DELAWARE STATE SENATE

141st GENERAL ASSEMBLY

AN ACT TO AMEND TITLES 16 AND 18 OF THE DELAWARE CODE RELATING TO HEALTH INSURANCE.

WHEREAS Delaware statute, unlike the statutes of many other states, does not require health insurance policies to permit reasonable referrals to specialists at the recommendation of an insured’s primary care physician; and

WHEREAS Delaware statute does not expressly require health insurance policies to provide for necessary emergency room services; and

WHEREAS Delaware statute does not require health insurance policies to cover accepted prescription drugs which are recommended by a patient’s physician but not listed on the insurance company’s list of pre-approved drugs; and

WHEREAS necessary referrals, emergency room care, and necessary prescription drugs are critical to the provision of adequate health care to persons who receive medical care under Delaware health insurance policies; and

WHEREAS current law in Delaware does not require health insurers to offer quick, internal appeals of benefit denials; and

WHEREAS Delaware patients have been unfairly denied coverage for medically necessary and otherwise covered routine patient care costs incurred while participating in important and established clinical trials; and

WHEREAS Senate Bill No. 299, enacted during the 140^th General Assembly, provides for the prompt and efficient resolution of health insurance coverage disputes involving medical necessity determinations and other medical issues, but does not provide an efficient mechanism for resolving disputes involving non-medical issues:

NOW THEREFORE:

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

Section 1. This Act shall be referred to as the "Delaware Patient’s Bill of Rights".

Section 2. Amend Title 16, § 9119 of the Delaware Code by adding thereto after subsection (c), new subsections (d) through (f), to read as follows:

1. For cases in which a denial, reduction, or termination of benefits should be reviewed by both an IURO and by the Department of Insurance, or where there is ambiguity as to where the review should be conducted, the review shall be conducted by an IURO pursuant to this Section.
2. The Department of Insurance shall refer any appeals that are incorrectly filed with it to the Department of Health and Social Services, where such appeals shall be treated as timely if they were filed with the Department of Insurance within the time restraints imposed by Title 18, Section 332 of the Delaware Code. The Department of Health and Social Services shall forward any appeals that are incorrectly filed with it to the Department of Insurance and appeals that are incorrectly filed with the Department of Health and Social Services shall be treated as timely filed if they were filed within the time constraints imposed by Title 16, Section 9119 of the Delaware Code."

Section 3. Amend Title 18, Section 102 of the Delaware Code by adding after subsection (10) a new subsection (11), to read as follows:

Section 4. Amend Title 18 of the Delaware Code by deleting § 332 in its entirety and by replacing it with the following:

"§ 332. Arbitration of disputes involving health insurance coverage.

1. 'Adverse determination' means a benefit denial, reduction, or termination, a denial of certification, or both.
2. 'Benefit denial' means the denial, in whole or in part, of payment or reimbursement for health care services rendered or health care supplies provided to any person claiming benefits under an insurance policy delivered or issued for delivery in Delaware.
3. 'Carrier' in this section shall have the same meaning applied to it at 18 Del.C. §3343(a)(1).
4. 'Covered person' means a person who claims to be entitled to receive benefits from a carrier.
5. 'Denial of certification' means a determination that an admission or continued stay, or course of treatment, or other covered health care service does not satisfy the insurance policy’s clinical requirements for appropriateness, necessity, health care setting and/or level of care.
6. 'Emergency review' means an IRP review involving an imminent, emergent, or serious threat to the health of the claimant.
7. 'Health plan' shall have the same meaning as 'health benefit plan' as defined at 18 Del.C. §3343(a)(2).
8. 'Insurance policy' shall have the meaning assigned to it at 18 Del.C. §2702, and shall also include all health plans and policies for the payment for, provision of, or reimbursement for medical services, supplies or both issued by insurers, health services corporations or managed care organizations.
9. 'Internal review process' or 'IRP' means the procedure for an internal review of an adverse determination pursuant to subsection (b) of this section.

