Regular Session 2015-2016 House Bill 1657 P.N. 2918

PRINTER'S NO. 2918

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1657

Session of

2015

INTRODUCED BY QUINN, BAKER, BARBIN, CALTAGIRONE, P. COSTA, COX,

DAVIS, DIAMOND, FEE, FLYNN, GILLEN, GILLESPIE, GODSHALL,

PHILLIPS-HILL, JOZWIAK, KAUFER, KNOWLES, LONGIETTI,

MACKENZIE, MILLARD, B. MILLER, MURT, MUSTIO, O'BRIEN, PETRI,

READSHAW, REESE, ROZZI, SANTORA, SAYLOR, STURLA, THOMAS,

WARD, WATSON, YOUNGBLOOD, A. HARRIS AND EVERETT,

MARCH 10, 2016

REFERRED TO COMMITTEE ON HEALTH, MARCH 10, 2016

AN ACT

Providing for preauthorizations conducted by utilization review

entities relating to health care services.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Utilization

Review Entity Preauthorization Act.

Section 2. Declaration of policy.

The General Assembly finds and declares as follows:

(1) The physician-patient relationship is paramount and

should not be subject to third-party intrusion.

(2) Preauthorization programs should not be permitted to

hinder patient care or intrude on the practice of medicine.

(3) Preauthorization programs must include the use of

independently developed, evidence-based and, when necessary

or available, appropriate use criteria or written clinical

criteria.

(4) Preauthorization programs must include reviews by

appropriate physicians to ensure a fair process for patients.

Section 3. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Adverse determination." A decision by a utilization review

entity that:

(1) The health care services furnished or proposed to be

furnished to a subscriber are not medically necessary or are

experimental or investigational.

(2) Denies, reduces or terminates benefit coverage.

The term does not include a decision to deny, reduce or

terminate services which are not covered for reasons other than

their medical necessity or experimental or investigational

nature.

"Appeal." A formal request, either orally or in writing, to

reconsider a determination not to preauthorize a health care

service.

"Appeals procedure." A formal process that permits a

subscriber, attending physician or his designee, facility or

health care provider on a subscriber's behalf, to appeal an

adverse determination rendered by the utilization review entity

or its designee utilization review entity or agent.

"Appropriate use criteria." Criteria that:

(1) defines when and how often it is medically necessary

and appropriate to perform a specific test or procedure; and

(2) is derived from documents from professional

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societies that are evidence-based or, when evidence is

conflicting or lacking, from expert consensus panels and

which documents include published clinical guidelines for

appropriate use for the specific clinical scenario under

consideration.

"Authorization." A determination by a utilization review

entity that:

(1) a health care service has been reviewed and, based

on the information provided, satisfies the utilization review

entity's requirements for medical necessity and

appropriateness; and

(2) payment will be made for the health care service.

"Clinical criteria." The written policies, written screening

procedures, drug formularies or lists of covered drugs,

determination rules, determination abstracts, clinical

protocols, practice guidelines and medical protocols used by a

utilization review entity to determine the necessity and

appropriateness of health care services.

"Emergency health care services." Health care services that

are provided in a hospital emergency facility after the sudden

onset of a medical condition that manifests itself by symptoms

of sufficient severity, including severe pain, that the absence

of immediate medical attention could reasonably be expected by a

prudent layperson, who possesses an average knowledge of health

and medicine, to result in:

(1) placing the patient's health in serious jeopardy;

(2) serious impairment to bodily function; or

(3) serious dysfunction of a bodily organ or part.

"Expedited appeal." A formal request, either orally or in

writing, to reconsider an adverse determination not to authorize

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emergency health care services or urgent health care services.

"Final adverse determination." An adverse determination that

has been upheld by a utilization review entity at the completion

of the utilization review entity's appeals process.

"Health care service." Health care procedures, treatments or

services provided by or within:

(1) a facility licensed in this Commonwealth;

(2) a doctor of medicine or a doctor of osteopathy; or

(3) the scope of practice for which a health care

professional is licensed in this Commonwealth.

The term includes the provision of pharmaceutical products or

services or durable medical equipment.

"Medically necessary health care services." Health care

services that a prudent physician 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:

(1) in accordance with generally accepted standards of

medical practice;

(2) clinically appropriate in terms of type, frequency,

extent, site and duration; and

(3) not primarily for the economic benefit of the health

plans and purchasers or for the convenience of the patient,

treating physician or other health care provider.

