Senate Bill No. 99
(By Senator Hunter)
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[Introduced January 13, 1999; referred to the Committee
on Banking and Insurance; and then to the Committee on Finance.]
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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 twenty- five-d, relating to the freedom of choice health care act;
establishing standards for health plan relationships with
enrollees, health professionals and providers; short title;
definitions; certification of health plans; requirements for
certification; network plans; enrollees having choice in
designation of health professionals and providers;
nondiscrimination; equitable access to networks; development
of plan policies; due process for enrollees; due process for
health professionals and providers; reporting and disclosure
requirements by network plans; requirements of
confidentiality and solvency; quality assurance; case
review; department proposing rules; and health plan liability.
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 twenty-five-d,
to read as follows:
ARTICLE 25D. FREEDOM OF CHOICE IN HEALTH CARE ACT.
§33-25D-1. Short title.
This article may be cited as "The Freedom of Choice Health
Care Act".
§33-25D-2. Definitions.
For the purposes of this article, the following terms and
definitions apply:
(a) "Department" means the department of health and human
resources;
(b) "Emergency medical condition" means a medical condition,
including emergency labor and delivery, that manifests itself by
acute symptoms of sufficient severity such that the absence of
immediate medical attention could be expected to result in:
(1) Placing the patient's health in serious jeopardy;
(2) Serious impairment to bodily functions;
(3) Serious dysfunction of any bodily organ or part; or
(4) Death;
(c) "Emergency services" means health care items and
services that are necessary for the treatment of an emergency
medical condition;
(d) "Enrollee" means an individual enrolled in a particular
health plan for medical services, either through employment-
related group insurance offerings or other group insurance
offerings secured individually by an enrollee;
(e) "Enrollee with special health care needs" means an
enrollee who is an individual or a member of a family that
includes an individual with a disability or chronic condition,
with an adjusted gross income of not more than twelve thousand
five hundred dollars whether single or married and filing
separately, or if married and filing jointly, an income of not
more than twenty-five thousand dollars;
(f) "Health plan" means any plan or arrangement that
provides, or pays the cost of health benefits, whether through
insurance, reimbursement or otherwise;
(g) "Health professional" means an individual who is
licensed, certified, accredited or otherwise credentialed to
provide health care items and services as authorized under the
laws of this state;
(h) "Individually identifiable information" means any
information, whether oral, written or otherwise recorded, that
identifies or can readily be associated with, the identity of an
enrollee, a health care professional or a provider;
(i) "Medically underserved area" means a geographical area
within the state, comprised of at least three hundred square
miles, containing a minimum population of two thousand persons,
wherein no more than one hospital or extended care facility
operated in connection with a hospital exists:
Provided, That,
for the purpose of this article, "hospital" and "extended care
facility" is construed with the meaning assigned pursuant to
section one, article five-b, chapter sixteen of this code;
(j) "Network" means the participating health professionals
and providers through which a plan provides health care items and
services to enrollees;
(k) "Network plan" means a health plan that provides or
arranges for the provision of health care items and services to enrollees through participating health professionals and
providers;
(l) "Participating" means a health professional or provider
that provides health care items and services to enrollees of a
network plan under an agreement with the plan;
(m) "Provider" means a health organization, hospital,
extended care facility, health facility or health agency that is
licensed, certified, credentialed, or otherwise authorized to
provide health care items and services under the laws of this
state;
(n) "Rural area" means an area not contained in any
incorporated municipality, where the population density is less
than one hundred persons per square mile;
(o) "Service area" means the geographic area served by a
plan;
(p) "Specialized treatment expertise" means:
(1) Expertise in diagnosing and treating unusual diseases
and conditions;
(2) Diagnosing and treating unusual diseases and conditions;
and
(3) Providing other specialized health care;
(q) "Urgent care services" means health care items and
services that are necessary for the treatment of a condition
that:
(1) Is not an emergency medical condition;
(2) Requires prompt medical or clinical treatment; and
(3) Poses a danger to the patient if not treated in a timely
manner; and
(r) "Utilization review" means prospective, concurrent or
retrospective review of health care items and services for
medical necessity, appropriateness or quality of care that
includes preauthorization requirements for coverage of these
items and services.
§33-25D-3. Certification of health plans.
(a) No later than the first day of March, two thousand, the
department shall propose rules for legislative approval in
accordance with the provisions of article three, chapter twenty- nine-a of this code, to establish a process under which:
(1) A health plan may apply to be certified under this
article;
(2) The certification is periodically reviewed; and
(3) The certification is terminated or not renewed if the health plan fails substantially to meet the requirements of this
article.
