Senate Bill No. 546
(By Senator Wiedebusch)
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[Introduced February 19, 1996; referred to the Committee
on Banking and Insurance; and then to the Committee on the
Judiciary.]
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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
forty-one, relating to enacting a "Patient Protection Act";
short title; legislative purpose; definitions; certain
required and prohibited acts; remedies; violations deemed
unfair methods of competition or unfair or deceptive acts or
practices in the business of insurance; promulgation of
rules; protected statements; certain types of discrimination
prohibited; good cause required for contract cancellation,
non-renewal, suspension, revocation, etc.; certain
conditions required in provider contracts; refusal to
contract on certain bases prohibited; coverage for specific
conditions or services not mandated; beneficiary's right to
choose a provider; conditions and charges imposed upon
beneficiaries to be similar; notification to beneficiaries of right to choose a provider; promotion of continuity of
care; waiver or modification by insurance commissioner of
beneficiary's right to choose a provider and related
requirements; economic credentialing prohibited; decisions
regarding coverage to be made within a reasonable period of
time; third-party payer liability; presumption of necessity;
exceptions to same; limitation on liability prohibited; and
recovery of costs and attorney fees.
Be it enacted by the Legislature of West Virginia:
That chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article forty-one, to
read as follows:
ARTICLE 41. PATIENT PROTECTION ACT.
§33-41-1. Short title.
This article shall be known and may be cited as the "Patient
Protection Act."
§33-41-2. Legislative purpose.
The purpose of this article is to ensure a beneficiary's
right to choose the health care provider of his or her choice.
§33-41-3. Definitions.
For purposes of this article:
(a) "Appropriate medical practice" means medical practice
that is commonly accepted among health care practitioners as the
standard of care.
(b) "Beneficiary" means any policyholder, subscriber,
member, employee or other person who is eligible for benefits
under a contract in which a third-party payer agrees to reimburse
for covered health care or dental services up to the limits and
exclusions contained in the benefits contract, regardless of
whether the contract is a traditional insurance policy, a health
maintenance organization contract, a preferred provider
organization contract or any other policy, contract, plan or
agreement that provides hospital or medical expense coverage.
(c) "Provider" means a hospital, nursing home, physician,
podiatrist, dentist, pharmacist, chiropractor or any other
licensed provider of health care services who is entitled to
reimbursement by a third-party payer for services rendered to a
beneficiary under a benefits contract. "Provider" includes, but
is not limited to, any provider who is employed by a corporate or
other entity and who assigns his reimbursement to that entity;
any licensed mental health professional, including licensed
independent social workers and licensed professional clinical
counselors if the health care policy, contract, plan or agreement
specifically covers the services of any licensed mental health
professional; or any other licensed health care professional if
the services legally performed by him or her are covered under
the health care policy, contract, plan or agreement.
(d) "Third-party payer" means any sickness and accident
insurer, health maintenance organization, preferred provider organization, health care corporation, medical care corporation,
dental care corporation or prepaid dental plan organization that
is authorized to operate or do business in this state. "Third-
party payer" also includes any employer acting as a self insurer
by providing, or by providing payment for, health care benefits
for employees who reside in this state; any administrator of a
health care policy; any person or entity performing utilization
review, managed care or claims payment processing under contract
with, or on behalf of, an employer or a third party that provides
or administers health care benefits; or any health service paid
for, or purchased by, a state agency or its program or designee.
§33-41-4. Certain provider statements protected; certain
retaliatory actions prohibited; violation deemed an unfair
method of competition or unfair or deceptive act or practice in the business of insurance; remedies.
(a) No third-party payer may prohibit, contractually or
otherwise, a provider from making any statement to a patient or
a patient's representative regarding the patient's health care
policy, contract, plan or agreement, including statements
regarding the patient's rights or the third-party payer's duties
and obligations under the health care policy, contract, plan or
agreement.
(b) No third-party payer may discriminate against, take any
adverse action against or otherwise penalize a provider for
making statements that are protected under subsection (a) of this
section.
(c) Any person who violates subsection (a) of this section
is deemed to have engaged in an unfair method of competition or
an unfair or deceptive act or practice in the business of
insurance under article eleven of this chapter.
(d) Any provider who is harmed as a result of a violation of
subsection (b) of this section may institute a civil action for
damages and injunctive or other equitable relief in the circuit
court of any county in which the third-party payer conducts
business.
§33-41-5. Good cause required for contract cancellation,
non-renewal, suspension, revocation, etc.; commissioner to promulgate rules; incorporation of same into
provider contracts; contracts subject to disapproval; violation deemed an unfair method of competition
or an unfair or deceptive act or practice in the business of insurance; remedies; and recovery
of costs, attorney fees and damages.
