H. B. 2342
(By Delegates Amores and Coleman)
[Introduced February 20, 2001
; referred to the
Committee on Government Organization then Finance.]
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-three,
relating to adoption of a Patient Protection Act; assuring
fairness and choice to patients and providers under managed
health care benefit plans; providing protection of consumer
choice; requiring certification and review of managed care
plans and utilization review programs; setting forth health
care provider credentialing requirements; providing
application of standards; requiring choice requirement for
point-of-service plans; allowing charging of premiums and fees
and their disclosure; requiring choice of health plans; and requiring proposal of rules.
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-three, to read as
follows:
ARTICLE 43. PATIENT PROTECTION ACT.
§33-43-1. Short title.
This article shall be known and may be cited as "The Patient
Protection Act."
§33-43-2. Purpose.
The Legislature hereby finds and declares that:
(a)
As this state's health care market becomes increasingly
dominated by health plans that use various managed care techniques
that include decisions regarding coverage and the appropriateness
of health care, it is a vital state governmental interest to
protect patients from unfair managed care practices; and
(b)
This article requires the commissioner of the department
of tax and revenue's division of insurance to establish standards
for the certification of qualified managed care plans and qualified
utilization review programs. These standards are necessary to
ensure patient protection, to avoid discrimination against qualified health care providers, to establish safeguards for
utilization review practices and to develop more and better
coverage options for all eligible enrollees, including the option
to enroll in a point-of-service plan. To enhance patients' choices
of health care providers, this article mandates the availability of
a point-of-service option for those enrollees who desire this
coverage option.
§33-43-3. Definitions.
For purposes of this article:
(a)
"Benefit payment schedule plan" means a health plan that:
(1) Provides coverage for all items and services included in
the standard benefit package, which items and services are
furnished by any lawful health care provider of the enrollee's
choice, subject to state licensing requirements;
(2) Makes payment for the services of a provider on a
fee-for-service basis without regard to whether or not there is a
contractual arrangement between the plan and the provider; and
(3) Provides a benefit payment schedule that identifies
covered services and the payment provided for each service covered
by the plan. No copayments or coinsurance may be applied. The
plan shall reimburse the payment for services to the enrollee
unless the enrollee authorizes direct payment to the provider.
(b) "Commissioner" means the insurance commissioner of West
Virginia.
(c) "Emergency services" means those health care services that
are provided in a hospital emergency facility after the sudden
onset of a medical condition that manifests itself by symptoms of
sufficient severity, including severe pain, that the absence of
immediate medical attention could reasonably be expected by a
prudent layperson who possesses an average knowledge of health and
medicine, to result in:
(1) Placing the patient's health in serious jeopardy;
(2) Serious impairment to bodily functions; or
(3) Serious disfunction of any body organ or part.
(d) "Health care provider" means any person, organization or
entity, including, but not limited to, hospitals, pharmacies,
and
laboratories or any other appropriately state-licensed or otherwise
state-recognized provider of health care services or supplies.
(e) "Health care provided incentive plan" means any
compensation arrangement between the plan and a health care
provider that may directly or indirectly have the effect of
reducing or limiting services provided with respect to an
individual or individuals enrolled in the plan.
(f) "Health maintenance organization" means a public or private organization which provides, or otherwise makes available
to enrollees, health care services that include, at a minimum,
basic health care services.
(g) "Managed care contractor" means a person that:
(1)
Establishes, operates or maintains a network of
participating providers;
(2)
Conducts or arranges for utilization review activities;
or
(3)
Contracts with an insurance company, a hospital or
medical service plan, an employer, an employee organization or any
other entity providing coverage for health care services to operate
a managed care plan.
(h) "Managed care entity" means a licensed insurance company,
hospital or medical service plan, health maintenance organization,
an employer or employee organization or a managed care contractor,
as defined in this section, that operates a managed care plan.
(i) "Managed care plan" means a restrictive health care plan
operated by a managed care entity, as defined in this section, that
provides for the financing and delivery of health care services to
persons enrolled in such plan through:
(1) Arrangements with selected providers to furnish health
care services;
(2) Explicit standards for the selection of participating
providers;
(3) Organizational arrangements for ongoing quality assurance,
utilization review programs and dispute resolution; and
(4) Financial incentives for persons enrolled in the plan to
use the participating providers and procedures provided for by the
plan:
Provided, That for purposes of this article, a managed care
plan does not include an integrated medical group contracting with
a plan for the direct provision of services to plan enrollees.