(b) No later than the first day of March, two thousand, the
department shall propose rules for legislative approval in
accordance with the provisions of article three, chapter twenty- nine-a of this code, which provide requirements that are required
to be met in order for a health plan to be certified under this
article.
§33-25D-4. Requirements for certification.
(a) A health care plan shall include as a participating
health professional or provider any health professional or
provider that accepts the terms and conditions established by the
plan for other participating providers.
(b) Subject to subsections (c), (d) and (e) of this section,
a health plan meets the requirements of this subsection if the
plan establishes and maintains adequate arrangements with a
sufficient number, mix and distribution of health professionals
and providers to assure that covered items and services are
available and accessible to each enrollee:
(1) In the service area of the plan;
(2) In a variety of sites of service;
(3) With reasonable promptness, including reasonable hours
of operation and after-hours services;
(4) With reasonable proximity to the residences and
workplaces of enrollees; and
(5) In a manner that:
(A) Takes into account the diverse needs of enrollees; and
(B) Reasonably assures continuity of care.
(c) A health plan that has an arrangement with only one
provider to furnish a particular service or category of services
to enrollees may not be treated as meeting the requirements of
this subsection unless the provider is the only provider of this
service or category in the service area of the plan and otherwise
meets the requirements of this article.
(d) A health plan that serves a geographic area that is
rural or medically underserved shall be treated as meeting the
requirement that it has a sufficient number, mix and distribution
of health professionals and providers with respect to the area if
the plan:
(1) Has arrangements with a sufficient number of health
professionals and providers in categories of health professionals
and providers specified as necessary by the department to serve the rural or medically underserved areas:
Provided, That the
department on or before the first day of March, two thousand,
shall propose rules for legislative approval in accordance with
the provisions of article three, chapter twenty-nine-a of this
code, which specify necessary categories of health professionals
and providers in accordance with the requirements of this
subsection; and
(2) Meets all other legislatively approved rules proposed by
the department.
(e)
Nothing in this section requires a health plan to have
arrangements that conflict with its responsibilities to establish
measures designed to maintain quality and control costs.
(f) A health plan, subject to this article, shall provide
covered items and services without regard to whether a health
professional or provider called upon to furnish the items or
services has a contractual arrangement with the plan. In so
doing, it shall:
(1) Assure the availability and accessibility of medically
or clinically necessary emergency services and urgent care
services within the service area of the plan twenty-four hours
a day, seven days a week;
(2) Require no preauthorization for items and services
furnished in a hospital emergency department to an enrollee with
symptoms that reasonably suggest an emergency medical condition;
(3) Cover and make reasonable payment provisions for:
(A) Emergency services;
(B) Nonemergency services;
(C) Medical screening examinations and other ancillary
services necessary to determine if a medical condition is an
emergency medical condition; and
(D) Urgent care services; and
(4) Make preauthorization determinations for services that
are furnished in a hospital emergency department and urgent care
services facility within time limits provided for under this
article.
§33-25D-5. Network plans.
A network plan meets the requirements of this article if the
plan demonstrates that enrollees have access to specialized
treatment expertise when the treatment is medically or clinically
indicated in the professional judgment of a treating health
professional. A network plan meets the requirements of this
article by entering into agreements with, and demonstrating sufficient referrals to, centers of specialized treatment
expertise required by the department:
Provided, That the
department shall propose rules for legislative approval in
accordance with the provisions of article three, chapter twenty- nine-a of this code, that prescribe methods for determining
reasonable and sufficient standards to judge the requirements of
this section.
§33-25D-6. Enrollees to have choice in designation of health
professionals and providers.
(a) A plan subject to the provisions of this article shall
ensure enrollees have reasonable and meaningful discretion to
choose health professionals and providers. It shall cover
services furnished by out-of-network providers while promoting
continuity of care.
(b) A plan shall cover items and services furnished to an
enrollee by a health professional or provider that is not a
participating health professional or provider, while establishing
cost-sharing requirements for items and services required by this
article.
(c) The department shall establish a schedule of limits on
cost sharing for items and services needed by enrollees with special health care needs or chronic conditions. It shall,
additionally, establish a schedule of limits on cost sharing for
all other items and services offered under a plan.
