a) The DRG categories, modifiers and definitions adopted by HCCRA shall be patterned generally after those used to determine hospital reimbursement under the federal medical system, but may be modified and enhanced as necessary by HCCRA.
(b) On at least a yearly basis, HCCRA shall determine a payment rate for hospital services, which generally shall be expressed as a single, uniform numerical multiplier of the DRG payment schedule established by medicare.
(c) The payment rate for selected DRG's shall be modified upward or downward by HCCRA if it appears that certain services produce atypical levels of profit or loss compared to other services. In making these modifications, HCCRA shall attempt to assure that all necessary hospital services are equally profitable, to create the incentive for hospitals to compete for patients based on the total number served rather than on the basis of particularly profitable services or particular remunerative of patients.
(d) The payment schedule shall be generally uniform statewide. It may not be modified based on traditional hospital charges or fees, but may be modified up to a total of two and one-half percent upward or downward for any or all DRG's, as determined by HCCRA, based on one or more of the following considerations:
(1) Any difference in the cost of living between the areas in which various hospitals are located;
(2) Any major departure from the expected severity of disease within any major DRG at any particular hospital, if adequately documented;
(3) Payments made by hospitals to service debts owed to banks or other commercial lending institutions:
Provided,
That if any hospital is owed money other than for unpaid hospital services, or if any hospital has incurred any mortgage or other lien against its assets, and the proceeds of the mortgage or lien have passed from the control of the hospital board of directors or have been used for purposes that do not relate directly to the provision of health care services, such payments may not be considered in reimbursement rates;
(4) Costs of education.
(e) An additional adjustment of the reimbursement rate for any hospital shall be made for the profits from laboratory, X ray, other diagnostic services, physical therapy services, rehabilitation services, home health services, skilled nursing services, clinics and other outpatient health care services provided by, owned by or otherwise financially associated with that hospital, up to the full total dollar amount of such profits.
(f) An additional adjustment shall be made for any unusually high or low amount of uncompensated or undercompensated inpatient care provided by any hospital, the value of the services to be determined by reference to the DRG category of the care and the standard DRG reimbursement schedule.
(g) An additional adjustment to the reimbursement rate for any hospital shall be made based on the income or profits realized by that hospital from any investments and assets not associated with patient care, up to the full dollar value of the income or profits.
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16-29E-13. Hospital boards of directors.
(a) The board of directors of any hospital situated within the state of West Virginia shall have and retain control over all decisions of the hospital relating to or affecting the cost of hospital services or the type of health care services offered by the hospital. The control may not be delegated by contract or otherwise to any other person or entity. The scope of authority granted herein shall be interpreted broadly, and includes the employment and supervision of the chief executive officer of the hospital and control over all funds received as payment for health care and related services.
(b) No person may serve on the board of directors of any nonprofit hospital or hospital owned by any county, city or other political subdivision of the state of West Virginia who is employed by or receives any other remuneration or financial benefit from the hospital or from any subsidiary or affiliate thereof, or who owns or is employed by any entity selling or seeking to sell goods or services to that hospital.
(c) No person may serve the board of directors of any nonprofit hospital or hospital owned by any county, city or other political subdivision of the state of West Virginia who owns, is employed by, or has other financial interest in any other hospital or any other entity providing any health-related service which is in competition with such hospital or with any service offered by such hospital.
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16-29E-14. Control of duplicative health care services.
(a) Designation of primary care provider; incentives.
(1) Any person who is a beneficiary of any individual or group accident and sickness policy issued pursuant to chapter thirty-three of this code shall, on or before the first day of January of each year, be offered by the insurer the opportunity to designate a personal primary care provider for the ensuing calendar year. The designation shall also include a statement regarding anatomical donation, organ donation, the use of life support under conditions where there is no hope of recovery and the designation of medical power of attorney in case of unforeseen mental incompetence. Primary care providers for the enrollees of health maintenance organizations shall be designated according to the terms of the enrollee's contract with the health maintenance organization.
(2) Any health care services provided by a beneficiary's designated primary care provider, or upon the order of or at the request of that provider, or by another provider consulted by the designated provider, or by another provider covering for the designated provider, while the designated provider is unavailable for patient care, shall be reimbursed by the beneficiary's insurer to at least the level of the standard payment schedule for health care services established by HCCRA pursuant to section seven of this article, subject to any policy-specific copayments and limitations of coverage.
