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