Bill Text: IA SSB1161 | 2017-2018 | 87th General Assembly | Introduced

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Bill Title: A bill for an act relating to prior authorization by a utilization review entity for coverage of health care services and including applicability provisions.

Spectrum: Committee Bill

Status: (N/A - Dead) 2017-02-23 - Subcommittee: Shipley, C. Johnson, and Ragan. [SSB1161 Detail]

Download: Iowa-2017-SSB1161-Introduced.html

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Senate Study Bill 1161 - Introduced
SENATE FILE _____
BY (PROPOSED COMMITTEE ON
HUMAN RESOURCES BILL BY
CHAIRPERSON SEGEBART)
A BILL FOR
An Act relating to prior authorization by a utilization review
entity for coverage of health care services and including
applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. NEW SECTION . 514F.7 Prior authorization.
1. Definitions. For purposes of this section:
a. (1) “Adverse determination” means a determination by
a utilization review entity that an admission, availability
of care, continued stay, or other health care service, other
than a dental care service, that is a covered benefit has been
reviewed and, based upon the information provided, does not
meet the utilization review entity’s requirements for medical
necessity, appropriateness, health care setting, level of care,
or effectiveness, and the requested service or payment for the
service is therefore denied, reduced, or terminated.
(2) For the purposes of denial of a dental care service,
“adverse determination” means a determination by a utilization
review entity that a dental care service that is a covered
benefit has been reviewed and, based upon the information
provided, does not meet the utilization review entity’s
requirements for medical necessity, and the requested service
or payment for the service is therefore denied, reduced, or
terminated in whole or in part.
(3) “Adverse determination” does not include a denial of
coverage for a service or treatment specifically listed in plan
or evidence of coverage documents as excluded from coverage.
b. “Authorization” means a determination by a utilization
review entity that a requested health care service has been
reviewed and, based upon the information provided, meets the
utilization review entity’s requirements for medical necessity,
appropriateness, health care setting, level of care, or
effectiveness, and that payment will be made for the requested
service.
c. “Clinical review criteria” means the written policies,
screening procedures, drug formularies or lists of covered
drugs, determination rules, determination abstracts, clinical
protocols, practice guidelines, medical protocols, and any
other criteria or rationale used by a utilization review entity
to determine the necessity and appropriateness of health care
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services.
d. “Covered person” means a policyholder, subscriber,
enrollee, or other individual participating in a health benefit
plan. “Covered person” includes a covered person’s legally
authorized representative.
e. “Dental care services” means diagnostic, preventive,
maintenance, and therapeutic dental care that is provided in
accordance with chapter 153.
f. “Emergency health care services” means health care items
and services furnished or required to evaluate and treat an
emergency medical condition.
g. “Emergency medical condition” means the sudden and, at
the time, unexpected onset of a health condition or illness
that manifests itself by symptoms of sufficient severity,
including but not limited to severe pain, that an ordinarily
prudent person, possessing an average knowledge of health and
medicine, could reasonably expect the absence of immediate
medical attention to result in a serious impairment to bodily
functions, serious dysfunction of a bodily organ or part, or
would place the person’s health in serious jeopardy.
h. “Facility” means an institution providing health care
services or a health care setting, including but not limited
to hospitals and other licensed inpatient centers, ambulatory
surgical or treatment centers, skilled nursing centers,
residential treatment centers, diagnostic, laboratory and
imaging centers, and rehabilitation and other therapeutic
health settings.
i. “Health benefit plan” means a policy, contract,
certificate, or agreement offered or issued by a health carrier
to provide, deliver, arrange for, pay for, or reimburse any of
the costs of health care services.
j. “Health care professional” means a physician or other
health care practitioner licensed, accredited, registered, or
certified to perform specified health care services consistent
with state law.
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k. “Health care provider” or “provider” means a health care
professional or a facility.
l. “Health care services” means services for the diagnosis,
prevention, treatment, cure, or relief of a health condition,
illness, injury, or disease provided by a health care provider.
