71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
Enrolled
House Bill 3040
Sponsored by Representatives KRUSE, KRUMMEL; Representatives
BACKLUND, BARNHART, BATES, BROWN, BUTLER, CARLSON, DEVLIN,
DOYLE, GARRARD, HASS, KNOPP, KRIEGER, LEE, LOWE, MERKLEY,
MINNIS, MONNES ANDERSON, MORGAN, MORRISETTE, NELSON, NOLAN,
PATRIDGE, RINGO, ROSENBAUM, SHETTERLY, G SMITH, P SMITH, T
SMITH, STARR, TOMEI, C WALKER, V WALKER, WILSON, WINTERS,
WIRTH, WITT, ZAUNER, Senators CASTILLO, CORCORAN, METSGER
CHAPTER ................
AN ACT
Relating to protections for enrollees of health benefit plans;
creating new provisions; and amending ORS 743.801, 743.803,
743.804, 743.817, 746.075, 750.055 and 750.333.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 743.801 is amended to read:
743.801. As used in ORS 743.699, 743.801, 743.803, 743.804,
743.806, 743.807, 743.808, 743.809, 743.811, 743.814, 743.817,
743.819, 743.821, 743.823, 743.827, 743.829, 743.831, 743.834,
743.837 and 743.839 { + and sections 3, 5, 8, 9, 10, 11, 12, 13
and 14 of this 2001 Act + }:
(1) 'Emergency medical condition' means a medical condition
that manifests itself by symptoms of sufficient severity that a
prudent layperson possessing an average knowledge of health and
medicine would reasonably expect that failure to receive
immediate medical attention would place the health of a person,
or a fetus in the case of a pregnant woman, in serious jeopardy.
(2) 'Emergency medical screening exam' means the medical
history, examination, ancillary tests and medical determinations
required to ascertain the nature and extent of an emergency
medical condition.
(3) 'Emergency services' means those health care items and
services furnished in an emergency department and all ancillary
services routinely available to an emergency department to the
extent they are required for the stabilization of a patient.
{ + (4) 'Enrollee' has the meaning given that term in ORS
743.730. + }
{ - (4) - } { + (5) + } 'Grievance' means a written
complaint submitted by or on behalf of an enrollee regarding the:
(a) Availability, delivery or quality of health care services,
including a complaint regarding an adverse determination made
pursuant to utilization review;
(b) Claims payment, handling or reimbursement for health care
services; or
(c) Matters pertaining to the contractual relationship between
an enrollee and an insurer.
Enrolled House Bill 3040 (HB 3040-B) Page 1
{ - (5) - } { + (6) + } 'Health benefit plan' has the
meaning provided for that term in ORS 743.730.
{ - (6) - } { + (7) + } 'Independent practice association'
means a corporation wholly owned by providers, or whose
membership consists entirely of providers, formed for the sole
purpose of contracting with insurers for the provision of health
care services to enrollees, or with employers for the provision
of health care services to employees, or with a group, as
described in ORS 743.522, to provide health care services to
group members.
{ - (7) - } { + (8) + } 'Insurer' has the meaning provided
for that term in ORS 731.106. For purposes of ORS 743.699,
743.801, 743.803, 743.804, 743.806, 743.807, 743.808, 743.809,
743.811, 743.814, 743.817, 743.819, 743.821, 743.823, 743.827,
743.829, 743.831, 743.834, 743.837, 743.839, 750.055 and
750.333 { + and sections 3, 5, 8, 9, 10, 11, 12, 13 and 14 of
this 2001 Act + }, 'insurer' also includes a health care service
contractor as defined in ORS 750.005.
{ - (8) - } { + (9) + } 'Managed health insurance' means
any health benefit plan that:
(a) Requires an enrollee to use { - , or creates incentives
for an enrollee to use, - } { + a specified network of networks
of + }providers managed, owned, under contract with or employed
by the insurer { + in order to receive benefits under the plan,
except for emergency or other specified limited service + };
{ - and - } { + or + }
(b) { - Reimburses any of the providers described in
paragraph (a) of this subsection on a basis other than
fee-for-service billing or discounts from fee-for-service
billing. - } { + In addition to the requirements of paragraph
(a) of this subsection, offers a point-of-service provision that
allows an enrollee to use providers outside of the specified
network or networks at the option of the enrollee and receive a
reduced level of benefits. + }
{ - (9) - } { + (10) + } 'Medical services contract' means
a contract between an insurer and an independent practice
association, between an insurer and a provider, between an
independent practice association and a provider or organization
of providers, between medical or mental health clinics, and
between a medical or mental health clinic and a provider to
provide medical or mental health services. 'Medical services
contract' does not include a contract of employment or a contract
creating legal entities and ownership thereof that are authorized
under ORS chapter 58, 60 or 70, or other similar professional
organizations permitted by statute.
{ + (11)(a) 'Preferred provider organization insurance' means
any health benefit plan that:
(A) Specifies a preferred network of providers managed, owned
or under contract with or employed by an insurer;
(B) Does not require an enrollee to use the preferred network
of providers in order to receive benefits under the plan; and
(C) Creates financial incentives for an enrollee to use the
preferred network of providers by providing an increased level of
benefits.
(b) 'Preferred provider organization insurance' does not mean a
health benefit plan that has as its sole financial incentive a
hold harmless provision under which providers in the preferred
network agree to accept as payment in full the maximum allowable
amounts that are specified in the medical services contracts. + }
Enrolled House Bill 3040 (HB 3040-B) Page 2
{ - (10) - } { + (12) + } 'Prior authorization' means a
determination by an insurer prior to provision of services that
the insurer will provide reimbursement for the services. 'Prior
authorization ' does not include referral approval for evaluation
and management services between providers.