(j) "Medical savings account" means a trust used for the
payment of medical expenses which is created or organized for the
exclusive benefit of an individual, his or her dependents covered
under a group accident and sickness policy, and his or her
beneficiaries, and as more fully defined in section fifteen,
article sixteen, chapter thirty-three of this code.
(k) An "out-of-network" or "point-of-service" plan is a plan
that:
(1) Provides additional coverage and access to care by
nonnetwork providers to an eligible enrollee of a health plan which
otherwise restricts access to and coverage for items and services
that are provided by a health care provider who is not a member of
the plan's provider network; or
(2) May cover any other services the enrollee seeks, whether
the services are provided in or outside of the enrollee's plan.
(l) "Participating provider" means any health care provider as
defined in this section that has entered into an agreement with a
managed care entity to provide health care services or supplies to
a patient enrolled in a managed care plan.
(m) "Preferred provider organization" means an alternative
health care delivery system, created by contract between health
care providers and third-parties such as employers or third-party
administrators, under which the preferred provider organization
agrees to provide health care services to a defined population of
enrollees in return for payment based on a negotiated schedule of
fixed fees. A preferred provider organization is distinguished
from a health maintenance organization or similar organization in
that:
(1) Preferred provider organization providers are paid on a
fee-for-service basis while other systems pay by capitation or
salary; and
(2) Preferred provider organization physicians are not at
financial risk for services not provided while, with health
maintenance organization's and similar organizations, the
organization, as purchaser of the service, retains the risk of loss.
(n) "Provider network" means, with respect to a health plan
that restricts access, those providers who have entered into a
contract or agreement with the plan under which the providers are
obligated to provide items and services in the standard benefits
package to eligible individuals enrolled in the plan, or who have
an agreement to provide services on a fee-for-service basis.
(o) "Qualified managed care plan" means a managed care plan
that the commissioner certifies, upon application by the plan, as
meeting the requirements of this article.
(p) "Qualified utilization review program" means a utilization
review program that the commissioner certifies, upon application by
the program, as meeting the requirements of this article.
(q) "Specialty" means any medical specialty as recognized by
the American board of medical specialties or the American
osteopathic association.
(r) "Traditional insurance plan" includes those plans that
offer the standard benefits package which pays for medical services
on a fee-for-service basis using:
(1) A usual, customary or reasonable payment methodology; or
(2) A resource based relative value schedule, and which is
usually linked to an annual deductible or coinsurance payment on each allowed amount.
(s) "Utilization review program" means a system for reviewing
the medical necessity, appropriateness or quality of health care
services and supplies provided under a health insurance plan or a
managed care plan using specified guidelines. Such a system may
include preadmission certification, the application of practice
guidelines, continued-stay review, discharge planning,
preauthorization of ambulatory procedures and retrospective review.
§33-43-4. Protection of consumer choice.
Nothing in this article prohibits:
(a)
An individual from purchasing any health care services
with that individual's own funds, whether those services are
covered within the individual's standard benefit package or from
another health care provider or plan; or
(b)
An employer from providing coverage for benefits in
addition to the comprehensive benefit package.
§33-43-5. Certification and review of managed care plans and
utilization review programs.
(a) The commissioner shall establish a process for
certification of managed care plans and utilization review
programs. The commissioner shall also establish procedures for the
periodic review and recertification of qualified managed care plans and qualified utilization review programs. Periodic review and
recertification shall include those managed care plans and
utilization review programs which exist prior to the effective date
of this article.
(b) The commissioner shall terminate the certification of a
previously qualified managed care plan or a qualified utilization
review program if the commissioner determines that the plan or
program no longer meets the applicable requirements for
certification. Before effecting a termination, the commissioner
shall provide the plan notice and opportunity for a hearing on the
proposed termination pursuant to the provisions of article five,
chapter twenty-nine-a of this code.
(c) An eligible organization, as defined in Title 42 U.S.C. §
1395mm, meets the requirements of this article for certification as
a qualified managed care plan.
(d) If the commissioner finds that a national accrediting body
establishes or has established a requirement or requirements for
accreditation of a managed care plan or utilization review program
that is or are at least equivalent to the requirements of this
article, the commissioner may consider the managed care plan or
utilization review program thus accredited as meeting the
certification requirements of this article.
