Substitute House Bill No. 6883
Substitute House Bill No. 6883
PUBLIC ACT NO. 97-99
AN ACT CONCERNING MANAGED CARE.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. (NEW) As used in sections 1 to 14,
inclusive, 20, 21 and 28 of this act:
(1) "Commissioner" means the Insurance
Commissioner.
(2) "Managed care organization" means an
insurer, health care center, hospital or medical
service corporation or other organization
delivering, issuing for delivery, renewing or
amending any individual or group health managed
care plan in this state.
(3) "Managed care plan" means a product
offered by a managed care organization that
provides for the financing or delivery of health
care services to persons enrolled in the plan
through: (A) Arrangements with selected providers
to furnish health care services; (B) explicit
standards for the selection of participating
providers; (C) financial incentives for enrollees
to use the participating providers and procedures
provided for by the plan; or (D) arrangements that
share risks with providers, provided the
organization offering a plan described under
subparagraph (A), (B), (C) or (D) of this
subdivision is licensed by the Insurance
Department pursuant to chapter 698, 698a or 700 of
the general statutes and that the plan includes
utilization review pursuant to sections 38a-226 to
38a-226d, inclusive, of the general statutes, as
amended by this act.
(4) "Provider" means a person licensed to
provide health care services under chapters 370 to
373, inclusive, 375 to 383b, inclusive, 384a to
384c, inclusive, of the general statutes, or
chapter 400j of the general statutes.
(5) "Enrollee" means a person who has
contracted for or who participates in a managed
care plan for himself or his eligible dependents.
Sec. 2. (NEW) On January 15, 1999, and
annually thereafter, the Insurance Commissioner
shall submit a report, to the Governor, and to the
joint standing committees of the General Assembly
having cognizance of matters relating to public
health and relating to insurance and real estate,
concerning the commissioner's responsibilities
under the provisions of this act. The report shall
include: (1) A summary of the quality assurance
plans submitted by managed care organizations
pursuant to section 4 of this act along with
suggested changes to improve such plans; (2)
suggested modifications to the consumer report
card developed under the provisions of section 13
of this act; (3) a summary of the commissioner's
procedures and activities in conducting market
conduct examinations of utilization review
companies, including, but not limited to: (A) The
number of desk and field audits completed during
the previous calendar year; (B) a summary of
findings of the desk and field audits, including
any recommendations made for improvements or
modifications; (C) a description of complaints
concerning managed care companies, including a
summary and analysis of any trends or similarities
found in the complaints filed by enrollees; (4) a
summary of the complaints received by the
Insurance Department's Consumer Affairs Division
and the commissioner under section 20 of this act,
including a summary and analysis of any trends or
similarities found in the complaints received; (5)
a summary of any violations the commissioner has
found against any managed care organization; and
(6) a summary of the issues discussed related to
health care or managed care organizations at the
Insurance Department's quarterly forums throughout
the state.
Sec. 3. (NEW) (a) Each managed care
organization, as defined in section 1 of this act,
that fails to file the data, reports or
information required by this act shall pay a late
fee of one hundred dollars per day for each day
from the due date of such data, reports or
information to the date of filing. Each managed
care organization that files incomplete data,
reports or information shall be so informed by the
commissioner, shall be given a date by which to
remedy such incomplete filing and shall pay said
late fee commencing from the new due date.
(b) On June 1, 1998, and annually thereafter,
the commissioner shall submit, to the Governor and
to the joint standing committees of the General
Assembly having cognizance of matters relating to
public health and matters relating to insurance
and real estate, a list of those managed care
organizations that have failed to file any data,
report or information required by this act.
Sec. 4. (NEW) (a) On or before May 1, 1998,
and annually thereafter, each managed care
organization shall submit to the commissioner:
(1) A report on its quality assurance plan
that includes, but is not limited to, information
on complaints related to providers and quality of
care, on decisions related to patient requests for
coverage and on prior authorization statistics.
Statistical information shall be submitted in a
manner permitting comparison across plans and
shall include, but not be limited to: (A) The
ratio of the number of complaints received to the
number of enrollees; (B) a summary of the
complaints received related to providers and
delivery of care or services and the action taken
on the complaint; (C) the ratio of the number of
prior authorizations denied to the number of prior
authorizations requested; (D) the number of
managed care organization's utilization review
determinations not to certify an admission,
service, procedure or extension of stay, and the
denials upheld and reversed on appeal within the
managed care organization's utilization review
procedure; (E) the percentage of those employers
or groups that renew their contracts within the
previous twelve months; and (F) all data required
by the National Committee for Quality Assurance
(NCQA) for its Health Plan Employer Data and
Information Set (HEDIS). If an organization does
not provide information for the National Committee
for Quality Assurance for its Health Plan Employer
Data and Information Set, then it shall provide
such other equivalent data as the commissioner may
require by regulations adopted in accordance with
the provisions of chapter 54 of the general
statutes. The commissioner shall find that the
requirements of this subdivision have been met if
the managed care plan has received a one-year or
higher level of accreditation by the National
Committee for Quality Assurance and has submitted
the Health Plan Employee Data Information Set data
required by subparagraph (F) of this subdivision.
(2) A model contract that contains the
provisions currently in force in contracts between
the organization and participating providers in
this state and, upon the commissioner's request, a
copy of any individual contracts between such
parties, provided the contract may withhold or
redact proprietary fee schedule information.
(3) A written statement of the types of
financial arrangements or contractual provisions
that the managed care organization has with
hospitals, utilization review companies,
physicians and any other health care providers
including, but not limited to, compensation based
on a fee-for-service arrangement, a risk-sharing
arrangement or a capitated risk arrangement.
