UNOFFICIAL COPY AS OF 10/25/1802 REG. SESS.02 RS SB 146/SCS
AN ACT relating to health insurance.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
Page 1 of 42
SB014640.100-1777SENATE COMMITTEE SUB
UNOFFICIAL COPY AS OF 10/25/1802 REG. SESS.02 RS SB 146/SCS
Section 1. KRS 304.17A-605 is amended to read as follows:
(1)KRS 304.17A-600, 304.17A-603, 304.17A-605, 304.17A-607, 304.17A.-609, 304.17A-611, 304.17A-613, and 304.17A-615 set forth the requirements and procedures regarding utilization review and shall apply to:
(a)Any insurer or its private review agent that provides or performs utilization review in connection with a health benefit plan or a limited health service benefit plan; and
(b)Any private review agent that performs utilization review functions on behalf of any person providing or administering health benefit plans or limited health service benefit plans.
(2)Where an insurer or its agent provides or performs utilization review, and in all instances where internal appeals as set forth in KRS 304.17A-617, are involved, the insurer or its agent shall be responsible for:
(a)Monitoring all utilization reviews and internal appeals carried out by or on behalf of the insurer;
(b)Ensuring that all requirements of KRS 304.17A-600 to 304.17A-633 are met;
(c)Ensuring that all administrative regulations promulgated in accordance with KRS 304.17A-609, 304.17A-613, and 304.17A-629 are complied with; and
(d)Ensuring that appropriate personnel have operational responsibility for the performance of the insurer's utilization review plan.
(3)A private review agent that operates solely under contract with the federal government for utilization review or patients eligible for hospital services under Title XVIII of the Social Security Act shall not be subject to the registration requirements set forth in KRS 304.17A-607, 304.17A-609, and 304.17A-613.
SECTION 2. SUBTITLE 17C OF KRS CHAPTER 304 IS ESTABLISHED AND A NEW SECTION THEREOF IS CREATED TO READ AS FOLLOWS:
As used in this subtitle, unless the context requires otherwise:
(1)"At the time of enrollment" means the same as defined in KRS 304.17A-005(2);
(2)"Enrollee" means an individual who is enrolled in a limited health service benefit plan;
(3)"Health care provider" or "provider" means the same as defined in KRS 304.17A-005(19);
(4)"Insurer" means any insurance company, health maintenance organization, self-insurer or multiple employer welfare arrangement not exempt from state regulation by ERISA, provider-sponsored integrated health delivery network, self-insured employer-organized association, nonprofit hospital, medical-surgical, dental, health service corporation, or limited health service organization authorized to transact health insurance business in Kentucky who offers a limited health service benefit plan; and
(5)"Limited health service benefit plan" means any policy or certificate that provides services for dental, vision, mental health, substance abuse, chiropractic, pharmaceutical, podiatric, or other such services as may be determined by the commissioner to be offered under a limited health service benefit plan. A limited health service benefit plan shall not include hospital, medical, surgical, or emergency services except as these services are provided incidental to the plan.
SECTION 3. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
A health insurer shall not discriminate against any provider who is located within the geographic coverage area of the limited health benefit plan and who is willing to meet the terms and conditions for participation established by the insurer.
SECTION 4. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
(1)An insurer shall disclose in writing to a covered person and an insured or enrollee, in a manner consistent with the provisions of KRS 304.14-420 to 304.14-450, the terms and conditions of its limited health service benefit plan and shall promptly provide the covered person and enrollee with written notification of any change in the terms and conditions prior to the effective date of the change. The insurer shall provide the required information at the time of enrollment and upon request thereafter.
(2)The information required to be disclosed under this section shall include a description of:
(a)Covered services and benefits to which the enrollee or other covered person is entitled;
(b)Restrictions or limitations on covered services and benefits;
(c)Financial responsibility of the covered person, including copayments and deductibles;
(d)Prior authorization and any other review requirements with respect to accessing covered services;
(e)Where and in what manner covered services may be obtained;
(f)Changes in covered services or benefits, including any addition, reduction, or elimination of specific services or benefits;
(g)The covered person's right to the following:
1.A utilization review and the procedure for initiating a utilization review, if an insurer elects to provide utilization review; and
2.An internal appeal of a utilization review decision made by or on behalf of the insurer with respect to the denial, reduction, or termination of a limited health service benefit plan or the denial of payment for a health care service, and the procedure to initiate an internal appeal;
(h)Measures in place to ensure the confidentiality of the relationship between an enrollee and a health care provider;
(i)Other information as the commissioner shall require by administrative regulation;
(j)A summary of the drug formulary, including, but not limited to, a listing of the most commonly used drugs, drugs requiring prior authorization, any restrictions, limitations, and procedures for authorization to obtain drugs not on the formulary, and, upon request of an insured or enrollee, a complete drug formulary; and
(k)A statement informing the insured or enrollee that if the provider meets the insurer's enrollment criteria and is willing to meet the terms and conditions for participation, the provider has the right to become a provider for the insurer.
