GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 351*

 
 
Short Title:	Utilization Review and Grievance Changes.	()	
Sponsors:	Representatives Hurley and Dockham (Primary Sponsors).	
Referred to:	Insurance.	
March 1, 2001

A BILL TO BE ENTITLED
AN ACT TO MAKE TECHNICAL AND SUBSTANTIVE CHANGES IN THE LAW GOVERNING MANAGED CARE UTILIZATION REVIEW AND GRIEVANCE PROCEDURES.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑50‑61(a)(6) reads as rewritten:
"(6)	'Grievance' means a written complaint submitted by a covered person about any of the following:
a.	An insurer's decisions, policies, or actions related to availability, delivery, or quality of health care services. A written complaint submitted by a covered person about a decision rendered solely on the basis that the health benefit plan contains a benefits exclusion for the health care service in question is not a grievance if the exclusion of the specific service requested is clearly stated in the certificate of coverage.
b.	Claims payment or handling; or reimbursement for services.
c.	The contractual relationship between a covered person and an insurer.
d.	The outcome of an appeal of a noncertification under this section."
SECTION 2.  G.S. 58‑50‑61(a)(13) reads as rewritten:
"(13)	'Noncertification' means a determination by an insurer or its designated utilization review organization that an admission, availability of care, continued stay, or other health care service has been reviewed and, based upon the information provided, does not meet the insurer's requirements for medical necessity, appropriateness, health care setting, level of care or effectiveness, or does not meet the prudent layperson standard for coverage of emergency services in G.S. 58-3-190, and the requested service is therefore denied, reduced, or terminated. A 'noncertification' is not a decision rendered solely on the basis that the health benefit plan does not provide benefits for the health care service in question, if the exclusion of the specific service requested is clearly stated in the certificate of coverage. A 'noncertification' includes any situation in which an insurer or its designated agent makes an evaluation or review of medical information about a covered person's condition to determine whether a requested treatment is experimental, investigational, or cosmetic, and the extent of coverage under the health benefit plan is affected by that decision."
SECTION 3.  G.S. 58‑50‑61(a)(17) reads as rewritten:
"(17)	'Utilization review' means a set of formal techniques designed to monitor the use of or evaluate the clinical necessity, appropriateness, efficacy or efficiency of health care services, procedures, providers, or facilities. These techniques may include:
a.	Ambulatory review. – Utilization review of services performed or provided in an outpatient setting.
b.	Case management. – A coordinated set of activities conducted for individual patient management of serious, complicated, protracted, or other health conditions.
c.	Certification. – A determination by an insurer or its designated URO that an admission, availability of care, continued stay, or other service has been reviewed and, based on the information provided, satisfies the insurer's requirements for medically necessary services and supplies, appropriateness, health care setting, level of care, and effectiveness.
d.	Concurrent review. – Utilization review conducted during a patient's hospital stay or course of treatment.
e.	Discharge planning. – The formal process for determining, before discharge from a provider facility, the coordination and management of the care that a patient receives after discharge from a provider facility.
f.	Prospective review. – Utilization review conducted before an admission or a course of treatment including any required preauthorization or precertification.
g.	Retrospective review. – Utilization review of medically necessary services and supplies that is conducted after services have been provided to a patient, but not the review of a claim that is limited to an evaluation of reimbursement levels, veracity of documentation, accuracy of coding, or adjudication for payment. Retrospective review includes the review of claims for emergency services to determine whether the prudent layperson standard in G.S. 58-3-190 has been met.
h.	Second opinion. – An opportunity or requirement to obtain a clinical evaluation by a provider other than the provider originally making a recommendation for a proposed service to assess the clinical necessity and appropriateness of the proposed service."
SECTION 4.  G.S. 58‑50‑61(f) reads as rewritten:
"(f)	Prospective and Concurrent Reviews. – As used in this subsection, 'necessary information' includes the results of any patient examination, clinical evaluation, or second opinion that may be required. Prospective and concurrent determinations shall be communicated to the covered person's provider within three business days after the insurer obtains all necessary information about the admission, procedure, or health care service. If an insurer certifies a health care service, the insurer shall notify the covered person's provider. For a noncertification, the insurer shall notify the covered person's provider and send written or electronic confirmation of the noncertification to the covered person. In concurrent reviews, the insurer shall remain liable for health care services until the covered person has been notified of the noncertification. When the covered person is institutionalized, a written notice of noncertification shall be provided to the covered person, however, the noncertification is deemed to have been communicated to the covered person upon notification of the covered person's provider."