“Health care services” includes dental care services and the
provision of pharmaceutical products or services or durable
medical equipment.
m. “Health carrier” means an entity subject to the
insurance laws and regulations of this state, or subject
to the jurisdiction of the commissioner, including an
insurance company offering sickness and accident plans, a
health maintenance organization, a nonprofit health service
corporation, a plan established pursuant to chapter 509A
for public employees, or any other entity providing a plan
of health insurance, health care benefits, or health care
services. “Health carrier” includes, for purposes of this
section, an organized delivery system.
n. “Medically necessary health care services” means
health care services and supplies that a prudent health care
provider would provide to a covered person for the purpose
of preventing, diagnosing, or treating a health condition,
illness, injury, or disease, or the symptoms of an illness,
injury, or disease in a manner that is all of the following:
(1) In accordance with generally accepted standards of
medical practice.
(2) Clinically appropriate in terms of type, frequency,
extent, site, and duration.
(3) Not primarily for the economic benefit of the health
benefit plan or health care provider or for the convenience of
the covered person or the health care provider.
o. “Organized delivery system” means an entity system
authorized under 1993 Iowa Acts, ch. 158, and licensed by the
director of public health, and performing utilization review.
p. “Prior authorization” means the process by which a
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utilization review entity determines the medical necessity
or medical appropriateness of otherwise covered health care
services prior to the rendering of such health care services
including but not limited to preadmission review, pretreatment
review, utilization, and case management. “Prior authorization”
includes a utilization review entity’s requirement that a
covered person or health care provider notify the utilization
review entity prior to receiving or providing a health care
service.
q. “Urgent health care service” means a health care service
subject to prior authorization prescribed for a covered
person, for which the time periods for making a nonexpedited
prior authorization, could, in the opinion of a health care
professional with knowledge of the covered person’s medical
condition, do either of the following:
(1) Seriously jeopardize the life or health of the covered
person or the ability of the covered person to regain maximum
function.
(2) Subject the covered person to severe pain that cannot be
adequately managed without the health care service that is the
subject of prior authorization.
r. (1) “Utilization review entity” means an individual or
entity that performs prior authorization for one or more of the
following entities:
(a) An employer with employees in Iowa who are covered under
a health benefit plan.
(b) A health carrier.
(c) Any individual or entity that provides, offers to
provide, or administers hospital, outpatient, medical, or other
health care services.
(2) “Utilization review entity” includes a health carrier
that performs prior authorization for its own health benefit
plans.
2. Prior authorization requirements and restrictions ——
disclosure.
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a. A utilization review entity shall make any current prior
authorization requirements or restrictions, including clinical
review criteria, readily accessible on the entity’s internet
site to covered persons, health care providers, and the general
public. The restrictions and requirements shall be described
in detail but in easily understandable language.
b. A utilization review entity shall not implement a new or
amended prior authorization requirement or restriction until
the utilization review entity has done both of the following:
(1) Updated the utilization review entity’s internet site
to reflect the new or amended requirement or restriction.
(2) Provided written notice of the new or amended
requirement or restriction not less than sixty calendar
days before the new or amended requirement or restriction is
implemented to health care providers contracted to provide
health care services pursuant to a health benefit plan to which
the prior authorization requirement or restriction applies.
c. A utilization review entity shall make statistics
available on the entity’s internet site in a readily accessible
format that indicate how prior authorization is applied on the
basis of each of the following:
(1) Specialty of the health professional.
(2) Type of health care service requested.
(3) The clinical indication offered for requesting a health
care service.
(4) Reason for denial of prior authorization.
3. Utilization review entity’s obligations with respect to
prior authorization.
a. If a utilization review entity requires prior
authorization for coverage of a nonurgent health care service,
the entity shall either give prior authorization covering the
nonurgent health care service or make an adverse determination
denying coverage of the nonurgent health care service within
five calendar days of obtaining all necessary information
to give authorization or make an adverse determination. A
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contractual timeline may vary from this standard but in no
event shall the timeline for giving authorization or making an
adverse determination for coverage of a nonurgent health care
service exceed five calendar days.
b. If a utilization review entity requires prior
authorization for coverage of an urgent health care service,
the entity shall either give prior authorization covering the
urgent health care service or make an adverse determination
denying coverage of the urgent health care service and notify
the covered person and the covered person’s health care
provider of that authorization or denial within seventy-two
hours of obtaining all necessary information to give
authorization or make an adverse determination. A contractual
timeline may vary from this standard but in no event shall
the timeline for giving authorization or making an adverse
determination for coverage of an urgent health care service
exceed seventy-two hours.
c. For purposes of this subsection, “necessary information”
includes the results of a face-to-face clinical evaluation or
second opinion that may be required.
