Senate Bill No. 114
(By Senators Tomblin (Mr. President) and Sprouse
By Request of the Executive)
____________
[Introduced February 15, 2001; referred to the Committee
on Banking and Insurance; and then to the Committee on the
Judiciary.]
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A BILL to amend and reenact sections one, two and three, article
twenty-five-c, chapter thirty-three of the code of West
Virginia, one thousand nine hundred thirty-one, as amended;
and to further amend said article by adding thereto eleven new
sections, designated sections four through fourteen,
inclusive, all relating to the patients' bill of rights;
providing for notice of certain enrollee rights; and
establishing the right to an external review of coverage
denials.
Be it enacted by the Legislature of West Virginia:
That sections one, two and three, article twenty-five-c,
chapter thirty-three of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended and reenacted; and
that said article be further amended by adding thereto eleven new
sections, designated sections four through fourteen, inclusive, all
to read as follows:
ARTICLE 25C. HEALTH MAINTENANCE ORGANIZATION PATIENT BILL OF RIGHTS.
§33-25C-1. Short title and purpose.
This article may be referred to as the "Patients' Bill of
Rights." It is the intent of the Legislature that enrollees
covered by health plans receive quality health care designed to
maintain and improve their health. The purpose of this act is to
ensure that health plan enrollees:
(a) Have improved access to information regarding their health
plans;
(b) Have sufficient and timely access to appropriate health
care services, and choice among health care providers;
(c) Are assured that health care decisions are made by
appropriate medical personnel;
(d) Have access to a quick and impartial process for appealing
plan decisions;
(e) Are protected from unnecessary invasions of health care
privacy; and
(f) Are assured that personal health care information will be
used only as necessary to obtain and pay for health care or to
improve the quality of care.
§33-25C-2. Definitions.
(a) "Commissioner" or "department" means the commissioner of
insurance.
(b) "Enrollee," "subscriber" or "member" is a natural person
who has entered into an agreement with a health maintenance
organization or prepaid limited health service organization for the
provision of managed health care.
(c) "External review" means a process, independent of all
affected parties, to determine if a health care service is
medically necessary, medically appropriate or experimental.
(d) "Health care plan" means a plan that establishes,
operates, or maintains a network of health care providers that have
entered into agreements with the plan to provide health care
services to enrollees to whom the plan has the ultimate obligation
to arrange for the provision of or payment for services through
organizational arrangements for ongoing quality assurance,
utilization review programs, or dispute resolution.
For purposes of this definition, "health care plan" shall not
include indemnity health insurance policies including those using
a contracted provider network.
(b) (e) "Managed care plan" or "plan" means any health
maintenance organization or prepaid limited health care service
organization.
(c) (f) "Provider" means any physician, hospital or other
person or organization which is licensed or otherwise authorized in
this state to provide health care services or supplies.
§33-25C-3. Notice of certain enrollee rights.
All managed care plans must provide to subscribers on a form
prescribed by the commissioner enrollees a notice of certain
subscriber enrollee rights. The notice shall address the following
areas be provided to enrollees on a yearly basis on a form
prescribed by the commissioner and shall include, but not be
limited to:
(a) The enrollee's rights to a description of his or her rights and responsibilities, plan benefits, benefit limitations,
premiums, and individual cost-sharing requirements;
(1) (b) The enrollee's right to a description of the plan's
grievance procedure and the ability of the subscriber right to
pursue grievance and hearing procedures without reprisal from the
managed care plan;
(2) How the subscriber (c) A description of the method in
which an enrollee can obtain a listing of the plan's provider
network, including the names and credentials of all participating
providers, and the method in which an enrollee may choose providers
within the plan;
(3) (d) The subscriber's enrollee's right to privacy and
confidentiality;
(4) The subscriber's ability to examine and offer corrections
to their own medical records;
(e) The right to full disclosure from the enrollee's health
care provider of any information relating to his or her medical
condition or treatment plan, and the ability to examine and offer
corrections to the enrollee's medical records;
(5) (f) The subscriber's enrollee's right to be informed of
plan policies and any charges for which the subscriber enrollee
will be responsible;
(6) The subscriber's ability to obtain evidence of the medical
credentials of a plan provider such as diploma and board
certifications;
(7) (g) The right of subscriber's enrollees to have coverage
denials reviewed by appropriate medical professionals consistent with plan review procedures;
(h) The enrollee's right to emergency services, pursuant to
section eight-d, article twenty-five-a of this chapter, without
prior authorization if a prudent layperson acting reasonably would
have believed that an emergency medical condition existed, and the
right to a description of procedures to obtain emergency services;
(i) The enrollee's right to the procedures for obtaining
out-of-area services;
(j) The right of an enrollee to direct access, annually to an
obstetrician/gynecologist for the purpose of a well woman
examination without referral from her primary care physician
pursuant to sections two and four, article forty-two of this
chapter;
(k) A description of the method in which an enrollee can
obtain access to a summary of the plan's accreditation report;
(l) The right of an enrollee over fifty years of age to
colorectal examinations and laboratory tests for colorectal cancer;
(m) The right of a diabetic enrollee whose health benefit
policy includes eye care benefits to direct access to an eye care
provider in accordance with article twenty-five-e of this chapter;
(n) A list of any other legally mandated benefits to which the
enrollee is entitled.