SECTION 5.  G.S. 58‑50‑61(i) reads as rewritten:
"(i)	Requests for Informal Reconsideration. – An insurer may establish procedures for informal reconsideration of noncertifications and, if established, the procedures shall be in writing. After a written notice of noncertification has been issued in accordance with subsection (h) of this section, the reconsideration shall be conducted between the covered person's provider and a medical doctor licensed to practice medicine in this State designated by the insurer. An insurer shall not require a covered person to participate in an informal reconsideration before the covered person may appeal a noncertification under subsection (j) of this section. If, after informal reconsideration, the insurer upholds the noncertification decision, the insurer shall issue a new notice in accordance with subsection (h) of this section. If the insurer is unable to render an informal reconsideration decision within 10 business days after the date of receipt of the request for an informal reconsideration, it shall treat the request for informal reconsideration as a request for an appeal; provided that the requirements of subsection (k) of this section for acknowledging the request shall apply beginning on the day the insurer determines an informal reconsideration decision cannot be made before the tenth business day after receipt of the request for an informal reconsideration."
SECTION 6.  G.S. 58‑50‑61(k) reads as rewritten:
"(k)	Nonexpedited Appeals. – Within three business days after receiving a request for a standard, nonexpedited appeal, the insurer shall provide the covered person with the name, address, and telephone number of the coordinator and information on how to submit written material. For standard, nonexpedited appeals, the insurer shall give written notification of the decision to the covered person and the covered person's provider within 30 days after the insurer receives the request for an appeal. The written decision shall contain:
(1)	The professional qualifications and licensure of the person or persons reviewing the appeal.
(2)	A statement of the reviewers' understanding of the reason for the covered person's appeal.
(3)	The reviewers' decision in clear terms and, if the decision is not in favor of the covered person, the medical rationale in sufficient detail for the covered person to respond further to the insurer's position.
(4)	If the decision is not in favor of the covered person, a reference to the evidence or documentation that is the basis for the decision, including the clinical review criteria used to make the determination, and instructions for requesting the clinical review criteria.
(5)	If the decision is not in favor of the covered person, a statement advising the covered person of the covered person's right to request a second‑level grievance review and a description of the procedure for submitting a second‑level grievance under G.S. 58‑50‑62."
SECTION 7.  G.S. 58‑50‑61(l) reads as rewritten:
"(l)	Expedited Appeals. – An expedited appeal of a noncertification may be requested by a covered person or his or her provider acting on the covered person's behalf only when a nonexpedited appeal would reasonably appear to seriously jeopardize the life or health of a covered person or jeopardize the covered person's ability to regain maximum function. The insurer may require documentation of the medical justification for the expedited appeal. The insurer shall, in consultation with a medical doctor licensed to practice medicine in this State, provide expedited review, and the insurer shall communicate its decision in writing to the covered person and his or her provider as soon as possible, but not later than four days after receiving the information justifying expedited review. The written decision shall contain the provisions specified in subsection (k) of this section. If the expedited review is a concurrent review determination, the insurer shall remain liable for the coverage of health care services until the covered person has been notified of the determination. When the covered person is institutionalized, a written notice of noncertification shall be provided to the covered person; provided, however, the noncertification is deemed to have been communicated to the covered person upon notification of the covered person's provider. An insurer is not required to provide an expedited review for retrospective noncertifications."
SECTION 8.  G.S. 58‑50‑62(b) reads as rewritten:
"(b)	Availability of Grievance Process. – Every insurer shall have a grievance process whereby a covered person may voluntarily request a review of any decision, policy, or action of the insurer that affects that covered person. A decision rendered solely on the basis that the health benefit plan does not provide benefits for the health care service in question is not subject to the insurer's grievance procedures, if the exclusion of the specific service requested is clearly stated in the certificate of coverage. The grievance process may provide for an immediate informal consideration by the insurer of a grievance. If the insurer does not have a procedure for informal consideration or if an informal consideration does not resolve the grievance, the grievance process shall provide for first‑ and second‑level reviews of grievances. Appeal of a noncertification that has been reviewed under G.S. 58‑50‑61 shall be reviewed as a second‑level grievance under this section."
SECTION 8.1.  G.S. 58‑50‑62 is amended by adding the following new subsection to read:
"(b1)	Informal Consideration of Grievances. – If the insurer provides procedures for informal consideration of grievances, the procedures shall be in writing, and the following requirements apply:
(1)	If the grievance concerns a clinical issue and the informal consideration decision is not in favor of the covered person, the insurer shall treat the request as a request for a first-level grievance review, except that the requirements of subdivision (e)(1) of this section apply on the day the decision is made or on the tenth business day after receipt of the request for informal consideration, whichever is sooner; or
(2)	If the grievance concerns a nonclinical issue and the informal consideration decision is not in favor of the covered person, the insurer shall issue a written decision that includes the information set forth in subsection (c) of this section.