(3)The insurer shall file the information required under this section with the department.
SECTION 5. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
An insurer that offers a limited health service benefit plan that utilizes a provider network shall have a provider network that is available to all persons enrolled in the plan within thirty (30) minutes or thirty (30) miles of each enrollee's place of residence or work, to the extent available.
SECTION 6. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
(1)Insurers shall establish relevant, objective standards for initial consideration of providers and for providers to continue as a participating provider in the plan. Standards shall be reasonably related to services provided. Selection or participation standards based on the economics or capacity of a provider's practice shall be adjusted to account for case mix, severity of illness, patient age, and other features that may account for higher than expected or lower than expected costs. All data profiling or other data analysis pertaining to participating providers shall be done in a manner which is valid and reasonable. Plans shall not use criteria that would allow an insurer to avoid high-risk populations by excluding providers because they are located in geographic areas that contain populations or providers presenting a risk of higher than average claims, losses, or health services utilization, or that would exclude providers because they treat or specialize in treating populations presenting a risk of higher than average claims, losses, or health services utilization.
(2)Each insurer shall establish mechanisms for soliciting and acting upon applications for provider participation in the plan in a fair and systematic manner. These mechanisms shall, at a minimum, include:
(a)Allowing all providers who desire to apply for participation in the plan an opportunity to apply at any time during the year, or, where an insurer does not conduct open continuous provider enrollment, conducting a provider enrollment period at least annually with the date publicized to providers located in the geographic service area of the plan at least thirty (30) days in advance of the enrollment period; and
(b)Making criteria for provider participation in the plan available to all applicants.
(3)An insurer that offers a limited health service benefit plan shall establish a policy governing the removal of and withdrawal by health care providers from the provider network that includes the following:
(a)The insurer shall inform a participating health care provider of the insurer's removal and withdrawal policy at the time the insurer contracts with the health care provider to participate in the provider network, and when changed thereafter;
(b)If a participating health care provider's participation will be terminated or withdrawn prior to the date of the termination of the contract as a result of a professional review action, the insurer and participating health care provider shall comply with the standards in 42 U.S.C. sec. 11112; and
(c)If the insurer finds that a health care provider represents an imminent danger to an individual patient or to the public health, safety, or welfare, the medical director shall promptly notify the appropriate professional state licensing board.
SECTION 7. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
(1)An insurer shall file with the commissioner sample copies of any agreements it enters into with providers for the provision of health care services. The commissioner shall promulgate administrative regulations prescribing the manner and form of the filings required. The agreements shall include the following:
(a)A hold harmless clause that states that the provider may not, under any circumstance, including:
1.Nonpayment of moneys due to providers by the insurer;
2.Insolvency of the insurer; or
3.Breach of the agreement,
bill, charge, collect a deposit, seek compensation, remuneration, or reimbursement from, or have any recourse against the subscriber, dependent of subscriber, enrollee, or any persons acting on their behalf, for services provided in accordance with the provider agreement. This provision shall not prohibit collection of deductible amounts, copayment amounts, coinsurance amounts, and amounts for noncovered services;
(b)A survivorship clause that states the hold harmless clause and continuity of care clause shall survive the termination of the agreement between the provider and the insurer; and
(c)A clause requiring that if a provider enters into any subcontract agreement with another provider to provide health care services to the subscriber, dependent of the subscriber, or enrollee of a limited health service benefit plan, the subcontract agreement must meet all requirements of this subtitle and that all such subcontract agreements shall be filed with the commissioner in accordance with this subsection.
(2)An insurer that enters into any risk-sharing arrangement or subcontract agreement shall file a copy of the arrangement with the commissioner. The insurer shall also file the following information regarding the risk-sharing arrangement:
(a)The number of enrollees affected by the risk-sharing arrangement;
(b)The health care services to be provided to an enrollee under the risk-sharing arrangement;
(c)The nature of the financial risk to be shared between the insurer and entity or provider, including, but not limited to, the method of compensation;
(d)Any administrative functions delegated by the insurer to the entity or provider. The insurer shall describe a plan to ensure that the entity or provider will comply with the requirements of this subtitle in exercising any delegated administrative functions; and
(e)The insurer's oversight and compliance plan regarding the standards and method of review.
(3)Nothing in this section shall be construed as requiring an insurer to submit the actual financial information agreed to between the insurer and the entity or provider. The commissioner shall have access to a specific risk-sharing arrangement with an entity or provider upon request to the insurer. Financial information obtained by the department shall be considered to be a trade secret and shall not be subject tot KRS 61.872 to 61.884.