{ - (11) - } { + (13) + } 'Provider' means a person
licensed, certified or otherwise authorized or permitted by laws
of this state to administer medical or mental health services in
the ordinary course of business or practice of a profession.
{ - (12) - } { + (14) + } 'Stabilization' means that,
within reasonable medical probability, no material deterioration
of an emergency medical condition is likely to occur.
{ - (13) - } { + (15) + } 'Utilization review' means a set
of formal techniques used by an insurer or delegated by the
insurer designed to monitor the use of or evaluate the medical
necessity, appropriateness, efficacy or efficiency of health care
services, procedures or settings.
SECTION 2. { + Sections 3, 5, 8, 9, 10, 11, 12, 13 and 14 of
this 2001 Act are added to and made a part of ORS chapter
743. + }
{ +
CONTINUITY OF CARE + }
SECTION 3. { + (1) As used in this section, 'continuity of
care' means the feature of a health benefit plan under which an
enrollee who is receiving care from an individual provider is
entitled to continue with care with the individual provider for a
limited period of time after the medical services contract
terminates.
(2) An insurer offering managed health insurance or preferred
provider organization insurance in this state shall provide
continuity of care to an enrollee under a health benefit plan if:
(a) A medical services contract or other contract for an
individual provider's services is terminated;
(b) The provider no longer participates in the provider
network; and
(c) The insurer does not cover services when services are
provided to enrollees by the individual provider or covers
services at a benefit level below the benefit level specified in
the plan for out-of-network providers.
(3) In order to obtain continuity of care, an enrollee must
request continuity of care from the insurer.
(4) An enrollee of a health benefit plan is entitled to
continuity of care when the following conditions are met:
(a) The enrollee is undergoing an active course of treatment
that is medically necessary and, by agreement of the individual
provider and the enrollee, it is desirable to maintain continuity
of care; and
(b) The contractual relationship between the individual
provider and the insurer described in subsection (2) of this
section with respect to the plan covering the enrollee has ended,
except as provided in subsection (5) of this section.
(5) A health benefit plan is not required to provide continuity
of care when the contractual relationship between the individual
provider and the insurer described in subsection (2) of this
section ends under one of the following circumstances:
(a) The contractual relationship between the individual
provider and the insurer has ended because the individual
provider:
Enrolled House Bill 3040 (HB 3040-B) Page 3
(A) Has retired;
(B) Has died;
(C) No longer holds an active license;
(D) Has relocated out of the service area;
(E) Has gone on sabbatical; or
(F) Is prevented from continuing to care for patients because
of other circumstances; or
(b) The contractual relationship has terminated in accordance
with provisions of the medical services contract relating to
quality of care and all contractual appeal rights of the
individual provider have been exhausted.
(6) A health benefit plan is not required to provide continuity
of care if the enrollee leaves a health benefit plan or if the
policyholder discontinues the plan in which the enrollee is
enrolled.
(7) Except as provided for pregnancy in subsection (8) of this
section, an enrollee who is entitled to continuity of care shall
receive the care until the earlier of the following dates:
(a) The day following the date on which the active course of
treatment entitling the enrollee to continuity of care is
completed; or
(b) The 120th day after the date of notification by the insurer
to the enrollee of the termination of the contractual
relationship with the individual provider, as required by
subsection (9) of this section.
(8) An enrollee who is undergoing care for a pregnancy and who
becomes entitled to continuity of care after commencement of the
second trimester of the pregnancy shall receive the care until
the later of the following dates:
(a) The 45th day after the birth; or
(b) As long as the enrollee continues under an active course of
treatment, but not later than the 120th day after the date of
notification by the insurer to the enrollee of the termination of
the contractual relationship with the individual provider as
required by subsection (9) of this section.
(9) An insurer shall give written notice of the termination of
the contractual relationship between the insurer and the
individual provider and of the right to obtain continuity of care
to those enrollees that the insurer knows or reasonably should
know are under the care of the individual provider. The notice
may be given prior to the date on which the termination of the
contractual relationship with the individual provider takes
effect only if the insurer gives notice in a good faith belief
that the termination will take effect as stated in the notice. In
any event, the notice shall be given to those enrollees not later
than the 10th day after the date on which the termination of the
contractual relationship with the individual provider takes
effect. If the insurer first learns the identity of an affected
enrollee after the date of termination of the contractual
relationship with the individual provider or after the date on
which the insurer gave notice to the other affected enrollees,
then the insurer shall give a notice of termination to the
affected enrollee not later than the 10th day after learning that
enrollee's identity.
(10) For the purpose of notifying an enrollee under subsection
(7)(b) or (8)(b) of this section:
(a) The date of notification by the insurer is the earlier of
the date on which the enrollee receives the notice or the date on
which the insurer receives or approves the request for continuity
of care.
Enrolled House Bill 3040 (HB 3040-B) Page 4
(b) If an individual provider belongs to a provider group, the
provider group may deliver the notice if the insurer agrees that
the provider group may do so and if the notice clearly provides
the information that the plan is required to provide to the
enrollee under subsection (9) of this section.