"Preauthorization." The process by which a utilization

review entity determines the medical necessity or medical

appropriateness of otherwise covered health care services prior

to the rendering of the health care services including, but not

limited to, preadmission review, pretreatment review,

utilization and case management. The term includes a health

insurer's or utilization review entity's requirement that a

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subscriber or health care provider notify the health insurer or

utilization review agent prior to providing a health care

service.

"Retrospective review." The review of the medical necessity

and appropriateness of health care services provided to a

subscriber, the performance of which review occurs for the first

time subsequent to the completion of the health care services.

"Subscriber." An individual who is eligible to receive

health care benefits by a health insurer pursuant to a health

plan or other health insurance coverage. The term includes such

individual's legally authorized representative.

"Urgent health care service." A health care service with

respect to which the application of the time periods for making

a nonexpedited preauthorization, in the opinion of a physician

with knowledge of a subscriber's medical condition could:

(1) seriously jeopardize the life or health of the

subscriber or the ability of the subscriber to regain maximum

function; or

(2) subject the subscriber to severe pain that cannot be

adequately managed without the care or treatment that is the

subject of the utilization review.

"Utilization review entity." An individual or entity that

performs preauthorization for one or more of the following

entities:

(1) an employer with employees in this Commonwealth who

are covered under a health benefit plan or health insurance

policy;

(2) an insurer that writes health insurance policies;

(3) a preferred provider organization or health

maintenance organization; and

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(4) any other individual or entity that provides, offers

to provide or administers hospital, outpatient, medical or

other health benefits to an individual treated by a health

care provider in this Commonwealth under a policy, plan or

contract.

The term includes a health insurer if the health insurer

performs preauthorization.

Section 4. Basis, development and use.

(a) Electronic communications network required.--A

utilization review entity shall utilize an electronic

communications network that permits:

(1) Preauthorization requests to be submitted

electronically.

(2) Authorizations and adverse determinations to be

returned electronically.

(b) Preauthorization restrictions to be based on written

clinical criteria.--Any restrictions that a utilization review

entity places on the preauthorization of health care services

shall be:

(1) Based on the medical necessity or appropriateness of

those services and on written clinical criteria.

(2) Applied consistently.

to be based on written clinical criteria.--Adverse

determinations and final adverse determinations made by a

utilization review agent must be based on written clinical

criteria.

(d) Lack of evidence-based and expert consensus standards

not to be the sole basis of an adverse determination.--If no

independently developed, evidence-based standards derived from

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documents from professional societies, or when evidence-based

standards are conflicting or lacking from expert consensus

panels, exist for a particular health care item, treatment, test

or imaging procedure, the utilization review entity may not deny

coverage of the treatment, items, test or imaging procedure

based solely on the grounds that the item, treatment, test or

imaging procedure does not meet an evidence-based standard.

(e) The basis of clinical criteria and expert consensus.--

Written clinical criteria shall:

(1) Be based on nationally recognized standards.

(2) Be developed in accordance with the current

standards of national accreditation entities.

(3) Reflect community standards of care.

(4) Ensure quality of care and access to needed health

care services.

(5) Be evidence-based or based on generally accepted

expert consensus standards.

(6) Be sufficiently flexible to allow deviations from

norms when justified on case-by-case basis.

(7) Be evaluated and updated if necessary at least

annually.

(f) Preauthorization not required.--Preauthorization shall

not be required:

(1) where a medication or procedure prescribed for a

patient is customary and properly indicated or is a treatment

for the clinical indication as supported by peer-reviewed

medical publications; or

(2) for a patient currently managed with an established

treatment regimen.

Section 5. Mandatory disclosure and review of preauthorization

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requirements and restrictions.

(a) Disclosure.--A utilization review entity shall post to

its publicly accessible Internet website:

(i) A current list of services and supplies requiring

preauthorization.

(ii) Written clinical criteria for preauthorization

decisions.

(b) Specific notice to contracted health care providers.--If

a utilization review entity intends to implement a new

preauthorization requirement or restriction or to amend an

existing requirement or restriction, the utilization review

entity shall provide contracted health care providers of written

notice of the new or amended requirement or amendment not less

than 60 days before the requirement or restriction is

implemented.

