Insurance, Administration

Rule R590-203

Health Grievance Review Process and Disability Claims

Notice of Proposed Rule

(Amendment)

DAR File No.: 34768
Filed: 05/02/2011 06:14:04 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the amendment is to incorporate changes as a result of adoption of a new appeals procedure for health benefit plans. The appeals process for health benefit plans is changing due to H.B. 128 during the 2011 General Session, and to adopt a review process that insurers are required to follow as a result of the Patient Protection and Affordability Act. Due to this change, the grievance review procedures for health benefit plans will differ from those currently required for health care insurance. To preserve the process for health care policies other than a health benefit plan this rule is being revised to exclude health benefit plans, and a new rule, R590-261, is being adopted for health benefit plans. Additionally, the rule was reviewed and items identified for change including: adding a definition for urgent care claim and carrier; and updating the reference of insurer to carrier. (DAR NOTE: H.B. 128 is effective as of 05/10/2011. The proposed new Rule R590-261 is under DAR No. 34770 in this issue, May 15, 2011, of the Bulletin.)

Summary of the rule or change:

To preserve the process for health care policies other than a health benefit plan, this rule is being revised to exclude health benefit plans, and a new rule, R590-261, is being adopted for health benefit plans. The changes to this rule include: adding a definition for urgent care claim and carrier; and updating the reference of insurer to carrier.

State statutory or constitutional authorization for this rule:

• Section 31A-22-629
• Section 31A-4-116
• Section 31A-2-203
• Section 31A-2-201

Anticipated cost or savings to:

the state budget:

The changes to this rule will have no effect on the department or state's budget or revenues, nor will it impact the workload of employees of the department.

local governments:

Local government will not be affected since the rule relates solely to the relationship between the department and its licensees and the insureds of the insurer.

small businesses:

The changes to this rule should have no fiscal impact on any entity associated with this rule, including small or large businesses insurers or their licensees. Health benefit plans are being excluded from the rule, definitions are being changed and the reference to carriers is being changed to insurers.

persons other than small businesses, businesses, or local governmental entities:

The changes to this rule should have no fiscal impact on any entity associated with this rule, including small or large businesses insurers or their licensees. Health benefit plans are being excluded from the rule, definitions are being changed and the reference to carriers is being changed to insurers.

Compliance costs for affected persons:

The changes to this rule should have no fiscal impact on any entity associated with this rule, including small or large insurers or their insureds. Health benefit plans are being excluded from the rule, definitions are being changed and the reference to carriers is being changed to insurers.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule will have no fiscal impact on businesses.

Neal T. Gooch, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

06/14/2011

Interested persons may attend a public hearing regarding this rule:

• 06/09/2011 09:00 AM, State Office Building, 450 N State Street, Room 3112, Salt Lake City, UT

This rule may become effective on:

06/21/2011

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-203. Health Grievance Review Process[ and Disability Claims].

R590-203-1. Authority.

This rule is specifically authorized by Subsections 31A-22-629(4) and 31A-4-116, which requires the commissioner to establish minimum standards for grievance review procedures. The rule is also promulgated pursuant to Subsections 31A-2-201(1) and 31A-2-201(3)(a) in which the commissioner is empowered to administer and enforce this title and to make rules to implement the provisions of this title. The authority to examine [insurer]carrier records, files, and documentation is provided by Section 31A-2-203.

 

R590-203-2. Purpose.

The purpose of this rule is to ensure that [insurer's]a carrier's grievance review procedures for individual and group health insurance and disability income [replacement] plans comply with [the Department of Labor, Pension and Welfare Benefits Administration Rules and Regulations for Administration and Enforcement: Claims Procedure,] 29 CFR 2560.503-1, and [Utah Code] Sections 31A-4-116 and 31A-22-629.

 

R590-203-3. Applicability and Scope.

(1) [Except as provided in R590-203-3.(3), this] This rule applies to individual and group:

(a) [policies issued or renewed and effective on or after January 1, 2001]health care insurance;

(b) disability income [replacement] policies;[

(i) including short-term,] and

[ (ii) long-term disability policies;

] (c) [health insurance; and

(d)] health maintenance organization contracts.

(2) Long Term Care and Medicare supplement policies are not considered health insurance for the purpose of this rule.

(3) [Income replacement, short-term and long-term disability]Disability income policies[,] are exempt from R590-203-6.

(4) This rule does not apply to a health benefit plan that complies with R590-261, Health Benefit Plan Adverse Benefit Determinations.

 

R590-203-4. Definitions.

[For]In addition to the definitions in Section 31A-1-301, the following definitions shall apply for the purposes of this rule:

(1)(a) "Adverse benefit determination" means the:

(i) denial of a benefit;

(ii) reduction of a benefit;

(iii) termination of a benefit; or

(iv) failure to provide or make payment, in whole or in part, for a benefit.

