RS C.S.S.B. 384 75(R) BILL ANALYSIS INSURANCE C.S.S.B. 384 By: Nelson (Smithee) 4-30-97 Committee Report (Substituted) BACKGROUND Currently, utilization review (UR) agents are licensed and regulated under the Insurance Code. UR is a system for prospective or concurrent review to determine the medical necessity and appropriateness of health care services provided to an individual. Standards and complaint and appeals processes do not apply to all regulated health care entities or agents performing UR functions. This bill provides uniform requirements for all health care entities performing UR; provisions for patient access to their confidential medical records; and standards for specialty agents who conduct UR for specialty health care services such as dentistry, chiropractic, or physical therapy. PURPOSE As proposed, C.S.S.B. 384 expands the utilization review (UR) process by providing uniform requirements for health care agencies performing UR and places the UR process under the purview of the commissioner of insurance. Also, this bill provides access to certain confidential medical records for patients and establishes standards for specialty agents who conduct UR for certain health care services. RULEMAKING AUTHORITY Rulemaking authority is granted to the commissioner of insurance in SECTION 7 (Section 8(e), Article 21.58A, Insurance Code). Previously granted rule making authority is amended to reflect the "Commissioner" instead of the board of insurance in SECTION 9 (Section 13, Article 21.58A, Insurance Code) and SECTION 10 (Section 14(g)(1) and (h), Article 21.58A, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2, Article 21.58A, Insurance Code, to redefine "administrative procedure act," "certificate," "emergency care," "open meetings law," "open records law" and "health benefit plan." Deletes definition of "board." Adds definition of "life-threatening condition." Makes conforming changes. SECTION 2. Amends Sections 3(b), (d), (e), and (f), Article 21.58A, Insurance Code, to authorize the commissioner of insurance (commissioner) to only issue a certificate to an applicant who has met the applicable requirements of this article and rules of the commissioner rather than the State Board of Insurance (board). Makes conforming changes. SECTION 3. Amends Sections 4(c), (h), (i), (k), (m), and (n), Article 21.58A, Insurance Code, as follows: (c) Personnel employed or under contract with the utilization review agent shall be appropriately qualified. Personnel who obtain information regarding a patient's specific medical condition, diagnosis, and treatment options or protocols directly from physician or other provider, either orally or in writing and who are not physicians shall be nurses, physician assistants, or mental health providers qualified to provide the services requested by the provider. This section shall not be interpreted to require these qualifications for those performing administrative tasks. (h)Requires utilization review to be conducted under the direction of a physician licensed to practice medicine in the State of Texas, rather than by a state licensing agency in the United States. (i)Sets forth requirements for utilization review decisions and screening criteria used by utilization review agents. (k)Deletes a provision requiring the health care provider to discuss the treatment plan with a dentist. (m)Requires an agent to maintain a complaint system providing procedures for the resolution of oral or written complaints and to maintain records for three years, rather than two. Requires the complaint procedure to include a response within 30 days, rather than 60. Changes references to "commissioner" instead of board of insurance. (n)Prohibits a delegation from relieving the agent of full responsibility for compliance with this article, including the conduct of those to whom utilization review has been delegated. Makes conforming changes. SECTION 4. Amends Sections 5(c) and (d), Article 21.58A, Insurance Code, to require the clinical basis for the adverse determination and a description of the procedure for the complaint and appeal process to be included in the notification by the agent. Sets forth requirements for the notification of adverse determinations by the agent. Makes conforming changes. SECTION 5. Amends Section 6, Article 21.58A, Insurance Code, as follows: (a) A UR agent shall maintain and make available a written description of procedures for appeal of an adverse determination. (b) The procedure for appeals shall be as follows: 1) An enrollee or person acting on behalf of the enrollee may appeal an adverse determination orally or in writing. 2) Within five working days of receipt of the appeal, the UR agent shall send a letter acknowledging the date of the UR agents receipt of the appeal, including a reasonable list of documents needed to be submitted for the appeal. If the UR agent receives an oral appeal, the agent shall send a one-page appeal form to the appealing party. 3) A provision that appeal decisions shall be made by a physician. If the appeal is denied within 10 working days the health care provider set forth in writing cause for having a special type of specialty provider review the case. The denial shall be reviewed by a health care provider in the same or similar specialty as that under review. The review shall be completed within 15 working days of receipt of the request 4) An expedited appeal for emergency care shall include a review by a health care provider who has not previously reviewed the case, and who is of the same or similar specialty as a health care provider who manages the medical condition under review. The time period for the expedited review is not to exceed one day. 5)After the UR agent has sought review of the appeal of adverse determination, the agent shall issue a response letter to the patient, person acting on behalf of the patient, physician or health care provider explaining the resolution of the appeal and a statement of the specific medical, dental, or contractual reasons for the decision. 