1. Every carrier shall establish and maintain an IRP approved by the Insurance Commissioner.
2. The Insurance Commissioner shall approve those IRPs that meet the following minimum criteria:

1. Written notice. The IRP must provide for written notice of the internal review procedure to covered persons, annually and following any adverse determination;
2. Requests for review of adverse determinations. The IRP must permit covered persons to submit requests for internal reviews of adverse determinations ('grievances') orally or in writing. Grievances must be submitted within 30 days of receipt by the covered person of written notice of an adverse determination. The carrier must provide written forms for submission of grievances. Upon receipt of an oral grievance or a written grievance that does not contain sufficient information, the carrier must immediately provide the covered person with a written form upon which to make his grievance, and the carrier may require that an oral or insufficient written grievance be submitted in writing within ten days of the covered person’s receipt of the written form. A grievance shall be considered as received by the carrier when a written form, which the covered person purports to be complete, is received by the carrier.
3. Instructions on written form. The written form referred to in subparagraph (c)(2) of this section shall inform the covered person of the information necessary to pursue an internal grievance of an adverse decision.
4. Prompt response to written grievances. The IRP shall provide that within five business days of receipt of a written grievance, the carrier shall provide written acknowledgement of the grievance, including the name, address, and telephone number of the individual or department designated by the carrier to respond to the grievance.
5. Speedy review of grievances. That IRP shall require that all grievances be decided in an expeditious manner, and in any event, no more than (i) forty-eight hours after the receipt of all necessary information relating to an emergency review, (ii) thirty days after the receipt of all necessary information in the case of requests for referrals or determinations concerning whether a requested benefit is covered pursuant to the contract, and (iii) forty-five days after the receipt of all necessary information in all other instances. A grievance shall be considered decided when the carrier has made its final decision on the subject of the review and has deposited written notice of that decision in the mail, in accordance with subsections (7) and (8) below.
6. Assignment of qualified personnel. The IRP shall provide that when the subject of the grievance relates to medical or clinical matters, including medical necessity and appropriateness of treatment, the health carrier shall assign licensed, certified, or registered health care personnel with expertise in the field implicated by the request for review to conduct the review. The review shall be conducted by personnel other than those who made the initial adverse determination.
7. Written notice of decisions. The IRP shall provide that within five days after a grievance is decided in the manner described above, the insured shall be provided with written notice of the disposition of that grievance. In cases where the grievance has been decided in a manner that does not pay the claim in its entirety, the carrier shall provide the insured with a letter fully stating the reasons for the disposition (including specific policy language relied upon and any other documents relied upon), and the clinical rationale for the determination in cases where the determination has a clinical basis. The carrier’s written notice shall also inform the insured of the appropriate manner for the insured to pursue an external review of the carrier’s decision. Finally, the carrier’s written notice shall inform the insured of the mediation services offered by the Department of Insurance, but shall clearly inform the insured in layman’s terms that mediation does not change the deadlines imposed by 16 Del.C. § 9119 or 18 Del.C. § 332. The Department of Insurance shall inform any person with rights under 16 Del.C. § 9119 or 18 Del.C. § 332 of those rights.
8. Manner of notice of decisions. Written notice of the review decision shall be deposited in the mail, addressed to the last known address of the covered person. In the case of emergency reviews, the carrier shall also make reasonable efforts to notify the covered person immediately following the determination of the grievance and the written notice of determination shall be deposited in the mail, addressed to the last known address of the claimant, within 48 hours after the receipt of all information necessary to complete the review.

3. Every carrier shall submit a report on its internal review process on an annual basis to the Insurance Commissioner in accordance with regulations established by the Department.
4. With respect to adverse determinations that are subject to review by the Department of Insurance pursuant to 16 Del.C. § 9119(d), the Insurance Commissioner shall develop regulations providing for arbitration of such adverse determinations. Such regulations shall contain the following provisions:

1. Requests for arbitration shall be in writing and mailed to the Commissioner within 60 days of the receipt of the written statement referred to in subsection (c)(7) of this section.
2. Arbitrators shall be chosen from an appropriate panel of arbitrators, and hearings shall be conducted according to rules established by the Department of Insurance.
3. The arbitrator shall review written arbitration requests prior to holding any hearing or allowing any exchange of information between the parties, in order to determine whether a written arbitration request is meritless on its face, and may summarily dismiss meritless requests for arbitration.
4. Neither party shall be held to have waived any of its rights to seek relief in a court of law with respect to a covered person’s legal rights to benefits by an act relating to arbitration or the rendering of an arbitration decision.
5. Arbitration decisions shall be rendered within 45 days of the Commissioner’s receipt of an arbitration request.

