Senate Bill No. 546

(By Senator Wiedebusch)

____________

[Introduced February 19, 1996; referred to the Committee on Banking and Insurance; and then to the Committee on the Judiciary.]
____________



A BILL to amend chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article forty-one, relating to enacting a "Patient Protection Act"; short title; legislative purpose; definitions; certain required and prohibited acts; remedies; violations deemed unfair methods of competition or unfair or deceptive acts or practices in the business of insurance; promulgation of rules; protected statements; certain types of discrimination prohibited; good cause required for contract cancellation, non-renewal, suspension, revocation, etc.; certain conditions required in provider contracts; refusal to contract on certain bases prohibited; coverage for specific conditions or services not mandated; beneficiary's right to choose a provider; conditions and charges imposed upon beneficiaries to be similar; notification to beneficiaries of right to choose a provider; promotion of continuity of care; waiver or modification by insurance commissioner of beneficiary's right to choose a provider and related requirements; economic credentialing prohibited; decisions regarding coverage to be made within a reasonable period of time; third-party payer liability; presumption of necessity; exceptions to same; limitation on liability prohibited; and recovery of costs and attorney fees.

Be it enacted by the Legislature of West Virginia:
That chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article forty-one, to read as follows:
ARTICLE 41. PATIENT PROTECTION ACT.

§33-41-1. Short title.

This article shall be known and may be cited as the "Patient Protection Act."
§33-41-2. Legislative purpose.

The purpose of this article is to ensure a beneficiary's right to choose the health care provider of his or her choice.
§33-41-3. Definitions.

For purposes of this article:
(a) "Appropriate medical practice" means medical practice that is commonly accepted among health care practitioners as the standard of care.
(b) "Beneficiary" means any policyholder, subscriber, member, employee or other person who is eligible for benefits under a contract in which a third-party payer agrees to reimburse for covered health care or dental services up to the limits and exclusions contained in the benefits contract, regardless of whether the contract is a traditional insurance policy, a health maintenance organization contract, a preferred provider organization contract or any other policy, contract, plan or agreement that provides hospital or medical expense coverage.
(c) "Provider" means a hospital, nursing home, physician, podiatrist, dentist, pharmacist, chiropractor or any other licensed provider of health care services who is entitled to reimbursement by a third-party payer for services rendered to a beneficiary under a benefits contract. "Provider" includes, but is not limited to, any provider who is employed by a corporate or other entity and who assigns his reimbursement to that entity; any licensed mental health professional, including licensed independent social workers and licensed professional clinical counselors if the health care policy, contract, plan or agreement specifically covers the services of any licensed mental health professional; or any other licensed health care professional if the services legally performed by him or her are covered under the health care policy, contract, plan or agreement.
(d) "Third-party payer" means any sickness and accident insurer, health maintenance organization, preferred provider organization, health care corporation, medical care corporation, dental care corporation or prepaid dental plan organization that is authorized to operate or do business in this state. "Third- party payer" also includes any employer acting as a self insurer by providing, or by providing payment for, health care benefits for employees who reside in this state; any administrator of a health care policy; any person or entity performing utilization review, managed care or claims payment processing under contract with, or on behalf of, an employer or a third party that provides or administers health care benefits; or any health service paid for, or purchased by, a state agency or its program or designee.
§33-41-4. Certain provider statements protected; certain

retaliatory actions prohibited; violation deemed an unfair method of competition or unfair or deceptive act or practice in the business of insurance; remedies.
(a) No third-party payer may prohibit, contractually or otherwise, a provider from making any statement to a patient or a patient's representative regarding the patient's health care policy, contract, plan or agreement, including statements regarding the patient's rights or the third-party payer's duties and obligations under the health care policy, contract, plan or agreement.
(b) No third-party payer may discriminate against, take any adverse action against or otherwise penalize a provider for making statements that are protected under subsection (a) of this section.
(c) Any person who violates subsection (a) of this section is deemed to have engaged in an unfair method of competition or an unfair or deceptive act or practice in the business of insurance under article eleven of this chapter.
(d) Any provider who is harmed as a result of a violation of subsection (b) of this section may institute a civil action for damages and injunctive or other equitable relief in the circuit court of any county in which the third-party payer conducts business.
§33-41-5. Good cause required for contract cancellation, non-renewal, suspension, revocation, etc.; commissioner to promulgate rules; incorporation of same into provider contracts; contracts subject to disapproval; violation deemed an unfair method of competition or an unfair or deceptive act or practice in the business of insurance; remedies; and recovery of costs, attorney fees and damages.