6) Written notification to the appealing party of the determination of the appeal, but in no case beyond 30 days after the UR agent receives the appeal. SECTION 6. Amends Section 7, Article 21.58A, Insurance Code, by adding Subsection (c), to require an agent to provide a written description to the commissioner that establishes procedures to be used when responding to poststabilization care subsequent to emergency treatment requested by a treating physician or health care provider. SECTION 7. Amends Section 8, Article 21.58A, Insurance Code, to prohibit personal information from being disclosed by an agent. A UR agent may not disclose medical records, personal information or other information acquired during a UR review without written consent or as otherwise required by law. Sets forth requirements for an authorization if it is submitted by anyone other than the individual who is the subject of the personal or confidential information requested. The consent must be dated and signed by the individual who is subject of confidential information. Sets forth requirements for submitting requests for information about patients to an agent. If an individual submits a written request to the UR agent for access to recorded personal information, the UR agent shall provide written notice to the individual submitting the request of the nature and substance of the information, and permit the person to see and copy the recorded personal information or obtain a copy by mail. Charges for providing this information shall be reasonable as determined by rule of the commissioner, and may not include additional costs recouped for the UR. Not withstanding subsection (a) the UR agent shall provide to the commissioner on request individual records or other confidential information determined to be in compliance with this article. This information is confidential and not open record or subject to subpoena except to the extent necessary to enforce this article. A UR agent may not require a review of a mental health therapist's process or progress notes or observation of a psychotherapy session for approval of a UR. Makes conforming changes. SECTION 8. Amends Sections 9(a), (b), and (d), Article 21.58A, Insurance Code, to require the commissioner to notify the health maintenance organization or insurer of the alleged violations if the commissioner believes any person or entity conducting utilization review is in violation of this article. Authorizes the commissioner to assess administrative penalties under Article 1.10E of this code if an HMO or insurer has violated any provision of this article. Makes conforming changes. SECTION 9. Amends Section 13, Article 21.58A, Insurance Code, to authorize the commissioner to adopt rules to implement this article. Requires the commissioner to appoint an advisory committee to advise the commissioner in developing rules to administer this article as authorized by Section 2001.031, Government Code. Makes conforming changes. SECTION 10. Amends Section 14, Article 21.58A, Insurance Code, by amending Subsections (e), (g), and (h) and adding Subsection (j), to set forth exemptions of and requirements for a specialty agent, and establishes policies to which a specialty agent is required to comply. Deletes provisions for which the board is required to establish and maintain a complaint system. Makes conforming changes. SECTION 11. Effective date: September 1, 1997. SECTION 12. Emergency clause. COMPARISON BETWEEN ORIGINAL VERSION AND SUBSTITUTE Committee substitute changes the definition of "health benefit plan" to specifically exclude a plan that provides coverage only for a specified accident or disease or a hospital indemnity, Medicare supplement, long-term care, or other limited health insurance policy. SECTION 1, Article 21.58A, Section 2(9). Committee substitute adds the word "condition" to the definition of "life-threatening" and deletes the words "diseases or." SECTION 1, Article 21.58A, Section 2(12). Committee substitute adds mental health providers (qualified to provide the service requested by the provider) to the list of individuals who may obtain information regarding a patient's specific medical condition, diagnosis, and treatment options or protocols directly from a physician or health care provider. Committee substitute deletes all other individuals (records technicians, records administrators and other trained persons qualified to obtain information) that were included in the engrossed version. SECTION 3, Article 21.58A, Section 4(c). Committee substitute requires utilization review to be conducted under the direction of a physician licensed in Texas. The engrossed bill required utilization review to be conducted under the direction of a physician licensed in the United States. SECTION 3, Article 21.58A, Section 4(h). Committee substitute adds mental health criteria to the required screening criteria to be used for utilization review. SECTION 3, Article 21.58A, Section 4(i). Committee substitute exempts certain information from subpoena, as well as open records law, except to the extent necessary for the commissioner to enforce this article. SECTION 7, Article 21.58A, Section 8(i). Committee substitute prohibits utilization review agents from requiring the observation of a psychotherapy session or the submission or review of a mental health therapist's process or progress notes for any reason. SECTION 7, Article 21.58A, Section 8(j). Committee substitute adds the language "or other person or entity." SECTION 8, Article 21.58A, Section 9(a) and (d). Committee substitute allows personnel who perform solely clerical or administrative tasks to do so without being licensed or otherwise qualified pursuant to this subsection. SECTION 10, Art. 21.58A, Section 14(j)(2). Adds language to make bill apply to a utilization review performed on or after September 1, 1997. UR's performed prior to this date are subject to the law prior to enacting date. SECTION 11.