HBA-ATS H.B. 3016 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3016 By: Smithee Insurance 3/28/1999 Introduced BACKGROUND AND PURPOSE Enacted by the 75th Legislature, Article 20A.12, Insurance Code, requires health maintenance organizations (HMOs) to establish a system for complaints and appeals brought by enrollees and health care providers. The system must include a provision to notify an enrollee of the enrollee's right to appeal an adverse determination to an independent review organization (IRO). Some HMOs have concluded that an enrollee's disagreement with an adverse determination constitutes a complaint and not an appeal within the meaning of Article 20A.12. This is important because an appeal of an adverse determination activates the requirements set forth by Article 21.58A, Insurance Code, to which HMOs are subject. Under Article 21.58A, an enrollee can request an IRO review of a denied claim. However, an enrollee must first complete the utilization review agent's (usually used by insurers to help make payment determinations) appeal process before requesting an IRO review. H.B. 3016 provides that when a utilization review agent notifies an enrollee that it has made an adverse determination of a claim for payment, the notification must include notification to the enrollee of the enrollee's right to appeal and of the procedures for appealing an adverse determination to an independent review organization (organization), and notification to an enrollee who has a life-threatening condition of the enrollee's right to an immediate review by the organization and the procedures to obtain that review. In addition, this bill specifies that a complaint filed with a utilization review agent that concerns dissatisfaction or disagreement with an adverse determination constitutes an appeal of that adverse determination. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 5(a) and (c), Article 21.58A, Insurance Code, as follows: (a) Requires a utilization review agent (agent) to notify the enrollee or a person acting on behalf of the enrollee and the enrollee's provider of record, of a determination made in a utilization review, rather than notifying the enrollee, a person acting on behalf of the enrollee, or the enrollee's provider of record. (c) Includes notification to the enrollee of the enrollee's right to appeal and of the procedures for appealing an adverse determination to an independent review organization (organization), and notification to an enrollee who has a life-threatening condition of the enrollee's right to an immediate review by the organization and the procedures to obtain that review among those items that need to be included in a description of the procedure for the complaint process in an agent's notification of an adverse determination. SECTION 2. Amends Section 6(a), Article 21.58A, Insurance Code, to specify that a filed complaint with an agent that concerns dissatisfaction or disagreement with an adverse determination constitutes an appeal of that adverse determination, for purposes of this section. SECTION 3. Amends Section 6(b), Article 21.58A, Insurance Code, as amended by Chapters 163 and 1025, Acts of the 75th Legislature, Regular Session, 1997, and reenacts it, as follows: (b) Provides that the procedures for appeal must, rather than shall, be reasonable and must, rather than shall, include certain provisions. (2) Provides that the letter the agent is required to send to the appealing party acknowledging the agent's receipt of the appeal must include, among other provisions, a list of the documents, rather than reasonable documents, that the appealing party must submit for review by the utilization review agent. Makes nonsubstantive changes. (3) Deletes dental or specialty conditions from the types of conditions, procedures, or treatments that the health care provider reviewing a denial typically manages. Makes a nonsubstantive change. (4) Deletes denials of care for life-threatening conditions from the types of denials to which an expedited appeal procedure applies. Provides that an expedited appeal procedure must, rather than shall, include a review by a health care provider. Makes nonsubstantive changes. (5) Requires an agent, after the agent has sought review of an appeal of an adverse determination, to issue a response letter to the patient or a person acting on behalf of the patient and the patient's physician or health care provider, rather than notifying the patient, a person acting on behalf of the patient, or physician or health care provider. Deletes the provision that requires the response letter to give the specific medical, dental, or contractual reasons for the resolution, the clinical basis for such a decision, and the specialization of any physician or other provider consulted. (6) Specifies that the 30th day that the written notification to the appealing party of the determination of the appeal must be sent by is the 30th calendar day. (7) Adds this subdivision to set forth that a provision that the appealing party must be provided a clear and concise statement of the clinical basis for the adverse determination must be included in the procedures for an appeal. Makes nonsubstantive changes. SECTION 4. Amends Section 6(c), Article 21.58A, Insurance Code, to include Article 21.58A among the other laws that limit the entitlements given an enrollee who has a life-threatening condition to an immediate appeal to an organization and to comply with procedures for an internal review of the agent's adverse termination. Deletes the definition of "life-threatening condition" used in this section. SECTION 5. Effective date: September 1, 1999. SECTION 6. Emergency clause.