(4) Such information as the commissioner
deems necessary to complete the consumer report
card he is required to develop and distribute
pursuant to section 13 of this act. Such
information may include, but need not be limited
to: (A) The organization's characteristics,
including its model, its profit or nonprofit
status, its address and telephone number, the
length of time it has been licensed in this and
any other state, its number of enrollees and
whether it has received any national or regional
accreditation; (B) a summary of the information
required by subdivision (3) of this section,
including any change in a plan's rates over the
prior three years, its medical loss ratio or
percentage of the total premium revenues spent on
medical care compared to administrative costs and
plan marketing, how it compensates health care
providers and its premium level; (C) a description
of services, the number of primary care physicians
and specialists, and distribution and the number
of hospitals, by county; (D) utilization review
information, including the name or source of any
established medical protocols and the utilization
review standards; (E) medical management
information, including the provider-to-patient
ratio by primary care provider and speciality care
provider, the percentage of primary and speciality
care providers who are board certified, and how
the medical protocols incorporate input as
required in section 6 of this act; (F) the quality
assurance information required to be submitted
under the provisions of subdivision (1) of
subsection (a) of this section; (G) the status of
the organization's compliance with the reporting
requirements of this section; (H) whether the
organization markets to individuals and Medicare
recipients; (I) the number of hospital days per
thousand enrollees; and (J) the average length of
hospital stays for specific procedures, as may be
requested by the commissioner.
(5) A summary of the procedures used by
managed care organizations to credential
providers.
(b) The information required pursuant to
subsection (a) of this section shall be consistent
with the data required by the National Committee
for Quality Assurance (NCQA) for its Health Plan
Employer Data and Information Set (HEDIS).
(c) The commissioner may accept electronic
filing for any of the requirements under this
section.
(d) No managed care organization shall be
liable for a claim arising out of the submission
of any information concerning complaints
concerning providers, provided the managed care
organization submitted the information in good
faith.
Sec. 5. (NEW) For any contract delivered,
issued for delivery, renewed, amended or continued
in this state on or after October 1, 1997, each
managed care organization shall provide: (1)
Annually to each enrollee a listing of all
providers available under the provisions of the
enrollee's enrolment agreement; and (2)
notification, as soon as possible, to each
enrollee upon the termination or withdrawal of the
enrollee's primary care physician.
Sec. 6. (NEW) (a) Each managed care
organization shall, prior to implementing new
medical protocols or substantially or materially
altered existing medical protocols, obtain input
from physicians actively practicing in Connecticut
and practicing in the relevant specialty areas.
The managed care organization shall also seek
input from physicians who are not employees of or
consultants, other than to the extent a person is
an employee or consultant solely for the purposes
of this subsection, to the managed care
organization provided the input is not
unreasonably withheld. The managed care
organization shall obtain the input in a manner
permitting verification by the commissioner and
shall document the process by which it obtained
the input.
(b) Each managed care organization shall (1)
make available, upon the request of a
participating provider, its medical protocols for
examination during regular business hours at the
principal Connecticut headquarters of the managed
care organization, and (2) if a managed care
organization denies a treatment, service or
procedure, the organization shall furnish, upon
the request of a participating provider, a copy of
the relevant medical protocol to the participating
provider, along with an explanation of the denial
at the time the denial is made.
Sec. 7. (NEW) Each managed care organization,
in developing provider profiles or otherwise
measuring health care provider performance, shall:
(1) Make allowances for the severity of illness or
condition of the patient mix; (2) make allowances
for patients with multiple illnesses or
conditions; (3) make available to the commissioner
documentation of how the managed care organization
makes such allowances; and (4) inform enrollees
and participating providers, upon request, how the
managed care organization considers patient mix
when profiling or evaluating providers.
Sec. 8. (NEW) (a) Each managed care contract
delivered, issued for delivery, renewed, amended
or continued in this state on or after October 1,
1997, shall be in writing and a copy thereof
furnished to the group contract holder or
individual contract holder, as appropriate. Each
such contract shall contain the following
provisions: (1) Name and address of the managed
care organization; (2) eligibility requirements;
(3) a statement of copayments, deductibles or
other out-of-pocket expenses the enrollee must
pay; (4) a statement of the nature of the health
care services, benefits or coverages to be
furnished and the period during which they will be
furnished and, if there are any services, benefits
or coverages to be excepted, a detailed statement
of such exceptions, provided such services,
benefits or coverages to be furnished conform at a
minimum to the requirements of the federal Health
Maintenance Organization Act; (5) a statement of
terms and conditions upon which the contract may
be cancelled or otherwise terminated at the option
of either party; (6) claims procedures; (7)
enrollee grievance procedures; (8) continuation of
coverage; (9) conversion; (10) extension of
benefits, if any; (11) subrogation, if any; (12)
description of the service area, and out-of-area
benefits and services, if any; (13) a statement of
the amount the enrollee or others on his behalf
must pay to the managed care organization and the
manner in which such amount is payable; (14) a
statement that the contract includes the
endorsement thereon and attached papers, if any,
and contains the entire contract; (15) a statement
that no statement by the enrollee in his
application for a contract shall void the contract
or be used in any legal proceeding thereunder,
unless such application or an exact copy thereof
is included in or attached to such contract; and
(16) a statement of the grace period for making
any payment due under the contract, which shall
not be less than ten days. The commissioner may
waive the filing requirements of this subsection
for any managed care organization required to file
under section 38a-182 of the general statutes.
(b) Each managed care organization shall
provide every enrollee with a plan description.
The plan description shall be in plain language as
commonly used by the enrollees and consistent with
chapter 699a of the general statutes. The plan
description shall be made available to each
enrollee and potential enrollee prior to the
enrollee's entering into the contract and during
any open enrolment period. The plan description
shall not contain provisions or statements that
are inconsistent with the plan's medical
protocols. The plan description shall contain:
(1) A clear summary of the provisions set
forth in subdivisions (1) to (12), inclusive, of
subsection (a) of this section, subdivision (3) of
section 4 of this act, sections 11, 12 and 13 of
this act;
(2) A statement of the number of managed care
organization's utilization review determinations
not to certify an admission, service, procedure or
extension of stay, and the denials upheld and
reversed on appeal within the managed care
organization's utilization review procedure;
(3) A description of emergency services, the
appropriate use of emergency services, including
to the use of E 9-1-1 telephone systems, any cost
sharing applicable to emergency services and the
location of emergency departments and other
settings in which participating physicians and
hospitals provide emergency services and post
stabilization care;
(4) Coverage of the plans, including
exclusions of specific conditions, ailments or
disorders;
(5) The use of drug formularies or any limits
on the availability of prescription drugs;
(6) The number, types and specialties and
geographic distribution of direct health care
providers;
(7) Participating and nonparticipating
provider reimbursement procedure;
(8) Preauthorization and utilization review
requirements and procedures, internal grievance
procedures and internal and external complaint
procedures;
(9) The medical loss ratio, or percentage of
total premium revenue spent on medical care
compared to administrative costs and plan
marketing;
(10) The plan's for-profit, nonprofit
incorporation and ownership status;
(11) Telephone numbers for obtaining further
information, including the procedure for enrollees
to contact the organization concerning coverage
and benefits, claims grievance and complaint
procedures after normal business hours;
(12) How notification is provided to an
enrollee when the plan is no longer contracting
with an enrollee's primary care provider;
(13) The procedures for obtaining referrals
to specialists or for consulting a physician other
than the primary care physician;
(14) The status of the National Committee for
Quality Assurance (NCQA) accreditation;
(15) Enrollee satisfaction information; and
(16) Procedures for protecting the
confidentially of medical records and other
patient information.