(b) "Adverse benefit determination" includes:

(i) denial, reduction, termination, or failure to provide or make payment that is based on a determination of an insured's eligibility to participate in a plan;

(ii) a denial, reduction, or termination of, or a failure to provide or make payment, in whole or in part, for, a benefit resulting from the application of a utilization review;

(iii) failure to cover an item or service for which benefits are otherwise provided because it is determined to be:

(A) experimental;

(B) investigational; or

(C) not a medical necessity or appropriate.

(2) "Carrier" means any person or entity that provides health insurance in this state including:

(a) an insurance company;

(b) a prepaid hospital or medical care plan;

(c) a health maintenance organization;

(d) a multiple employer welfare arrangement; and

(e) any other person or entity providing a health insurance plan under Title 31A.

([1]3) "Consumer Representative" may be an employee of the [insurer]carrier who is a consumer of a health insurance or a[n] disability income [replacement] policy, as long as the employee is not:

(a) the individual who made the adverse determination; or

(b) a subordinate to the individual who made the adverse determination.

[ (2) "Health Insurance" means a contract of:

(a) health care insurance as defined in 31A-1-301; and

(b) health maintenance organization as defined in 31A-8-101.

] ([3]4) "Medical Necessity" means:

(a) health care services or products that a prudent health care professional would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is:

(i) in accordance with generally accepted standards of medical practice in the United States;

(ii) clinically appropriate in terms of type, frequency, extent, site, and duration;

(iii) not primarily for the convenience of the patient, physician, or other health care provider; and

(iv) covered under the contract; and

(b) that when a medical question-of-fact exists medical necessity shall include the most appropriate available supply or level of service for the individual in question, considering potential benefits and harms to the individual, and known to be effective.

(i) For interventions not yet in widespread use, the effectiveness shall be based on scientific evidence.

(ii) For established interventions, the effectiveness shall be based on:

(A) scientific evidence;

(B) professional standards; and

(C) expert opinion.

([4]5)(a) "Scientific evidence" means:

(i) scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff; or

(ii) findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes.

(b) Scientific evidence shall not include published peer-reviewed literature sponsored to a significant extent by a pharmaceutical manufacturing company or medical device manufacturer or a single study without other supportable studies.

(6)(a) "Urgent care claim" means a request for a health care service or course of treatment with respect to which the time periods for making non-urgent care request determination:

(i) could seriously jeopardize the life or health of the insured or the ability of the insured to regain maximum function; or

(ii) in the opinion of a physician with knowledge of the insured's medical condition, would subject the insured to severe pain that cannot be adequately managed without the health care service or treatment that is the subject of the request.

(b)(i) Except as provided in Subsection (6)(a)(ii), in determining whether a request is to be treated as an urgent care request, an individual acting on behalf of the carrier shall apply the judgment of a prudent layperson who possesses an average knowledge of health and medicine.

(ii) Any request that a physician with knowledge of the insured's medical condition determines is an urgent care request within the meaning of Subsection (6)(a) shall be treated as an urgent care claim.

 

R590-203-5. Adverse Benefit Determination.

(1) A[n insurer's]carrier's adverse benefit determination review procedure shall be compliant with the adverse benefit determination review requirements set forth in [the Department of Labor, Pension and Welfare Benefits Administration Rules and Regulations for Administration and Enforcement: Claims Procedure,] 29 CFR 2560.503-1, effective January 20, 2001. This document is incorporated by reference and available for inspection at the Insurance Department[ and the Department of Administrative Rules].

(2) [The provision of this rule and federal regulation applies to claims filed under individual or group plans on or after the first day of the first plan year beginning on or after July 1, 2002, but no later than January 1, 2003.

(3)] A[n insurer's]carrier's adverse benefit determination appeal board or body shall include at least one consumer representative that shall be present at every meeting.

 

R590-203-6. Independent and Expedited Adverse Benefit Determination Reviews for Health Insurance.

(1) A[n insurer]carrier shall provide an independent review procedure as a voluntary option for the resolution of adverse benefit determinations[ of medical necessity].

(2) An independent review procedure shall be conducted by an independent review organization, person, or entity other than the [insurer]carrier, the plan, the plan's fiduciary, the employer, or any employee or agent of any of the foregoing, that do not have any material professional, familial, or financial conflict of interest with the health plan, any officer, director, or management employee of the health plan, the enrollee, the enrollee's health care provider, the provider's medical group or independent practice association, the health care facility where service would be provided and the developer or manufacturer of the service being provided.

(3) Independent review organizations shall be designated by the [insurer]carrier, and the independent review organization chosen shall not own or control, be a subsidiary of, or in any way be owned or controlled by, or exercise control with a health insurance plan, a national, state, or local trade association of health insurance plans, and a national, state, or local trade association of health care providers.

(4) The submission to an independent review procedure is purely voluntary and left to the discretion of the claimant.