(o) Effective the first day of July, two thousand two, the
enrollee's right to an external review of a coverage denial by an
independent external review organization certified and selected by
the commissioner, the cost of which is to be borne by the plan;
(p) The right of an enrollee to have medical advice or options communicated to him or her without any limitations or restrictions
being placed upon the provider or primary care physician by the
managed care plan;
(q) The enrollee's managed care plan may not provide to any
provider or any primary care physician an incentive or disincentive
plan that includes specific payment made directly or indirectly, in
any form, to the provider or primary care physician as an
inducement to deny, release, limit, or delay specific, medically
necessary and appropriate services provided with respect to a
specific enrollee or groups of enrollees with similar medical
conditions; and
(8) (r) Any other areas the commissioner may by rule
require.
§33-25C-4. Access to appropriate health services.
(a) Each enrollee in a health plan must have adequate choice
among health care providers.
(b) Each managed care plan must allow an enrollee to choose a
primary care provider who is accepting new enrollees from a list of
participating providers. Enrollees also must be permitted to
change primary care providers after six months with the change
becoming effective no later than the beginning of the month
following the enrollee's request for the change.
(c) Each managed care plan must have a process whereby an
enrollee with a complex or serious medical, psychiatric, or
psychological condition may receive a standing referral to a
participating specialist for an extended period of time.
(d) Each managed care plan must provide for appropriate and timely referral of enrollees to a choice of specialists within the
plan if specialty care is warranted. If the type of medical
specialist needed for a specific condition is not represented on
the specialty panel, enrollees must have access to nonparticipating
specialty health care providers, and reimbursement shall be
considered as in network.
(e) Each managed care plan must provide, upon the request of
an enrollee, access by the enrollee to a second opinion regarding
any medical diagnosis or treatment plan from a qualified
participating provider of the enrollee's choice.
(f) Each managed care plan must continue to cover services of
a primary care provider whose contract with the plan or whose
contract with a subcontractor is being terminated by the plan or
subcontractor without cause under the terms of that contract for at
least sixty days following notice of termination to the enrollees
or, in group coverage arrangements involving periods of open
enrollment, only until the end of the next open enrollment period.
The provider's relationship with the managed care plan or
subcontractor must be continued on the same terms and conditions as
those of the contract the plan or subcontractor is terminating,
except for any provision requiring that the managed care plan
assign new enrollees to the terminated provider.
(g) Each managed care plan must include in its network any
physician who applies and who meets its credentialing criteria, and
who is willing to accept the plan's reimbursement levels for the
same type of physician.
(h) Every managed care plan shall meet the standards set forth in this section and any rules adopted by the commissioner to
implement this section. In developing rules to implement this
section, the commissioner shall consider relevant standards adopted
by national managed care accreditation organizations and state
agencies that purchase managed health care services.
§33-25C-5. Health care decisions.
(a) Managed care plans that offer a health plan shall maintain
a documented utilization review program description and written
utilization review criteria based on reasonable medical evidence.
The program must include a method for reviewing and updating
criteria. Managed care plans shall make clinical protocols,
medical management standards, and other review criteria available
upon request to participating providers.
(b) The commissioner shall adopt, in rule, standards for this
section after considering relevant standards adopted by national
managed care accreditation organizations and state agencies that
purchase managed health care services.
(c) A managed care plan shall not be required to use medical
evidence or standards in its utilization review of religious
nonmedical treatment or religious nonmedical nursing care.
§33-25C-6. Retrospective denial of services.
(a) A managed care plan shall not retrospectively deny
coverage for emergency care that complies with the prudent
layperson standard set forth in section eight-d, article twenty-
five-a of this chapter.
(b) A managed care plan shall not retrospectively deny
nonemergency care that had prior authorization under the plan's written policies at the time the care was rendered, except in cases
of fraud or misrepresentation.