Sec. 9. (NEW) (a) Each contract delivered,
issued for delivery, renewed, amended or continued
in this state on and after October 1, 1997,
between a managed care organization and a
participating provider shall require the provider
to give at least sixty days' advance written
notice to the managed care organization and shall
require the managed care organization to give at
least sixty days' advance written notice to the
provider in order to withdraw from or terminate
the agreement.
(b) The provisions of this section shall not
apply: (1) When lack of such notice is necessary
for the health or safety of the enrollees; (2)
when a provider has entered into a contract with a
managed care organization that is found to be
based on fraud or material misrepresentation; or
(3) when a provider engages in any fraudulent
activity related to the terms of his contract with
the managed care organization.
(c) No managed care organization shall take
or threaten to take any action against any
provider in retaliation for such provider's
assistance to an enrollee under the provisions of
subsection (e) of section 18 or section 20 of this
act.
Sec. 10. (NEW) No contract delivered, issued
for delivery, renewed, amended or continued in
this state on and after October 1, 1997, between a
managed care organization and a participating
provider shall prohibit or limit any cause of
action or contract rights an enrollee otherwise
has.
Sec. 11. (NEW) Each managed care plan that
requires a percentage coinsurance payment by the
insured shall calculate the insured's coinsurance
payment on the lesser of the provider's or
vendor's charges for the goods or services or the
amount payable by the managed care organization
for such goods or services.
Sec. 12. (NEW) (a) No contract delivered,
issued for delivery, renewed, amended or continued
in this state on and after October 1, 1997,
between a managed care organization and a
participating provider shall prohibit the provider
from discussing with an enrollee any treatment
options and services available in or out of
network, including experimental treatments.
(b) No contract delivered, issued for
delivery, renewed, amended or continued in this
state on and after October 1, 1997, between a
managed care organization and a participating
provider shall prohibit the provider from
disclosing, to an enrollee who inquires, the
method the managed care organization uses to
compensate the provider.
Sec. 13. (NEW) (a) Not later than March 15,
1999, and annually thereafter, the Insurance
Commissioner, after consultation with the
Commissioner of Public Health, shall develop and
distribute a consumer report card on all managed
care organizations. The commissioner shall develop
the consumer report card in a manner permitting
consumer comparison across organizations.
(b) The consumer report card shall include
(1) all health care centers licensed pursuant to
chapter 698a of the general statutes and (2) the
fifteen largest licensed health insurers that use
provider networks and that are not included in
subdivision (1) of this subsection. The insurers
selected pursuant to subdivision (2) of this
subsection shall be selected on the basis of
Connecticut direct written health premiums from
such network plans.
(c) The commissioner shall test market a
draft of the consumer report card prior to its
publication and distribution. As a result of such
test marketing, the commissioner may make any
necessary modification to its form or substance.
Sec. 14. (NEW) Each managed care organization
shall establish and maintain an internal grievance
procedure to assure that enrollees may seek a
review of any grievance that may arise from a
managed care organization's action or inaction,
other than action or inaction based on utilization
review, and obtain a timely resolution of any such
grievance. Such grievance procedure shall comply
with the following requirements:
(1) Enrollees shall be informed of the
grievance procedure at the time of initial
enrolment and at not less than annual intervals
thereafter, which notification may be met by
inclusion in an enrolment agreement or update.
(2) Notices to enrollees describing the
grievance procedure shall explain: (A) The process
for filing a grievance with the managed care
organization; (B) that the enrollee, a person
acting on behalf of an enrollee, including the
enrollee's health care provider, may make a
request for review of a grievance; and (C) the
time periods within which the managed care
organization must resolve the grievance.
Sec. 15. Section 38a-226 of the general
statutes is repealed and the following is
substituted in lieu thereof:
For purposes of sections 38a-226 to 38a-226d,
inclusive, AS AMENDED BY THIS ACT:
(1) "Utilization review" means the
prospective or concurrent assessment of the
necessity and appropriateness of the allocation of
health care resources and services given or
proposed to be given to an individual within this
state. Utilization review shall not include
elective requests for clarification of coverage.
(2) "Utilization review company" means any
company, organization or other entity performing
utilization review, except:
(A) An agency of the federal government;
(B) An agent acting on behalf of the federal
government, but only to the extent that the agent
is providing services to the federal government;
(C) Any agency of the state of Connecticut;
or
(D) A hospital's internal quality assurance
program except if associated with a health care
financing mechanism.
(3) "Commissioner" means the Insurance
Commissioner.
(4) "Enrollee" means an individual who has
contracted for or who participates in coverage
under an insurance policy, a health care center
contract, an employee welfare benefits plan, a
hospital or medical services plan contract or any
other benefit program providing payment,
reimbursement or indemnification for health care
costs for an individual or his eligible
dependents.
(5) "Provider of record" or "provider" means
the physician or other licensed practitioner
identified to the utilization review agent as
having primary responsibility for the care,
treatment and services rendered to an individual.
Sec. 16. Section 38a-226a of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) [On or after October 1, 1992, a] NO
utilization review company may [not] conduct
utilization review in this state unless it is
licensed by the commissioner. All licenses [must]
SHALL be renewed on an annual basis.
(b) The annual license fee shall be two
thousand five hundred dollars and shall be
dedicated exclusively to the regulation of
utilization review.