(a) No third-party payer may, without good cause: (i) Cancel or refuse to renew the contract of any provider; or (ii) suspend, revoke or limit the participating status of any provider. As used in this subsection, "good cause" does not include the use of information regarding a provider's economic profile to cancel or refuse to renew the contract of the provider, or to otherwise suspend, revoke or limit the participating status of the provider, unless the third-party payer determines, in good faith, that, when compared to other providers with similar contracts with the third-party payer, the provider's practice patterns do not result in quality long-term patient outcome or the provider's patients do not have a higher severity of illness or injury.
(b) The commissioner of insurance shall promulgate rules in accordance with chapter twenty-nine-a of this code that establish procedures for affording a provider due process of law if a third-party payer cancels or refuses to renew the contract of the provider, or otherwise suspends, revokes or limits the participating status of the provider. The substance of these rules shall be incorporated into each contract entered into between a third-party payer and a provider, and shall require all of the following:
(1) Written explanation of the reason for the action taken by the third-party payer, including proper notice of any charges made against the provider;
(2) Adequate notice of the right to a hearing to determine whether a violation of subsection (a) of this section has occurred;
(3) Reasonable opportunity to prepare for a hearing;
(4) A fair, objective and independent hearing that affords the provider the opportunity to be present during the proceedings, to cross-examine witnesses, to be represented by counsel and to present a defense;
(5) Provision of a copy of the record of the hearing, but only upon a proper request and payment of a reasonable fee to cover the costs of preparing the copy; and
(6) Procedures for appealing adverse decisions.
(c) No third-party payer shall fail to comply with the rules adopted pursuant to subsection (b) of this section.
(d) A contract between a third-party payer and a provider that does not incorporate the substance of the rules adopted pursuant to subsection (b) of this section is subject to disapproval by the commissioner.
(e) Any person who violates subsection (a) or (c) of this section is deemed to have engaged in an unfair method of competition or an unfair or deceptive act or practice in the business of insurance under article eleven of this chapter.
(f) Any provider who is harmed as a result of a violation of subsection (a) or (c) of this section may commence a civil action for damages and injunctive or other equitable relief in the circuit court of any county in which the third-party payer conducts business.
(g) The prevailing party in any civil action filed or hearing conducted under this section is entitled to recover costs of the action or hearing, including reasonable attorney fees. If the third-party payer is the prevailing party, it is also entitled to recover any other damages caused by the provider's actions.
§33-41-6. Refusal to contract on certain bases prohibited; section not to mandate coverage for specific conditions or services; violation deemed an unfair method of competition or an unfair or deceptive act or practice in the business of insurance; remedies.

(a) No third-party payer may refuse to contract with a provider for the treatment of conditions or for the provision of services under any policy, contract, plan, or agreement for the provision of health care or dental services that is delivered, issued for delivery or renewed in this state on or after the effective date of this section if the refusal is based on race, gender, national origin, age or religion.
(b) No third-party payer may refuse to contract with a provider for the treatment of conditions or for the provision of services under any policy, contract, plan, or agreement for the provision of health care or dental services that is delivered, issued for delivery or renewed in this state on or after the first day of January, one thousand nine hundred ninety-seven, if the refusal is based on the fact that the provider is licensed or registered for a particular practice, including but not limited to dentistry, optometry, pharmacy, medicine or surgery or osteopathic medicine or surgery, podiatric medicine or surgery, psychology, chiropractic or nursing.
(c) Nothing in subsection (b) of this section may be construed as mandating coverage for any specific condition or service.
(d) Any person who violates subsection (a) or (b) of this section is deemed to have engaged in an unfair method of competition or an unfair or deceptive act or practice in the business of insurance under article eleven of this chapter.
(e) Any provider who is harmed as a result of a violation of subsection (a) or (b) of this section may commence a civil action for damages and injunctive or other equitable relief in the circuit court of any county in which the third-party payer conducts business.
§33-41-7. Beneficiary's right to choose a provider; requirements for same; charges and conditions to be imposed similarly upon beneficiaries; notice of right to choose provider; commissioner to promulgate rules; violation deemed an unfair method of competition or an unfair or deceptive act or practice; remedies; promotion of continuity of care.