(11) A health benefit plan may condition continuity of care
upon the requirement that the individual provider adhere to the
medical services contract between the provider and the insurer
and accept the contractual reimbursement rate applicable at the
time of contract termination or, if the contractual reimbursement
rate was not based on a fee for service, a rate equivalent to the
contractual rate. + }
SECTION 4. ORS 743.803 is amended to read:
743.803. (1) { - No - } { + A + } medical services contract
may { + not + } require the provider, as an element of the
contract or as a condition of compensation for services, to
agree:
(a) In the event of alleged improper medical treatment of a
patient, to indemnify the other party to the medical services
contract for any damages, awards or liabilities including but not
limited to judgments, settlements, attorney fees, court costs and
any associated charges incurred for any reason other than the
negligence or intentional act of the provider or the provider's
employees;
(b) To charge the other party to the medical services contract
a rate for services rendered pursuant to the medical services
contract that is no greater than the lowest rate that the
provider charges for the same service to any other person;
(c) To deny care to a patient because of a determination made
pursuant to the medical services contract that the care is not
covered or is experimental, or to deny referral of a patient to
another provider for the provision of such care, if the patient
is informed that the patient will be responsible for the payment
of such noncovered, experimental or referral care and the patient
nonetheless desires to obtain such care or referral; or
(d) Upon the provider's withdrawal from or termination or
nonrenewal of the medical services contract, not to treat or
solicit a patient even at that patient's request and expense.
(2) { - All - } { + A + } medical services
{ - contracts - } { + contract + } shall:
(a) Grant to the provider adequate notice and hearing
procedures, or such other procedures as are fair to the provider
under the circumstances, prior to termination or nonrenewal of
the medical services contract when such termination or nonrenewal
is based upon issues relating to the quality of patient care
rendered by the provider.
(b) Set forth generally the criteria used by the other party to
the medical services contract for the termination or nonrenewal
of the medical services contract.
(c) Entitle the provider to an annual accounting accurately
summarizing the financial transactions between the parties to the
medical services contract for that year.
(d) Allow the provider to withdraw from the care of a patient
when, in the professional judgment of the provider, it is in the
best interest of the patient to do so.
(e) Provide that a doctor of medicine or osteopathy licensed
under ORS chapter 677 shall be retained by the other party to the
medical services contract and shall be responsible for all final
medical and mental health decisions relating to coverage or
payment made pursuant to the medical services contract.
Enrolled House Bill 3040 (HB 3040-B) Page 5
(f) Provide that a physician who is practicing in conformity
with ORS 677.095 may advocate a decision, policy or practice
without being subject to termination or penalty for the sole
reason of such advocacy.
(g)(A) Entitle the party to the medical services contract who
is being reimbursed for the provision of health care services on
a basis that includes financial risk withholds, or the party's
representative, to a full accounting of health benefits claims
data and related financial information on no less than a
quarterly basis by the party to a medical service contract who
has made reimbursement, as follows:
(i) The data shall include all pertinent information relating
to the health care services provided, including related provider
and patient information, reimbursements made and amounts withheld
under the financial risk withhold provisions of the medical
services contract for the period of time under reconciliation and
settlement between the parties.
(ii) Any reconciliation and settlement undertaken pursuant to a
medical services contract shall be based directly and exclusively
upon data provided to the party who is being reimbursed for the
provision of health care services.
(iii) All data, including supplemental information or
documentation, necessary to finalize the reconciliation and
settlement provisions of a medical services contract relating to
financial risk withholds shall be provided to the party who is
being reimbursed for the provision of health care services no
later than 30 days prior to finalizing the reconciliation and
settlement.
(B) Nothing in this paragraph shall be construed to prevent
parties to a medical services contract from mutually agreeing to
alternative reconciliation and settlement policies and
procedures.
{ + (h) Provide that when continuity of care is required to
be provided under a health benefit plan by section 3 of this 2001
Act, the insurer and the individual provider shall provide
continuity of care to enrollees as provided in section 3 of this
2001 Act. + }
(3) The other party to a medical services contract shall not:
(a) Refer to other documents or instruments in a contract
unless the nonprovider party agrees to make available to the
provider for review a copy of the documents or instruments within
72 hours of request; or
(b) Provide as an element of a contract with a third party
relating to the provision of medical services to a patient of the
provider that the provider's patient may not sue or otherwise
recover from the nonprovider party, or must hold the nonprovider
party harmless for, any and all expenses, damages, awards or
liabilities that arise from the management decisions, utilization
review provisions or other policies or determinations of the
nonprovider party that have an impact on the provider's treatment
decisions and actions with regard to the patient.
(4) An insurer, independent practice association, medical or
mental health clinic or other party to a medical services
contract shall provide the criteria for selection of parties to
future medical services contracts upon the request of current or
prospective parties.
{ +
REFERRALS TO SPECIALISTS + }
Enrolled House Bill 3040 (HB 3040-B) Page 6
SECTION 5. { + (1) If an insurer offers a health benefit plan
that requires, as a condition of coverage for specialty care
services, a referral by a physician who is authorized under the
plan or under the medical services contract between the physician
and the insurer to refer an enrollee to specialty care services,
the insurer must include the requirements of this section in the
plan. The requirements apply only to benefits for which the
member is contractually eligible under the plan. The requirements
are as follows:
(a) The plan must establish and implement a procedure for
standing referrals, so that an enrollee is not required to obtain
approval from the authorized physician for each appointment with
a specialist after the initial appointment.
(b) The plan must allow a standing referral for an enrollee if
the authorized physician determines that the enrollee needs
continuing care from a specialist.
(c) The plan must allow an enrollee to request and obtain a
second medical opinion or consultation from a second physician
who is a network provider and who is authorized to make decisions
regarding the need for a referral to a specialist. If the plan
does not have a network provider available to give a second
medical opinion or consultation, the plan must allow the enrollee
to obtain the opinion or consultation from a similarly qualified
physician who is not a network provider. The plan may not impose
a charge for the second medical opinion or consultation that is
greater than the cost that the enrollee would otherwise pay for
an initial medical opinion or consultation from the second
physician.
