Brief⁽¹⁾

Sub. for S.B. 80, as amended, enacts new law creating an external review process for insureds of any health insurance plan who receive an adverse decision that determines a proposed or delivered health care service is not or was not medically necessary or is determined to be experimental or investigational. The adverse decision must have resulted in the insured having a financial liability to a provider of those services or the decision was the reason the beneficiary did not receive the requested services in the first instance.

The bill:

• requires a health insurance plan to notify the insured of an adverse decision and of the insured's right to request that an external organization review that decision when all internal review procedures have been exhausted, or the insured has not received a decision from the insurance plan within 60 days of a request for an internal review;



• permits the insured, the insured's treating health care provider with the written authorization of the insured, or a legally authorized designee of the insured to request an external review within 90 days of receipt of an adverse decision;



• requires the insured to provide to the Insurance Commissioner:

• all necessary information pertaining to the adverse decision in order for the Commissioner to determine that the request meets the criteria for an external review, and



• with an appeal form and a fully executed release to obtain necessary medical records;





• requires the health insurance plan to provide a copy of the adverse decision and all medical and other records pertaining to the insured's claim within five business days of the request by the Commissioner;



• provides that all medical information submitted to the Commissioner and to the review organization shall be subject to state and federal confidentiality laws;



• requires the Commissioner:



• to make a decision on a request for review within ten business days after receiving all necessary information;



• to notify all parties in writing that a request will or will not be granted;



• to design and implement an expedited procedure for use in an emergency medical condition for the purposes of the external review organization rendering a decision (the external review organization must provide an expedited resolution of emergency medical conditions within seven business days); and



• to contract with external review organizations eligible to conduct independent reviews of adverse decisions;





• requires that all external reviews be conducted by qualified and credentialed health care providers with respect to the health care service under review and who have no conflict of interest related to the performance of their duties under this law;

• provides that, within 30 business days, a written decision of the review organization must be issued to the insured and the Commissioner, including the basis and rationale for the decision;



• stipulates that the review must be based on clinical criteria which are reasonable, generally accepted and recognized standards of practice by prudent physicians or other providers; and



• establishes as the standard of review whether the health care service denied was under the insured's contract medically necessary, or



• as regards experimental or investigational treatment, the standard is whether the service denied was covered or excluded from coverage under the terms of the insured's contract;





• permits the decision of the external review organization to be reviewed de novo directly by the district court at the request of either the insured or health insurance plan, however, seeking a judicial review will not stay the external review organization's decision as to the payment for or provision of services during the pendency of the review;



• deems all materials used in the external review and the decision of external review organization admissible in any subsequent litigation;



• relieves the external review organization and individuals working on behalf of the organization from liability in damages to any insured or health insurance plan for any opinion rendered under this law;



• limits the insured to one external review per year arising out of the same set of facts;



• allows the insured the option of selecting a review process under federal or state law, but the insured may not pursue a review process under both federal and state law; and



• authorizes the Commissioner to adopt rules and regulations necessary to carry out the purposes of the law.

Sub. for S.B. 80, as amended, becomes effective from and after January 1, 2000, and its publication in the statute book.

Background

Sub. for S.B. 80, as amended, was recommended by the Insurance Commissioner and supported by the Kansas Medical Society, the Kansas Psychiatric Society, the Kansas Association of Health Plans, Blue Cross Blue Shield of Kansas, and the Health Insurance Association of America.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html