(a) Except as provided in section eight of this article, no third-party payer may deny a beneficiary the right to choose a provider of health care or dental services if the following conditions are met:
(1) The provider accepts the standard terms and conditions offered by the third-party payer to other providers, and any hospital or other health care facility to which a beneficiary may be referred by the provider accepts the standard terms and conditions offered by the third-party payer to other health care facilities. As used in this subdivision, "standard terms and conditions" includes utilization review guidelines, practice protocols, quality assurance guidelines, data reporting requirements and level of payment. With respect to credentialing, "standard terms and conditions" may not be more restrictive than the licensing standards imposed by this state;
(2) The beneficiary notifies the third-party payer of his choice of provider on a form prescribed by the third-party payer in accordance with rules adopted by the insurance commissioner in accordance with chapter twenty-nine-a of this code;
(3) The health care or dental services sought by the beneficiary are to be rendered by a provider licensed in this state to perform those services; and
(4) None of the actions set forth in subsection (a), section five of this article has been taken, with just cause, against the provider, and the provider has not been the subject of any disciplinary action imposed by a licensure or regulatory agency of another state.
(b) No third-party payer may impose upon a beneficiary any copayment, fee or other charge or condition that is not similarly imposed upon all other beneficiaries under the health care policy, contract, plan or agreement.
(c) Each third-party payer, except those that have been granted a waiver or modification under section eight of this article, shall notify beneficiaries of the substance of subsection (a) of this section. The insurance commissioner shall promulgate, in accordance with chapter twenty-nine-a of this code, rules to specify the contents of the notice and the manner in which it is to be provided.
(d) Any person who violates subsection (a) or (b) of this section or who fails to comply with subsection (c) of this section is deemed to have engaged in an unfair method of competition or an unfair or deceptive act or practice in the business of insurance under article eleven of this chapter.
(e) A provider or beneficiary harmed as a result of a violation of subsection (a) or (b) of this section or a failure to comply with subsection (c) of this section may commence a civil action for damages and injunctive or other equitable relief in the circuit court of any county in which the third-party payer conducts business.
(f) In enacting this section, the Legislature intends to promote continuity of care for patients changing third-party payers.
§33-41-8. Waiver or modification of certain requirements.

(a) The insurance commissioner may waive or modify the requirements of subsection (a), section seven of this article if a third-party payer, upon requesting a waiver or modification, demonstrates to the commissioner's satisfaction all of the following:
(1) Compliance with those requirements would unreasonably increase the costs of the health care policy, contract, plan or agreement;
(2) If the waiver or modification is granted, the level of access to providers' services and the quality of care provided under the policy, contract, plan or agreement would not be adversely affected;
(3) If the waiver or modification is granted, the third- party payer would be in compliance with any provision of this code that requires the reimbursement, utilization or consideration of a specific category of a licensed or certified health care practitioner;
(4) If the waiver or modification is granted, the third-party payer would not be in violation of subsection (a) or (b) of section six of this article.
(5) If the waiver or modification is granted, the third-party payer would be in compliance with any other criteria relating to access, quality, and cost that the insurance commissioner may require by rule promulgated in accordance with chapter twenty-nine-a of this code, including the timeliness of service, delivery, geographic availability of services, the degree to which the waiver or modification would contain health care costs and any other relevant health care policy consideration.
(b) The insurance commissioner shall make a determination under subsection (a) of this section pursuant to a hearing conducted in accordance with chapter twenty-nine-a of this code. Within ten days after receiving a third-party payer's request for a waiver or modification, the commissioner shall notify the third-party payer of the date, time and location of the hearing.
(c) Upon receipt of the notice required by subsection (b) of this section, the third-party payer shall provide to all beneficiaries under the policy, contract, plan or agreement a notice by regular mail that, at a minimum, states the substance of all of the following:
(1) The third-party payer is in the process of requesting the insurance commissioner for a waiver or modification of the requirements of subsection (a), section seven of this article in order to limit provider participation in the policy, contract, plan or agreement;
(2) If the waiver or modification is granted, the provider from which a beneficiary currently receives services may no longer be eligible to participate in the policy, contract, plan or agreement;
(3) The third-party payer will, upon the beneficiary's request, provide a list of all providers that would be eligible to participate in the policy, contract, plan or agreement;
(4) Each beneficiary has a right to comment on this potential change in the policy, contract, plan or agreement; and
(5) The date, time and location of the hearing to be conducted by the insurance commissioner.
(d) The third-party payer shall provide notice to the commissioner of the bureau of public health of its request for a waiver or modification by the insurance commissioner under subsection (a) of this section. The commissioner of the bureau of public health may review and make findings with respect to the potential impact of the waiver or modification on the level of access to providers' services and the quality of care that would be provided under the policy, contract, plan or agreement. The commissioner of the bureau of public health shall submit his or her findings to the insurance commissioner for consideration in making the determination under subsection (a) of this section.
(e) Any beneficiary, provider or other interested party that may be affected by the waiver or modification may submit comments to the commissioner for consideration.
(f) The third-party payer shall provide such financial records, cost data and other information relating to the criteria set forth in subsection (a) of this section, including information regarding solvency, capacity to deliver services, degree of cost containment and contractual reimbursement provisions, that the commissioner may reasonably require for purposes of making a determination under that subsection. All such information is a public record, as defined in section two, article one, chapter twenty-nine-b of this code.
(g) A waiver or modification granted by the insurance commissioner under subsection (a) of this section is effective for a period of not more than two years. At the expiration of this period, a new request for a waiver or modification shall be made before a new waiver or modification may be granted. The commissioner may, at any time during that two-year period, suspend the waiver or modification if conditions exist that warrant reconsideration of the granting of the waiver or modification. All actual and necessary expenses incurred by the commissioner in making a determination under subsection (a) of this section shall be assessed against the third-party payer requesting the waiver or modification.
(h) Each third-party payer that obtains a waiver or modification under subsection (a) of this section shall provide notice by regular mail of such waiver or modification to all beneficiaries under any policy, contract, plan or agreement that is issued or established on or after the effective date of the waiver or modification. Such notice shall be provided no later than thirty days after the effective date of the coverage under the policy, contract, plan or agreement.
§33-41-9. Economic credentialing prohibited; violation deemed an unfair method of competition or an unfair or deceptive act or practice in the business of insurance; remedies.