(2) A specialist to whom an enrollee is referred must make
regular reports to the authorized physician under subsection (1)
of this section in accordance with best practices for coordinated
care as established by the insurer. + }
{ +
NETWORK ADEQUACY + }
SECTION 6. ORS 743.817 is amended to read:
743.817. { - All insurers - } { + An insurer + } offering
managed health insurance { + or preferred provider organization
insurance + } in this state shall:
(1) File an annual summary with the Department of Consumer and
Business Services that { - documents - } { + reports on + }
the scope { + and adequacy + } of the insurer's network and the
insurer's ongoing monitoring to ensure that all covered services
are reasonably accessible to enrollees. { + The Director of the
Department of Consumer and Business Services shall adopt rules
establishing uniform indicators that insurers offering managed
health insurance or preferred provider organization insurance
must use for reporting under this subsection, including but not
limited to reporting on the scope and adequacy of networks. For
the purpose of developing the rules, the director shall consult
with an advisory committee appointed by the director. The
advisory committee must include representatives of persons likely
to be affected by the rules, including consumers, purchasers of
health insurance and insurers that offer managed health insurance
or preferred provider organization insurance. + }
(2) Establish a means to provide to the insurer's managed care
plan { + or preferred provider organization insurance + }
enrollees, purchasers and providers a meaningful opportunity to
Enrolled House Bill 3040 (HB 3040-B) Page 7
participate in the development and implementation of insurer
policy and operation through:
(a) The establishment of advisory panels;
(b) Consultation with advisory panels on major policy
decisions; or
(c) Other means including but not limited to:
(A) Governing board meetings or special meetings at which
enrollees, purchasers and providers are invited to express
opinions; and
(B) Enrollee councils that are given a reasonable opportunity
to meet with the governing board or its designee.
SECTION 7. ORS 746.075 is amended to read:
746.075. { + (1) A person may not engage, directly or
indirectly, in any action described in subsection (2) of this
section in connection with:
(a) + } { - In - } The offer or sale of any insurance { - ,
directly or indirectly, - } { + ; + } or
{ + (b) + } { - In connection with - } Any inducement or
attempted inducement { - , directly or indirectly, - } of any
insured or person with ownership rights under an issued life
insurance policy to lapse, forfeit, surrender, assign, effect a
loan against, retain, exchange or convert the policy { - , no
person shall: - } { + . + }
{ + (2) Subsection (1) of this section applies to the
following actions: + }
{ - (1) - } { + (a) + } { - Make, issue, circulate or
cause - } { + Making, issuing, circulating or causing + } to be
made, issued or circulated, any estimate, illustration, circular
or statement misrepresenting the terms of any policy issued or to
be issued or the benefits or advantages therein or the dividends
or share of surplus to be received thereon;
{ - (2) - } { + (b) + } { - Make - } { + Making + } any
false or misleading representation as to the dividends or share
of surplus previously paid on similar policies;
{ - (3) - } { + (c) + } { - Make - } { + Making + } any
false or misleading representation as to the financial condition
of any insurer, or as to the legal reserve system upon which any
life insurer operates;
{ - (4) - } { + (d) + } { - Use - } { + Using + } any
name or title of any policy or class of policies misrepresenting
the true nature thereof;
{ - (5) - } { + (e) + } { - Employ - }
{ + Employing + } any device, scheme { - , - } or artifice to
defraud;
{ - (6) - } { + (f) + } { - Obtain - }
{ + Obtaining + } money or property by means of any untrue
statement of a material fact or any omission to state a material
fact necessary in order to make the statement { - made - } , in
light of the circumstances under which it was made, not
misleading; { - or - }
{ - (7) - } { + (g) + } { - Engage - } { + Engaging + }
in any other transaction, practice or course of business
{ - which - } { + that + } operates as a fraud or deceit upon
the purchaser, insured or person with policy ownership rights
{ - . - } { + ; or
(h) Materially misrepresenting the provider network of an
insurer offering managed health insurance or preferred provider
organization insurance as defined in ORS 743.801, including its
composition and the availability of its providers to enrollees in
the plan. + }
Enrolled House Bill 3040 (HB 3040-B) Page 8
{ +
EXTERNAL REVIEW + }
SECTION 8. { + (1) An insurer offering health benefit plans in
this state shall have an external review program that meets the
requirements of this section and sections 10 and 11 of this 2001
Act. Each insurer shall provide the external review through an
independent review organization that is under contract with the
Director of the Department of Consumer and Business Services to
provide external review. Each health benefit plan must allow an
enrollee, by applying to the insurer, to obtain review by an
independent review organization of a dispute relating to an
adverse decision by the insurer on one or more of the following:
(a) Whether a course or plan of treatment is medically
necessary.
(b) Whether a course or plan of treatment is experimental or
investigational.
(c) Whether a course or plan of treatment that an enrollee is
undergoing is an active course of treatment for purposes of
continuity of care under section 3 of this 2001 Act.
(2) An insurer shall incur all costs of its external review
program. The insurer may not establish or charge a fee payable by
enrollees for conducting external review.
(3) When an enrollee applies for external review, the insurer
shall request the director to appoint an independent review
organization. When an independent review organization is
appointed, the insurer shall forward all medical records and
other relevant materials to the independent review organization
and shall produce additional information as requested by the
independent review organization to the extent that the
information is reasonably available to the insurer. The insurer
shall furnish all such records, materials and information in a
timely manner in order to enable a timely decision by the
independent review organization. The director may establish
timelines for the purpose of this subsection.