1. The Insurance Commissioner shall establish a schedule of fees for arbitration. Fees chargeable to covered persons shall not exceed $75 per arbitration. The carrier shall be responsible for all costs of arbitration which exceed this fee regardless of the final ruling, and shall reimburse the Commissioner for the expenses related to the arbitration process. Funds paid to the Insurance Commissioner under this subsection shall be placed in the arbitration fund and shall be used exclusively for the payment of appointed arbitrators. The Insurance Commissioner may, in her discretion, impose a schedule of maximum fees that can be charged by an arbitrator for a given type of arbitration.
2. If the arbitrator makes a decision in favor of the carrier, that decision shall 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 decision favor the covered person the carrier shall have the right to appeal the matter to the Court, in accordance with Court rules. The outcome of that appeal, however, shall have no effect on the covered person, as to whom the decision of the arbitrator shall control. The assignment of counsel for an appeal by the carrier and the payment of expenses of that assigned counsel shall be as set forth in 16 Del.C. § 9119(a).
3. Nothing in this section shall be construed to affect policies or contracts to the extent that those policies or contracts are exempt from state regulation under federal law or regulation, nor shall anything in this section be read to restrict any affirmative rights granted to patients or insureds under any other provision of the Delaware Code or the common law of the State of Delaware.
4. Notwithstanding any other language in the Delaware Code, the Department of Health and Social Services shall have the authority to carry out all duties assigned to it by this Section."

Section 5. Amend Title 18, Chapter 33 of the Delaware Code by adding a new §3347, to read as follows:

"§ 3347. Referrals.

1. This section applies to every policy or contract of health insurance which is delivered or issued for delivery in this state, including each policy or contract issued by a health service corporation, and which designates network physicians or providers or preferred physicians or providers (hereinafter referred to collectively as 'network providers').
2. All individual and group health insurance policies shall provide that if medically necessary covered services are not available through network providers, or the network providers are not available within a reasonable period of time, the insurer, on the request of a network provider, within a reasonable period, shall allow referral to a non-network physician or provider and shall reimburse the non-network physician or provider at a previously agreed-upon or negotiated rate. In such circumstances, the non-network physician or provider may not balance bill the insured. Such a referral shall not be refused by the insurer absent a decision by a physician in the same or a similar specialty as the physician to whom a referral is sought that the referral is not reasonably related to the provision of medically necessary services.
3. All individual and group health insurance policies which do not allow insureds to have direct access to health care specialists shall establish and implement a procedure by which insureds can obtain a standing referral to a health care specialist.
4. The procedure established under subsection (c) of this section:

1. Shall provide for a standing referral to a specialist if the insured’s network provider determines that the insured needs continuing care from the specialist; and
2. May require the insurer’s approval of an initial treatment plan designed by the specialist containing (i) a limit on the number of visits to the specialist, (ii) a time limit on the duration of the referral, and (iii) mandatory updates on the insured’s condition. Such approval shall not be withheld absent a decision by a qualified physician that the treatment sought in the treatment plan is not reasonably related to the appropriate treatment of the insured’s condition.
3. Within the treatment period referred to in subsection (d)(2) of this section, the specialist shall be permitted to treat the insured without a further referral from the insured’s network provider and may authorize such further referrals, procedures, tests, and other medical services as the individual’s network provider would otherwise be permitted to provide or authorize.
4. Referrals, procedures, tests, and other medical services referred to in this subsection (d) shall be provided by network providers unless such services are not available through network providers, or the network providers are not available within a reasonable period of time. If services are not available through network providers, or the network providers are not available within a reasonable period of time, the out-of-network provider shall be reimbursed at an agreed-upon or negotiated rate. In such circumstances, the non-network provider may not balance bill the insured.

