As Amended by House Committee
Session of 1999
Substitute For Senate Bill No. 80
By Committee on Financial Institutions and
Insurance
4-8
10 AN ACT relating
to accident and health insurance; concerning an exter-
11 nal review process;
providing certain requirements.
12
13 Be it enacted by the Legislature of the
State of Kansas:
14 Section
1. For the purposes of this act:
15 (a) "Adverse
decision" means a utilization review determination by a
16 third-party administrator, a health
insurance plan, an insurer or a health
17 care provider acting on behalf of an
insured that a proposed or delivered
18 health care service which would otherwise
be covered under an insured's
19 contract is not or was not medically
necessary or the health care treatment
20 has been determined to be experimental or
investigational and, (1) if the
21 requested service is provided in a manner
that leaves the insured with a
22 financial obligation to the provider or
providers of such services, or (2)
23 the adverse decision is the reason for the
insured not receiving the re-
24 quested services.
25 (b) "Emergency
medical condition" means the sudden, and at the
26 time, unexpected onset of a health
condition that requires immediate
27 medical attention, where failure to provide
medical attention would result
28 in a serious impairment to bodily
functions, serious dysfunction of a bodily
29 organ or part or would place a person's
health in serious jeopardy.
30 (c) "External
review organization" means an entity that conducts in-
31 dependent external reviews of adverse
decisions pursuant to a contract
32 with the commissioner. Such entity shall
have experience serving as the
33 external quality review organization in
health programs administered by
34 the state of Kansas, or be a nationally
accredited external review organi-
35 zation which utilizes health care providers
actively engaged in the practice
36 of their profession in the state of Kansas
who are qualified and creden-
37 tialed with respect to the health care
service review. In the event no
38 Kansas providers are qualified and
credentialed with respect to the review
39 of any case, the external review
organization shall have the discretion to
40 employ health care providers who actively
engage in such health care
41 provider's practice outside the state of
Kansas.
42 (d) "Health
insurance plan" means any hospital or medical expense
43 policy, health, hospital or medical service
corporation contract, and a plan
Sub. SB 80--Am. by H
2
1 provided by a municipal group-funded
pool, or a health maintenance
2 organization contract offered by an
employer or any certificate issued
3 under any such policies, contracts or
plans.
4
"(e) "Insured" means the beneficiary of any health insurance
com-
5 pany, fraternal benefit society,
health maintenance organization, non-
6 profit hospital and medical service
corporation, municipal group funded
7 pool, and the self-funded coverage
established by the state of Kansas, or
8 any hospital or medical expense,
health, hospital or medical service cor-
9 poration contract or a plan provided
by a municipal group-funded pool.
10 (f) "Insurer"
means any health insurance company, fraternal benefit
11 society, health maintenance organization,
nonprofit hospital and medical
12 service corporation, provider sponsored
organizations, municipal group-
13 funded pool and the self-funded coverage
established by the state of Kan-
14 sas for its employees.
15 Sec. 2. (a)
The provisions of this act shall not apply to any policy or
16 certificate which provides coverage for any
specified disease, specified
17 accident or accident only coverage, credit,
dental, disability income, hos-
18 pital indemnity, long-term care insurance
as defined by K.S.A. 40-227,
19 and amendments thereto, vision care or any
other limited supplemental
20 benefit nor to any medicare supplement
policy of insurance as defined
21 by the commissioner of insurance by rule
and regulation, coverage under
22 a plan through medicare, medicaid, or the
federal employees health ben-
23 efits program, any coverage issues as a
supplement to liability insurance,
24 workers compensation or similar insurance,
automobile medical-payment
25 insurance or any insurance under which
benefits are payable with or with-
26 out regard to fault, whether written on a
group, blanket or individual
27 basis.
28 (b) The right to
external review under this act shall not be construed
29 to change the terms of coverage under a
health insurance plan or insur-
30 ance policy.
31 (c) The insurer
or health insurance plan shall provide written notice
32 to the insured of a final adverse decision
and the opportunity for request-
33 ing an external review.
34 (d) The insured
has the right to request an independent external re-
35 view of an adverse decision by a health
insurance plan or insurer when:
36 (1) The insured has exhausted all available
internal review procedures
37 provided by the health insurance plan or
insurer, unless the insured has
38 an emergency medical condition, in which
case an expedited procedure
39 is used; or (2) the insured has not
received a final decision from the
40 insurer within 60 days of seeking the
internal review, except to the extent
41 that the delay was requested by the
insured.
42 (e) Within
180 90 days of receipt of an adverse
decision by a health
43 insurance plan or an insurer, any request
for external review shall be made
Sub. SB 80--Am. by H
3
1 in writing to the commissioner from
the following persons: (1) The in-
2 sured; (2) the treating physician or
health care provider acting on behalf
3 on the insured with written
authorization from the insured; or (3) a legally
4 authorized designee of the
insured.
5 (f) The
insured shall provide all information in the possession of the
6 insured pertaining to the adverse
decision in order for the commissioner
7 to make a preliminary determination
for an external review. The insured
8 also shall provide the commissioner
with an appeal form, and a fully ex-
9 ecuted release for the commissioner
and the external review organization
10 to obtain any necessary medical records
from the insurer or health in-
11 surance plan and any other relevant
provider.
12 (g) In responding
to the commissioner, the insurer or health insur-
13 ance plan shall provide a copy of the
adverse decision given to the insured
14 and all medical and other records
pertaining to the insured's claim within
15 five business days of the request of the
commissioner.