(3) Any health care service provided by or at the request of a provider who is not listed in subdivision (2) of this subsection, except as provided in subdivision (2), subsection (b), section seven of this article, shall be reimbursed by the insurer at no more than seventy percent of the standard payment schedule established by HCCRA, subject to any policy-specific copayments and limitations of coverage. The remaining thirty percent shall be the obligation of the beneficiary.
(b) Selection of coverage.
The mandatory standard benefit package established by HCCRA pursuant to section eight of this article shall include sufficient preselectable choices to satisfy the policy of nondiscrimination among health care providers established in chapter thirty-three of this code while strongly discouraging the simultaneous utilization of competing health care services or disciplines. The choices shall conform to the following guidelines:
(1) On or before the first day of January of each year, beneficiaries shall be offered a choice of basic coverage packages, which choices shall include:
(A) Primarily medical and/or osteopathic physician coverage with limited coverage of chiropractic physicians or other secondary providers, the limitations to include limited or no payments or substantial copayments for services from the secondary providers;
(B) Primarily chiropractic physician coverage with limited coverage for medical and osteopathic physicians or other secondary providers, the limitations to include limited or no payments or substantial copayments for services from the secondary providers; or
(C) Any other choices as HCCRA determines.
(2) The alternative basic benefit packages shall be designed to be of approximately equal cost per covered individual.
(3) The alternative basic benefit packages shall be structured so as to strongly encourage the use of only one health care discipline, and, to the extent possible, of only one health care provider during any calendar year.
(c) Nonpayment for duplicative services.
No insurer is obligated to reimburse for any outpatient laboratory test, X ray or other diagnostic procedure or any similar procedure, which is performed twice or more within any three-month period unless the test or procedure meets one or more of the following criteria:
(1) Any tests or procedures ordered or performed by the beneficiary's designated primary care provider;
(2) Both tests or procedures were ordered by the same provider, and no similar test or procedure has also been done by another provider in the interim;
(3) The statement or bill requesting reimbursement for any procedure is accompanied by a written explanation of the necessity therefor, in sufficient detail to demonstrate the need for the repetition.
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16-29E-15. Profits from health care ventures.
(a) This section does not apply to any medical equipment or facility which is wholly owned and operated by any hospital or hospitals operating within the state of West Virginia, and more than fifty percent of the use of which is to provide services to inpatients of the hospital or hospitals.
(b) On or before the first day of January, one thousand nine hundred ninety-five, HCCRA shall promulgate rules pursuant to section three, chapter twenty-nine-a of this code, which shall require that:
(1) Any person or entity which owns or operates medical equipment used to perform diagnostic testing or procedures for which that person or entity receives total payments of more than five thousand dollars per year shall report the ownership to HCCRA.
(2) On a form and in a manner to be determined by HCCRA, any such person or entity shall report all required financial activity associated with such equipment or its operation, including the cost to purchase, the cost to finance, the cost to operate, the depreciation thereof and any other information as HCCRA requires.
(3) On the basis of the information so supplied, HCCRA shall determine the charges for any procedure using the equipment. In establishing these charges, HCCRA shall consider:
(A) The amount invested in the equipment;
(B) The cost of servicing any debt resulting from the purchase of the equipment;
(C) The risk, if any, involved in the investment;
(D) The reasonable cost to operate the equipment;
(E) A reasonable profit or return from the ownership of the equipment, which generally may not be greater than five percent per year, based on the amount invested and considering any depreciation or appreciation of the value of the equipment.
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16-29E-16. Advertising of health care and related services.
(a) Any paid advertising of health care or related services must be submitted to and preapproved by HCCRA. Those entities specifically subject to this provision shall include all licensed health care practitioners, all hospitals and hospital corporations, all medical corporations, all insurers and all health maintenance organizations and other partnerships, corporations or associations providing health care services.
(b) The advertising shall be limited to:
(1) Statements which are factual in nature;
(2) Statements which inform the public as to the availability of certain health care services:
Provided,
That the statements may not serve to increase the demand for the services unless HCCRA believes that the increased demand is in the public interest;
(3) The relative cost of specific health care services from specific providers or hospitals;
(4) Other factors relating to the location, convenience or cost of health care services.