1. Nothing in this Section shall prevent the operation of policy provisions involving deductibles or co-payments."

1. This section applies to every policy or contract of health insurance, including each policy or contract issued by a health service corporation, which is delivered or issued for delivery in this state, and which designates network physicians or providers or preferred physicians or providers (hereinafter referred to collectively as 'network providers'). However, this section applies only to conditions for which coverage is provided by those policies or contracts.
2. All individual and group health insurance policies shall provide that persons covered under those policies will be insured for emergency care services performed by non-network providers at an agreed-upon or negotiated rate, regardless of whether the physician or provider furnishing the services has a contractual or other arrangement with the insurer to provide items or services to persons covered under the policies. In the event that the provider of emergency services and the insurer cannot agree upon the appropriate rate, the provider shall be entitled to those charges and rates allowed by the Insurance Commissioner or her designee following an arbitration of the dispute. The Insurance Commissioner shall adopt regulations concerning the arbitration of such disputes.
3. Plans described in subsections (a) and (b) of this section shall cover:

1. any medical screening examination or other evaluation medically required to determine whether an emergency medical condition exists;
2. necessary emergency care services, including treatment and stabilization of an emergency medical condition; and
3. services originated in a hospital emergency facility or comparable facility following treatment or stabilization of an emergency medical condition as approved by the insurer with respect to services performed by non-network providers, provided that the insurer is required to approve or disapprove coverage of poststabilization care as requested by a treating physician or provider within the time appropriate to the circumstances relating to the delivery of services and the condition of the patient, but in no case to exceed one hour from the time of the request.

4. Nothing in this Section shall prevent the operation of policy provisions involving deductibles or co-payments. As used in this section 'emergency medical condition' means a medical or behavioral condition, the onset of which is sudden, that manifests itself by symptoms of sufficient severity, including, but not limited to, severe pain, that a prudent layperson, possessing an average knowledge of medicine and health, could reasonably expect the absence of immediate medical attention to result in (a) placing the health of the person afflicted with such condition in serious jeopardy, or in the case of a behavioral condition, placing the health of such person or others in serious jeopardy; (b) serious impairment to such person’s bodily functions, (c) serious impairment or dysfunction of any bodily organ or part of such person, or (d) serious disfigurement of such person."

Section 7. Amend Title 18, Chapter 33 of the Delaware Code by adding a new §3349, to read as follows:

"§3349. Prescription Medication.

1. This section applies to every policy or contract of health insurance, including each policy or contract issued by a health service corporation, which is delivered or issued for delivery in this state and which provides coverage for outpatient prescription drugs.
2. Every policy or contract of health insurance described in subsection (a) shall provide coverage for any outpatient drug prescribed to treat a covered person for a covered chronic, disabling, or life-threatening illness if the drug:

1. has been approved by the Food and Drug administration for at least one indication; and
2. is recognized for treatment of the indication for which the drug is prescribed in:

1. a prescription drug reference compendium approved by the Insurance Commissioner for purposes of this section, or
2. substantially accepted peer reviewed medical literature.

3. Coverage of a drug required by this section shall include coverage of medically necessary services associated with administration of the drug.
4. This section does not require coverage for:

1. experimental drugs not otherwise approved for the proposed use or indication by the Food and Drug Administration, or
2. any disease, condition, service, or treatment that is excluded from coverage under the policy.

5. Nothing in this Section shall prevent the operation of policy provisions involving deductibles, co-insurance, allowable charge limitations, maximum dollar policy limitations, or coordination of benefits."

Section 8. Amend Title 18, Chapter 35 of the Delaware Code by adding a new §3559D, to read as follows:

"§3559D. Referrals.