§33-43-6. Certification requirements for managed care plans.
(a) The commissioner shall establish standards for the
certification of qualified managed care plans that conduct business
in this state, which standards shall incorporate the following
requirements:
(1) Prospective enrollees in health insurance plans shall be
provided information as to the terms and conditions of the plan so
that they can make informed decisions about accepting a certain
system of health care delivery. This information shall be provided
in a clear and concise format that explicitly details any
limitations in choice of primary health care providers access to
specialists and also describes the method of health care provider
payment. Whenever the plan is described orally to enrollees, terms
used shall be easily understood, truthful and objective. Further,
all plans shall provide written descriptions in a readable and
understandable format, consistent with standards developed for
supplemental insurance coverage under Title XVIII of the Social
Security Act. This format shall be standardized so that customers
can compare the attributes of different plans. All plans shall
specifically include the following:
(A) Coverage provisions, benefits and any exclusions by
category of service, provider or physician and, if applicable, by specific service;
(B) Any and all prior authorization or other review
requirements including preauthorization review, concurrent review,
postservice review, postpayment review and any procedures that may
lead the patient to be denied coverage for or not be provided a
particular service;
(C) Financial arrangements or contractual provisions with
hospitals, review companies, physicians or any other provider of
health care services that would limit the services offered,
restrict referral or treatment options or negatively affect the
physician's fiduciary responsibility to his or her patients,
including, but not limited to, financial incentives not to provide
medical or other services;
(D) Explanation of how plan determinations of whether a
service or item is covered including policy regarding new and
emerging technology;
(E) Explanation of how plan limitations impact enrollees,
including information on enrollee financial responsibility for
payment for coinsurance or other noncovered or out-of-plan
services;
(F) Medical benefit/loss ratios and an explanation that they
reflect the percentage of premiums expended for health care services; and
(G) Enrollee satisfaction statistics, including percent
reenrollment, reasons for leaving plan, and other similar data.
(2) Any limitations or conditions placed by a plan upon the
frequency or duration of treatment for a particular diagnosis shall
be applied equally to all types of participating providers.
(3) Plans shall demonstrate that they have adequate access to
physicians and other providers so that all covered health care
services will be provided in a timely fashion by establishing
standards, such as physician/patient ratios, to insure an
enrollee's reasonable access to primary care physicians, specialty
care and needed services of other providers. This requirement may
not be waived and shall be met in all geographical areas where the
plan has enrollees, including rural areas.
(4) Plans shall meet financial reserve requirements
established by the commissioner to insure proper payment for
covered services. Stop-loss or reimbursement coverage shall be
established to provide for planned failures even when a plan has
met the reserve requirements.
(5) All plans shall establish a mechanism, with defined
rights, under which participating providers in the plan provide
input into the plan's medical policy, including coverage of new technology and procedures, utilization review criteria and
procedures, quality and credentialing criteria, and medical
management procedures.
(6) All plans are required to credential participating
providers within the plan pursuant to the provisions of section
seven of this article. All plans shall permit all physicians
residing or practicing within the plan's geographic service area to
apply for plan credentials and, at a minimum of one time per annum,
shall notify physicians of the opportunity to apply for these
credentials.
(7) To avoid discriminating against enrollees with expensive
medical conditions, plans may not exclude a practitioner solely
because his or her practice contains a substantial number of
patients.
(8) Plans may not include terms or clauses in contracts with
health care providers that permit the plan to terminate the
contract "without cause."
(9) Plans may not prohibit or restrict any health care
provider from disclosing to any subscriber, enrollee or member any
medically appropriate health care information that the medical
provider considers appropriate regarding the nature of treatment,
risks or alternatives thereto, the availability of alternate therapies, consultation or test, the decision of any plan to
authorize or deny the services or the process the plan of any
person contracting with the plan uses, or proposed use, to
authorize or deny health care service benefits. Any prohibition or
restriction contained in a contract with a health care provider is
contrary to public policy and is void and unenforceable.
(b) Each plan shall establish and demonstrate to the
commissioner procedures to ensure that all applicable federal and
state laws enacted to protect the confidentiality of provider and
individual medical records are followed.