(c) The request for licensure or renewal
shall include the name, address, telephone number
and normal business hours of the utilization
review company, the name and telephone number of a
person for the commissioner to contact, and
evidence of compliance noted in the provisions of
section 38a-226c, AS AMENDED BY THIS ACT. Any
material changes in the information filed in
accordance with this subsection shall be filed
with the commissioner within thirty days of the
change.
(d) The [Insurance Department] COMMISSIONER
shall receive and investigate all grievances filed
against utilization review companies by an
enrollee. THE COMMISSIONER SHALL CODE, TRACK AND
REVIEW ALL GRIEVANCES. THE COMMISSIONER MAY IMPOSE
SUCH PENALTIES AS AUTHORIZED, IN ACCORDANCE WITH
SECTION 38a-226b, AS AMENDED BY THIS ACT.
(e) In the absence of any contractual
agreement to the contrary, the enrollee is
responsible for requesting certification and for
authorizing the provider to release, in a timely
manner, all information necessary to conduct the
review. A utilization review company shall permit
either the enrollee, the enrollee's representative
or the provider of record to assist in fulfilling
that responsibility.
(f) If the commissioner determines that
additional data from a utilization review company
is necessary to determine compliance with the
provisions of sections 38a-226 to 38a-226d,
inclusive, AS AMENDED BY THIS ACT, he may require
the utilization review company to provide [on an
annual basis,] data relating to reviews, appeals
and denials.
Sec. 17. Section 38a-226b of the general
statutes is repealed and the following is
substituted in lieu thereof:
(1) Whenever the commissioner has reason to
believe that a utilization review company subject
to sections 38a-226 to 38a-226d, inclusive, AS
AMENDED BY THIS ACT, has been or is engaging in
conduct in violation of said sections, and that a
proceeding by him in respect thereto would be in
the interest of the public, the commissioner shall
issue and serve upon such company a statement of
the charges in that respect and a notice of a
hearing to be held at a time and place fixed in
the notice, which shall not be less than thirty
days after the date of service. At the time and
place fixed for such hearing, such company shall
have an opportunity to be heard and to show cause
why an order should not be made by the
commissioner requiring such company to cease and
desist from the alleged conduct complained of.
(2) If, after such hearing, the commissioner
determines that the utilization review company
charged has engaged in a violation of sections
38a-226 to 38a-226d, inclusive, AS AMENDED BY THIS
ACT, he shall reduce his findings to writing and
shall issue and cause to be served upon the
utilization review company a copy of such findings
and an order requiring such company to cease and
desist from engaging in such violation. The
commissioner may, at his discretion, order any one
or more of the following:
(A) Payment of a civil penalty of not more
than one thousand dollars for each and every act
or violation, provided such penalty shall not
exceed an aggregate penalty of ten thousand
dollars unless the company knew or reasonably
should have known it was in violation of sections
38a-226 to 38a-226d, inclusive, AS AMENDED BY THIS
ACT, in which case the penalty shall be not more
than five thousand dollars for each and every act
or violation not to exceed an aggregate penalty of
fifty thousand dollars in any six-month period;
(B) Suspension or revocation of the
utilization review company's license to do
business in this state if it knew or reasonably
should have known that it was in violation of
sections 38a-226 to 38a-226d, inclusive, AS
AMENDED BY THIS ACT; and
(C) Payment of such reasonable expenses as
may be necessary to compensate the [Insurance
Department] COMMISSIONER in connection with the
proceedings under this subdivision which shall be
dedicated exclusively to the regulation of
utilization review.
(3) Any company aggrieved by any such order
of the commissioner may appeal therefrom in
accordance with the provisions of section 4-183,
except venue for such appeal shall be in the
judicial district of Hartford-New Britain*.
(4) Any person who violates a cease and
desist order of the commissioner made pursuant to
this section and while such order is in effect
shall, after notice and hearing and upon order of
the commissioner, be subject to the following: (A)
A civil penalty of not more than fifty thousand
dollars; or (B) suspension or revocation of such
person's license.
Sec. 18. Section 38a-226c of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) All utilization review companies [must]
SHALL meet the following minimum standards:
(1) Each utilization review company shall
maintain and make available procedures for
providing notification of its determinations
regarding certification in accordance with the
following:
(A) Notification of [a] ANY prospective
determination by the utilization review company
shall be mailed or otherwise communicated to the
provider of record or the enrollee or other
appropriate individual within two business days of
the receipt of all information necessary to
complete the review, PROVIDED ANY DETERMINATION
NOT TO CERTIFY AN ADMISSION, SERVICE, PROCEDURE OR
EXTENSION OF STAY SHALL BE IN WRITING. AFTER A
PROSPECTIVE DETERMINATION THAT AUTHORIZES AN
ADMISSION, SERVICE, PROCEDURE OR EXTENSION OF STAY
HAS BEEN COMMUNICATED TO THE APPROPRIATE
INDIVIDUAL, BASED ON ACCURATE INFORMATION FROM THE
PROVIDER, THE UTILIZATION REVIEW COMPANY MAY NOT
REVERSE SUCH DETERMINATION IF SUCH ADMISSION,
SERVICE, PROCEDURE OR EXTENSION OF STAY HAS TAKEN
PLACE IN RELIANCE ON SUCH DETERMINATION.
(B) Notification of a concurrent
determination shall be mailed or otherwise
communicated to the provider of record within two
business days of receipt of all information
necessary to complete the review or, provided
[that] all information necessary to perform the
review has been received, prior to the end of the
current certified period AND PROVIDED ANY
DETERMINATION NOT TO CERTIFY AN ADMISSION,
SERVICE, PROCEDURE OR EXTENSION OF STAY SHALL BE
IN WRITING.
(C) THE UTILIZATION REVIEW COMPANY SHALL NOT
MAKE A DETERMINATION NOT TO CERTIFY BASED ON
INCOMPLETE INFORMATION UNLESS IT HAS CLEARLY
INDICATED, IN WRITING, TO THE PROVIDER OF RECORD
OR THE ENROLLEE ALL THE INFORMATION THAT IS NEEDED
TO MAKE SUCH DETERMINATION.