1. This section applies to every group or blanket policy or contract of health insurance, including each policy or contract issued by a health service corporation, which is delivered or issued for delivery in this state, and which designates network physicians or providers or preferred physicians or providers (hereinafter referred to collectively as 'network providers').
2. All individual and group health insurance policies shall provide that if medically necessary covered services are not available through network providers, or the network providers are not available within a reasonable period of time, the insurer, on the request of a network provider, within a reasonable period, shall allow referral to a non-network physician or provider and shall reimburse the non-network physician or provider at a previously agreed-upon or negotiated rate. In such circumstances, the non-network physician or provider may not balance bill the insured. Such a referral shall not be refused by the insurer absent a decision by a physician in the same or a similar specialty as the physician to whom a referral is sought that the referral is not reasonably related to the provision of medically necessary services.
3. All individual and group health insurance policies which do not allow insureds to have direct access to health care specialists shall establish and implement a procedure by which insureds can obtain a standing referral to a health care specialist.
4. The procedure established under subsection (c) of this section:

1. Shall provide for a standing referral to a specialist if the insured’s network provider determines that the insured needs continuing care from the specialist; and
2. May require the insurer’s approval of an initial treatment plan designed by the specialist containing (i) a limit on the number of visits to the specialist, (ii) a time limit on the duration of the referral, and (iii) mandatory updates on the insured’s condition. Such approval shall not be withheld absent a decision by a qualified physician that the treatment sought in the treatment plan is not reasonably related to the appropriate treatment of the insured’s condition.
3. Within the treatment period referred to in subsection (d)(2) of this section, the specialist shall be permitted to treat the insured without a further referral from the insured’s network provider and may authorize such further referrals, procedures, tests, and other medical services as the individual’s network provider would otherwise be permitted to provide or authorize.
4. Referrals, procedures, tests, and other medical services referred to in this subsection (d) shall be provided by network providers unless such services are not available through network providers, or the network providers are not available within a reasonable period of time. If services are not available through network providers, or the network providers are not available within a reasonable period of time, the out-of-network provider shall be reimbursed at an agreed-upon or negotiated rate. In such circumstances, the non-network provider may not balance bill the insured.

1. Nothing in this Section shall prevent the operation of policy provisions involving deductibles or co-payments."

Section 9. Amend Title 18, Chapter 35 of the Delaware Code by adding a new §3559E, to read as follows:

"§3559E. Emergency Care.

1. This section applies to every group or blanket policy or contract of health insurance, including each policy or contract issued by a health service corporation, which is delivered or issued for delivery in this state, and which designates network physicians or providers or preferred physicians or providers (hereinafter referred to collectively as 'network providers'). However, this section applies only to conditions for which coverage is provided by those policies or contracts.
2. All individual and group health insurance policies shall provide that persons covered under those policies will be insured for emergency care services performed by non-network providers at an agreed-upon or negotiated rate, regardless of whether the physician or provider furnishing the services has a contractual or other arrangement with the insurer to provide items or services to persons covered under the policies. In the event that the provider of emergency services and the insurer cannot agree upon the appropriate rate, the provider shall be entitled to those charges and rates allowed by the Insurance Commissioner or her designee following an arbitration of the dispute. The Insurance Commissioner shall adopt regulations concerning the arbitration of such disputes. In such circumstances, the non-network provider may not balance bill the insured.
3. Plans described in subsections (a) and (b) of this section shall cover:

1. any medical screening examination or other evaluation medically required to determine whether an emergency medical condition exists;
2. necessary emergency care services, including treatment and stabilization of an emergency medical condition; and
3. services originated in a hospital emergency facility or comparable facility following treatment or stabilization of an emergency medical condition as approved by the insurer with respect to services performed by non-network providers, provided that the insurer is required to approve or disapprove coverage of poststabilization care as requested by a treating physician or provider within the time appropriate to the circumstances relating to the delivery of services and the condition of the patient, but in no case to exceed one hour from the time of the request.

1. Nothing in this Section shall prevent the operation of policy provisions involving deductibles or co-payments. As used in this section 'emergency medical condition' means a medical or behavioral condition, the onset of which is sudden, that manifests itself by symptoms of sufficient severity, including, but not limited to, severe pain, that a prudent layperson, possessing an average knowledge of medicine and health, could reasonably expect the absence of immediate medical attention to result in (a) placing the health of the person afflicted with such condition in serious jeopardy, or in the case of a behavioral condition, placing the health of such person or others in serious jeopardy; (b) serious impairment to such person’s bodily functions, (c) serious impairment or dysfunction of any bodily organ or part of such person, or (d) serious disfigurement of such person."