(4) An insurer shall expedite an enrollee's case if a provider
with an established clinical relationship to the enrollee
certifies in writing and provides supporting documentation that
the ordinary time period for external review would seriously
jeopardize the life or health of the enrollee or the enrollee's
ability to regain maximum function. + }
SECTION 9. { + (1) The Director of the Department of Consumer
and Business Services shall contract with independent review
organizations as provided in this section for the purpose of
providing external review under section 8 of this 2001 Act. The
director may have contracts with no more than five independent
review organizations at any one time. Contracts shall be let with
independent review organizations on a biennial basis. A contract
may be renewed if both parties agree.
(2) The director shall seek public comment when the director
proposes to enter into a contract with an independent review
organization or proposes to renew or not renew a contract.
(3) When evaluating proposals to contract with independent
review organizations, the director shall consider factors that
include but are not limited to relative expertise,
professionalism, quality of compliance with the rules established
under subsection (4) of this section, cost and record of past
performance.
Enrolled House Bill 3040 (HB 3040-B) Page 9
(4) The director shall adopt rules governing independent review
organizations, their composition and their conduct. The rules
shall include but need not be limited to:
(a) Professional qualifications of health care providers,
physicians or contract specialists making external review
determinations;
(b) Criteria requiring independent review organizations to
demonstrate protections against bias and conflicts of interest;
(c) Procedures for conducting external reviews;
(d) Procedures for complaint investigations;
(e) Procedures for ensuring the confidentiality of medical
records transmitted to the independent review organizations for
use in external reviews;
(f) Fairness of procedures used by independent review
organizations;
(g) Fees for external reviews;
(h) Timelines for decision making and notice to the parties;
and
(i) Quality assurance mechanisms to ensure timeliness and
quality of review.
(5) The director shall develop procedures for assigning cases
filed by enrollees to independent review organizations under
contract with the director. The cases shall be assigned on a
random basis. The procedures shall allow an insurer only one
opportunity to reject the assignment of an independent review
organization to a particular case. + }
SECTION 10. { + (1) An insurer of a health benefit plan shall
include in the plan the following statements, in boldfaced type
or otherwise emphasized:
(a) A statement of the right of enrollees to apply for external
review by an independent review organization; and
(b) A statement of whether the insurer agrees to be bound by
decisions of independent review organizations.
(2) If an insurer states in the health benefit plan as provided
in subsection (1) of this section that the insurer is not bound
by the decisions of independent review organizations, the plan
and the written information provided by the plan must prominently
disclose that:
(a) The insurer is not bound by the decisions of independent
review organizations;
(b) The insurer may follow nonetheless a decision by an
independent review organization; and
(c) If the insurer does not follow a decision of an independent
review organization, the enrollee has the right to sue the
insurer.
(3) If an insurer states in the health benefit plan as provided
in subsection (1) of this section that the insurer is bound by
the decisions of independent review organizations, the plan must
prominently disclose that fact. The plan must also state that the
insurer agrees to act in accordance with the decision of the
independent review organization notwithstanding the definition of
medical necessity in the plan. + }
SECTION 11. { + (1) An enrollee shall apply in writing for
external review of an adverse decision by the insurer of a health
benefit plan not later than the 180th day after receipt of the
insurer's final written decision following its internal review
through its grievance and appeal process under ORS 743.804. An
enrollee is eligible for external review only if the enrollee has
satisfied the following requirements:
Enrolled House Bill 3040 (HB 3040-B) Page 10
(a) The enrollee must have signed a waiver granting the
independent review organization access to the medical records of
the enrollee.
(b) The enrollee must have exhausted the plan's internal
grievance procedures established pursuant to ORS 743.804. The
insurer may waive the requirement of compliance with the internal
grievance procedures and have a dispute referred directly to
external review upon the enrollee's consent.
(2) An enrollee who applies for external review of an adverse
decision shall provide complete and accurate information to the
independent review organization in a timely manner. + }
SECTION 12. { + (1) An independent review organization shall
perform the following duties when appointed under section 8 of
this 2001 Act to review a dispute under a health benefit plan
between an insurer and an enrollee:
(a) Decide whether the dispute is covered by the conditions
established in section 8 of this 2001 Act for external review and
notify the enrollee and insurer in writing of the decision. If
the decision is against the enrollee, the independent review
organization shall notify the enrollee of the right to file a
complaint with or seek other assistance from the Director of the
Department of Consumer and Business Services and the availability
of other assistance as specified by the director.
(b) Appoint a reviewer or reviewers as determined appropriate
by the independent review organization.
(c) Notify the enrollee of information that the enrollee is
required to provide and any additional information the enrollee
may provide, and when the information must be submitted.
(d) Notify the insurer of additional information the
independent review organization requires and when the information
must be submitted.
(e) Decide the dispute relating to the adverse decision of the
insurer under section 8 (1) of this 2001 Act and issue the
decision in writing.
(2) A decision by an independent review organization shall be
based on expert medical judgment after consideration of the
enrollee's medical record, the recommendations of each of the
enrollee's providers, relevant medical, scientific and
cost-effectiveness evidence and standards of medical practice in
the United States. An independent review organization must make
its decision in accordance with the coverage described in the
health benefit plan, except that the independent review
organization may override the insurer's standards for medically
necessary or experimental or investigational treatment if the
independent review organization determines that the standards of
the insurer are unreasonable or are inconsistent with sound
medical practice.
(3) When review is expedited, the independent review
organization shall issue a decision not later than the third day
after the date on which the enrollee applies to the insurer for
an expedited review.
(4) When a review is not expedited, the independent review
organization shall issue a decision not later than the 30th day
after the enrollee applies to the insurer for a review.
