PA 09-49—sSB 959

Insurance and Real Estate Committee

AN ACT CONCERNING EXTERNAL APPEALS OF ADVERSE DETERMINATIONS BY A MANAGED CARE ORGANIZATION, HEALTH INSURER OR UTILIZATION REVIEW COMPANY

SUMMARY: This act establishes an expedited external appeal process that supplements the legally required standard external appeal process. By law, a health plan enrollee, or a licensed health care provider acting on the enrollee's behalf with his or her consent (“provider”), must exhaust the internal appeal process of the health insurer, managed care organization (MCO), or utilization review (UR) company that made an adverse determination before applying to the insurance commissioner for a standard external appeal.

The act permits an enrollee or provider to ask the insurance commissioner for an expedited external appeal before exhausting the company's internal appeal process if (1) he or she has filed a request for an expedited internal review and (2) the time to complete it could cause, or exacerbate, an emergency or life-threatening situation for the enrollee.

After receiving an expedited external appeal request, the required medical release, and a $25 filing fee, the insurance commissioner must assign the appeal to an independent review entity. The act adopts (1) standards, procedures, record maintenance, and reporting requirements for review entities and (2) qualifications for clinical reviewers. The review entities and their clinical reviewers decide whether to reverse, revise, or uphold a denial. The act makes a review entity's decisions regarding standard and expedited external appeals binding on the enrollee and the insurer, MCO, or UR company.

With respect to adverse determinations by a UR company, the act specifies that an enrollee's provider of record, the licensed practitioner with primary responsibility for the enrollee's treatment, is deemed to be acting on the enrollee's behalf and with his or her consent if (1) the admission, service, procedure, or extension of stay in question has not yet occurred or (2) the entity's coverage denial creates a financial liability for the enrollee.

It also makes technical and conforming changes.

EFFECTIVE DATE: October 1, 2009

DEFINITIONS

The act defines “adverse determination” as a decision by a health insurer, MCO, or UR company to deny, reduce, or terminate payment for an admission, service, procedure, or extension of stay that, although a covered benefit, does not meet its requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness.

It defines a “covered benefit” as a service to which a health care plan enrollee is entitled under the terms of the plan. It defines “health care services” as services rendered to diagnose, prevent, treat, cure, or relieve a health condition, illness, injury, or disease.

The act defines “review entity” as an entity that conducts independent, external reviews of adverse determinations. By law, review entities include (1) medical peer review organizations and independent UR companies that are not related to, or associated with, any insurer or MCO and (2) nationally recognized health experts or institutions the insurance commissioner approves.

An “MCO” is an insurer, health care center (HMO), hospital or medical service corporation, or other organization delivering, issuing, renewing, amending, or continuing any individual or group health managed care plan in Connecticut.

EXPEDITED EXTERNAL APPEAL PROCESS

The act permits an enrollee or provider to ask the insurance commissioner for an expedited external appeal before exhausting the company's internal appeal process if (1) he or she has filed a request for an expedited internal review with the UR company and (2) the time to complete it could cause, or exacerbate, an emergency or life-threatening situation for the enrollee.

The request must include a $25 filing fee and a signed medical records release form. The commissioner may waive the filing fee if the enrollee is indigent or unable to pay. The company against which the appeal is filed must also pay a $25 fee. The commissioner must refund (1) the company's fee if, after a preliminary review, the appeal is not accepted for a full review or (2) the prevailing party's fee after a full review is completed.

Insurance Commissioner

Immediately upon receiving an expedited external appeal request, the act requires the commissioner to randomly assign it to a review entity from among the list of approved review entities established in accordance with the act. But the act prohibits the commissioner from granting an expedited external appeal if the enrollee has already received the health care services in question.

It requires the commissioner to notify the insurer, MCO, or UR company that made the adverse determination of the (1) expedited external appeal request and (2) name of the assigned review entity.

Adverse Determination Information Required

The act requires the insurer, MCO, or UR company, within one business day after receiving the commissioner's notice, to provide the review entity all documents and information it considered in making the adverse determination. It may provide this information by e-mail, telephone, fax, or other expeditious method.

An MCO that fails to provide the required information on time is subject to a $100 penalty for each day the information is late (CGS 38a-478n).

Preliminary Review

Upon receiving the expedited external appeal from the commissioner, the act requires the review entity to conduct a preliminary review within two business days to determine whether to accept it for full review. (If the insurer, MCO, or UR company takes its full one business day to submit information, the entity has, in effect, one business day to complete the preliminary review. )

The review entity must accept the appeal for full review if it determines the:

1. patient involved is or was the involved health insurer's or MCO's enrollee;

2. benefit or service at issue reasonably appears to be a covered service or benefit under the health care plan;

3. enrollee or provider has provided all information the commissioner requires to make a preliminary determination, including the appeal form, a copy of the coverage denial, and a fully executed release to obtain any necessary medical records from the insurer, MCO, and any relevant provider; and

4. adverse determination may cause or exacerbate an emergency or life-threatening situation for the enrollee if the appeal is not reviewed expeditiously.