(a) No third-party payer may, without good cause: (i)
Cancel or refuse to renew the contract of any provider; or (ii)
suspend, revoke or limit the participating status of any
provider. As used in this subsection, "good cause" does not
include the use of information regarding a provider's economic
profile to cancel or refuse to renew the contract of the
provider, or to otherwise suspend, revoke or limit the
participating status of the provider, unless the third-party
payer determines, in good faith, that, when compared to other
providers with similar contracts with the third-party payer, the
provider's practice patterns do not result in quality long-term patient outcome or the provider's patients do not have a higher
severity of illness or injury.
(b) The commissioner of insurance shall promulgate rules in
accordance with chapter twenty-nine-a of this code that establish
procedures for affording a provider due process of law if a
third-party payer cancels or refuses to renew the contract of the
provider, or otherwise suspends, revokes or limits the
participating status of the provider. The substance of these
rules shall be incorporated into each contract entered into
between a third-party payer and a provider, and shall require all
of the following:
(1) Written explanation of the reason for the action taken
by the third-party payer, including proper notice of any charges
made against the provider;
(2) Adequate notice of the right to a hearing to determine
whether a violation of subsection (a) of this section has
occurred;
(3) Reasonable opportunity to prepare for a hearing;
(4) A fair, objective and independent hearing that affords
the provider the opportunity to be present during the
proceedings, to cross-examine witnesses, to be represented by
counsel and to present a defense;
(5) Provision of a copy of the record of the hearing, but
only upon a proper request and payment of a reasonable fee to
cover the costs of preparing the copy; and
(6) Procedures for appealing adverse decisions.
(c) No third-party payer shall fail to comply with the rules
adopted pursuant to subsection (b) of this section.
(d) A contract between a third-party payer and a provider
that does not incorporate the substance of the rules adopted
pursuant to subsection (b) of this section is subject to
disapproval by the commissioner.
(e) Any person who violates subsection (a) or (c) of this
section is deemed to have engaged in an unfair method of
competition or an unfair or deceptive act or practice in the
business of insurance under article eleven of this chapter.
(f) Any provider who is harmed as a result of a violation of
subsection (a) or (c) of this section may commence a civil action
for damages and injunctive or other equitable relief in the
circuit court of any county in which the third-party payer
conducts business.
(g) The prevailing party in any civil action filed or
hearing conducted under this section is entitled to recover costs
of the action or hearing, including reasonable attorney fees. If
the third-party payer is the prevailing party, it is also
entitled to recover any other damages caused by the provider's
actions.
§33-41-6. Refusal to contract on certain bases prohibited;
section not to mandate coverage for specific conditions or services; violation deemed an unfair method of
competition or an unfair or deceptive act or practice in the business of insurance; remedies.
(a) No third-party payer may refuse to contract with a
provider for the treatment of conditions or for the provision of
services under any policy, contract, plan, or agreement for the
provision of health care or dental services that is delivered,
issued for delivery or renewed in this state on or after the
effective date of this section if the refusal is based on race,
gender, national origin, age or religion.
(b) No third-party payer may refuse to contract with a
provider for the treatment of conditions or for the provision of
services under any policy, contract, plan, or agreement for the
provision of health care or dental services that is delivered,
issued for delivery or renewed in this state on or after the
first day of January, one thousand nine hundred ninety-seven, if
the refusal is based on the fact that the provider is licensed or
registered for a particular practice, including but not limited
to dentistry, optometry, pharmacy, medicine or surgery or
osteopathic medicine or surgery, podiatric medicine or surgery,
psychology, chiropractic or nursing.
(c) Nothing in subsection (b) of this section may be
construed as mandating coverage for any specific condition or
service.
(d) Any person who violates subsection (a) or (b) of this
section is deemed to have engaged in an unfair method of
competition or an unfair or deceptive act or practice in the
business of insurance under article eleven of this chapter.
(e) Any provider who is harmed as a result of a violation of
subsection (a) or (b) of this section may commence a civil action
for damages and injunctive or other equitable relief in the
circuit court of any county in which the third-party payer
conducts business.
§33-41-7. Beneficiary's right to choose a provider; requirements
for same; charges and conditions to be imposed
similarly upon beneficiaries; notice of right to choose
provider; commissioner to promulgate rules; violation deemed an unfair method of competition or an unfair
or deceptive act or practice; remedies; promotion of continuity of care.