(5) An independent review organization shall file synopses of
its decisions with the director according to the format and other
requirements established by the director. The synopses shall
exclude information that is confidential, that is otherwise
exempt from disclosure under ORS 192.501 and 192.502 or that may
Enrolled House Bill 3040 (HB 3040-B) Page 11
otherwise allow identification of an enrollee. The director shall
make the synopses public. + }
SECTION 13. { + (1) If an insurer has agreed under the
provisions of a health benefit plan to be bound by the decision
of an independent review organization and the insurer fails to
comply with such a decision, the Director of the Department of
Consumer and Business Services shall impose on the insurer a
civil penalty of not less than $100,000 and not more than $1
million.
(2) A decision of an independent review organization is
admissible in any legal proceeding involving the insurer or the
enrollee and involving the disputed issues subject to external
review.
(3) The sanctions under subsection (1) of this section and the
remedies under subsection (2) of this section are in addition to
and not in lieu of other sanctions, rights and remedies provided
by law or contract. + }
SECTION 14. { + (1) An enrollee who is the subject of a
decision of an independent review organization has a private
right of action against the insurer for damages arising from an
adverse decision by the insurer that is subject to external
review if:
(a) The insurer states in the health benefit plan in which the
enrollee is enrolled that the insurer is not bound by the
decisions of an independent review organization; and
(b) The insurer fails to comply with the decision.
(2) The Legislative Assembly intends that there is no private
right of action under subsection (1) of this section if a court
finds either subsection (1)(a) or (b) of this section to be
unconstitutional or otherwise void. + }
SECTION 15. ORS 743.804 is amended to read:
743.804. All insurers offering a health benefit plan in this
state shall:
(1) Have a written policy that recognizes the rights of
enrollees:
(a) To voice grievances about the organization or health care
provided;
(b) To be provided with information about the organization, its
services and the providers providing care;
(c) To participate in decision making regarding their health
care; and
(d) To be treated with respect and recognition of their dignity
and need for privacy.
(2) Provide a summary of policies on enrollees' rights and
responsibilities to all participating providers upon request and
to all enrollees either directly or, in the case of group
coverage, to the employer or other policyholder for distribution
to enrollees.
(3) Have a timely and organized system for resolving grievances
and appeals. The system shall include:
(a) A systematic method for recording all grievances and
appeals, including the nature of the grievances, and significant
actions taken;
(b) Written procedures explaining the grievance and appeal
process, including a procedure to assist enrollees in filing
written grievances;
(c) Written decisions in plain language justifying grievance
determinations, including appropriate references to relevant
policies, procedures and contract terms;
Enrolled House Bill 3040 (HB 3040-B) Page 12
(d) Standards for timeliness in responding to grievances or
appeals that accommodate the clinical urgency of the situation;
(e) Notice in all written decisions prepared pursuant to this
subsection that the enrollee may file a complaint with the
Director of the Department of Consumer and Business Services; and
(f) An appeal process for grievances that includes at least the
following:
(A) { - Two - } { + Three + } levels of review, the second
of which shall be by persons not previously involved in the
dispute { + and the third of which shall provide external review
pursuant to an external review program meeting the requirements
of sections 8, 10 and 11 of this 2001 Act + };
(B) Opportunity for enrollees and any representatives of the
enrollees to appear before a review panel at either the first or
second level of review. Representatives may include health care
providers or any other persons chosen by the enrollee. The
enrollee and insurer shall each provide advance notification of
the number of representatives who will appear before the panel
and the relationship of the representatives to the enrollee or
insurer; and
(C) Written decisions in plain language justifying appeal
determinations, including specific references to relevant
provisions of the health benefit plan and related written
corporate practices.
(4) If the insurer has a prescription drug formulary, have:
(a) A written procedure by which a provider with authority to
prescribe drugs and medications may prescribe drugs and
medications not included in the formulary. The procedure shall
include the circumstances when a drug or medication not included
in the formulary will be considered a covered benefit; and
(b) A written procedure to provide full disclosure to enrollees
of any cost sharing or other requirements to obtain drugs and
medications not included in the formulary.
(5) Furnish to all enrollees either directly or, in the case of
a group policy, to the employer or other policyholder for
distribution to enrollees written general information informing
enrollees about services provided, access to services, charges
and scheduling applicable to each enrollee's coverage, including:
(a) Benefits and services included and how to obtain them,
including any restrictions that apply to services obtained
outside the insurer's network or outside the insurer's service
area { + , and the availability of continuity of care as required
by section 3 of this 2001 Act + };
(b) Provisions for referrals, if any, for specialty care,
behavioral health services and hospital services and how
enrollees may obtain the care or services;
(c) Provisions for after-hours and emergency care and how
enrollees may obtain that care, including the insurer's policy,
if any, on when enrollees should directly access emergency care
and use 9-1-1 services;
(d) Charges to enrollees, if applicable, including any policy
on cost sharing for which the enrollee is responsible;
(e) Procedures for notifying enrollees of:
(A) A change in or termination of any benefit;
(B) If applicable, termination of a primary care delivery
office or site; and
(C) If applicable, assistance available to enrollees affected
by the termination of a primary care delivery office or site in
selecting a new primary care delivery office or site;
Enrolled House Bill 3040 (HB 3040-B) Page 13
(f) Procedures for appealing decisions adversely affecting the
enrollee's benefits or enrollment status;
(g) Procedures, if any, for changing providers;
(h) Procedures for voicing grievances { + , including the
option of obtaining external review under the insurer's program
established pursuant to sections 8, 10 and 11 of this 2001
Act + };
(i) A description of the procedures, if any, by which enrollees
and their representatives may participate in the development of
the insurer's corporate policies and practices;
(j) Summary information on how the insurer makes decisions
regarding coverage and payment for treatment or services,
including a general description of any prior authorization and
utilization review requirements that affect coverage or payment;
(k) A summary of criteria used to determine if a service or
drug is considered experimental or investigational;
(L) Information about provider, clinic and hospital networks,
if any, including a list of network providers and information
about how the enrollee may obtain current information about the
availability of individual providers, the hours the providers are
available and a description of any limitations on the ability of
enrollees to select primary and specialty care providers;
(m) A general disclosure of any risk-sharing arrangements the
insurer has with physicians and other providers;
(n) A summary of the insurer's procedures for protecting the
confidentiality of medical records and other enrollee
information, including the provision required in ORS 743.809;
(o) A description of any assistance provided to
non-English-speaking enrollees;
(p) A summary of the insurer's policies, if any, on drug
prescriptions, including any drug formularies, cost sharing
differentials or other restrictions that affect coverage of drug
prescriptions;
(q) Notice of the enrollee's right to file a complaint or seek
other assistance from the Director of the Department of Consumer
and Business Services; and
(r) Notice of the information that is available upon request
pursuant to subsection (6) of this section and information that
is available from the Department of Consumer and Business
Services pursuant to ORS 743.804, 743.807, 743.814 and 743.817.