(d) A network plan is required to:
(1) Ensure that any procedure intended to coordinate care
and control costs does not create an undue burden for enrollees
with special health care needs or chronic conditions;
(2) Ensure direct access to relevant specialists for the
continued care of the enrollees when medically or clinically
indicated in the judgment of the treating health professional;
(3) In the case of an enrollee with special health care
needs or a chronic condition, determine whether, based on the
judgment of the treating health professional, it is medically or
clinically necessary or appropriate to use a specialist or a care
coordinator from an interdisciplinary team to ensure continuity
of care; and
(4) In circumstances under which a change of health
professional or provider might disrupt the continuity of care, in
the cases of hospitalization or dependency on technologically
advanced home medical equipment, provide for continued coverage
of items and services furnished by the health professional or provider that was treating the enrollee before the change for a
reasonable period of time after the change would otherwise occur.
The department shall propose rules for legislative approval in
accordance with the provisions of article three, chapter twenty- nine-a of this code, designating reasonable periods of time, in
accordance with this section, ranging from no fewer than one, nor
more than one hundred fifty days, or in cases of pregnancy, no
greater than sixty days. Extensions of these periods for cause
shall be permitted upon a showing of medical necessity. For the
purposes of this section, a change of health care professional or
provider may be authorized due to changes in the membership of a
plan's health professional and provider network, changes in the
health plan made available by an employer or other similar
circumstances specified by the department, as beyond the control
of the enrollee.
§33-25D-7. Nondiscrimination; equitable access to networks.
A health plan provided for under the provisions of this
article may not discriminate in the selection of health
professionals or providers on any basis other than availability
of items and services, costs of items and services and legitimate
perceptions regarding quality of care and technological differences. This requirement applies to primary health
professionals and providers as well as network health
professionals and providers.
§33-25D-8. Development of plan policies.
Approved network plans are required to establish mechanisms
and policies to incorporate the recommendations, suggestions and
views of enrollees and participating health professionals and
providers into:
(1) The medical policies of the plan, including policies
related to coverage of new technologies, treatments and
procedures;
(2) The utilization review criteria and procedures of the
plan;
(3) The quality and credentialing criteria of the plan; and
(4) The medical management procedures of the plan.
§33-25D-9. Due process for enrollees.
(a) The department and the health plan shall ensure that the
utilization review program of a health plan is developed with the
involvement of participating health providers and professionals.
It shall uniformly apply review criteria based on sound
scientific principles and the most recent medical advances. Only qualified and duly licensed and certified health professionals
may make review determinations. The plan, upon request, shall
disclose to participating health providers and professionals the
names and qualifications of individuals conducting the
utilization review process:
Provided, That the department shall
propose rules for legislative approval in accordance with the
provisions of article three, chapter twenty-nine-a of this code,
designed to safeguard the dispensation of this information to
ensure it is released solely to requesting professionals
authorized to receive it. Financial incentives designed to cause
reviewers to deny coverage are prohibited. Preauthorization
pursuant to utilization review does not apply to emergency- related services furnished in a hospital emergency department.
In the case of nonemergency preauthorizations involving an
enrollee examined in a hospital emergency department,
determinations of coverage shall be made within thirty minutes of
a request for determination. In the case of other requested
services, determinations shall be made within twenty-four hours:
Provided, That upon a reasonable showing of good cause related to
the medical complexity of an illness or condition, or upon the
unknown contingency of availability of organ donors or scarce technological equipment or devices involving overwhelming demand,
a period, up to three months, may be authorized by the
department:
Provided however, That in the event of a serious
and immediate prospect involving imminent death or substantial
permanent biological dysfunction or permanent medical set-back,
a determination shall be made, regardless of the underlying
medical complexities or availabilities of organ donors or
technological equipment or devices within a shorter period,
taking into account the most recent medical opinions from
qualified treating physicians, or other qualified physicians
specifically called upon to assess the immediate prognosis of an
enrollee.
(b) A determination shall be reduced to written notification
containing the basis for the determination, and it is subject to
immediate appeal.
(c) A favorable preauthorization review shall be treated as
a final determination for the purposes of making payment for
items or services provided unless the determination is later
determined to have been based on fraudulent information supplied
by the health provider or professional requesting the
determination. The notice of an initial determination of payment on a claim shall be made within thirty days of the date the claim
is submitted for an item or service and shall include an
explanation of the reasons for the determination and of the right
of immediate appeal.
(d) A plan shall provide timely access to review personnel
upon request. In the event personnel is not available, a
preauthorization that is otherwise required is waived.
