Delaware General Assembly

AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE RELATING TO HEALTH CARE ORGANIZATIONS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

(a) There is established the Independent Health Care Appeals Program in the Department of Health & Social Services. The program will include, at a minimum, a final step in the grievance process which provides for a review by an Independent Utilization Review Organization, hereafter referred to as ‘I.U.R.O.’, as specified in regulations promulgated by the Department pursuant to the authority granted in Section 9110 of Title 16 of the Delaware Code. The purpose of the program is to provide an independent medical necessity or appropriateness of services review of final decisions of carriers to deny, reduce or terminate benefits in the event the final decision is contested by the covered person. For the purpose of this act, ‘medical necessity’ means, the providing of covered health care services or products that a prudent physician would provide to a patient for the purpose of 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. Consistent with the symptoms or treatment of the condition; and

3. Not solely for anyone’s convenience.

The appeal review shall include any decisions regarding covered benefits by the covered person’s health benefits plan, and any determination by the I.U.R.O. shall be binding on the health carriers. If the I.U.R.O. makes a determination in favor of the carrier, it will give rise to a rebuttable presumption to that effect in any subsequent action brought by or on behalf of the covered person with respect to the decision. Should the determination favor the covered person, the health carrier shall have the ability to appeal the issue to Superior Court. The outcome of that appeal shall have no effect on the determination already made by the IURO. In any such instance in which an appeal is taken to the Superior Court, that Court shall, upon receiving notice of the appeal, appoint an independent attorney to defend the determination from which the appeal is taken. The expenses of the appeal to the Superior Court, including the assessment of attorney fees for the attorney appointed by the Court, shall be assessed by the Court against the health carrier. This act will affect ‘health carriers,’ defined as any entity subject to insurance laws and regulations of the state. For the purpose of this act, ‘health carriers’ shall be treated as ‘Managed Care Organizations’ as defined in Section 9102 of Title 16 of the Delaware Code.

(b) A covered person may apply to the Independent Health Care Appeals Program for a review of any decision to deny, reduce or terminate covered benefits if the person has already completed the carrier’s internal appeals process and the person contests the final decision by the carrier. Within sixty days of the date the final decision was issued by the carrier, a covered person or the covered person’s authorized representative may file a request for an external review with the health carrier. Upon receipt of a request for an external review, the health carrier shall send a copy of the request to the Department.

(c) The Department shall, at the time of the receipt of the request for an external review, assign an independent utilization review organization (IURO) from the list of certified IUROs pursuant to §9120 (a) of this Title and shall so inform the health carrier. The IURO shall notify the covered person or the covered person’s authorized representative in writing that they have been assigned to conduct an external review. Included in the notice shall be a statement that the covered person or the covered person’s authorized representative may submit additional information and supporting documentation that the IURO shall consider when conducting the external review. Such additional information must be submitted within seven days of receipt of the notification.

(d) Within seven calendar days after the date on which the health carrier receives notice of the IURO assigned, the health carrier shall provide to the assigned IURO all documents and information utilized in making the final decision to deny, reduce or terminate benefits, as well as the final written decision from the Stage 2 internal appeal.

§9120. Appeal Reviews; independent utilization review organizations.

(a) The Secretary shall certify such organizations that meet the requirements of this act or regulations to be promulgated pursuant to it or shall deem certified any independent review entity meeting standards developed for this purpose by an independent, national accrediting organization. The Department will contract these I.U.R.O.

(b) The Secretary shall appoint an I.U.R.O. on a rotating basis to hear each appeal. The carrier shall be responsible for all costs associated with the appeal regardless of the final ruling, and shall reimburse the Department within 90 days of a final decision for the expenses related to the appeal process. In addition, upon the written request of an MCO, the Secretary shall have the discretion to appoint an I.U.R.O. to conduct a preliminary review to determine if an appeal is clearly without merit. The cost of the preliminary review shall be borne by the MCO.

(c) Regulations promulgated under this section shall include the following requirements:

1. Expert reviewers assigned by independent review organizations must be physicians or other appropriate health care practitioners who meet the following minimum requirements:

a. Expert in the treatment of the covered person’s medical condition, and knowledgeable about the recommended service or treatment through recent or current actual clinical experience treating patients with the same or similar medical conditions of the covered person.

b. Hold a non-restricted license in a state of the United States, and for physicians, a current certification by a recognized American medical specialty board in the area(s) appropriate to the subject of review;

c. Have no history of disciplinary action or sanctions (including but not limited to, loss of staff privileges or participation restrictions) taken or pending by any hospital, government or regulatory body.

22. The independent review organization shall submit to the department the following information:

3a. The names of all stockholders and owners of more than five per cent of any stock or options, if a publicly held organization.

4b. The names of all entities the independent review organization controls or is affiliated with, including the nature and extent of any ownership or control, including the affiliated organization’s type of business.

5c. The names of all directors, officers and executives of the independent review organization, as well as a statement regarding any relationships the directors, officers and executives may have with any health care service plan, disability insurer, managed care organization, provider group or board or committee.