(5) A[n insurer's]carrier's voluntary independent review procedure shall:

(a) waive any right to assert that a claimant has failed to exhaust administrative remedies because the claimant did not elect to submit a dispute of medical necessity to a voluntary level of appeal provided by the plan;

(b) agree that any statute of limitations or other defense based on timeliness is tolled during the time a voluntary appeal is pending;

(c) allow a claimant to submit a dispute of medical necessity to a voluntary level of appeal only after exhaustion of the appeals permitted under 29 CFR Subsection 2560.503-1(c)(2)[, of the Department of Labor, Pension and Welfare Benefits Administration Rules and Regulations for the Administration and Enforcement: Claims Procedure];

(d) upon request from any claimant, provide sufficient information relating to the voluntary level of appeal to enable the claimant to make an informed decision about whether to submit a dispute of medical necessity to the voluntary level of appeal. This information shall contain a statement that the decision to use a voluntary level of appeal will not effect the claimant's rights to any other benefits under the plan and information about the applicable rules, the claimant's right to representation, and the process for selecting the decision maker.

(e) An independent review conducted in compliance with Section 31A-22-629, and this rule, can be binding on both parties. A claimant's submission to a binding independent review is purely voluntary and appropriate disclosure and notification must be given as required by [the Department of Labor, Pension and Welfare Benefits Administration Rules and Regulations for Administration and Enforcement: Claims Procedure,] 29 CFR 2560.503-1.

(6) Standards for voluntary independent review:

(a) The [insurer's]carrier's internal adverse benefit determination process must be exhausted unless the [insurer]carrier and [insured]claimant mutually agree to waive the internal process.

(b) Any adverse benefit determination of medical necessity may be the subject of an independent review.

(c) The claimant has 180 calendar days from the date of the final internal review decision to request an independent review.

(d) A[n insurer]carrier shall use the same minimum standards and times of notification requirement for an independent review that are used for internal levels of review, as set forth in 29 CFR Subsection 2560.503-1(h)(3), (i)(2) and (j).

(7) A[n insurer]carrier shall provide an expedited review process for cases involving urgent care claims.

(8) A request for an expedited review of an adverse benefit determination of medical necessity may be submitted either orally or in writing. If the request is made orally a[n insurer]carrier shall, within 24 hours, send written confirmation to the claimant acknowledging the receipt of the request for an expedited review.

(9) An expedited review requires:

(a) all necessary information, including the plan's original benefit determination, be transmitted between the plan and the claimant by telephone, facsimile, or other available similarly expeditious method;

(b) a[n insurer]carrier to notify the claimant of the benefit review determination, as soon as possible, taking into account the medical urgency, but not later than 72 hours after receipt of the claimant's request for review of an adverse benefit determination; and

(c) a[n insurer]carrier to use the same minimum standard for timing and notification as set forth in 29 CFR Subsection 2560.503-1(h), 503-1(i)(2)(i), and 503-1(j).

(10) This section, R590-203-6, does not apply to disability income [replacement] policies[, short term disability policies or long term disability policies].

 

R590-203-7. Disability Income [Replacement, Short-Term and Long-Term Disability, ]Adverse Benefit Determination Review.

(1) A[n insurer] carrier will notify a claimant of the benefit determination within 45 days of receipt of the claimant's request for review of an adverse benefit determination.

(2) The time period for making a determination on review may be extended for up to 45 days when necessary due to matters beyond the control of the [insurer]carrier.

(3) If the time period is extended due to the claimant's failure to submit information necessary to decide a claim, the time period for making the benefit determination on review shall be tolled from the date on which the notification of the extension is sent until the date on which the claimant responds to the request for additional information.

(4) Upon request, relevant information , free-of-charge, must be provided to the [insured]claimant on any adverse benefit determination.

 

R590-203-8. File and Record Documentation.

A[n insurer]carrier [selling health insurance or income replacement insurance, including short-term disability and long-term disability,] shall :

(1) make available upon request by the commissioner[, or the commissioner's duly appointed designees,] all adverse benefit determination review files and related documentation[.]; and

(2) [An insurer] shall [keep]maintain these records for the current calendar year plus five years.

 

R590-203-9. [Compliance.

(1) Insurers are to be compliant with the provisions of this rule and the Department of Labor, Pension and Welfare Benefits Administration Rules and Regulations for Administration and Enforcement: Claims Procedure, 29 CFR 2560.503-1, by July 1, 2002.

(2) The clarification changes made for income replacement and short-term and long-term disability policies are effective on the date these rule changes take effect.

 

R590-203-10.] Relationship to Federal Rules.

If a[n insurer]carrier complies with the requirements of [the Department of Labor, Pension and Welfare Benefits Administration Rules and Regulations for Administration and Enforcement: Claims Procedure,] 29 CFR 2560.503-1, then this rule is not applicable to employer plans, except for Sections 4, 5, 6, 7, and 8 of this rule. All individual plans will remain subject to this rule in its entirety.

 

R590-203-[11.]10. Enforcement Date.

The commissioner shall begin enforcing the provisions of this rule July 1, 2011.

 

R590-203-11. Severability.

If a provision or clause of this rule or its application to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of these provisions shall not be affected.

 

KEY: insurance

Date of Enactment or Last Substantive Amendment: [December 28, 2005]2011

Notice of Continuation: April 17, 2007

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-2-203; 31A-4-116; 31A-22-629