(e) In the case of appeals, the health plan shall be
required to provide for review of a denial of a request for items
or services related to emergency or urgent care within one hour
of the time the request for review is made. For all other
denials for items or services, it shall be made within twenty- four hours. The review shall be conducted by an appropriate
clinical peer professional who is in the same or similar
specialty as would typically provide the item or service
involved.
§33-25D-10. Due process for health professionals and providers.
(a) A network plan shall allow health professionals and
providers in its service areas to apply to become a participating
health professional or provider during at least one quarterly
period in a calendar year. It shall provide reasonable notice to the health professionals and providers of the opportunity to
apply and of the period or periods during which applications are
accepted. Applications shall be reviewed by qualified committees
of a minimum of three health professionals with appropriate
representation of the category, class or type of health
professional or provider making the application. The committee
shall select participating health professionals and providers
based on objective standards of quality which are evident from
the application materials submitted. In the event of the need
for further review of applications, committee members may require
free access to past employers or associates of applicants, as
well as the provision of references and a personal interview with
an applicant. When economic factors are considered in the
selection process, committee members shall use objective criteria
that take into account adjustments for economic profiling of
applicants, including, but not limited to, the severity of
illnesses or conditions of patients treated by applicants, and
the expense involved in equipment or technology that one
applicant may possess or have access to relative to other
applicants who do not have possession or access:
Provided, That
any adjustments made for equipment or technology may only be made when the equipment or technology bears a reasonable and
discernible relationship to improved quality of care, diagnosis
or treatment. Any economic profiling and the underlying
information and accounting principles involved shall be provided
to the plan purchasers, enrollees or health professionals or
providers upon request. In the event an applicant fails to meet
standards or requirements under the plan, the applicant shall be
so notified with specific reference to the particular standards
or requirements that have been cited as not being met, and the
basis for the conclusion. The applicant shall be afforded a
reasonable opportunity to supplement his, her or its application
in order to provide corrected or additional information, or to
take issue with the committee's determination.
(b) No contract issued under an approved plan may include a
provision allowing a health professional or provider to be
terminated without cause.
(c) In the event any applicant or contract health
professional or provider receives an adverse determination
regarding the provision of prospective services, he, she or it
has the right to appeal the determination. The appeal shall be
made within seven days of the determination and the committee shall conduct a hearing, which shall be recorded. In the event
the committee persists in the adverse determination, the
aggrieved party has the right to appeal to the department. This
appeal shall be made within seven days of the committee's action
on the initial appeal. The appeal to the department shall
entitle the appellant to a hearing de novo which shall also be
recorded. The department shall consider the record from the
initial appeal as well as the record that evolves before it. The
department shall propose rules for legislative approval in
accordance with the provisions of article three, chapter twenty- nine-a of this code, governing all additional aspects of the
hearing process not provided in this section.
(d) Unless a health professional or provider poses an
imminent threat of harm to enrollees, a reasonable notice of any
determination to terminate a health professional or provider "for
cause" shall be made. Prior to the appeal procedures provided
for in this section, the aggrieved party shall be given the
opportunity to informally review with the committee all
information upon which the adverse determination was made. After
the review, unless there exists the presence of compelling
factors or justifications to otherwise take action, the aggrieved party shall be given an opportunity to enter into a corrective
plan, before the determination becomes ripe for appeal.
§33-25D-11. Reporting and disclosure requirements by network
plans.
(a) Network plans shall provide enrollees and prospective
enrollees with truthful, accurate and easily understandable
marketing materials concerning:
(1) Coverage provisions, benefits and exclusions;
(2) The specific amount of the premium charged by the plan
that is set aside for administration and marketing;
(3) The specific amount of the premium that is expended
directly for patient care;
(4) The number, mix and distribution of participating health
professionals and providers;
(5) The ratio of enrollees to participating health
professionals and providers by category, class and type of health
professional and provider;
(6) The expenditures and utilization per enrollee by
category, class and type of health professional and provider;
(7) The financial obligations of the enrollee and the plan,
including premiums, copayments, deductibles and established aggregate maximums on out-of-pocket costs, for all items and
services, including:
(A) Those provided by nonparticipating health professionals
and providers; and
(B) Those provided to an enrollee who is outside the service
area of the plan;
(8) Utilization review requirements of the plan;
(9) Financial arrangements and incentives that may:
(A) Limit the items and services furnished to an enrollee;
(B) Restrict referral or treatment options; or
(C) Negatively affect the fiduciary responsibility of a
health professional or provider to an enrollee;
(10) Other incentives for health professionals and providers
to control costs;
(11) The loss ratio of the plan;
(12) Enrollee satisfaction statistics, including data for
enrollees receiving services from health professionals and
providers that are not participating health professionals and
providers showing the percentage of enrollees reenrolling in the
plan and the percentage of those disenrolling;
(13) Quality indicators for the plan and participating health professionals and providers, including:
(A) Population-based statistics as immunization rates; and
(B) Performance measures, as:
(i) Survival after surgery, adjusted for case mix;
(ii) Hospital readmissions; and
(iii) Appropriate referrals and prevention of secondary
complications following treatment;
(14) Grievance procedures and appeal rights under the plan,
and summary information about the number and disposition of
grievances and appeals in the most recent period for which
complete and accurate information is available; and
(15) The percentage of utilization review determinations
made by the plan that are contrary to the judgment of the
treating health professional or provider and the percentage of
the determinations that are reversed on appeal.
