H. B. 2456
(By Delegates Coleman, Warner and Cann)
[Introduced March 10, 1997; 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 twenty- five-c, 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-c,
to read as follows:
ARTICLE 25C. FREEDOM OF CHOICE IN HEALTH CARE ACT.
§33-25C-1. Short title.
This article is known and may be cited as "The Freedom of
Choice Health Care Act."
§33-25C-2. Definitions.
For the purposes of this article, the following terms and
definitions apply:
(a) "Emergency medical condition" means a medical condition,
including emergency labor and delivery, that manifests itself by
acute symptoms of sufficient severity 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;
(b) "Emergency services" means health care items and
services that are necessary for the treatment of an emergency medical condition;
(c) "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;
(d) "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;
(e) "Health plan" means any plan or arrangement that
provides, or pays the cost of health benefits, whether through
insurance, reimbursement or otherwise;
(f) "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;
(g) "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;
(h) "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 in accordance with the meaning assigned
thereto pursuant to section one, article five-b, chapter sixteen
of this code;
(i) "Network" means the participating health professionals
and providers through which a plan provides health care items and
services to enrollees;
(j) "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;
(k) "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;
(l) "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;
(m) "Rural area" means an area not contained in any
incorporated municipality, wherein the population density is less
than one hundred persons per square mile;
(n) "Department" means the department of health and human
resources;
(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;
(r) "Utilization review" means prospective, concurrent or
retrospective review of health care items and services for
medical necessity, appropriateness or quality of care, including
preauthorization requirements for coverage of these items and
services.
§33-25C-3. Certification of health plans.
(a) No later than the first day of March, one thousand nine
hundred ninety-eight, the department shall propose rules, subject
to legislative approval, 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, one thousand nine
hundred ninety-eight, the department shall propose rules, subject
to legislative approval, which provide requirements that shall be
met in order for a health plan to be certified under this
article.
§33-25C-4. Requirements for certification.
(a) A health plan shall cover any item or service furnished
by a health professional or provider belonging to a category,
class or type of health professional or provider that is
otherwise authorized to operate under the laws of this state. It
shall, additionally, include a network plan to 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 subdivisions (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 the
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 rural or medically underserved areas:
Provided, That the department on or before the first day of
March, one thousand nine hundred ninety-eight, shall propose
rules subject to legislative approval 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 may be construed as requiring 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; (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
under this article.
§33-25C-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 such treatment is medically or
clinically indicated in the professional judgement of a treating
health professional. A network plan further 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 subject to legislative
approval that prescribe methods for determining reasonable and
sufficient standards to judge the requirements of this
subsection.
§33-25C-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 shall be 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 subject to legislative approval, designating reasonable
periods of time for such continued coverage 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 the 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.
§33-25C-7. Nondiscrimination; equitable access to networks.
A health plan provided 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.
§33-25C-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: (a) The medical policies of the plan, including
policies related to coverage of new technologies, treatments and
procedures; (b) the utilization review criteria and procedures of
the plan; (c) the minimum requirements for ensuring quality
control and qualifying criteria of the plan; and (d) the medical
management procedures of the plan.
§33-25C-9. Due process for enrollees.
(a) The utilization review procedures of a health plan shall
be developed with the involvement of participating health
providers and professionals. It shall uniformly apply review
criteria based on sound scientific principles and the most
current body of medical knowledge; including the most recent
technological and scientific 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,
subject to legislative approval, 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
hereby 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 therefor. 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,
injury or condition, or upon the unknown contingency of: (1) The
availability of organ donors, or (2) scarce and technologically
advanced or superior equipment or devices, a period of up to
three months, may be authorized by the department:
Provided,
however, That in the event of a serious and substantial prospect of 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 therefor, and it shall be 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 the personnel are not available, any
preauthorization that would be 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 qualified in the same or similar specialty as
would typically provide the item or service involved.
§33-25C-10. Due process for health professionals and providers.
(a) Network plans shall allow health professionals and
providers in its service area to apply to become participating
health professionals or providers 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, comprised of a minimum of three health professionals,
including at least one professional, certified or qualified, in
the particular category, class or type of health care expertise
as the 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 authorization to make inquiry of past employers or
associates of applicants, as well as requiring the provision
of references and personal interviews with applicants. 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 expenses
involved in the use, purchase and maintenance of equipment or
technology that one applicant may possess or have access to
relative to other applicants who do not have such possession or
access:
Provided, That any adjustments made for equipment or
technology expense 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 including the principles, procedures, assumptions and
data whereupon the profiling is premised, shall be published to
the plan purchasers, enrollees, or health professionals or
providers upon request. In the event any applicant is determined
not to meet minimum standards required under the plan, the
applicant shall be so notified, with specific reference to the
particular standards that have been cited as not being met, and the basis for that 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 shall have the
right to appeal the determination. The appeal shall be made
within seven days of the adverse 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 subject to legislative approval
governing all additional aspects of the hearing process not
provided hereunder.
(e) Unless a health professional or provider poses an imminent
threat of harm to enrollees, a reasonable notice of any intention
to terminate a health professional or provider "for cause" shall
be made. Prior to the appeal procedures provided 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. Thereafter, 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.
§33-25C-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 such health professionals and providers; (6) the expenditures and utilization
per enrollee by category, class and type of health professionals
and providers; (7) the financial obligations of the enrollee
under the plan in relation to the payment of premiums,
copayments, deductibles and established aggregate maximums of
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 respective percentages of enrollees
reenrolling in and opting out from, the plan; (13) quality
indicators for the plan and participating health professionals
and providers, including: (A) Population-based statistics such
as immunization rates; and (B) performance measures based on such statistical criteria 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, subject to legislative approval, providing for the
requirement of a uniform format, pursuant to this subsection.
§33-25C-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, health professionals and providers.
(b) The department, no later than the first day of March, one thousand nine hundred ninety-eight, shall propose rules, subject
to legislative approval setting forth minimum solvency
requirements for any plan authorized hereunder. 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.
§33-25C-13. Quality assurance; case review.
(a) Health plans operating under the provisions of this
article shall systematically and continuously assess, with the
purpose of improving results 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) Quality improvement required hereunder shall assess 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. It shall additionally measure improvements in
clinical outcomes and plan performance while analyzing 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 affect quality of
care.
§33-25C-14. Incentives to serve underserved areas.
The department shall study and report to the Legislature on
the feasibility and desirability of voluntary participation by
health plans in a system that: (a) Uses a risk adjustment
mechanism to arrive at appropriately enhanced levels of premium
payments that is required to provide coverage to high risk or
underserved populations, and (b) 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.
§33-25C-15. Department to propose rules to carry out purposes of
this article.
The department, no later than the first day of March, one
thousand nine hundred ninety-eight, shall propose rules subject
to legislative approval necessary to carry out the purposes and
provisions of this article, not previously specified herein.
§33-25C-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 wherein 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 hereunder, 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.
Article twenty-five-c is new; therefore, strike-throughs and
underscoring have been omitted.
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