(a) Except as provided in section eight of this article, no
third-party payer may deny a beneficiary the right to choose a
provider of health care or dental services if the following
conditions are met:
(1) The provider accepts the standard terms and conditions
offered by the third-party payer to other providers, and any
hospital or other health care facility to which a beneficiary may
be referred by the provider accepts the standard terms and
conditions offered by the third-party payer to other health care
facilities. As used in this subdivision, "standard terms and
conditions" includes utilization review guidelines, practice
protocols, quality assurance guidelines, data reporting
requirements and level of payment. With respect to
credentialing, "standard terms and conditions" may not be more
restrictive than the licensing standards imposed by this state;
(2) The beneficiary notifies the third-party payer of his
choice of provider on a form prescribed by the third-party payer
in accordance with rules adopted by the insurance commissioner in
accordance with chapter twenty-nine-a of this code;
(3) The health care or dental services sought by the
beneficiary are to be rendered by a provider licensed in this
state to perform those services; and
(4) None of the actions set forth in subsection (a), section
five of this article has been taken, with just cause, against the
provider, and the provider has not been the subject of any
disciplinary action imposed by a licensure or regulatory agency
of another state.
(b) No third-party payer may impose upon a beneficiary any
copayment, fee or other charge or condition that is not similarly
imposed upon all other beneficiaries under the health care
policy, contract, plan or agreement.
(c) Each third-party payer, except those that have been
granted a waiver or modification under section eight of this
article, shall notify beneficiaries of the substance of
subsection (a) of this section. The insurance commissioner shall
promulgate, in accordance with chapter twenty-nine-a of this
code, rules to specify the contents of the notice and the manner
in which it is to be provided.
(d) Any person who violates subsection (a) or (b) of this
section or who fails to comply with subsection (c) of this section is deemed to have engaged in an unfair method of
competition or an unfair or deceptive act or practice in the
business of insurance under article eleven of this chapter.
(e) A provider or beneficiary harmed as a result of a
violation of subsection (a) or (b) of this section or a failure
to comply with subsection (c) of this section may commence a
civil action for damages and injunctive or other equitable relief
in the circuit court of any county in which the third-party payer
conducts business.
(f) In enacting this section, the Legislature intends to
promote continuity of care for patients changing third-party
payers.
§33-41-8. Waiver or modification of certain requirements.
(a) The insurance commissioner may waive or modify the
requirements of subsection (a), section seven of this article if
a third-party payer, upon requesting a waiver or modification,
demonstrates to the commissioner's satisfaction all of the
following:
(1) Compliance with those requirements would unreasonably
increase the costs of the health care policy, contract, plan or
agreement;
(2) If the waiver or modification is granted, the level of
access to providers' services and the quality of care provided
under the policy, contract, plan or agreement would not be
adversely affected;
(3) If the waiver or modification is granted, the third-
party payer would be in compliance with any provision of this
code that requires the reimbursement, utilization or
consideration of a specific category of a licensed or certified
health care practitioner;
(4) If the waiver or modification is granted, the
third-party payer would not be in violation of subsection (a) or
(b) of section six of this article.
(5) If the waiver or modification is granted, the
third-party payer would be in compliance with any other criteria
relating to access, quality, and cost that the insurance
commissioner may require by rule promulgated in accordance with
chapter twenty-nine-a of this code, including the timeliness of
service, delivery, geographic availability of services, the
degree to which the waiver or modification would contain health
care costs and any other relevant health care policy
consideration.
(b) The insurance commissioner shall make a determination
under subsection (a) of this section pursuant to a hearing
conducted in accordance with chapter twenty-nine-a of this code.
Within ten days after receiving a third-party payer's request for
a waiver or modification, the commissioner shall notify the
third-party payer of the date, time and location of the hearing.
(c) Upon receipt of the notice required by subsection (b) of
this section, the third-party payer shall provide to all beneficiaries under the policy, contract, plan or agreement a
notice by regular mail that, at a minimum, states the substance
of all of the following:
(1) The third-party payer is in the process of requesting
the insurance commissioner for a waiver or modification of the
requirements of subsection (a), section seven of this article in
order to limit provider participation in the policy, contract,
plan or agreement;
(2) If the waiver or modification is granted, the provider
from which a beneficiary currently receives services may no
longer be eligible to participate in the policy, contract, plan
or agreement;
(3) The third-party payer will, upon the beneficiary's
request, provide a list of all providers that would be eligible
to participate in the policy, contract, plan or agreement;
(4) Each beneficiary has a right to comment on this
potential change in the policy, contract, plan or agreement; and
(5) The date, time and location of the hearing to be
conducted by the insurance commissioner.
(d) The third-party payer shall provide notice to the
commissioner of the bureau of public health of its request for a
waiver or modification by the insurance commissioner under
subsection (a) of this section. The commissioner of the bureau
of public health may review and make findings with respect to the
potential impact of the waiver or modification on the level of access to providers' services and the quality of care that would
be provided under the policy, contract, plan or agreement. The
commissioner of the bureau of public health shall submit his or
her findings to the insurance commissioner for consideration in
making the determination under subsection (a) of this section.