(3)	If the insurer is unable to render an informal consideration decision within 10 business days after receipt of the grievance, the insurer shall treat the request as a request for a first-level grievance review, except that the requirements of subdivision (e)(1) of this section apply beginning on the day the insurer determines an informal consideration decision cannot be made before the tenth business day after receipt of the grievance."
SECTION 9.  G.S. 58‑50‑62(e) reads as rewritten:
"(e)	First‑Level Grievance Review. – A covered person or a covered person's provider acting on the covered person's behalf may submit a grievance.
(1)	The insurer does not have to allow a covered person to attend the first‑level grievance review. A covered person may submit written material. Within three business days after receiving a grievance, the insurer shall provide the covered person with the name, address, and telephone number of the coordinator and information on how to submit written material.
(2)	An insurer shall issue a written decision to the covered person and, if applicable, to the covered person's provider, within 30 days after receiving a grievance. The person or persons reviewing the grievance shall not be the same person or persons who initially handled the matter that is the subject of the grievance and, if the issue is a clinical one, at least one of whom shall be a medical doctor with appropriate expertise to evaluate the matter. Except as provided in subdivision (3) of this subsection, the written decision issued in a first‑level grievance review shall contain:
a.	The professional qualifications and licensure of the person or persons reviewing the grievance.
b.	A statement of the reviewers' understanding of the grievance.
c.	The reviewers' decision in clear terms and, if the decision is not in favor of the covered person, the contractual basis or medical rationale in sufficient detail for the covered person to respond further to the insurer's position.
d.	A reference to the evidence or documentation used as the basis for the decision.
e.	A statement advising the covered person of his or her right to request a second‑level grievance review and a description of the procedure for submitting a second‑level grievance under this section.
(3)	Grievances concerning the quality of clinical care delivered by the covered person's provider are subject to peer review confidentiality, and therefore the written decision shall contain:
a.	The professional qualifications and licensure of the person or persons reviewing the grievance.
b.	A statement of the reviewers' understanding of the grievance.
c.	A statement that information regarding the matter is subject to confidential peer review and that specific details of the review, and the outcome of the review cannot be provided to the covered person.
d.	A statement advising the covered person that a second-level grievance review is not available."
SECTION 10.  G.S. 58‑50‑62(f) reads as rewritten:
"(f)	Second‑Level Grievance Review. – An insurer shall establish a second‑level grievance review process for covered persons who are dissatisfied with the first‑level grievance review decision or a utilization review appeal decision. A covered person or the covered person's provider acting on the covered person's behalf may submit a second-level grievance.
(1)	An insurer shall, within 10 business days after receiving a request for a second‑level grievance review, make known to the covered person:
a.	The name, address, and telephone number of a person designated to coordinate the grievance review for the insurer.
b.	A statement of a covered person's rights, which include the right to request and receive from an insurer all information relevant to the case; attend the second‑level grievance review; present his or her case to the review panel; submit supporting materials before and at the review meeting; ask questions of any member of the review panel; and be assisted or represented by a person of his or her choice, which person may be without limitation to: a provider, family member, employer representative, or attorney. If the covered person chooses to be represented by an attorney, the insurer may also be represented by an attorney.
(2)	An insurer shall convene a second‑level grievance review panel for each request. The panel shall comprise persons who were not previously involved in any matter giving rise to the second‑level grievance, are not employees of the insurer or URO, and do not have a financial interest in the outcome of the review. A person who was previously involved in the matter may appear before the panel to present information or answer questions. All of the persons reviewing a second‑level grievance involving a noncertification or a clinical issue shall be providers who have appropriate expertise, including at least one clinical peer. Provided, however, an insurer that uses a clinical peer on an appeal of a noncertification under G.S. 58‑50‑61 or on a first‑level grievance review panel under this section may use one of the insurer's employees on the second‑level grievance review panel in the same matter if the second‑level grievance review panel comprises three or more persons."
SECTION 11.  If any section or provision of this act is declared unconstitutional, preempted, or otherwise invalid by the courts, it does not affect the validity of the act as a whole or any part other than the part so declared to be unconstitutional, preempted, or otherwise invalid.
SECTION 12.  This act becomes effective October 1, 2001.