16 (h) The
confidentiality of any medical information submitted by the
17 insured, on behalf of the insured, insurer
or health insurance plan, shall
18 be maintained pursuant to applicable state
and federal laws.
19 Sec. 3. (a)
The commissioner shall:
20 (1) Negotiate
contracts with external review organizations which are
21 eligible to conduct independent review of
the adverse decision by a health
22 insurance plan or insurer;
23 (2) allow the
insurer or the health insurance plan, an insured or treat-
24 ing physician or health care provider
acting on behalf of the insured, or
25 legally authorized designee filing a
request for external review to provide
26 additional written information as may be
relevant for the commissioner
27 to make a final decision on whether the
request qualified for external
28 review;
29 (3) make a
decision on a request for external review within 10 busi-
30 ness days after receiving all necessary
information;
31 (4) notify the
insured and treating physician or health care provider
32 acting on behalf of the insured, or legally
authorized designee, and insurer
33 or health insurance plan in writing that a
request for external review will
34 or will not be granted; and
35 (5) design and
implement an expedited procedure for use in an emer-
36 gency medical condition for purposes of the
external review organization
37 rendering a decision.
38 (b) The external
review organization as defined in subsection (c) of
39 section 1, and amendments thereto, shall
provide that all reviews com-
40 pleted pursuant to this act are conducted
by qualified and credentialed
41 health care providers with respect to the
health care service under review
42 and who have no conflict of interest
relating to the performance of the
43 external review organization's duties in
this act.
Sub. SB 80--Am. by H
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1 (c) The
external review organization shall issue a written decision to
2 the insured and concurrently send a
copy of such decision to the com-
3 missioner including the basis and
rationale for its decision within 30 busi-
4 ness days. Each external
review shall be based on clinical criteria which
5 are generally accepted,
recognized and reasonable standards of practice
6 by prudent physicians or
other providers. The standard of review shall be
7 whether the health care
service denied by the insurer or health insurance
8 plan was, under the
insured's contract, medically necessary and
clinically
9 appropriate as to the
type, frequency, extent, site and duration. In any
10 external review regarding
experimental or investigational treatment, the
11 standard of review shall be
whether the health care service denied by the
12 insurer or health insurance plan
is approved by the food and drug ad-
13 ministration, is reimbursed by
medicare and such experimental or inves-
14 tigational treatment has at
least entered phase III trials of the national
15 institute of health
The standard of review shall be whether the
16 health care service denied by the
insurer or health insurance plan
17 was medically necessary under the terms
of the insured's contract.
18 In reviews regarding experimental or
investigational treatment,
19 the standard of review shall be whether
the health care service
20 denied by the insurer or health
insurance plan was covered or
21 excluded from coverage under the terms
of the insured's contract.
22 (d) The external
review organization shall provide expedited resolu-
23 tion when an emergency medical condition
exists, and shall resolve all
24 issues within seven business days.
25 (e) The external
review organization shall maintain and report such
26 data as may be required by the commissioner
in order to assess the ef-
27 fectiveness of the external review
process.
28 (f) No external
review organization nor any individual working on
29 behalf of such organization shall be liable
in damages to any insured,
30 health insurance plan or insurer for any
opinion rendered as part of an
31 external review conducted pursuant to this
act.
32 (g) The external
review organization shall maintain confidentiality of
33 the medical records of the insured in
accordance to state and federal law.
34 Sec. 4. (a)
The decision of the external review organization shall
be
35 binding as to payment or
provision of services on the health insurance
36 plan or insurer, except to the
extent the insured, insurer or health insur-
37 ance plan has other remedies
applicable under state or federal law. All
38 material used in an external
review and the decision of the external review
39 organization as a result of the
external review shall be deemed admissible
40 in any subsequent
litigation The decision of the external review
or-
41 ganization may be reviewed directly by
the district court at the
42 request of either the insured, insurer
or health insurance plan. The
43 review by the district court shall
be de novo. The decision of the
Sub. SB 80--Am. by H
5
1 external review organization shall
not preclude the insured, in-
2 surer or health insurance plan
from exercising other available
3 remedies applicable under state or
federal law. Seeking a review
4 by the district court or any other
available remedies exercised by
5 the insured, insurer or health
insurance plan after the decision of
6 the external review organization
will not stay the external review
7 organization's decision as to the
payment or provision of services
8 to be rendered during the pendency
of the review by the insurer
9 or health insurance plan. All
material used in an external review
10 and the decision of the external review
organization as a result of
11 the external review shall be deemed
admissible in any subsequent
12 litigation.
13 (b) In no event
shall more than one external review be available dur-
14 ing the same year for any request arising
out of the same set of facts. An
15 insured may not pursue, either concurrently
or sequentially, an external
16 review process under both a federal and
state law. In the event external
17 review processes are available pursuant to
federal law and this act, the
18 insured shall have the option of
designating which external review process
19 will be utilized.
20 (c) The
commissioner of insurance is hereby authorized to negotiate
21 and enter into contracts necessary to
perform the duties required by this
22 act.
23 (d) The
commissioner of insurance shall adopt rules and regulations
24 necessary to carry out the purposes of this
act. The rules and regulations
25 shall ensure that the commissioner is able
to provide for an effective and
26 efficient external review of health care
services.
27 Sec. 5. This act shall
take effect and be in force from and after Jan-
28 uary 1, 2000, and its publication in the
statute book.
29