Section 6. Personnel qualified to make preauthorizations and

adverse determinations.

A utilization review entity shall ensure that:

(1) Preauthorizations are made by a qualified licensed

health care professional.

(2) Adverse determinations are made by a physician. The

reviewing physician must possess a current and valid

nonrestricted license to practice medicine in this

Commonwealth.

Section 7. Utilization review entity duties in preauthorizations

or nonurgent circumstances.

(a) Deadline.--If a health insurer requires preauthorization

of a health care item, service, test or imaging procedure, the

utilization review entity shall make a preauthorization or

adverse determination and notify the subscriber and the

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subscriber's health care provider within two business days of

obtaining all necessary information to make the preauthorization

or adverse determination.

(b) Requirements specific to notices of preauthorization.--

Notifications of preauthorizations shall be accompanied by a

unique preauthorization number and indicate:

(1) The specific health care services preauthorized.

(2) The next date for review.

(3) The total number of days approved.

(4) The date of admission or initiation of services, if

applicable.

utilization review entity nor the payer or health insurer that

has retained the utilization review entity may retroactively

deny coverage for emergency or nonemergency care that had been

preauthorized when it was provided, if the information provided

was accurate.

(d) Consultation prior to issuing an adverse

determination.--

(1) If a utilization review entity questions the medical

necessity of a health care service, the utilization review

entity shall notify the subscriber's physician that medical

necessity is being questioned prior to issuing an adverse

determination.

(2) The subscriber's physician or the subscriber's

designee shall have the right to discuss the medical

necessity of the health care service with the utilization

review physician.

Section 8. Utilization review entity duties relating to urgent

health care services.

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(a) Deadline.--A utilization review entity shall render a

preauthorization or adverse determination concerning urgent care

services and notify the subscriber's physician of the

preauthorization or adverse determination, not later than one

business day after receiving all information needed to complete

the review of the requested health care services.

(b) Availability of physician rendering adverse

determination to subscriber's attending physician.--

(1) If a utilization review entity questions the medical

necessity of an urgent health care service, the utilization

review entity shall notify the subscriber's physician that

medical necessity is being questioned.

(2) Prior to issuing an adverse determination, the

utilization review physician shall be available to discuss

the medical necessity of the urgent health care services with

the subscriber's physician or the subscriber's designee.

Section 9. Utilization review entity duties concerning emergency

health care services.

(a) A utilization review entity cannot require

preauthorization.--No utilization review entity may require

preauthorization for pre-hospital transportation or treatment

for emergency health care services, including postevaluation and

poststabilization services.

(b) Restrictions concerning time limits within which

notification of inpatient admissions may be required.--A

utilization review entity shall allow a subscriber and the

subscriber's health care provider a minimum of one business day

following an emergency admission, service or procedure to notify

the utilization review entity of the admission, service or

procedure.

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Section 10. Notifications of adverse determinations.

Written notice of adverse determinations shall be provided to

the subscriber and the subscriber's health care provider which

shall include instructions concerning how an appeal may be

performed.

Section 11. Reviews of appeals.

(a) Expedited appeals.--

(1) A subscriber or the subscriber's health care

provider may request an expedited appeal of an adverse

determination via telephone, facsimile, electronic mail or

the most expeditious method.

(2) Within one business day of receiving an expedited

appeal and all information necessary to decide the appeal,

the utilization review entity shall provide the subscriber

and the subscriber's health care provider written

confirmation of the expedited review determination.

(b) Physicians to review appeals.--An appeal shall be

reviewed only by a physician who is:

(1) Board certified in the same specialty as a health

care provider who typically manages the medical condition or

disease.

(2) Currently in active practice in the same specialty

as the health care provider who typically manages the medical

condition or disease.

(3) Knowledgeable of and has experience providing the

health care services under appeal.

(4) Not employed by a utilization review entity, under

contract with the utilization review entity, other than to

participate in one or more of the utilization review entity's

health care provider networks or to perform reviews of

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appeals, or otherwise have any financial interest in the

outcome of the appeal.

(5) Not involved in making the adverse determination.

(6) Familiar with all known clinical aspects of the

health care services under review, including, but not limited

to, all pertinent medical records provided to the

utilization review entity by the subscriber's health care

provider and any relevant records provided to the utilization

review entity by a health care facility.

that appeal procedures satisfy the following requirements:

(1) (i) The subscriber and the subscriber's health care

provider may challenge the adverse determination and have

the right to appear in person before the physician who

reviews the adverse determination.