(c) HCCRA shall disapprove any paid advertising which:
(1) Is political in nature, or which is designed to affect public policy, unless the advertising is paid for by individuals in accordance with laws referable to political activity and lobbying;
(2) Contains information which is untrue, misleading or deceptive;
(3) Contains any statement, image or other means of communication which is intended to increase demand for specific health care services, unless HCCRA, after consultation with the medical advisory committee, determines that the increased demand is in the public interest;
(4) Contains any statement or implication which tends to denigrate the character or competence of any health care provider, unless the statement is a direct quotation from a licensing or reviewing body which has publicly sanctioned, publicly reprimanded or otherwise publicly censured the provider.
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16-29E-17. Penalties for violations.
(a) Except as otherwise provided herein, any violation of this article is subject to any or all of the following penalties:
(1) Actions against the licensure of any practitioner or institution may include: A public reprimand; restrictions or limitations of authorization to provide health care services; revocation of certificate of need; suspension of licensure for up to five years; revocation of licensure;
(2) Remedial actions which may be required include: A program of education as prescribed by the board; a requirement to practice or do business under the direction of another person specified by the board; public service as specified by the board;
(3) Civil fines of not less than one hundred dollars nor more than one thousand dollars may be assessed against any entity and any individual for a first violation of this article;
(4) Civil fines of not less than one thousand dollars nor more than ten thousand dollars may be levied against any entity and any individual for a second violation of this article;
(5) Civil fines of not less than ten thousand dollars nor more than one hundred thousand dollars may be assessed against any entity and any individual for repeated violations of this article;
(6) In addition to any fines, any financial gain realized as a result of any violation of this article shall be refunded by any individual or any entity responsible for the violation.
(b) Upon determination by the board that there is probable cause to believe that any person, partnership, corporation, association, insurance company, health maintenance organization or other entity subject to the provisions of this article has violated any provisions of this article, or if any such entity fails or refuses to make a report required by this article, the board shall provide written notice to the alleged violator stating the nature of the alleged violation and the time and place at which the alleged violator shall appear to show good cause why a penalty should not be imposed.
The hearing shall be conducted in accordance with the provisions of article five, chapter twenty-nine-a of this code.
After reviewing the record of the hearing, if the board determines that a violation of this article has occurred, the board shall assess a penalty as described above:
Provided,
That no action may be taken against the licensure of any individual without a subsequent disciplinary hearing conducted by the respective licensing board.
Anyone so penalized shall be notified in writing and the notification shall include the reasons for the penalty. If the violator fails to meet the penalty within thirty days, or any longer period as may be specified by the board, the attorney general may institute a civil action in the circuit court of Kanawha County to enforce the penalty.
(c) Any person against whom a civil penalty is assessed pursuant to the provisions of this article, has the right to judicial review as provided in articles five and six, chapter twenty-nine-a of this code.
(d) If any hospital, institutional health care provider, insurer, health maintenance organization or corporation providing patient care or ancillary medical services fails within a reasonable period of time to provide financial information required by HCCRA pursuant to the provisions of this article, HCCRA may seek injunctive relief from the circuit court of Kanawha County. Upon its determination that a failure has occurred, in addition to the fines and sanctions specified within this subsection, the court may impose the same sanctions and fines on any individual responsible for the failure and may additionally, for a specified period sufficient to fully and freely ascertain the information and assure compliance with this article, remove the officers and executives of the entity and place HCCRA or its designee in control of the operation and finances thereof.
NOTE: This bill creates the Health Care Cost Control Act of 1994. Its stated intent is to control expenditures on health care without compromising the quality or availability of health care. The bill establishes a medical advisory committee within the West Virginia Health Care Cost Review Authority ("HCCRA"). The bill establishes fee and payment schedules for health care providers and health insurers. The bill addresses medical malpractice reform, limiting contingent fees for plaintiffs' attorneys and noneconomic loss liability; punitive damages and provides for credit for collateral source payments. The bill provides for a mandatory standard health benefits plan and it deals with inappropriate financial incentives. The bill also addresses health insurance overhead and guaranteed loss ratios; hospital reimbursement rates; and who may serve on hospital boards of directors. It controls duplicative health care services and profits from health care ventures and advertising of health care and related services. And, finally, the bill provides penalties for violations, including action against the licensure of any practitioner or institution and the assessment of civil penalties.
This article is new; therefore, strike-throughs and underscoring have been omitted.