(D) NOTWITHSTANDING SUBPARAGRAPHS (A) TO (C),
INCLUSIVE, OF THIS SUBDIVISION, THE UTILIZATION
REVIEW COMPANY MAY GIVE AUTHORIZATION ORALLY,
ELECTRONICALLY OR COMMUNICATED OTHER THAN IN
WRITING. IF THE DETERMINATION IS AN APPROVAL FOR A
REQUEST, THE COMPANY SHALL PROVIDE A CONFIRMATION
NUMBER CORRESPONDING TO THE AUTHORIZATION.
[(C)] (E) Any notice of a determination not
to certify an admission, service, procedure or
extension of stay shall include in writing (i) the
principal reasons for the determination, [and]
(ii) the procedures to initiate an appeal of the
determination or the name and telephone number of
the person to contact with regard to an appeal
PURSUANT TO THE PROVISIONS OF THIS SECTION, AND
(iii) THE PROCEDURE TO APPEAL TO THE COMMISSIONER
PURSUANT TO SECTION 20 OF THIS ACT.
(2) Each utilization review company shall
maintain and make available a written description
of the appeal procedure by which either the
enrollee or the provider of record may seek review
of determinations not to certify an admission,
service, procedure or extension of stay. The
procedures for appeals shall include the
following:
(A) Each utilization review company shall
notify in writing the enrollee and provider of
record of its determination on the appeal as soon
as practical, but in no case later than thirty
days after receiving the required documentation on
the appeal.
(B) On appeal, all determinations not to
certify an admission, service, procedure or
extension of stay shall be made by a licensed
practitioner of the medical arts.
(3) The process established by each
utilization review company may include a
reasonable period within which an appeal must be
filed to be considered.
(4) Each utilization review company shall
also provide for an expedited appeals process for
emergency or life threatening situations. Each
utilization review company shall complete the
adjudication of such expedited appeals within two
business days of the date the appeal is filed and
all information necessary to complete the appeal
is received by the utilization review company.
(5) Each utilization review company shall
utilize written clinical criteria and review
procedures which are established and periodically
evaluated and updated with appropriate involvement
from practitioners.
(6) Nurses, practitioners and other licensed
health professionals making utilization review
decisions shall have current licenses from a state
licensing agency in the United States or
appropriate certification from a recognized
accreditation agency in the United States.
(7) In cases where an appeal to reverse a
determination not to certify is unsuccessful, each
utilization review company [should] SHALL assure
that a practitioner in a specialty related to the
condition is reasonably available to review the
case. WHEN THE REASON FOR THE DETERMINATION NOT TO
CERTIFY IS BASED ON MEDICAL NECESSITY, INCLUDING
WHETHER A TREATMENT IS EXPERIMENTAL OR
INVESTIGATIONAL, EACH UTILIZATION REVIEW COMPANY
SHALL HAVE THE CASE REVIEWED BY A PHYSICIAN WHO IS
A SPECIALIST IN THE FIELD RELATED TO THE CONDITION
THAT IS THE SUBJECT OF THE APPEAL. THE REVIEW
SHALL BE COMPLETED WITHIN THIRTY DAYS OF THE
REQUEST FOR REVIEW. THE UTILIZATION REVIEW COMPANY
SHALL BE FINANCIALLY RESPONSIBLE FOR THE REVIEW
AND SHALL MAINTAIN, FOR THE COMMISSIONER'S
VERIFICATION, DOCUMENTATION OF THE REVIEW,
INCLUDING THE NAME OF THE REVIEWING PHYSICIAN.
(8) [Each] EXCEPT AS PROVIDED IN SUBSECTION
(e) OF THIS SECTION, EACH utilization review
company shall make review staff available by
toll-free telephone, at least forty hours per week
during normal business hours.
[(9) Unless there is a contrary written
agreement between the utilization review company
and the hospital, all hospitals in this state
shall permit each licensed utilization review
company to conduct reviews on the premises. Each
utilization review company shall conduct its
telephone, on-site information gathering reviews
and hospital communications during the hospitals'
and practitioners' reasonable and normal business
hours, unless otherwise mutually agreed. Each
utilization review company's staff shall identify
themselves by name and by the name of their
organization and, for on-site reviews, should
carry picture identification and the utilization
review company's company identification card.
(10)] (9) Each utilization review company
shall comply with all applicable federal and state
laws to protect the confidentiality of individual
medical records. Summary and aggregate data shall
not be considered confidential if it does not
provide sufficient information to allow
identification of individual patients.
[(11)] (10) Each utilization review company
shall allow a minimum of twenty-four hours
following an emergency admission, service or
procedure for an enrollee or his representative to
notify the utilization review company and request
certification or continuing treatment for that
condition.
(11) NO UTILIZATION REVIEW COMPANY MAY GIVE
AN EMPLOYEE ANY FINANCIAL INCENTIVE BASED ON THE
NUMBER OF DENIALS OF CERTIFICATION SUCH EMPLOYEE
MAKES.
(12) EACH UTILIZATION REVIEW COMPANY SHALL
ANNUALLY FILE WITH THE COMMISSIONER (A) THE NAMES
OF ALL MANAGED CARE ORGANIZATIONS, AS DEFINED IN
SECTION 1 OF THIS ACT, THAT THE UTILIZATION REVIEW
COMPANY SERVICES IN CONNECTICUT, (B) ANY
UTILIZATION REVIEW SERVICES FOR WHICH THE
UTILIZATION REVIEW COMPANY HAS CONTRACTED OUT FOR
SERVICES AND THE NAME OF SUCH COMPANY PROVIDING
THE SERVICES, AND (C) THE NUMBER OF UTILIZATION
REVIEW DETERMINATIONS NOT TO CERTIFY AN ADMISSION,
SERVICE, PROCEDURE OR EXTENSION OF STAY AND THE
OUTCOME OF SUCH DETERMINATION UPON APPEAL WITHIN
THE UTILIZATION REVIEW COMPANY.
(13) ANY UTILIZATION REVIEW DECISION TO
INITIALLY DENY SERVICES SHALL BE MADE BY A
LICENSED HEALTH PROFESSIONAL.