SECTION 8. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
(1)An insurer may not contract with a health care provider to limit the provider's disclosure to an enrollee, or to another person on behalf of an enrollee, of any information relating to the enrollee's medical condition or treatment option.
(2)A health care provider shall not be penalized, or a health care provider's contract with a limited health service benefit plan terminated, because the provider discusses medically necessary or appropriate care with an enrollee or another person on behalf of an enrollee.
(a)The health care provider may not be prohibited by the plan from discussing all treatment options with the enrollee.
(b)Other information determined by the health care provider to be in the best interests of the enrollee may be disclosed by the provider to the enrollee or to another person on behalf of an enrollee.
(3)(a)A health care provider shall not be penalized for discussing financial incentives and financial arrangements between the provider and the insurer with an enrollee.
(b)Upon request, an insurer shall inform its enrollees in writing of the type of financial arrangements between the plan and participating providers if those arrangements include an incentive or bonus.
SECTION 9. A NEW SECTION OF SUBTITLE 17C OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
(1)Each insurer shall have a process for the selection of health care providers who will be on the plan's list of participating providers, with written policies and procedures for review and approval used by the plan.
(2)The plan shall establish minimum professional requirements for participating health care providers. An insurer may not discriminate against a provider solely on the basis of the provider's license by the state.
(3)The plan shall demonstrate that it has consulted with appropriately qualified health care providers to establish the minimum professional requirements.
(4)The plan's selection process shall include verification of each health care provider's license, history of license suspension or revocation, and liability claims history.
(5)An insurer shall establish a formal written, ongoing process for the reevaluation of each participating health care provider within a specified number of years after the provider's initial acceptance into the plan. The reevaluation shall include an update of the previous review criteria and an assessment of the provider's performance pattern based on criteria such as enrollee clinical outcomes, number of complaints, and malpractice actions.
SECTION 10. SUBTITLE 38A OF KRS CHAPTER 304 IS ESTABLISHED AND A NEW SECTION THEREOF IS CREATED TO READ AS FOLLOWS:
As used in this subtitle, unless the context requires otherwise:
(1)"Enrollee" means an individual who is enrolled in a limited health services benefit plan;
(2)"Evidence of coverage" means any certificate, agreement, contract, or other document issued to an enrollee stating the limited health services to which the enrollee is entitled. All coverages described in an evidence of coverage issued by a a limited health service organization are deemed to be "limited health services benefit plans" to the extent defined in Section 2 of this Act unless exempted by the commissioner;
(3)"Limited health service" means dental care services, vision care services, mental health services, substance abuse services, chiropractic services, pharmaceutical services, podiatric care services, and such other services as may be determined by the commissioner to be limited health services. Limited health service shall not include hospital, medical, surgical, or emergency services except as these services are provided incidental to the limited health services set forth in this subsection;
(4)"Limited health service contract" means any contract entered into by a limited health service organization with a policyholder to provide limited health services;
(5)"Limited health service organization" means a corporation, partnership, limited liability company, or other entity that undertakes to provide or arrange limited health service or services to enrollees. A limited health service organization does not include a provider or an entity when providing or arranging for the provision of limited health services under a contract with a limited health service organization, health maintenance organization, or a health insurer; and
(6)"Provider" means the same as defined in KRS 304.17A-005(19).
SECTION 11. A NEW SECTION OF SUBTITLE 38A OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
No person may operate a limited health service organization in this state without obtaining and maintaining a certificate of authority from the commissioner pursuant to this section and Sections 12, 13, 14, 15, 16, 18, and 20 of this Act, except an insurer authorized to transact health insurance in this state.
SECTION 12. A NEW SECTION OF SUBTITLE 38A OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:
An application for a certificate of authority to operate a limited health service organization shall be filed with the commissioner on a form prescribed by the commissioner. The application shall be verified by an officer or authorized representative of the applicant and shall set forth, or be accompanied by, the following:
(1)A copy of the applicant's basic organizational document, such as the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents and all amendments to these documents;
(2)A copy of all bylaws, rules, and regulations, or similar documents, if any, regulating the conduct of the applicant's internal affairs;
(3)A list of the names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant's affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers, and any person or entity owning or having the right to acquire ten percent (10%) or more of the voting securities of the applicant, and the partners or members in the case of a partnership or association. Such listing shall fully disclose the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the limited health service organization, including any possible conflicts of interest;
(4)A complete biographical statement, on forms prescribed by the department, with respect to each individual identified under this section;
(5)A statement generally describing the applicant, its facilities, personnel, and the limited health services to be offered;
(6)A copy of the form of any contract made, or to be made between the applicant and any person listed in subsection (3) of this section;
(7)A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any functions including, but not limited to, marketing, administration, enrollment, investment management and provider agreements, subcontract agreements, and risk-sharing arrangements for the provision of limited health services to enrollees;