(c) Any plan that operates a health care provider incentive
plan shall meet the following requirements:
(1) No specific payment may be made directly or indirectly
under the plan to a health care provider group as an inducement to
reduce or limit medically necessary services provided to an
individual patient; and
(2) If the plan places a health care provider at financial
risk for services not provided by the health care provider, the
plan shall provide stop-loss protection for the health care
provider that is adequate and appropriate, based on standards
developed by the commissioner, that take into account the number of
health care providers placed at such financial risk in the group or under the plan and the number of individuals enrolled with the
organization who receive services from the health care provider.
§33-43-7. Health care provider credentialing.
(a) Each managed care plan shall establish a credentialing
process for all health care providers applying for participation in
the plan. A credentialing process shall begin upon the receipt of
the application of a physician for inclusion in the plan. Each
application shall be reviewed by a credentialing committee,
composition of which includes appropriate representation of each
applicant's particular professional licensure.
(b) Credentialing shall be based upon objective standards of
quality, developed in consultation with health care providers
credentialed in the plan that include education, training,
background, experience, professional disposition and demonstrated
competence. The standards shall be made available to applicants
and enrollees. When economic considerations are germane to a
credentialing decision, objective criteria shall be used and shall
be made available to applicants, participating health care
providers and enrollees. Any economic profiling of health care
providers shall be adjusted to recognize case mix, severity of
illness, age of patients and other features of a health care
provider's practice that may account for costs that are higher than or lower than expected. Profiles shall be made available to those
so profiled.
(c) All decisions regarding physician credentialing by a plan
shall be made in writing and made a part of the applicant's record.
The applicant shall be provided a written statement of all reasons
for denial of an application or nonrenewal of a contract.
(d) Applicants for credentialing shall be entitled to a due
process appeal from all adverse decisions. The commissioner shall
establish procedures for due process appeals from adverse
credentialing decisions pursuant to the provisions of article five,
chapter twenty-nine-a of this code.
(e) The same standards and procedures that a plan uses for
approving an initial application for plan credentials shall also be
used in those cases where the plan seeks to reduce or withdraw the
credentials. Before a plan initiates a proceeding that may lead to
the termination of a contract "for cause," the plan shall notify
the physician in writing and provide an opportunity to discuss the
reasons for the termination and an opportunity to propose, enter
into, and complete a corrective action plan, except in cases where
there is a threat of imminent harm to patient health or a state
medical board or other governmental agency has taken some action
that limits or restricts the physician's ability to lawfully practice medicine within the jurisdiction.
§33-43-8. Certification requirements for utilization review
programs.
(a) The commissioner shall establish standards for the
certification of qualified utilization review programs.
(b) All utilization review program plans shall have a medical
director who is responsible for all clinical decisions by the plan
and who shall provide assurances to the commissioner that the
medical review or utilization practices used by the plan and the
payors or reviewers with whom the plan contracts comply with the
following requirements:
(1) Screening criteria, weighing elements and computer
algorithms used in the review process and their method of
development. The criteria shall be based on sound scientific
principles and developed in consultation with practicing physicians
and other affected health care providers. The criteria shall be
released upon request to enrollees and participating health care
providers;
(2) Any person who recommends denial of coverage or denial of
payment, or who determines that, based on medical necessity
standards, a service should not be provided, shall be of the same
particular professional licensure as the practitioner who prescribed or provided the service;
(3) Each claimant or provider, upon assignment of a claimant,
who has a claim denied as not medically necessary shall be provided
with a written statement of reasons for the decision, which shall
be clearly documented in the permanent case record, whether that
record is automated or manual. This written determination letter
shall include a general description of the reason the service was
denied, an explanation of both the claimant's and the provider's
appeal rights and instructions to appeal the determination to the
plan's utilization review director, medical director, physician
peer review committee or other appropriate person or entity as
designated by the plan in conjunction with any other physician or
provider group charged with oversight of the plan's utilization
review program;
(4) Any individual who makes a determination or a
recommendation that a certain service or site of service is
medically unnecessary or inappropriate shall be a physician
licensed to practice medicine in this state;
(5) A representative of the private review agent shall be
reasonably accessible to patients, patients' families and providers
at least five days per week during normal business hours. Payment
may not be denied for treatment rendered during a period when the review agent was not available;
(6) No private review agent may enter a hospital to interview
a patient unless approved in advance by the patient's attending