(b) UNLESS THERE IS A CONTRARY WRITTEN
AGREEMENT BETWEEN THE UTILIZATION REVIEW COMPANY
AND THE HOSPITAL, ALL HOSPITALS IN THIS STATE
SHALL PERMIT EACH LICENSED UTILIZATION REVIEW
COMPANY TO CONDUCT REVIEWS ON THE PREMISES. EACH
UTILIZATION REVIEW COMPANY SHALL CONDUCT ITS
TELEPHONE, ON-SITE INFORMATION GATHERING REVIEWS
AND HOSPITAL COMMUNICATIONS DURING THE HOSPITALS'
AND PRACTITIONERS' REASONABLE AND NORMAL BUSINESS
HOURS, UNLESS OTHER ARRANGEMENTS ARE MUTUALLY
AGREED UPON. EACH UTILIZATION REVIEW COMPANY'S
STAFF SHALL IDENTIFY THEMSELVES BY NAME AND BY THE
NAME OF THEIR ORGANIZATION AND, FOR ON-SITE
REVIEWS, SHALL CARRY PHOTOGRAPHIC IDENTIFICATION
AND THE UTILIZATION REVIEW COMPANY'S COMPANY
IDENTIFICATION CARD.
[(12)] (c) The provider of record shall
provide to each utilization review company, within
a reasonable period of time, all relevant
information necessary for the utilization review
company to certify the admission, procedure,
treatment or length of stay. Failure of the
provider to provide such documentation for review
shall be grounds for a denial of certification in
accordance with the policy of the utilization
review company or the health benefit plan.
[(13)] (d) No provider, enrollee or agent
thereof may provide to any utilization review
company information which is fraudulent or
misleading. If fraudulent or misleading statements
have occurred, the commissioner shall provide
notice of the alleged violation and opportunity to
request a hearing in accordance with chapter 54 to
said provider, enrollee [,] or agent thereof. If a
hearing is not requested or if after a hearing the
commissioner finds that a violation has in fact
occurred, the commissioner may impose a civil
penalty [(A)] (1) of not more than five thousand
dollars, or [(B)] (2) commensurate with the value
of services provided which were certified as a
result of said fraudulent or misleading
information. In addition, any allegation or denial
made without reasonable cause and found untrue
shall subject the party pleading the same to the
payment of such reasonable expenses as may be
necessary to compensate the [Insurance] Department
for expenses incurred due to such untrue pleading.
All such payments to the department shall be
dedicated exclusively to the regulation of
utilization review.
[(14) No employee of a utilization review
company may receive any financial incentive based
on the number of denials of certification made by
such employee.
(15)] (e) ON OR AFTER NOVEMBER 1, 1997, IF AN
ENROLLEE HAS BEEN ADMITTED TO AN ACUTE CARE
HOSPITAL AND THE ATTENDING PHYSICIAN DETERMINES
THAT THE ENROLLEE'S LIFE WILL BE ENDANGERED OR
OTHER SERIOUS INJURY OR ILLNESS COULD OCCUR IF THE
PATIENT IS DISCHARGED OR IF TREATMENT IS DELAYED,
THE ATTENDING PHYSICIAN MAY TRANSMIT, PURSUANT TO
THE STANDARDIZED PROCESS DEVELOPED PURSUANT TO
SECTION 22 OF THIS ACT, A REQUEST FOR AN EXPEDITED
REVIEW TO THE UTILIZATION REVIEW COMPANY. IF SUCH
ATTENDING PHYSICIAN RECEIVES NO RESPONSE, IN THE
STANDARDIZED PROCESS DEVELOPED PURSUANT TO SECTION
22 OF THIS ACT, FROM THE UTILIZATION REVIEW
COMPANY AFTER THREE HOURS HAVE PASSED SINCE THE
PROVIDER SENT THE REQUEST AND ALL INFORMATION
NEEDED TO COMPLETE THE REVIEW, THE REQUEST SHALL
BE DEEMED APPROVED. EACH UTILIZATION REVIEW
COMPANY SHALL MAKE REVIEW STAFF AVAILABLE FROM
8:00 A.M. TO 9:00 P.M. TO PROCESS REQUESTS
PURSUANT TO THIS SUBSECTION.
(f) The Insurance Commissioner, [in] AFTER
consultation with the Commissioner of Public
Health, [may] SHALL adopt regulations, in
accordance with chapter 54, as he deems necessary
to clarify or supplement the standards set forth
in this [subsection] SECTION. THE REGULATIONS
SHALL INCLUDE STANDARDS, WHICH MAY BE BASED ON THE
NATIONAL STANDARDS OF THE AMERICAN ACCREDITATION
HEALTH CARE COMMISSION, CONCERNING THE
CONFIDENTIALITY OF PATIENT MEDICAL RECORDS.
Sec. 19. Section 38a-226d of the general
statutes is repealed and the following is
substituted in lieu thereof:
[Notwithstanding the provisions of section
38a-226c, the] THE commissioner may find that the
standards in [said] section 38a-226c, AS AMENDED
BY THIS ACT, have been met if each utilization
review company has received approval or
accreditation by a utilization review
accreditation organization, or otherwise
demonstrates to the commissioner that it adheres
to standards which are substantially similar to
the standards in SAID section 38a-226c, [and
provide the same or greater protection to the
rights of enrollees whose care is reviewed]
PROVIDED SUCH APPROVAL, ACCREDITATION OR STANDARDS
DOES NOT PROVIDE LESS PROTECTION TO ENROLLEES THAN
IS PROVIDED UNDER SAID SECTION 38a-226c.
Sec. 20. (NEW) (a) On or after January 1,
1998, any enrollee, or any provider acting on
behalf of an enrollee with the enrollee's consent,
who has exhausted the internal mechanisms provided
by a managed care organization or utilization
review company to appeal a determination not to
certify an admission, service, procedure or
extension of stay, may appeal such determination
to the commissioner.
(b) (1) To appeal a decision under the
provisions of this section, an enrollee or any
provider acting on behalf of an enrollee shall,
within thirty days from receiving a final written
determination from the enrollee's managed care
organization or utilization review company, file a
written request with the commissioner. The appeal
shall be on forms prescribed by said commissioner
and shall include the filing fee provided for in
subdivision (2) of this section and a general
release executed by the enrollee for all medical
records pertinent to the appeal.
(2) The filing fee shall be twenty-five
dollars. If the commissioner finds that an
enrollee is indigent or unable to pay the fee, the
commissioner shall waive the fee.