The review entity must, upon completing the preliminary review, immediately notify the enrollee or provider, as applicable, in writing whether or not the appeal is accepted for full review. If it is not accepted for full review, the written notification must include the reasons for the decision.

Denied Request for Expedited Appeal

The act permits an enrollee or provider to request a standard external appeal if an expedited external appeal request is denied.

Full Review

If the review entity accepts the appeal for full review, the act requires it to determine whether the coverage denial should be reversed, revised, or affirmed. Under the act, the person performing the review must be a health care provider specializing in the field related to the enrollee's condition.

Information to Consider

In conducting the full review, the review entity may consider:

1. pertinent medical records;

2. consulting reports from appropriate health care professionals;

3. documents the insurer, MCO, enrollee, the enrollee's authorized representative, or the enrollee's provider submitted;

4. practice guidelines the federal government or national, state, or local medical societies, boards, or associations developed; and

5. clinical protocols or practice guidelines the MCO, insurer, or UR company developed.

The act defines “authorized representative” as (1) a person to whom an enrollee gives express written consent to represent him or her in an external appeal, (2) a person the law authorizes to provide “substituted consent” for the enrollee, or (3) the enrollee's family member when the enrollee is unable to provide consent.

The act requires the review entity to consider, to the extent it is available and, in the review entity's opinion, appropriate, (1) the relevant health plan coverage terms to ensure the entity's decision does not conflict, (2) any applicable clinical review criteria the insurer, MCO, or UR company develops and uses in making adverse determinations, and (3) medical or scientific evidence. After considering that information, the act requires the review entity to also consider its own clinical reviewers' opinions.

The act defines “medical or scientific evidence” as evidence found in:

1. peer-reviewed scientific studies published in, or accepted for publication by, medical journals (a) meeting nationally recognized requirements for scientific manuscripts and (b) that submit most of their published articles for review by experts who are not part of the editorial staff;

2. peer-reviewed medical literature, including literature relating to therapies reviewed and approved by a qualified institutional review board, biomedical compendia, and other medical literature meeting the criteria of the National Institutes of Health's National Library of Medicine for indexing in Index Medicus (MEDLINE) or Elsevier Science for indexing in Excerpta Medica (EMBASE);

3. medical journals the secretary of health and human services recognizes under federal Social Security law;

4. the following standard reference compendia: (a) the American Hospital Formulary Service - Drug Information, (b) Drug Facts and Comparisons, (c) the American Dental Association's Accepted Dental Therapeutics, and (d) the U. S. Pharmacopoeia - Drug Information; and

5. findings, studies, or research conducted by, or under the auspices of, federal government agencies or nationally recognized federal research institutes, including (a) the Agency for Healthcare Research and Quality, (b) the National Institutes of Health, (c) the National Cancer Institute, (d) the National Academy of Sciences, (e) the Centers for Medicare and Medicaid Services, (f) the Food and Drug Administration, (g) any national board the National Institutes of Health recognizes to evaluate the medical value of health care services, and (h) any other source comparable to (a) through (e).

Appeal Decision

The act requires the review entity to (1) complete the full review within two business days after the preliminary review is completed and (2) forward the commissioner its decision to reverse, revise, or affirm the adverse determination and a report of the full review.

The act permits the review entity to ask the commissioner for an extension to complete its review if circumstances exist beyond its control. If the commissioner grants the extension, the review entity must notify the enrollee or provider in writing of the (1) review status, (2) specific reasons for the delay, and (3) anticipated completion date.

The act specifies that a review entity is not bound by any decisions or conclusions the insurer, MCO, or UR company made during a utilization review process.

STANDARD EXTERNAL APPEAL

The act adds to the standard external appeal requirements. Specifically, when a review entity accepts a standard external appeal for full review, the act requires the commissioner to notify the insurer, MCO, or UR company that made the adverse determination of the (1) external appeal request and (2) name of the review entity assigned to the appeal.

Adverse Determination Information Required

The act requires the insurer, MCO, or UR company, within five business days after receiving the commissioner's notice, to provide the review entity all documents and information it considered in making the adverse determination. It may provide this information by e-mail, telephone, fax, or other expeditious method. By law, it must, within five days of receiving a request from the commissioner, provider, or enrollee, provide information regarding the benefit plan to which the appeal relates (e. g. , whether it is a fully- or self-insured plan, if the service to which the appeal relates is covered under the plan).

By law, an MCO that fails to provide the required information on time is subject to a $100 penalty for each day the information is late (CGS 38a-478n).

BINDING DECISION

The act makes a review entity's external appeal decision—standard or expedited—binding on the insurer, MCO, UR company, and enrollee (but apparently not the provider). Prior law required the commissioner to accept the review entity's decision on a standard external appeal and made the commissioner's decision binding.

The act does not limit or prohibit any other remedy available under federal or state law.

SUBSEQUENT APPEAL PROHIBITED

The act prohibits an enrollee or provider from requesting a subsequent external appeal involving an adverse determination that was already the subject of an external appeal.

