72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1092
Senate Bill 353
Sponsored by Senator NELSON
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Decreases amount of capital or surplus required by health care
service contractor furnishing only complementary health services.
Makes conforming amendments.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to health care service contractors; amending ORS
735.605, 743.556, 750.005, 750.015 and 750.045 and section 5,
chapter 318, Oregon Laws 2001; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 750.005 is amended to read:
750.005. { + As used in ORS 750.005 to 750.095:
(1) 'Claims' means any amount incurred by the insurer covering
contracted benefits.
(2) 'Complementary health services' means the following health
care services:
(a) Chiropractic as defined in ORS 684.010;
(b) Naturopathic medicine as defined in ORS 685.010;
(c) Massage therapy as defined in ORS 687.011; or
(d) Acupuncture as defined in ORS 677.757. + }
{ - (1) - } { + (3) + } 'Doctor' means any person lawfully
licensed or authorized by statute to render any health care
services.
{ - (2) - } { + (4) + } 'Health care service contractor'
means:
(a) Any corporation that is sponsored by or otherwise
intimately connected with a group of doctors licensed by this
state, or by a group of hospitals licensed by this state, or
both, under contracts with groups of doctors or hospitals
{ - which - } { + that + } include conditions holding the
subscriber harmless in the event of nonpayment by the health care
service contract as provided in ORS 750.095, and { - which - }
{ + that + } accepts prepayment for health care services; or
(b) Any person referred to in ORS 750.035.
{ + (5) 'Health care services' means the furnishing of
medicine, medical or surgical treatment, nursing, hospital
service, dental service, optometrical service, complementary
health services or any or all of the enumerated services or any
other necessary services of like character, whether or not
contingent upon sickness or personal injury, as well as the
furnishing to any person of any and all other services and goods
for the purpose of preventing, alleviating, curing or healing
human illness, physical disability or injury. + }
{ - (3) - } { + (6) + } 'Health maintenance organization'
means any health care service contractor operated on a for-profit
or not for-profit basis which:
(a) Qualifies under Title XIII of the Public Health Service
Act; or
(b)(A) Provides or otherwise makes available to enrolled
participants health care services, including at least the
following basic health care services:
(i) Usual physician services;
(ii) Hospitalization;
(iii) Laboratory;
(iv) X-ray;
(v) Emergency and preventive services; and
(vi) Out-of-area coverage;
(B) Is compensated, except for copayments, for the provision of
basic health care services listed in subparagraph (A) of this
paragraph to enrolled participants on a predetermined periodic
rate basis;
(C) Provides physicians' services primarily directly through
physicians who are either employees or partners of such
organization, or through arrangements with individual physicians
or one or more groups of physicians organized on a group practice
or individual practice basis; and
(D) Employs the terms 'health maintenance organization' or '
HMO' in its name, contracts, literature or advertising media on
or before July 13, 1985.
{ - (4) 'Health care services' means the furnishing of
medicine, medical or surgical treatment, nursing, hospital
service, dental service, optometrical service or any or all of
the enumerated services or any other necessary services of like
character, whether or not contingent upon sickness or personal
injury, as well as the furnishing to any person of any and all
other services and goods for the purpose of preventing,
alleviating, curing, or healing human illness, physical
disability or injury. - }
{ - (5) 'Claims' means any amount incurred by the insurer
covering contracted benefits. - }
SECTION 2. ORS 750.045 is amended to read:
750.045. (1) A health care service contractor that is a
for-profit or not-for-profit corporation shall possess and
thereafter maintain capital or surplus, or any combination
thereof, of not less than $2.5 million.
(2) A health care service contractor that is a for-profit or
not-for-profit corporation shall file a surety bond or such other
bond or securities in the sum of $250,000 as are authorized by
the Insurance Code as a guarantee of the due execution of the
policies to be entered into by such contractor in accordance with
ORS 750.005 to 750.095. In lieu of such bond or securities, a
health care service contractor may file an irrevocable letter of
credit issued by an insured institution as defined in ORS 706.008
in the sum of $250,000. This subsection does not apply to a
health care service contractor that has at least 75 percent of
its assets invested in health care service facilities pursuant to
ORS 733.700.