(3) Upon receipt of the appeal together with
the executed release and appropriate fee, the
commissioner shall assign the appeal for review to
an entity as defined in subsection (c) of this
section.
(4) Upon receipt of the request for appeal
from the commissioner, the entity conducting the
appeal shall conduct a preliminary review of the
appeal and accept it if such entity determines:
(A) The individual was or is an enrollee of the
managed care organization; (B) the benefit or
service that is the subject of the complaint or
appeal reasonably appears to be a covered service,
benefit or service under the agreement provided by
contract to the enrollee; (C) the enrollee has
exhausted all internal appeal mechanisms provided;
(D) the enrollee has provided all information
required by the commissioner to make a preliminary
determination including the appeal form, a copy of
the final decision of denial and a fully-executed
release to obtain any necessary medical records
from the managed care organization and any other
relevant provider.
(5) Upon completion of the preliminary
review, the entity conducting such review shall
immediately notify the member or provider, as
applicable, in writing as to whether the appeal
has been accepted for full review and, if not so
accepted, the reasons therefor.
(6) If accepted for full review, the entity
shall conduct such review in accordance with the
regulations adopted by the commissioner, after
consultation with the Commissioner of Public
Health, in accordance with the provisions of
chapter 54 of the general statutes.
(c) To provide for such appeal the Insurance
Commissioner, after consultation with the
Commissioner of Public Health, shall engage
impartial health entities to provide for medical
review under the provisions of this section. Such
review entities shall include (1) medical peer
review organizations, (2) independent utilization
review companies, provided any such organizations
or companies are not related to or associated with
any managed care organization and (3) nationally
recognized health experts or institutions approved
by the commissioner.
(d) The commissioner shall accept the
decision of the reviewing entity and the decision
of the commissioner shall be binding.
Sec. 21. (NEW) (a) Each managed care
organization shall conform to all applicable state
and federal antidiscrimination and confidentiality
statutes, shall ensure that the confidentiality of
specified enrollee patient information and records
in their custody is protected, and shall have
written confidentiality policies and procedures.
(b) No managed care organization shall sell,
for any commercial purpose the names of its
enrollees or any identifying information
concerning enrollees.
Sec. 22. (NEW) (a) On or before October 1,
1997, the Insurance Commissioner shall develop a
standardized process for use in seeking expedited
utilization review approval pursuant to section
38a-226c of the general statutes, as amended by
this act. In developing such standardized process,
the commissioner may convene and consult with a
working group composed of a representative of: The
Connecticut Medical Society; the Connecticut
Hospital Association; Blue Cross Blue Shield of
Connecticut; and the Association of Connecticut
HMOs.
(b) The process developed pursuant to
subsection (a) of this section shall be
distributed to all acute care hospitals in this
state and shall be revised as deemed necessary by
the commissioner.
Sec. 23. Section 38a-993 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) In any case where a hearing pursuant to
section 38a-990 results in the finding of an
intentional violation of sections 38a-975 to
38a-998, inclusive, the commissioner may, in
addition to the issuance of a cease and desist
order as prescribed in section 38a-992, order
payment of a penalty of not more than [five
hundred] TWO THOUSAND dollars for each violation
but not to exceed [ten] TWENTY thousand dollars in
the aggregate for multiple violations.
(b) Any person who violates a cease and
desist order of the commissioner under section
38a-992 may, after notice and hearing and upon
order of the commissioner, be subject to one or
more of the following, at the discretion of the
commissioner: (1) A penalty of not more than ten
thousand dollars for each violation; or (2) a
penalty of not more than fifty thousand dollars if
the commissioner finds that violations have
occurred with such frequency as to indicate a
general business practice; or (3) suspension or
revocation of an insurance institution's or
agent's license.
Sec. 24. Section 19a-647 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) As used in this section and subsection
(b) of section 20-138b:
(1) "Health care services" means health care
related services or products rendered or sold by a
provider within the scope of the provider's
license or legal authorization and includes
hospital, medical, surgical, dental, vision and
pharmaceutical services or products.
(2) "Person" means an individual, agency,
political subdivision, partnership, corporation,
limited liability company, association or any
other entity.
(3) "Preferred provider network" means an
arrangement in which agreements relating to the
health care services to be rendered by providers,
including the amounts to be paid to the providers
for such services, are entered into between such
providers and a person who establishes, operates,
maintains or underwrites the arrangement, in whole
or in part, and shall include any
provider-sponsored preferred provider network or
independent practice association that offers
network services. A preferred provider network
shall not include a workers' compensation
preferred provider organization established
pursuant to section 31-279-10 of the regulations
of Connecticut state agencies or an arrangement
relating only to health care services offered by
providers to individuals covered under
self-insured Employee Welfare Benefit Plans
established pursuant to the federal Employee
Retirement Income Security Act of 1974 as from
time to time amended.
(4) "Provider" means an individual or entity
duly licensed or legally authorized to provide
health care services.
(b) All preferred provider networks shall
file with the Office of Health Care Access prior
to the start of enrolment [. Any preferred
provider network existing as of October 1, 1993,
shall file within sixty days of said date. All
networks] AND shall annually update said filing by
July first [commencing July 1, 1994] OF EACH YEAR
THEREAFTER. The filing required by such network
shall include the following information: [, except
where such information is filed with the Insurance
Department:] (1) The identity of any company
controlling the operation of the preferred
provider network, a description of such
participation and, where applicable, the
following: (A) A certificate from the Secretary of
the State or the Insurance Commissioner regarding
the company's or organization's good standing to
do business in the state of Connecticut; (B) a
copy of the company's or organization's balance
sheet at the end of its most recently concluded
fiscal year, along with the name and address of
any public accounting firm or internal accountant
which prepared or assisted in the preparation of
such balance sheet; (C) a list of the names,
official positions and occupations of members of
the company's or organization's board of directors
or other policy-making body and of those executive
officers who are responsible for the company's or
organization's activities with respect to the
medical care network; (D) a list of the company's
or organization's principal owners; (E) in the
case of an out-of-state company or organization, a
certificate that such company or organization is
in good standing in its state of organization; (F)
the identity, address and current relationship of
any related or predecessor company or
organization; "related" for this purpose means
that a substantial number of the board or
policy-making body members, executive officers or
principal owners of both companies are the same;
and (G) in the case of a Connecticut or
out-of-state company or organization, a report of
the details of any suspension, sanction or other
disciplinary action relating to such company or
organization in this state or in any other state;
(2) a general description of the preferred
provider network, including: [its] (A) ITS
geographical service area, the names of the
hospitals included in the network; and [the names
listed by specialty, of the providers included in
the network] (B) THE PRIMARY CARE PHYSICIANS, THE
SPECIALTY PHYSICIANS, ANY OTHER CONTRACTING HEALTH
CARE PROVIDERS AND THE NUMBER AND PERCENTAGE OF
EACH GROUP'S CAPACITY TO ACCEPT NEW PATIENTS; and
(3) the name and address of the person to whom
applications may be made for participation. WITH
THE EXCEPTION OF THE PROVIDER NETWORK INFORMATION
REQUIRED IN SUBDIVISION (2) OF THIS SUBSECTION,
THE INFORMATION REQUIRED BY THIS SUBSECTION NEED
NOT BE FILED WITH THE OFFICE IF IT HAS ALREADY
BEEN FILED WITH THE INSURANCE COMMISSIONER.