physician. The attending physician or a designee is entitled to
attend the interview;
(7) No contract between a private review agent and a third
party payor may contain a provision that incorporates an incentive
for the reviewer to reduce the availability or affordability of
health care services by making payment to the private review agent
contingent in any way upon a reduction in the approval of health
care services, reduction in length of stay, reduction of treatment
or selection of the treatment setting;
(8) Utilization review of treatment for all illnesses is
nondiscriminatory and without regard to whether an illness is
classified as medical/physical or mental;
(9) Upon request and subject to reasonable safeguards and
standards, physicians shall be provided the names and credentials
of all individuals conducting medical necessity or appropriateness
reviews;
(10) Prior authorization may not be required for treatment of
an emergency medical condition, as defined in Title 42 U.S.C. §
1395dd, including medical screening exams and stabilizing treatment. Any requirement for prior authorization of medically
necessary services arising from the screening exams or stabilizing
treatment is considered approved unless the reviewing agent
responds otherwise within two hours of receiving a required request
for prior authorization. Requests by patients or physicians for
prior authorization of any nonemergency service shall be answered
within two business days. Qualified personnel shall be available
for same-day telephone responses to inquiries about medical
necessity, including certification of continued length of stay;
(11) In plans where prior authorization is a condition to
coverage of a service, plans shall ensure that enrollees are
required to sign medical information release consent forms upon
enrollment for use where services requiring prior authorization are
recommended or proposed by their physician;
(12) When prior authorization for a service or other covered
item is obtained, it is authorization for all purposes reasonably
related to that service or covered item and the service is covered
unless the prior authorization was obtained through fraud or the
submission of false information; and
(13) Procedures shall be established for ensuring that all
applicable federal and state laws designed to protect the
confidentiality of provider and individual medical records are followed.
§33-43-9. Application of standards.
(a) All standards required by this article shall be
established by the commissioner no later than twelve months after
the effective date of this article.
(b) In developing standards required by this article, the
commissioner shall:
(1) Review standards in use by national private accreditation
organizations and the national association of insurance
commissioners;
(2) Recognize, to the extent appropriate, differences in the
organizational structure and operation of managed care plans; and
(3) Establish procedures for the timely consideration of
applications for certification by managed care plans and
utilization review programs.
(c) The commissioner shall periodically review the standards
established under this article and may revise the standards from
time to time to assure that they continue to reflect appropriate
policies and practices for the cost-effective and medically
appropriate use of services within managed care plans and
utilization review programs.
§33-43-10. Choice requirement for point of service plans; premiums; fees; disclosure.
(a) Each sponsor of a health benefit plan that restricts
access to providers, including plans that are provided, offered or
made available by voluntary health purchasing cooperatives,
employers and self-insurers, shall offer to all eligible enrollees
at the time of enrollment and at least for a continuous one-month
period annually thereafter the opportunity to obtain coverage for
out-of-network services through a point-of-service plan.
(b) A plan may charge an enrollee who chooses to obtain
point-of-service coverage an alternative premium that takes into
account the actuarial value of the coverage.
(c) A point-of-service plan may require payment of coinsurance
for an out-of-network item or service with the applicable
coinsurance percentage not being greater than the percentage of
coinsurance payment provided for under the plan.
(d) All sponsors of point-of-service plans and participating
provider in those plans are required to disclose their fees,
applicable payment schedules, coinsurance requirements or any other
financial requirements that affect patient payment levels.
§33-43-11. Choice of health plans for enrollment.
(a) Each sponsor of a health benefit plan, including voluntary
health insurance purchasing cooperatives, employers and self-insurers, who offers, provides or makes available the benefit
plan, shall provide to each eligible enrollee a choice of health
plans among available plans.
(b) Each voluntary health insurance purchasing cooperative,
employer or other sponsor shall include among its health plan
offerings at least one of each of the following types of health
benefit plans, where available:
(1) A health maintenance organization or preferred provider
organization;
(2) A traditional insurance plan;
(3) A benefit payment schedule plan; and
(4) Medical savings accounts.
§33-43-12. Proposal of rules.
The commissioner shall propose rules for legislative approval
in accordance with the provisions of article three, chapter
twenty-nine-a of this code as may be necessary to effectuate the
requirements of this article.
NOTE: The purpose of this bill is to create a patient
protection act for enrollees of managed health care plans. It
requires the insurance commissioner to propose rules that would
establish certain standards to ensure patient protection, physician
credentialing, utilization review safeguards and coverage options,
including point-of-service plans.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
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