(3) Subsections (1) and (2) of this section do not apply to a
health care service contractor furnishing only { + complementary
health services, + } dental service or optometrical service
operated on a for-profit or not-for-profit basis if:
(a) The services referred to in this subsection maintain
capital or surplus, or any combination thereof, of not less than
$1 million.
(b) The services referred to in this subsection file a surety
bond or other such bond or securities in the sum of $50,000 as
are authorized by the Insurance Code as a guarantee of the due
execution of the policies to be entered into by such contractor
in accordance with ORS 750.005 to 750.095.
(4) A health care service contractor that is a for-profit or
not-for-profit corporation applying for its original certificate
of authority in this state shall possess, when first so
authorized, additional capital or surplus, or any combination
thereof, of not less than $500,000.
(5) For the protection of the public, the Director of the
Department of Consumer and Business Services may require a health
care service contractor to possess and maintain capital or
surplus, or any combination thereof, in excess of the amount
otherwise required under this section owing to the type, volume
and nature of insurance business transacted by the health care
service contractor, if the director determines that the greater
amount is necessary for maintaining the health care service
contractor's solvency according to standards established by rule.
In developing such standards, the director shall consider model
standards adopted by the National Association of Insurance
Commissioners or its successor organization. For the purpose of
determining the reasonableness and adequacy of a health care
service contractor's capital and surplus, the director must
consider at least the following factors, as applicable:
(a) The size of the health care service contractor, as measured
by its assets, capital and surplus, reserves, premium writings,
insurance in force and other appropriate criteria.
(b) The number of lives insured.
(c) The extent of the geographical dispersion of the lives
insured by the health care service contractor.
(d) The nature and extent of the reinsurance program of the
health care service contractor.
(e) The quality, diversification and liquidity of the
investment portfolio of the health care service contractor.
(f) The recent past and projected future trend in the size of
the investment portfolio of the health care service contractor.
(g) The combined capital and surplus maintained by comparable
health care service contractors.
(h) The adequacy of the reserves of the health care service
contractor.
(i) The quality and liquidity of investments in affiliates.
The director may treat any such investment as a disallowed asset
for purposes of determining the adequacy of combined capital and
surplus whenever in the judgment of the director the investment
so warrants.
(j) The quality of the earnings of the health care service
contractor and the extent to which the reported earnings include
extraordinary items.
SECTION 3. Section 5, chapter 318, Oregon Laws 2001, is amended
to read:
{ + Sec. 5. + } (1) To qualify for authority to transact
insurance in this state on and after { - the effective date of
this 2001 Act - } { + January 1, 2002 + }, an insurer that is
not authorized to transact insurance in this state on the day
before { - the effective date of this 2001 Act - }
{ + January 1, 2002, + }must possess and thereafter maintain
the applicable capital and surplus required by ORS 731.554,
731.562 and 731.566, as amended by sections 1 to 3 { + , chapter
318, Oregon Laws 2001 + } { - of this 2001 Act - } .
(2) To qualify for authority to transact health care services
in this state on and after { - the effective date of this 2001
Act - } { + January 1, 2002 + }, a health care service
contractor that is not authorized to transact health care
services in this state on the day before { - the effective date
of this 2001 Act - } { + January 1, 2002, + } must possess and
thereafter maintain the applicable capital and surplus required
by ORS 750.045, as amended by section 6 { + , chapter 318, Oregon
Laws 2001 + } { - of this 2001 Act - } .
(3) An insurer that is authorized to transact insurance in this
state on the day before { - the effective date of this 2001
Act - } { + January 1, 2002, + } and that possesses on that date
the applicable capital and surplus required under ORS 731.554,
731.562 and 731.566, as amended by sections 1 to 3 { + , chapter
318, Oregon Laws 2001 + } { - of this 2001 Act - } , must
thereafter maintain that capital and surplus.
(4) A health care service contractor that is authorized to
transact health care services in this state on the day before
{ - the effective date of this 2001 Act - } { + January 1,
2002, + } and that possesses on that date the applicable capital
and surplus required under ORS 750.045, as amended by section
6 { + , chapter 318, Oregon Laws 2001 + } { - of this 2001
Act - } , must thereafter maintain that capital and surplus.