REVIEW ENTITIES

Under prior law, the insurance commissioner, after consulting with the public health commissioner, had to contract with impartial review entities to review appeals. The act requires him, instead, to contract with independent review entities that meet specified criteria.

Qualifications for Selection

Under the act, to be selected as a review entity, the entity must (1) hold approval or accreditation from a nationally recognized private accrediting review entity the commissioner approved or (2) demonstrate to the commissioner that it adheres to qualifications substantially similar to, and that do not provide less protection to enrollees than, the policies and procedures it must have in place if selected (see below).

The act requires each review entity to provide the commissioner a statement of qualifications in accordance with state and Insurance Department contracting requirements. It deems as eligible a review entity accredited by a nationally recognized private accrediting review entity with independent review accreditation standards that the commissioner determines are at least equivalent to the minimum qualifications below.

Under the act, the commissioner's approval of a review entity is effective for two years, unless he determines before the end of the two years that the review entity is not satisfying the minimum qualifications below, in which case he must terminate the entity's contract.

Written Policies and Procedures Required

The act requires each approved review entity to have and maintain written policies and procedures governing all aspects of the external appeal processes, including expedited appeals.

The review entity's policies and procedures must include a quality assurance mechanism ensuring that the entity:

1. conducts external appeals within the required time frames and provides required notices in a timely manner;

2. selects and employs a sufficient number of qualified, impartial clinical reviewers to conduct external appeals;

3. suitably assigns reviewers to specific cases;

4. maintains the confidentiality of medical and treatment records and clinical review criteria; and

5. ensures its employees and contractors comply with the act.

The review entity's policies and procedures also must include (1) a toll-free fax service or e-mail that can receive information related to external appeals 24-hours a day, seven days a week and (2) an agreement to maintain and provide to the commissioner specified information in accordance with the act's record-keeping and reporting requirements (see below).

Clinical Reviewers' Qualifications

The act requires each clinical reviewer that a review entity assigns to an external appeal to be a physician or other health care provider who is, at a minimum:

1. an expert in treating the medical condition that is the subject of the appeal;

2. knowledgeable about the recommended health care service or treatment through recent or current clinical experience treating patients with the same or similar condition;

3. holds a nonrestricted provider license in a U. S. state;

4. if a physician, currently certified by a recognized American medical specialty board in the area or areas appropriate to the subject of the external appeal; and

5. has no history of past or pending disciplinary actions or sanctions, including loss of staff privileges or participation restrictions, by a hospital or governmental agency, unit, or regulatory body that raise a substantial question as to his or her physical, mental, or professional competence or moral character.

Conflict of Interest Prohibited

The act imposes conflict of interest restrictions for review entities. A review entity cannot own or control, be a subsidiary of, be owned or controlled by, or exercise control over, a health insurer; MCO; UR company; health plan; or a trade association of insurers, MCOs, or providers.

The act prohibits a review entity and its clinical reviewers assigned to appeals from having a “material professional, familial, or financial conflict of interest” with:

1. the insurer, MCO, or UR company that made the adverse determination being appealed or any of its officers, directors, or management employees;

2. the enrollee whose treatment is the subject of the appeal or the provider acting on his or her behalf;

3. the health care provider, medical group, or independent practice association recommending the service or treatment that is the subject of the appeal;

4. the facility or health care setting, including hospitals; licensed inpatient centers; ambulatory surgical or treatment centers; skilled nursing centers; residential treatment centers; diagnostic, laboratory, and imaging centers; and rehabilitative or other therapeutic health settings, at which the service or treatment would be provided; or

5. the developer or manufacturer of the principal drug, device, procedure, or other therapy recommended for the enrollee whose treatment is the subject of the appeal.

When determining whether a review entity or clinical reviewer has a “material professional, familial, or financial conflict of interest,” the act requires the commissioner to consider situations in which the review entity or clinical reviewer may have an apparent relationship or connection, but the actual relationship or connection does not constitute a disqualifying material conflict of interest.

The act requires a review entity to (1) be unbiased and (2) establish and maintain written procedures to ensure such impartiality.

Immunity from Liability

The act specifies that no liability for damages accrues against a review entity or its clinical reviewer, employee, agent, or contractor, for an opinion rendered, or act or omission performed, within the entity's or person's duties relating to an external appeal conducted in accordance with the act, unless rendered or performed in bad faith or with gross negligence.

Record Retention

The act requires a review entity to maintain for at least six years written records of the external appeals it conducts. The records must be available for insurers', MCOs', or UR companies' review.

Reporting Requirements

The act requires a review entity, upon the commissioner's request, to report in a format he prescribes. The report must include, for each insurer, MCO, and UR company:

1. the number of requested standard and expedited external appeals;

2. the number of resolved appeals by disposition (reversed, revised, affirmed);

3. the length of time to resolve each appeal;

4. a summary of the procedure and diagnosis codes relating to appeals; and

5. any other information the commissioner requires.

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