(ii) The utilization review entity shall provide the

subscriber and the subscriber's health care provider with

written notice of the time and place concerning where the

review meeting will take place. Notice shall be given to

the subscriber's health care provider at least 15

business days in advance of the review meeting.

(iii) If the subscriber or health care provider

cannot appear in person, the utilization review entity

shall offer the subscriber or health care provider the

opportunity to communicate with the reviewing physician,

at the utilization review entity's expense, by conference

call, video conferencing or other available technology.

(2) The physician performing the review of the appeal

shall consider all information, documentation or other

material submitted in connection with the appeal without

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regard to whether the information was considered in making

the adverse determination.

(d) Deadlines.--

(1) A utilization review entity shall decide an

expedited appeal and notify the subscriber and health care

provider of the determination within one business day after

receiving a notice of expedited appeal by the subscriber and

health care provider and all information necessary to decide

the appeal.

(2) A utilization review entity shall issue a written

determination concerning a nonexpedited appeal not later than

20 days after receiving a notice of appeal from a subscriber

or health care provider and all information necessary to

decide the appeal.

(e) Notifications of final adverse determinations.--Written

notice of final adverse determinations shall be provided to the

subscriber and the subscriber's health care provider.

Section 12. Continuation of coverage pending conclusion of the

appeal procedure.

If the appeal of an adverse determination concerns ongoing

health care services that are being provided pursuant to an

initially authorized admission or course of treatment, the

health care services shall be continued without liability to the

subscriber or the subscriber's health care provider until:

(1) The subscriber and the subscriber's health care

provider received a notice of final adverse determination

satisfying the requirements of a determination under section

(11)(e).

(2) The subscriber and the subscriber's health care

provider receive notice of a decision reached by an external

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review concerning the medical necessity of the health care

services that were the subject of the final adverse

determination, if the subscriber or the subscriber's health

care provider appeal a final adverse determination to an

external review proceeding.

Section 13. Limitation on requests for medical records.

When performing preauthorization, a utilization review agent

may only request copies of medical records when a difficulty

develops in determining the medical necessity or appropriateness

of a health care service. In that case, the utilization review

agent may only request the necessary and relevant sections of

the medical record.

Section 14. Preauthorization by secondary payers.

In the event that a subscriber is covered by more than one

health plan that requires preauthorization, the following

provisions shall apply:

(1) The primary health plan may require the subscriber

to comply with the primary health plan's preauthorization

requirements.

(2) If the secondary payer also requires

preauthorization of the health care services, the secondary

payer may not refuse payment for those health care services

solely on the basis that the secondary payer did not

preauthorize the health care services.

Section 15. No cost to the subscriber or the subscriber's

health care provider.

An appeal of an adverse determination or external review of a

final adverse determination shall be provided without charge to

the subscriber or health care provider.

Section 16. Effect of noncompliance.

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Failure by a utilization review entity to comply with the

deadlines and other requirements specified in this act shall

result in any health care services subject to review to be

deemed preauthorized.

Section 17. Uniform preauthorization form.

(a) Panel to be convened.--Within three months of the

effective date of this section, the Insurance Department shall

convene a panel. The panel shall develop a uniform

preauthorization form that all health care providers in this

Commonwealth shall use to request preauthorization and that all

health insurers shall accept as sufficient to request

preauthorization of health care services.

(b) Membership of panel.--The panel shall consist of not

fewer than 10 persons. Equal representation shall be afforded to

the physician, health care facility, employer, health insurer

and consumer protection communities within this Commonwealth.

date of this section, the panel shall conclude development of

the uniform preauthorization form and the Insurance Department

shall make the uniform preauthorization form available to health

care providers in this Commonwealth and utilization review

agents.

Section 18. Exemption.

(a) Preauthorization.--When appropriate use criteria exists

for a particular health care service, the health care service

shall be exempt from preauthorization if the provision of the

health care service comports with applicable appropriate use

criteria.

(b) Retrospective review.--A health care service that has

been provided in accordance with applicable appropriate use

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criteria shall not be subject to retrospective review.

Section 19. Effective date.

This act shall take effect in 60 days.

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