(b) The information required by this section shall be
displayed in a uniform format specified by the department that
includes the service area of a plan. The department shall
propose rules for legislative approval in accordance with the
provisions of article three, chapter twenty-nine-a of this code,
providing for the requirement of a uniform format, pursuant to this subsection.
§33-25D-12. Requirements of confidentiality and solvency.
(a) A health plan established under the provisions of this
article shall develop and maintain procedures designed to ensure
compliance with all state and federal laws concerning the
confidentiality of information pertaining to enrollees,
applicants, and health professionals and providers.
(b) The department, no later than the first day of March,
two thousand, shall propose rules for legislative approval in
accordance with the provisions of article three, chapter twenty- nine-a of this code, setting forth minimum solvency requirements
for any plan authorized under this article. The department shall
additionally propose rules in compliance with this subsection
designed to protect enrollees, health professionals and providers
in the event of plan insolvency.
§33-25D-13. Quality assurance; case review.
(a) A health plan operating under the provisions of this
article shall systematically and continuously assess, with the
purpose of improving outcomes associated with enrollee health
status, processes of care and enrollee satisfaction. It shall
additionally continuously monitor administrative efficiency and funding requirements of a plan relative to the requirements of
supporting preventive care, utilization, access and availability
of items and services, cost effectiveness, maintenance of
acceptable treatment modalities, specialist referrals and the
peer review process.
(b) A health plan meets the standard of quality improvement
required under this section if it assesses the performance of the
plan and its participating health professionals and providers and
report the results to plan purchasers, participating health
professionals and providers and the department, while continuing
to measure improvements in clinical outcomes and plan performance
and to measure quality assessment data to determine specific
interactions in the delivery system, both in the design and
funding of the plan and the clinical provision of care that
adversely impacts quality of care.
§33-25D-14. Incentives to serve underserved areas.
The department shall study and report to the joint committee
on government and finance on the feasibility and desirability of
voluntary participation by health plans in a system that:
(1) Uses a risk adjustment mechanism to arrive at
appropriately enhanced premium payments to health plans serving high risk or underserved populations; and
(2) Requires part of premiums paid to be passed through to
health professionals and providers serving the populations in
the form of bonus payments or higher reimbursement rates.
§33-25D-15. Department to propose rules to carry out purposes of
this article.
The department, no later than the first day of March, two
thousand, shall propose rules for legislative approval in
accordance with the provisions of article three, chapter twenty- nine-a of this code, necessary to carry out the purposes and
provisions of this article in all instances not previously
specified in this article.
§33-25D-16. Health plan liability.
(a) No health plan may engage in any activity that has the
effect of inappropriately limiting or denying care to any
individual enrolled in the plan through utilization review or
cost containment procedures. Any individual who alleges an
injury caused by the application of a clinically or medically
inappropriate determination, resulting from defects in the design
or the application of any utilization review or cost containment
procedure by a health plan, may commence a civil action against the health plan in the circuit court in the county where the
individual resides.
(b) No health plan may require any health professional or
provider to indemnify the plan for any recovery by an individual
in an action brought pursuant to the provisions of this section.
(c) In any action commenced under this section, if a court
or jury finds for the individual commencing the action, it may
award appropriate relief in monetary damages, including court
costs and attorneys' fees.
NOTE: The purpose of this bill is to establish standards
for health plan relationships with enrollees, health
professionals, and providers so that enrollees can have greater
choice in choosing doctors and health care providers.
This article is new; therefore, strike-throughs and
underscoring have been omitted.