(5) Notwithstanding the effective date of { - this 2001
Act - } { + chapter 318, Oregon Laws 2001 + }, an insurer that
is authorized to transact insurance in this state on the day
before { - the effective date of this 2001 Act - }
{ + January 1, 2002, + } and that does not possess on { - the
effective date of this 2001 Act - } { + January 1, 2002, + }
the applicable capital and surplus required under ORS 731.554 (1)
and (2), 731.562 and 731.566, as amended by sections 1 to 3 { + ,
chapter 318, Oregon Laws 2001 + } { - of this 2001 Act - } ,
must possess and maintain at least the amounts of capital and
surplus as follows:
(a) For insurers other than insurers transacting workers'
compensation insurance:
(A) $1,300,000, not later than December 31, 2002.
(B) $1,600,000, not later than December 31, 2003.
(C) $1,900,000, not later than December 31, 2004.
(D) $2,200,000, not later than December 31, 2005.
(E) $2,500,000, not later than December 31, 2006.
(b) For insurers transacting workers' compensation insurance:
(A) $3,400,000, not later than December 31, 2002.
(B) $3,800,000, not later than December 31, 2003.
(C) $4,200,000, not later than December 31, 2004.
(D) $4,600,000, not later than December 31, 2005.
(E) $5,000,000, not later than December 31, 2006.
(6) Notwithstanding the effective date of { - this 2001
Act - } { + chapter 318, Oregon Laws 2001 + }, a health care
service contractor that is authorized to transact health care
services in this state on the day before { - the effective date
of this 2001 Act - } { + January 1, 2002, + } and that does not
possess on { - the effective date of this 2001 Act - }
{ + January 1, 2002, + } the applicable capital and surplus
required under ORS 750.045, as amended by section 6 { + , chapter
318, Oregon Laws 2001 + } { - of this 2001 Act - } , must
possess and maintain at least the amounts of capital and surplus
as follows:
(a) As of each date specified in this paragraph, a health care
service contractor other than one to which ORS 750.045 (3)
applies shall possess and maintain capital or surplus, or any
combination thereof, of not less than the minimum amount
specified in connection with the date or an amount equal to 50
percent of the average claims as defined in ORS 750.005
{ - (5) - } for the preceding 12-month period, whichever is
greater. The required amount of capital and surplus for each
date, however, shall not be more than the maximum amount
specified in connection with that date. The dates and minimum and
maximum required amounts of capital and surplus are as follows:
(A) As of December 31, 2002, not less than $650,000 and not
more than $1,300,000.
(B) As of December 31, 2003, not less than $800,000 and not
more than $1,600,000.
(C) As of December 31, 2004, not less than $950,000 and not
more than $1,900,000.
(D) As of December 31, 2005, not less than $1,100,000 and not
more than $2,200,000.
(E) As of December 31, 2006, not less than $2,500,000.
(b) As of each date specified in this paragraph, a health care
service contractor to which ORS 750.045 (3) applies shall possess
and maintain capital or surplus, or any combination thereof, of
not less than the minimum amount specified in connection with the
date or an amount equal to 50 percent of the average claims as
defined in ORS 750.005 { - (5) - } for the preceding 12-month
period, whichever is greater. The required amount of capital and
surplus for each date, however, shall not be more than the
maximum amount specified in connection with that date. The dates
and minimum and maximum required amounts of capital and surplus
are as follows:
(A) As of December 31, 2002, not less than $300,000 and not
more than $600,000.
(B) As of December 31, 2003, not less than $350,000 and not
more than $700,000.
(C) As of December 31, 2004, not less than $400,000 and not
more than $800,000.
(D) As of December 31, 2005, not less than $450,000 and not
more than $900,000.
(E) As of December 31, 2006, not less than $1 million.
(7) An insurer authorized to transact insurance in this state
on the day before { - the effective date of this 2001 Act - }
{ + January 1, 2002, + } shall not be granted authority to
transact any other or additional class of insurance until the
insurer complies with the applicable provisions of ORS 731.554,
731.562 or 731.566, as amended by sections 1 to 3 { + , chapter
318, Oregon Laws 2001 + } { - of this 2001 Act - } .