(a) As used in this section, "economic credentialing" means a pattern or practice that is used by a third-party payer in reviewing the appropriateness of health care expenditures for claims made pursuant to benefits offered under a health care policy, contract, plan or agreement, and that denies, delays or reduces such benefits by assigning greater weight to consideration of financial matters than to consideration of appropriate medical practice.
(b) No third-party payer shall engage in economic credentialing.
(c) Any person who violates subsection (b) of this section is deemed to have engaged in an unfair method of competition or an unfair or deceptive act or practice in the business of insurance under article eleven of this chapter.
(d) Any beneficiary harmed as a result of a violation of subsection (b) of this section may commence a civil action for damages and injunctive or other equitable relief in the circuit court of any county in which the third-party payer conducts business.
(e) Nothing in this section may be construed as prohibiting or otherwise limiting a third-party payer from making reasonable reviews of expenditures to ensure cost containment.
§33-41-10. Decisions regarding coverage to be made within a reasonable period of time; third-party payer liability; presumption of necessity; exceptions; application.

(a) A third-party payer shall render a decision regarding approval for coverage of recommended services and care within a reasonable period of time. In making that decision, the third-party payer shall take into consideration the degree to which a beneficiary may be harmed by any delay in rendering the decision.
(b) A third-party payer is liable in a civil action to any beneficiary, under any policy, contract, plan or agreement issued by the third-party payer, for injuries or damages incurred as a result of either of the following:
(1) Any failure to comply with subsection (a) of this section that causes a delay of services and care that is recommended by a provider and that is covered under the policy, contract, plan or agreement; or
(2) Any decision by the third-party payer that causes a reduction or denial of services and care that is recommended by a provider and that is covered under the policy, contract, plan or agreement.
(c) For purposes of this section, any services and care recommended by a provider are presumed necessary under the terms of the policy, contract, plan or agreement issued by the third-party payer unless either of the following applies:
(1) The services and care are determined to be within exclusions or limitations of the policy, contract, plan or agreement.
(2) The services and care are determined not to be appropriate medical practice.
(d) This section applies only to policies, contracts, plans and agreements for health care services that are delivered, issued for delivery or renewed in this state on or after the effective date of this section.
§33-41-11. Limitation on liability prohibited.

No third-party payer shall limit its liability for any omission or for any action taken by it that affects the medical care of a beneficiary by including in its policy, contract, plan or agreement a hold-harmless clause or any other contractual provision that attempts to limit or eliminate the third-party payer's liability. Actions subject to this section include, but are not limited to, the denial of inpatient certification, the denial of coverage for additional hospitalization and the denial of a medical test or procedure.
§33-41-12. Recovery of civil action costs and attorney fees.

A provider or beneficiary who prevails in a civil action filed under section four, five, six, seven, nine or ten of this article is entitled, in addition to other substantive legal and equitable remedies, to recover the costs of the action, including reasonable attorney fees.




NOTE: The purpose of this bill is to enact a "Patient Protection Act" to ensure that the beneficiaries of health care plans have the right to choose the health care provider of their choice.

This article is new; therefore, strike-throughs and underscoring have been omitted.