(6) Provide the following information upon the request of an
enrollee or prospective enrollee:
(a) Rules related to the insurer's drug formulary, if any,
including information on whether a particular drug is included or
excluded from the formulary;
(b) Provisions for referrals, if any, for specialty care,
behavioral health services and hospital services and how
enrollees may obtain the care or services;
(c) A copy of the insurer's annual report on grievances and
appeals as submitted to the department under subsection (9) of
this section;
(d) A description of the insurer's risk-sharing arrangements
with physicians and other providers consistent with risk-sharing
information required by the federal Health Care Financing
Administration pursuant to 42 CFR 417.124 (3) (b) as in effect on
June 18, 1997;
(e) A description of the insurer's efforts, if any, to monitor
and improve the quality of health services; { - and - }
(f) Information about any insurer procedures for credentialing
network providers and how to obtain the names, qualifications and
Enrolled House Bill 3040 (HB 3040-B) Page 14
titles of the providers responsible for an enrollee's care
{ - . - } { + ; and
(g) A description of the insurer's external review program
established pursuant to sections 8, 10 and 11 of this 2001
Act. + }
(7) Except as otherwise provided in this subsection, provide to
enrollees, upon request, a written summary of information that
the insurer may consider in its utilization review of a
particular condition or disease to the extent the insurer
maintains such criteria. Nothing in this section shall require an
insurer to advise an enrollee how the insurer would cover or
treat that particular enrollee's disease or condition.
Utilization review criteria that is proprietary shall be subject
to verbal disclosure only.
(8) Provide the following information to an enrollee when the
enrollee has filed a grievance:
(a) Detailed information on the insurer's grievance and appeal
procedures and how to use them; { - and - }
(b) Information on how to access the complaint line of the
Department of Consumer and Business Services { - . - } { + ;
and
(c) Information explaining how an enrollee applies for external
review of the insurer's actions under the external review program
established by the insurer pursuant to section 8 of this 2001
Act. + }
(9) Provide annual summaries to the Department { + of Consumer
and Business Services + } of the insurer's aggregate data
regarding grievances { + , + } { - and - } appeals { + and
applications for external review + } in a format prescribed by
the department to ensure consistent reporting on the number,
nature and disposition of grievances { + , + }
{ - and - } appeals { + and applications for external
review + }.
(10) Ensure that the confidentiality of specified patient
information and records is protected, and to that end:
(a) Adopt and implement written confidentiality policies and
procedures;
(b) State the insurer's expectations about the confidentiality
of enrollee information and records in medical service contracts;
and
(c) Afford enrollees the opportunity to approve or deny the
release of identifiable medical personal information by the
insurer, except as otherwise required by law.
{ + (11) Notify an enrollee of the enrollee's rights under
the health benefit plan at the time that the insurer notifies the
enrollee of an adverse decision. The notification shall include:
(a) Notice of the right of the enrollee to apply for internal
and external review of the adverse decision;
(b) A statement whether a decision by an independent review
organization is binding on the insurer and enrollee;
(c) A statement that if the decision is not binding on the
insurer and if the insurer does not comply with the decision, the
enrollee may sue the insurer as provided in section 14 of this
2001 Act; and
(d) Information on filing a complaint with the Director of the
Department of Consumer and Business Services. + }
SECTION 16. ORS 750.055 is amended to read:
750.055. (1) The following provisions of the Insurance Code
shall apply to health care service contractors to the extent so
Enrolled House Bill 3040 (HB 3040-B) Page 15
applicable and not inconsistent with the express provisions of
ORS 750.005 to 750.095:
(a) ORS 731.004 to 731.150, 731.162, 731.216 to 731.362,
731.382, 731.385, 731.386, 731.390, 731.398 to 731.430, 731.450,
731.454, 731.488, 731.504, 731.508, 731.509, 731.510, 731.511,
731.512, 731.574 to 731.620, 731.592, 731.594, 731.640 to
731.652, 731.730, 731.731, 731.735, 731.737, 731.740, 731.750,
731.804 and 731.844 to 731.992.
(b) ORS 732.215, 732.220, 732.230, 732.245, 732.250, 732.320,
732.325 and 732.517 to 732.592, not including ORS 732.549 and
732.574 to 732.592.
(c)(A) ORS 733.010 to 733.050, 733.080, 733.140 to 733.170,
733.210, 733.510 to 733.620, 733.635 to 733.680 and 733.695 to
733.780 apply to not-for-profit health care service contractors.
(B) ORS chapter 733, not including ORS 733.630, applies to
for-profit health care service contractors.