3. Neither the expert reviewer, nor the independent review organization, has any material professional, familial, or financial conflict of interest with any of the following:

a. The plan.

b. Any officer, director or management of the plan.

c. The physician, the physician’s medical group or the independent practice association proposing the service or treatment.

d. The institution at which the service or treatment would be provided.

e. The development or manufacture of the principal drug, device, procedure or other therapy proposed for the covered person whose treatment is under review.

f. The covered person.

g. National, state or local trade association of health benefit plans or health care providers.

4. The independent review organization shall have a quality assurance mechanism in place that ensures the timeliness and quality of the reviews, the qualifications and independence of the experts; and the confidentiality of the medical records and review materials.

a. The Secretary shall establish procedures for transmitting the completed application for an appeal review to the independent review entity.

b. The independent review entity shall promptly review the pertinent medical records of the covered person to determine whether the carrier’s denial, reduction or termination of benefits deprived the covered person of medically necessary services covered by the person’s health benefits plan, based on applicable, generally accepted practice guidelines developed by the federal government, national or professional medical practice societies, boards or associations and any applicable clinical protocols or practice guidelines developed by the carrier. The organization shall complete its review and make its written determination within 45 days of receipt of a completed application for an appeal review. In no event shall appeals involving an imminent, emergent or serious threat to the health of the enrollee, as determined by the treating health care practitioner, exceed 72 hours. Upon completion of the review, the entity shall state its findings in writing and make a determination of whether the carrier’s denial, reduction or termination of benefits deprived the covered person of medically necessary services covered by the person’s health benefits plan. If the organization determines that the denial, reduction or termination of benefits deprived the person of medically necessary covered services, it shall send a determination to the covered person and the carrier. The determination shall be binding on the carrier and the carrier shall promptly notify the person what action it intends to take to implement the determination.

c. Coverage for the services required under this section shall be provided subject to the terms and conditions generally applicable to benefits under coverage under the plan. Nothing in this section shall be construed to require the plan to pay for services of a non-participating physician, that are not otherwise covered pursuant to the evidence of coverage under the plan.

d. The Secretary shall require the independent review organization to establish procedures to provide for an expedited review of a carrier’s denial, reduction or termination of a benefit decision when a delay in receipt of the services could seriously jeopardize the health or well being of the covered person.

e. The covered person’s medical records provided to the program and the independent utilization review organization and the findings and recommendations of the organization made pursuant to this act are confidential and shall be used only by the Department, the organization and the affected carrier for the purposes of this act. The medical records and findings and determinations shall not otherwise be divulged or made public so as to disclose the identity of any person to whom they relate and shall not be included under any materials available to public inspection pursuant to Chapter 100 of Title 29 of the Delaware Code.

f. A carrier may at any time determine to provide the requested medical services by so notifying the organization or the Secretary, as well as the covered person which notification shall terminate the review process. Reviews so terminated will be reported separately as required in §9122 (a) of this Title. The cost of a partial review by an I.U.R.O. shall be borne by the carrier.

(a) An employee of the Department who participates in the program shall not be liable in any action for damages to any person for any action taken within the scope of his function in the program. The Attorney General shall defend the person in any civi1 suit and the State shall provide indemnification for any damages awarded.

(b) The carrier that is the subject of the review shall not be liable in any action for damages to any person for any action taken to implement a determination of the independent review organization pursuant to this act.

(c) Any physician serving on the I.U.R.O. chosen by the Secretary to hear an appeal shall not be liable in any action for damages to any person for any action taken within the scope of his/her function in the program.

(a) The Secretary shall report annually to the Senate and the General Assembly standing Committees on health and insurance on the status of the program. The report shall include a summary of the number of reviews conducted and medical specialties affected, a summary of the findings and determinations made by the independent review organizations, the number of coverage decisions voluntarily changed by the carrier while involved in the review, and any other information and recommendations deemed appropriate by the Secretary.

(a) A carrier that violates any provision of this chapter shall be liable to a civil penalty of not less than $250 and not greater than $10,000 for each day that the carrier is in violation of the chapter if ten days notice in writing is given of the intent to levy the penalty and, at the discretion of the Secretary, the carrier has 30 days, or such additional time as the Secretary shall determine to be reasonable, to remedy the condition which gave rise to the violation and fails to do so within the time allowed.

(b) The Secretary may issue an order directing a carrier or a representative of a carrier to cease and desist from engaging in any act or practice in violation of the provisions of this act.

(c) Within 20 days after service of the order of cease and desist, the respondent may request a hearing on the question of whether acts or practices in violation of this act have occurred. The hearing shall be conducted pursuant to the ‘Administrative Procedure Act,’ and judicial review shall be available as provided therein. This appeal shall not stay the cease and desist order.

(d) In the case of any violation of the provisions of this Chapter, if the Secretary elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued pursuant to subsection (b) of this section, the Secretary may institute a proceeding to obtain injunctive relief in accordance with the applicable Court Rules.

(a) The Secretary shall enforce the provisions of this act. Within six months of the effective date of this Chapter, the Secretary shall adopt rules and regulations, pursuant to the ‘Administrative Procedure Act,’ necessary to carry out the purposes of this act. The regulations shall establish procedures for protections defined in this act.”

Approved July 18, 2000