Section 10. Amend Title 18, Chapter 35 of the Delaware Code by adding a new §3559F, to read as follows:

"§3559F. Prescription Medication.

1. This section applies to every group or blanket policy or contract of health insurance, including each policy or contract issued by a health service corporation, which is delivered or issued for delivery in this state and which provides coverage for outpatient prescription drugs.
2. Every group or blanket policy or contract of health insurance described in subsection (a) shall provide coverage for any outpatient drug prescribed to treat a covered person for a covered chronic, disabling, or life-threatening illness if the drug:

1. has been approved by the Food and Drug administration for at least one indication; and
2. is recognized for treatment of the indication for which the drug is prescribed in:

1. a prescription drug reference compendium approved by the Insurance Commissioner for purposes of this section, or
2. substantially accepted peer reviewed medical literature.

3. Coverage of a drug required by this section shall include coverage of medically necessary services associated with administration of the drug.
4. This section does not require coverage for:

1. experimental drugs not otherwise approved for the proposed use or indication by the Food and Drug Administration, or
2. any disease, condition, service or treatment that is excluded from coverage under the policy.

5. Nothing in this Section shall prevent the operation of policy provisions involving deductibles, co-insurance, allowable charge limitations, maximum dollar policy limitations, or coordination of benefits."

1. Definitions.

1. ‘Routine patient care costs,’ as used in this Section, include all items and services that are otherwise generally available to a qualified individual that are provided in the clinical trial except:

1. the investigational items or service itself;
2. items and services provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patients, and
3. items and services customarily provided by the research sponsors free of charge for any enrollee in the trial.

2. ‘Clinical trials’ for purposes of this section include clinical trials that are approved or funded by use of the following entities:

1. One of the National Institutes of Health (NIH);
2. An NIH Cooperative Group or center which is a formal network of facilities that collaborate or research projects and have an established NIH-approval peer review program operating within the group. This includes, but is not limited to, the NCI Clinical Cooperative Group and the NCI Community Clinical Oncology program.
3. The federal Departments of Veterans’ Affairs or Defense;
4. An institutional review board of an institution in this State that has a multiple project assurance contract approval by the Office of Protection for the Research Risks of the NIH; and
5. A qualified research entity that meets the criteria for NIH Center Support grant eligibility.

3. Any clinical trial receiving coverage for routine costs under the provisions of this act must meet the following requirements:

1. The subject or purpose of the trial must be the evaluation of an item or service that falls within the covered benefits of the policy and is not specifically excluded from coverage;
2. The trial must not be designed exclusively to test toxicity or disease pathophysiology.
3. The trial must have therapeutic intent.
4. Trials of therapeutic interventions must enroll patients with diagnosed disease.
5. The principal purpose of the trial is to test whether the intervention potentially improves the participant’s health outcomes.
6. The trial is well supported by available scientific and medical information or it is intended to clarify or establish the health outcomes of interventions already in common clinical use.
7. The trial does not unjustifiably duplicate existing studies.
8. The trial is in compliance with Federal regulations relating to the protection of human subjects.

2. Every group or blanket policy of health insurance which is delivered or issued for delivery in this state, including each policy or contract issued by a health service corporation, shall provide coverage for routine patient care costs as defined in paragraph (a)(1) of this Section for covered persons engaging in clinical trials for treatment of life threatening diseases. Nothing in this Section, however, independently requires coverage for expense of such clinical trials which are otherwise not covered under the policy or contract."

Section 12. Not later than October 1, 2001, the Secretary of the Department of Health and Social Services and the Delaware Insurance Commissioner shall adopt rules and regulations necessary to carry out the purposes of this Act.

Section 13. The provisions of this bill shall apply to all insurance policies, contracts, and plans delivered, issued for delivery, reissued, renewed, or extended on or after January 1, 2002, or at any time when any term of any such policy, contract or plan is changed or any premium adjustment is made on or after January 1, 2002.

Section 14. If any provision of this Act or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this Act which can be given effect without the invalid provisions or application, and to this end the provisions of this Act are severable.