(c) The commissioner may adopt, in rule, standards for this
section after considering relevant standards adopted by national
managed care accreditation organizations and state agencies that
purchase managed health care services.
§33-25C-7. Grievance process.
Each managed care plan that offers a health plan must have a
fully operational, comprehensive grievance process that complies
with the requirements of section twelve, article twenty-five-a,
chapter thirty-three of the code and any rules adopted by the
commissioner to implement this section. For the purposes of this
section, the commissioner shall consider grievance process
standards adopted by national managed care accreditation
organizations and state agencies that purchase managed health care
services.
§33-25C-8. Independent review of health care disputes.
(a) There is a need for a process for the fair consideration
of disputes relating to decisions by managed care plans that offer
a health plan to deny, modify, reduce, or terminate coverage of or
payment for health care services for an enrollee.
(b) An enrollee may seek review by a certified independent
review organization of a managed care plan's decision to deny,
modify, reduce, or terminate coverage of or payment for a health
care service, after exhausting the managed care plan's grievance
process and receiving a decision that is unfavorable to the
enrollee, or after the managed care plan has exceeded the timelines for grievances provided in section twelve, article twenty-five-a of
this chapter, without good cause and without reaching a decision.
(c) The commissioner must establish and use a rotational
registry system for the assignment of a certified independent
review organization to each dispute. The system should be flexible
enough to ensure that an independent review organization has the
expertise necessary to review the particular medical condition or
service at issue in the dispute.
(d) Managed care plans must provide to the appropriate
certified independent review organization, not later than the third
business day after the date the managed care plan receives a
request for review, a copy of:
(1) Any medical records of the enrollee that are relevant to
the review;
(2) Any documents used by the managed care plan in making the
determination to be reviewed by the certified independent review
organization;
(3) Any documentation and written information submitted to the
managed care plan in support of the appeal; and
(4) A list of each physician or health care provider who has
provided care to the enrollee and who may have medical records
relevant to the appeal. Health information or other confidential
or proprietary information in the custody of a managed care plan
may be provided to an independent review organization, subject to
rules adopted by the commissioner.
(e) The medical reviewers from a certified independent review
organization will make determinations regarding the medical necessity or appropriateness of, and the application of health plan
coverage provisions to, health care services for an enrollee. The
medical reviewers' determinations must be based upon their expert
medical judgment, after consideration of relevant medical,
scientific, and cost-effectiveness evidence. Except as provided in
this subsection, the certified independent review organization must
ensure that determinations are consistent with the scope of covered
benefits as outlined in the medical coverage agreement. Medical
reviewers may override the health plan's medical necessity or
appropriateness standards if the standards are determined upon
review to be unreasonable or inconsistent with sound, evidence-
based medical practice.
(f) Once a request for an independent review determination has
been made, the independent review organization must proceed to a
final determination, unless requested otherwise by both the managed
care plan and the enrollee or the enrollee's representative.
(g) Any party aggrieved by the decision of the external review
organization may appeal to the commissioner pursuant to section
fourteen, article two of this chapter.
(h) Managed care plans must timely implement the certified
independent review organization's determination, and must pay the
certified independent review organization's charges.
(i) When an enrollee requests independent review of a dispute
under this section, and the dispute involves a managed care plan's
decision to modify, reduce, or terminate an otherwise covered
health service that an enrollee is receiving at the time the
request for review is submitted and the managed care plan's decision is based upon a finding that the health service, or level
of health service, is no longer medically necessary or appropriate,
the managed care plan must continue to provide the health service
if requested by the enrollee until a determination is made under
this section. If the determination affirms the managed care plan's
decision, the enrollee may be responsible for the cost of the
continued health service.
(j) A certified independent review organization may notify the
office of the insurance commissioner if, based upon its review of
disputes under this section, it finds a pattern of substandard or
egregious conduct by a managed care plan.
(k) (1) The commissioner shall adopt rules to implement this
section after considering relevant standards adopted by national
managed care accreditation organizations.
(2) This section is not intended to supplant any existing
authority of the commissioner under this title to oversee and
enforce managed care plan compliance with applicable statutes and
rules.
§33-25C-9. Independent review organizations.
(a) The department shall adopt rules providing a procedure and
criteria for certifying one or more organizations to perform
independent review of health care disputes described in section
eight of this act.