(c) Any person developing, or expanding into
a new county, a preferred provider network
pursuant to this section and subsection (b) of
section 20-138b [after October 1, 1993, shall be
required to] SHALL provide a notice in at least
one major newspaper in the service area in which
it operates indicating plans to develop, or expand
into a new county, a preferred provider network.
Such notice shall include the medical specialties
included in the network, the name and address of
the person to whom applications may be made for
participation and a time frame for making
application. The preferred provider network shall
provide the applicant with written acknowledgement
of receipt of the application. Each complete
application shall be considered by the network in
a timely manner.
(d) The expenses incurred by the Office of
Health Care Access pursuant to subsection (b) of
this section shall be paid by the office, within
existing budgetary resources.
(e) (1) Each preferred provider network shall
file with the Office of Health Care Access and
make available upon request from a provider, the
general criteria for its selection or termination
of health care providers. Disclosure shall not be
required of criteria deemed by the network to be
of a proprietary or competitive nature that would
hurt the network's ability to compete or to manage
health services. For purposes of this section,
disclosure of criteria is proprietary or
anticompetitive if it has the tendency to cause
health care providers to alter their practice
pattern in a manner that would circumvent efforts
to contain health care costs and is proprietary if
revealing criteria would cause the network's
competitors to obtain valuable business
information.
(2) If a network uses criteria that have not
been filed pursuant to subdivision (1) of this
subsection to judge the quality and
cost-effectiveness of a health care provider's
practice under any specific program within the
network, the network may not reject or terminate
the provider participating in that program based
upon such criteria until the provider has been
informed of the criteria that his practice fails
to meet.
(f) A preferred provider network which has a
limited network and which does not provide any
reimbursement when an enrollee obtains service
outside that limited network shall inform each
applicant of that fact prior to enrolling the
applicant for coverage.
Sec. 25. (NEW) Each provider, as defined in
section 1 of this act, in utilizing laboratories
or testing facilities for enrollees in managed
care plans that provide coverage for laboratories
and testing facilities, shall utilize laboratories
or testing facilities covered by the enrollee's
managed care plan or notify the enrollee if the
provider intends to utilize a laboratory or
testing facility not covered by the plan.
Sec. 26. (NEW) (a) Each provider, as defined
in section 1 of this act, shall code for the
presenting symptoms of all emergency claims and
each hospital shall record such code for such
claims on locater 76 on the UB92 form or its
successor.
(b) The presenting symptoms, as coded by the
provider and recorded by the hospital on the UB92
form or its successor, shall be the basis for
reimbursement or coverage, provided such symptoms
reasonably indicated an emergency medical
condition.
(c) For the purposes of this section, in
accordance with the National Committee for Quality
Assurance, an emergency medical condition is a
condition such that a prudent lay-person, acting
reasonably, would have believed that emergency
medical treatment is needed.
(d) The Insurance Commissioner, after
consultation with the working group convened
pursuant to section 22 of this act, may develop
and disseminate to hospitals in this state a
claims form system that will ensure that all
hospitals consistently code for the presenting and
diagnosis symptoms on all emergency claims.
Sec. 27. (NEW) No group health insurance
policy delivered, issued for delivery, renewed,
amended or continued in this state on or after
October 1, 1997, whether issued by an insurance
company, a hospital service corporation, a medical
service corporation or a health care center, as
defined in section 38a-175 of the general
statutes, shall be delivered, issued for delivery,
renewed or continued in this state and no such
policy shall be amended to substantially alter or
change benefits or coverage unless persons covered
under such policy will be eligible for expenses
arising from biologically-based mental or nervous
conditions that are at least equal to coverage
provided for medical or surgical conditions. For
purposes of this section, "biologically-based
mental illness" means any mental or nervous
condition that is caused by a biological disorder
of the brain and results in a clinically
significant or psychological syndrome or pattern
that substantially limits the functioning of the
person with the illness, including schizophrenia,
schizoaffective disorder, major depressive
disorder, bipolar disorder, paranoia and other
psychotic disorders, obsessive-compulsive
disorder, panic disorder and pervasive
developmental disorder or autism.
Sec. 28. (NEW) Nothing in sections 1 to 14,
inclusive, 20 and 21 of this act shall be
construed to apply to a managed care organization
to the extent it is exempt from state law under
the federal Employee Retirement Income Security
Act.
Sec. 29. (NEW) The Insurance Commissioner
shall adopt regulations in accordance with the
provisions of chapter 54 of the general statutes
to implement the provisions of this act.
Sec. 30. (NEW) The provisions of sections 1 to
14, inclusive, 20, 21 and 27 of this act shall not
apply to any plan that provides for the financing
or delivery of health care services solely for the
purposes of workers' compensation benefits
pursuant to chapter 568 of the general statutes.
Sec. 31. (NEW) The Commissioner of Public
Health may request and shall receive any data,
report or information filed with the Insurance
Commissioner pursuant to the provisions of this
act.
Sec. 32. This act shall take effect from its
passage, except that sections 1 to 21, inclusive,
and 23 to 31, inclusive, shall take effect October
1, 1997.
Approved June 6, 1997