4. Utilization review entity’s obligations with respect to
coverage of emergency health care services.
a. A utilization review entity shall not require prior
authorization for emergency transportation to a hospital or for
the provision of emergency health care services.
b. A utilization review entity shall allow a covered person
and the covered person’s health care provider a minimum of
twenty-four hours following an emergency hospital admission
or the provision of emergency health care services to the
covered person, to notify the utilization review entity of
the emergency hospital admission or provision of emergency
health care services. If the emergency hospital admission or
provision of emergency health care services occurs on a holiday
or weekend, the utilization review entity shall not require
such notification until the next business day after the holiday
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or weekend.
c. A utilization review entity shall authorize coverage
of emergency health care services necessary to screen and
stabilize a covered person. If a health care provider
certifies in writing to a utilization review entity within
seventy-two hours of a covered person’s admission to a hospital
that the covered person’s condition required emergency
health care services, that certification shall create a
presumption that the emergency health care services were
medically necessary and such presumption may be rebutted only
if the utilization review entity can establish, by clear and
convincing evidence, that the emergency health care services
provided were not medically necessary.
d. A determination of the medical necessity or
appropriateness of emergency health care services provided to
a covered person shall not be based on whether or not those
services were provided by a health care provider under contract
to provide health care services pursuant to a health benefit
plan. Requirements or restrictions on coverage of emergency
health care services provided by health care providers not
under contract to provide services pursuant to a health benefit
plan shall not be greater than requirements or restrictions
that apply when those services are provided by a health care
provider under contract to provide such services pursuant to
the health benefit plan.
e. If a covered person receives emergency health
care services that require immediate postevaluation or
poststabilization health care services, a utilization review
entity shall give prior authorization or make an adverse
determination within sixty minutes of receiving a request for
prior authorization. If the utilization review entity does not
give authorization for or deny coverage of the postevaluation
or poststabilization health care services within sixty minutes
of receiving the request, coverage of such services shall be
deemed to be authorized.
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5. Retrospective denial. A utilization review entity shall
not revoke, limit, condition, or restrict prior authorization
after the date on which a health care provider provides the
health care services for which authorization was received. Any
language that attempts to disclaim payment for health care
services that have received prior authorization shall be null
and void.
6. Duration. A prior authorization shall be valid for
not less than one year from the date a health care provider
receives the prior authorization.
7. Expedited renewal. A utilization review entity shall
develop an expedited process for the renewal of an existing
prior authorization including a certification that the factors
constituting medical necessity or medical appropriateness
of the health care services for which renewal of prior
authorization is sought remain unchanged from the factors
that were considered before issuance of the original prior
authorization.
8. Administrative services fees.
a. A utilization review entity shall establish an
administrative services fee schedule for prior authorization
determinations, consistent with the federal Medicare
resource-based relative value scale methodology used to
reimburse health care professionals for medical reports. The
fee schedule shall be utilized by the utilization review
entity to determine the amount of payments to health care
professionals who complete administrative services required by
the utilization review entity as a condition of giving prior
authorization or making an adverse determination.
b. For the purpose of this subsection, “administrative
services” includes but is not limited to peer-to-peer
clinical consultations or second opinions, and completion of
certification documentation. “Administrative services” does not
include those services rendered by a health care professional
in the provision of health care services to a covered person.
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9. Failure to comply with this section. Upon the failure
of a utilization review entity to comply with deadlines or
other requirements specified in this section, any health care
services subject to prior authorization shall be deemed to be
automatically preauthorized.
10. Severability. If any provision of this section or the
application of this section to any person or circumstance is
held invalid, such invalidity shall not affect other provisions
or applications of the section which can be given effect
without the invalid provision or application.
Sec. 2. APPLICABILITY. This Act applies to a health benefit
plan that is delivered, issued for delivery, continued, or
renewed in this state on or after January 1, 2018.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to prior authorization of health
care services by a utilization review entity and includes
applicability provisions.