(e) Any beneficiary, provider or other interested party that
may be affected by the waiver or modification may submit comments
to the commissioner for consideration.
(f) The third-party payer shall provide such financial
records, cost data and other information relating to the criteria
set forth in subsection (a) of this section, including
information regarding solvency, capacity to deliver services,
degree of cost containment and contractual reimbursement
provisions, that the commissioner may reasonably require for
purposes of making a determination under that subsection. All
such information is a public record, as defined in section two,
article one, chapter twenty-nine-b of this code.
(g) A waiver or modification granted by the insurance
commissioner under subsection (a) of this section is effective
for a period of not more than two years. At the expiration of
this period, a new request for a waiver or modification shall be
made before a new waiver or modification may be granted. The
commissioner may, at any time during that two-year period,
suspend the waiver or modification if conditions exist that
warrant reconsideration of the granting of the waiver or modification. All actual and necessary expenses incurred by the
commissioner in making a determination under subsection (a) of
this section shall be assessed against the third-party payer
requesting the waiver or modification.
(h) Each third-party payer that obtains a waiver or
modification under subsection (a) of this section shall provide
notice by regular mail of such waiver or modification to all
beneficiaries under any policy, contract, plan or agreement that
is issued or established on or after the effective date of the
waiver or modification. Such notice shall be provided no later
than thirty days after the effective date of the coverage under
the policy, contract, plan or agreement.
§33-41-9. Economic credentialing prohibited; violation deemed
an unfair method of competition or an unfair or
deceptive act or practice in the business of insurance;
remedies.
(a) As used in this section, "economic credentialing" means
a pattern or practice that is used by a third-party payer in
reviewing the appropriateness of health care expenditures for
claims made pursuant to benefits offered under a health care
policy, contract, plan or agreement, and that denies, delays or
reduces such benefits by assigning greater weight to
consideration of financial matters than to consideration of
appropriate medical practice.
(b) No third-party payer shall engage in economic credentialing.
(c) Any person who violates subsection (b) of this section
is deemed to have engaged in an unfair method of competition or
an unfair or deceptive act or practice in the business of
insurance under article eleven of this chapter.
(d) Any beneficiary harmed as a result of a violation of
subsection (b) of this section may commence a civil action for
damages and injunctive or other equitable relief in the circuit
court of any county in which the third-party payer conducts
business.
(e) Nothing in this section may be construed as prohibiting
or otherwise limiting a third-party payer from making reasonable
reviews of expenditures to ensure cost containment.
§33-41-10. Decisions regarding coverage to be made within a
reasonable period of time; third-party payer liability; presumption of necessity; exceptions;
application.
(a) A third-party payer shall render a decision regarding
approval for coverage of recommended services and care within a
reasonable period of time. In making that decision, the
third-party payer shall take into consideration the degree to
which a beneficiary may be harmed by any delay in rendering the
decision.
(b) A third-party payer is liable in a civil action to any
beneficiary, under any policy, contract, plan or agreement issued
by the third-party payer, for injuries or damages incurred as a result of either of the following:
(1) Any failure to comply with subsection (a) of this
section that causes a delay of services and care that is
recommended by a provider and that is covered under the policy,
contract, plan or agreement; or
(2) Any decision by the third-party payer that causes a
reduction or denial of services and care that is recommended by
a provider and that is covered under the policy, contract, plan
or agreement.
(c) For purposes of this section, any services and care
recommended by a provider are presumed necessary under the terms
of the policy, contract, plan or agreement issued by the
third-party payer unless either of the following applies:
(1) The services and care are determined to be within
exclusions or limitations of the policy, contract, plan or
agreement.
(2) The services and care are determined not to be
appropriate medical practice.
(d) This section applies only to policies, contracts, plans
and agreements for health care services that are delivered,
issued for delivery or renewed in this state on or after the
effective date of this section.
§33-41-11. Limitation on liability prohibited.
No third-party payer shall limit its liability for any
omission or for any action taken by it that affects the medical care of a beneficiary by including in its policy, contract, plan
or agreement a hold-harmless clause or any other contractual
provision that attempts to limit or eliminate the third-party
payer's liability. Actions subject to this section include, but
are not limited to, the denial of inpatient certification, the
denial of coverage for additional hospitalization and the denial
of a medical test or procedure.
§33-41-12. Recovery of civil action costs and attorney fees.
A provider or beneficiary who prevails in a civil action
filed under section four, five, six, seven, nine or ten of this
article is entitled, in addition to other substantive legal and
equitable remedies, to recover the costs of the action, including
reasonable attorney fees.
NOTE: The purpose of this bill is to enact a "Patient
Protection Act" to ensure that the beneficiaries of health care
plans have the right to choose the health care provider of their
choice.
This article is new; therefore, strike-throughs and
underscoring have been omitted.