(b) The rules must require that the organization ensure:
(1) The confidentiality of medical records transmitted to an
independent review organization for use in independent reviews;
(2) That each health care provider, physician, or contract specialist making review determinations for an independent review
organization is qualified. Physicians, other health care
providers, and, if applicable, contract specialists must be
appropriately licensed, certified, or registered. Reviewers may be
drawn from nationally recognized centers of excellence, academic
institutions, and recognized leading practice sites. Expert
medical reviewers should have substantial, recent clinical
experience dealing with the same or similar health conditions. The
organization must have demonstrated expertise and a history of
reviewing health care in terms of medical necessity,
appropriateness, and the application of other health plan coverage
provisions;
(3) That any physician, health care provider, or contract
specialist making a review determination in a specific review is
free of any actual or potential conflict of interest or bias.
Neither the expert reviewer, nor the independent review
organization, nor any officer, director, or management employee of
the independent review organization may have any material
professional, familial, or financial affiliation with any of the
following: The managed care plan; professional associations of
managed care plans and providers; the provider; the provider's
medical or practice group; the health facility at which the service
would be provided; the developer or manufacturer of a drug or
device under review; or the enrollee;
(4) The fairness of the procedures used by the independent
review organization in making the determinations;
(5) That each independent review organization make its determination:
(A) Not later than the earlier of:
(i) The fifteenth day after the date the independent review
organization receives the information necessary to make the
determination; or
(ii) The twentieth day after the date the independent review
organization receives the request that the determination be made.
In exceptional circumstances, when the independent review
organization has not obtained information necessary to make a
determination, a determination may be made by the twenty-fifth day
after the date the organization received the request for the
determination; and
(B) In cases of a condition that could seriously jeopardize
the enrollee's health or ability to regain maximum function, not
later than the earlier of:
(i) Seventy-two hours after the date the independent review
organization receives the information necessary to make the
determination; or
(ii) The eighth day after the date the independent review
organization receives the request that the determination be made;
(6) That timely notice is provided to enrollees of the results
of the independent review, including the clinical basis for the
determination;
(7) That the independent review organization has a quality
assurance mechanism in place that ensures the timeliness and
quality of review and communication of determinations to enrollees
and managed care plans, and the qualifications, impartiality, and freedom from conflict of interest of the organization, its staff,
and expert reviewers; and
(8) That the independent review organization meets any other
reasonable requirements of the department directly related to the
functions the organization is to perform under this section and
section eight of this act.
(c) To be certified as an independent review organization
under this chapter, an organization must submit to the department
an application in the form required by the department. The
application must include:
(1) For an applicant that is publicly held, the name of each
stockholder or owner of more than five percent of any stock or
options;
(2) The name of any holder of bonds or notes of the applicant
that exceed one hundred thousand dollars;
(3) The name and type of business of each corporation or other
organization that the applicant controls or is affiliated with and
the nature and extent of the affiliation or control;
(4) The name and a biographical sketch of each director,
officer, and executive of the applicant and any entity listed under
subdivision (3) of this subsection and a description of any
relationship the named individual has with:
(A) A managed care plan;
(B) A utilization review agent;
(C) A nonprofit or for-profit health corporation;
(D) A health care provider;
(E) A drug or device manufacturer; or
(F) A group representing any of the entities described by
(4)(A) through (E) of this subsection;
(5) The percentage of the applicant's revenues that are
anticipated to be derived from reviews conducted under section
eight of this act;
(6) A description of the areas of expertise of the health care
professionals and contract specialists making review determinations
for the applicant; and
(7) The procedures to be used by the independent review
organization in making review determinations regarding reviews
conducted under section eight of this act.
(d) If at any time there is a material change in the
information included in the application under subsection (c) of
this section, the independent review organization shall submit
updated information to the department.
(e) An independent review organization may not be a subsidiary
of, or in any way owned or controlled by, a managed care plan or a
trade or professional association of health care providers or
managed care plans.
(f) An independent review organization, and individuals acting
on its behalf, are immune from suit in a civil action when
performing functions under this act. However, this immunity does
not apply to an act or omission made in bad faith or that involves
gross negligence.
(g) Independent review organizations must be free from
interference by state government in its functioning except as
provided in subsection (h) of this section.
(h) The rules adopted under this section shall include
provisions for terminating the certification of an independent
review organization for failure to comply with the requirements for
certification. The department may review the operation and
performance of an independent review organization in response to
complaints or other concerns about compliance.
(i) In adopting rules for this section, the department shall
take into consideration standards for independent review
organizations adopted by national accreditation organizations. The
department may accept national accreditation or certification by
another state as evidence that an organization satisfies some or
all of the requirements for certification by the department as an
independent review organization.
§33-25C-10. Managed care plan liability.
(a)(1) A managed care plan shall adhere to the accepted
standard of care for health care providers under West Virginia
common law when arranging for the provision of medically necessary
health care services to its enrollees. A managed care plan shall
be liable for any and all harm proximately caused by its failure to
follow that standard of care when the failure resulted in the
denial, delay, or modification of the health care service
recommended for, or furnished to, an enrollee.