The bill provides that a utilization review entity that
requires prior authorization for coverage of health care
services must make its prior authorization requirements or
restrictions readily accessible on its internet site. The
entity cannot implement new or amended prior authorization
requirements or restrictions until its internet site has been
updated and health care providers contracted to provide the
health care services to which the requirements or restrictions
apply have been given not less than 60 calendar days’ written
notice of the changes. A utilization review entity must make
specified statistics about application of prior authorization
available on its internet site.
If prior authorization is required for coverage of a
nonurgent health care service, a utilization review entity
must either give prior authorization to cover the service or
make an adverse determination denying such coverage within
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five calendar days of obtaining all necessary information.
If prior authorization is required for coverage of an urgent
health care service, a utilization review entity must give
prior authorization to cover the service or make an adverse
determination denying such coverage within 72 hours of
obtaining all necessary information. For purposes of the bill,
“necessary information” includes the results of a face-to-face
clinical evaluation or second opinion that may be required.
A utilization review entity cannot require prior
authorization for emergency transportation to a hospital or for
the provision of emergency health care services. A utilization
review entity must allow a person covered by a health benefit
plan and the person’s health care provider a minimum of 24
hours to notify the entity following an emergency hospital
admission or the provision of emergency health care services,
on the next business day if the admission or provision of
services occurs on a holiday or weekend.
A utilization review entity shall authorize coverage
of emergency health care services necessary to screen and
stabilize a covered person. If a health care provider
certifies in writing to a utilization review entity within
72 hours of a covered person’s admission to a hospital that
the covered person’s condition required emergency health care
services, that certification shall create a presumption that
the emergency health care services were medically necessary and
such presumption may be rebutted only if the utilization review
entity can establish, by clear and convincing evidence, that
the emergency health care services provided were not medically
necessary.
A determination of the medical necessity or appropriateness
of emergency health care services provided to a covered person
cannot be based on whether or not those services were provided
by a health care provider under contract to provide health care
services pursuant to a health benefit plan. Requirements or
restrictions on coverage of emergency health care services
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provided by health care providers not under contract to
provide services pursuant to a health benefit plan cannot be
greater than restrictions or requirements that apply when those
services are provided by a health care provider under contract
to provide such services pursuant to the health benefit plan.
If a covered person receives emergency health care services
that require immediate postevaluation or poststabilization
health care services, a utilization review entity shall give
authorization or make an adverse determination within 60
minutes of receiving a request for prior authorization, and if
the entity does not authorize or deny coverage of the health
care services within that time, coverage of such services is
deemed to be authorized.
A utilization review entity cannot revoke, limit, condition,
or restrict a prior authorization after the date on which a
health care provider provides the health care services for
which authorization was received. Any language that attempts
to disclaim payment for health care services that have received
prior authorization is null and void.
A prior authorization is valid for not less than one year
from the date a health care provider receives the prior
authorization. A utilization review entity shall develop
an expedited process for the renewal of an existing prior
authorization including a certification that the factors
constituting medical necessity or medical appropriateness of
the health care services for which the renewal is sought remain
unchanged from the factors that were considered before issuance
of the original prior authorization.
A utilization review entity is required to establish an
administrative services fee schedule for prior authorization
determinations, consistent with the federal Medicare
resource-based relative value scale methodology used to
reimburse health care professionals for medical reports. The
fee schedule shall be utilized by the utilization review
entity to determine the amount of payments to health care
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professionals who complete administrative services required
by the utilization review entity as a condition of making
a prior authorization determination. “Administrative
services” includes but is not limited to peer-to-peer
clinical consultations or second opinions, and completion
of certification documentation. “Administrative services”
does not include those services rendered by a health care
professional in the provision of health care services to a
covered person.
If a utilization review entity fails to comply with
deadlines or other requirements of the bill, any health care
services subject to prior authorization are deemed to be
automatically preauthorized.
The provisions of the bill are severable and if any provision
or application of a provision is held invalid, the other
provisions or applications can be given effect without the
invalid provision or application.
The provisions of the bill are applicable to a health benefit
plan that is delivered, issued for delivery, continued, or
renewed in this state on or after January 1, 2018.
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