(d) ORS chapter 734.
(e) ORS 742.001 to 742.009, 742.013, 742.061, 742.065, 742.150
to 742.162, 742.400, 742.520 to 742.540, 743.010, 743.013,
743.018 to 743.030, 743.050, 743.100 to 743.109, 743.402,
743.412, 743.472, 743.492, 743.495, 743.498, 743.522, 743.523,
743.524, 743.526, 743.527, 743.528, 743.529, 743.549 to 743.555,
743.556, 743.560, 743.600 to 743.610, 743.650 to 743.656,
743.693, 743.697, 743.699, 743.701, 743.704, 743.706 to 743.712,
743.721, 743.722, 743.726, 743.727, 743.728, 743.729, 743.804,
743.807, 743.808, 743.809, 743.814 to 743.839, 743.842, 743.845
and 743.847 { + and sections 3, 5, 8, 9, 10, 11, 12, 13 and 14
of this 2001 Act + }.
(f) The provisions of ORS chapter 744 relating to the
regulation of agents.
(g) ORS 746.005 to 746.140, 746.160, 746.180, 746.220 to
746.370 and 746.600 to 746.690.
(h) ORS 743.714, except in the case of group practice health
maintenance organizations that are federally qualified pursuant
to Title XIII of the Public Health Service Act unless the patient
is referred by a physician associated with a group practice
health maintenance organization.
(i) ORS 735.600 to 735.650.
(j) ORS 743.680 to 743.689.
(k) ORS 744.700 to 744.740.
(L) ORS 743.730 to 743.773.
(m) ORS 731.485, except in the case of a group practice health
maintenance organization that is federally qualified pursuant to
Title XIII of the Public Health Service Act and that wholly owns
and operates an in-house drug outlet.
(2) For the purposes of this section only, health care service
contractors shall be deemed insurers.
(3) Any for-profit health care service contractor organized
under the laws of any other state which is not governed by the
insurance laws of such state, will be subject to all requirements
of ORS chapter 732.
(4) The Director of the Department of Consumer and Business
Services may, after notice and hearing, adopt reasonable rules
not inconsistent with this section and ORS 750.003, 750.005,
750.025 and 750.045 that are deemed necessary for the proper
administration of these provisions.
SECTION 17. ORS 750.333 is amended to read:
750.333. (1) The following provisions of the Insurance Code
apply to trusts carrying out a multiple employer welfare
arrangement:
Enrolled House Bill 3040 (HB 3040-B) Page 16
(a) ORS 731.004 to 731.150, 731.162, 731.216 to 731.268,
731.296 to 731.316, 731.324, 731.328, 731.378, 731.386, 731.390,
731.398, 731.406, 731.410, 731.414, 731.418 to 731.434, 731.454,
731.484, 731.486, 731.488, 731.512, 731.574 to 731.620, 731.640
to 731.652, 731.804 to 731.992.
(b) ORS 733.010 to 733.050, 733.140 to 733.170, 733.210,
733.510 to 733.680 and 733.695 to 733.780.
(c) ORS chapter 734.
(d) ORS 742.001 to 742.009, 742.013, 742.061 and 742.400.
(e) ORS 743.028, 743.053, 743.524, 743.526, 743.527, 743.528,
743.529, 743.530, 743.560, 743.562, 743.600, 743.601, 743.602,
743.610, 743.693, 743.699, 743.727, 743.728, 743.730 to 743.773
(except 743.760 to 743.773), 743.801, 743.804, 743.807, 743.808,
743.809, 743.814 to 743.839, 743.842, 743.845 and 743.847 { +
and sections 3, 5, 8, 9, 10, 11, 12, 13 and 14 of this 2001
Act + }.
(f) ORS 743.556, 743.701, 743.703, 743.704, 743.706, 743.707,
743.709, 743.710, 743.712, 743.713, 743.714, 743.717, 743.718,
743.719, 743.721, 743.722, 743.725 and 743.726. Multiple employer
welfare arrangements to which ORS 743.730 to 743.773 apply are
subject to the sections referred to in this paragraph only as
provided in ORS 743.730 to 743.773.
(g) Provisions of ORS chapter 744 relating to the regulation of
agents and insurance consultants, and ORS 744.700 to 744.740.
(h) ORS 746.005 to 746.140, 746.160, 746.180 and 746.220 to
746.370.
(i) ORS 731.592 and 731.594.
(2) For the purposes of this section:
(a) A trust carrying out a multiple employer welfare
arrangement shall be considered an insurer.
(b) References to certificates of authority shall be considered
references to certificates of multiple employer welfare
arrangement.
(c) Contributions shall be considered premiums.
(3) The provision of health benefits under ORS 750.301 to
750.341 shall be considered to be the transaction of health
insurance.
SECTION 18. { + Except as provided in section 19 of this 2001
Act, this 2001 Act does not become operative until July 1,
2002. + }
SECTION 19. { + The Director of the Department of Consumer and
Business Services may take any action before the operative date
of this 2001 Act that is necessary to enable the director to
exercise, on and after the operative date of this 2001 Act, all
the duties, functions and powers conferred on the director by
this 2001 Act. + }
SECTION 20. { + The unit captions used in this 2001 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2001 Act. + }
----------
Enrolled House Bill 3040 (HB 3040-B) Page 17
Passed by House March 27, 2001
Repassed by House May 10, 2001
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate May 8, 2001
...........................................................
President of Senate
Enrolled House Bill 3040 (HB 3040-B) Page 18
Received by Governor:
......M.,............., 2001
Approved:
......M.,............., 2001
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2001
...........................................................
Secretary of State
Enrolled House Bill 3040 (HB 3040-B) Page 19