(2) A managed care plan is also liable for damages under
subdivision (1) of this subsection for harm to an enrollee
proximately caused by health care treatment decisions that result
from a failure to follow the accepted standard of care made by its:
(A) Employees;
(B) Agents; or
(C) Ostensible agents who are acting on its behalf and over
whom it has the right to exercise influence or control or has
actually exercised influence or control.
(b) A managed care plan may not enter into a contract with a
physician, hospital, or other health care provider or
pharmaceutical company which includes an indemnification or hold
harmless clause for the acts or conduct of the managed care plan.
Any such indemnification of hold harmless clause in an existing
contract is hereby declared void.
(c) This section does not create any new cause of action, or
eliminate any presently existing cause of action, with respect to
health care providers and health care facilities.
(d) It is a defense to any action or liability asserted under
this section against a managed care plan that:
(1) The health care service in question is not a benefit
provided under the plan or the service is subject to limitations
under the plan that have been exhausted;
(2) Neither the managed care plan, nor any employee, agent, or
ostensible agent for whose conduct the managed care plan is liable
under subdivision (1), subsection (b) of this section, controlled,
influenced, or participated in the health care decision; or
(3) The managed care plan did not deny or unreasonably delay
payment for treatment prescribed or recommended by a participating
health care provider for the enrollee.
(e) This section does not create any liability on the part of
an employer, government agency, or an employer group purchasing organization that purchases coverage or assumes risk on behalf of
its employers, or employees, or a governmental agency that
purchases coverage on behalf of individuals and families.
(f) Nothing in any law of this state prohibiting a managed
care plan from practicing medicine or being licensed to practice
medicine may be asserted as a defense by the managed care plan in
an action brought against it under this section.
(g)(1) A person may not maintain a cause of action under this
section against a managed care plan unless:
(A) The affected enrollee has suffered substantial harm. As
used in this subsection, "substantial harm" means loss of life,
loss or significant impairment of limb, bodily or cognitive
function, significant disfigurement, or severe or chronic physical
pain; and
(B) The affected enrollee or the enrollee's representative has
exercised the opportunity established in section eight of this act
to seek independent review of the health care treatment decision.
(2) This subsection (g) does not prohibit an enrollee from
pursuing other appropriate remedies, including injunctive relief,
a declaratory judgment, or other relief available under law, if its
requirements place the enrollee's health in serious jeopardy.
(h) In an action against a managed care plan, a finding that
a health care provider is an employee, agent, or ostensible agent
of such a managed care plan shall not be based solely on proof that
the person's name appears in a listing of approved physicians or
health care providers made available to enrollees under a health
plan.
(i) Any action under this section shall be commenced within
two years of the completion of the independent review process:
Provided, That a minor or persons under legal disability may
commence action within the time period prescribed in section
fifteen, article two, chapter fifty-five of this code.
(j) This section does not apply to workers' compensation
insurance under article two, chapter twenty-three of the code.
§33-25C-11. Delegation of duties.
Each managed care plan is accountable for and must oversee any
activities required by this act that it delegates to any
subcontractor. No contract with a subcontractor executed by the
managed care plan or the subcontractor may relieve the managed care
plan of its obligations to any enrollee for the provision of health
care services or of its responsibility for compliance with statutes
or rules.
§33-25C-12. Rules.
The commissioner may propose rules for legislative approval in
accordance with the provisions of article three, chapter
twenty-nine-a of this code:
(a) To establish further standards for external review
procedures to be implemented by managed care plans;
(b) To establish further standards for certification of
independent external review organizations; and
(c) To further effectuate the purposes of this article.
§33-25C-13. Effective date.
This article shall apply to all contracts issued or renewed on
or after the first day of July, two thousand one.
§33-25C-14. Construction.
(a) To the extent permitted by law, if any provision of this
act conflicts with state or federal law, such provision must be
construed in a manner most favorable to the enrollee.
(b) If any provision of this act or its application to any
person or circumstance is held invalid, the remainder of the act or
the application of the provision to other persons or circumstances
is not affected.
NOTE: The purpose of this patients' bill of rights is to put
medical decisions into the hands of patients and their medical
providers. Among the provisions are sections which ensure the
right to a speedy internal and external review of denial of claims
by health insurers, the right to know what is in the contracts
between health care providers and insurance companies, and the
right to sue an insurer if harmed.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§§33-25c-4 through 14 are new; therefore, strike-throughs and
underscoring have been omitted.