(8) An insurer or health care service contractor authorized to
transact insurance or health care services in this state on the
day before { - the effective date of this 2001 Act - }
{ + January 1, 2002, + } that reapplies for a certificate of
authority after having a certificate of authority revoked for any
cause shall not be granted authority to transact any insurance or
health care services until the insurer or health care service
contractor complies with the applicable provisions of ORS
731.554, 731.562, 731.566 or 750.045, as amended by sections 1 to
3 and 6 { + , chapter 318, Oregon Laws 2001 + } { - of this
2001 Act - } .
(9) If an insurer to which subsection (5) of this section
applies or a health care service contractor to which subsection
(6) of this section applies does not possess and maintain the
minimum amount of capital and surplus required by ORS 731.554 (1)
and (2), 731.562, 731.566 and 750.045, as amended by sections 1
to 3 and 6 { + , chapter 318, Oregon Laws 2001 + } { - of this
2001 Act - } , on or before December 31, 2006, the insurer or
health care service contractor may apply to the Director of the
Department of Consumer and Business Services for an extension of
time within which to attain the amount. The application must
state the reasons for the failure to attain the required minimum
amount, the date by which the amount is expected to be attained
and the means and likelihood of attaining the amount by that
date. The director may grant the extension if the director
determines that the extension is reasonable and appropriate in
the circumstances, taking into account factors that include but
are not limited to the following:
(a) Whether the insurer or health care service contractor has
made reasonable progress toward attaining the required minimum
amount during the time periods specified in this section; and
(b) Whether the insurer or health care service contractor is
likely to attain the required minimum amount by the date proposed
by the insurer or health care service contractor.
SECTION 4. ORS 735.605 is amended to read:
735.605. As used in ORS 735.600 to 735.650:
(1) 'Benefits plan' means the coverages to be offered by the
pool to eligible persons pursuant to ORS 735.600 to 735.650.
(2) 'Board' means the Oregon Medical Insurance Pool Board.
(3) 'Insured' means any individual resident of this state who
is eligible to receive benefits from any insurer.
(4) 'Insurer' means:
(a) Any insurer as defined in ORS 731.106 or fraternal benefit
society as defined in ORS 748.106 required to have a certificate
of authority to transact health insurance business in this state,
and any health care service contractor as defined in ORS 750.005
{ - (2) - } , issuing medical insurance in this state on or
after September 27, 1987.
(b) Any reinsurer reinsuring medical insurance in this state on
or after September 27, 1987.
(c) To the extent consistent with federal law, any
self-insurance arrangement covered by the Employee Retirement
Income Security Act of 1974, as amended, that provides health
care benefits in this state on or after September 27, 1987.
(d) All self-insurance arrangements not covered by the Employee
Retirement Income Security Act of 1974, as amended, that provides
health care benefits in this state on or after September 27,
1987.
(5) 'Medical insurance' means any health insurance benefits
payable on the basis of hospital, surgical or medical expenses
incurred and any health care service contractor subscriber
contract. Medical insurance does not include accident only,
disability income, hospital confinement indemnity, dental or
credit insurance, coverage issued as a supplement to liability
insurance, coverage issued as a supplement to Medicare, insurance
arising out of a workers' compensation or similar law, automobile
medical-payment insurance or insurance under which benefits are
payable with or without regard to fault and which is statutorily
required to be contained in any liability insurance policy or
equivalent self-insurance.
(6) 'Medicare' means coverage under both part A and part B of
Title XVIII of the Social Security Act, 42 U.S.C. 1395 et seq.,
as amended.
(7) 'Plan of operation' means the plan of operation of the
pool, including articles, bylaws and operating rules, adopted by
the board pursuant to ORS 735.600 to 735.650.
(8) 'Pool' means the Oregon Medical Insurance Pool as created
by ORS 735.610.
(9) 'Reinsurer' means any insurer as defined in ORS 731.106
from whom any person providing medical insurance to Oregon
insureds procures insurance for itself in the insurer, with
respect to all or part of the medical insurance risk of the
person.
(10) 'Self-insurance arrangement' means any plan, program,
contract or any other arrangement under which one or more
employers, unions or other organizations provide health care
services or benefits to their employees or members in this state,
either directly or indirectly through a trust or third party
administrator, unless the health care services or benefits are
provided by an insurance policy issued by an insurer other than a
self-insurance arrangement.
SECTION 5. ORS 743.556 is amended to read:
743.556. A group health insurance policy providing coverage for
hospital or medical expenses shall provide coverage for expenses
arising from treatment for chemical dependency including
alcoholism and for mental or nervous conditions. The following
conditions apply to the requirement for such coverage:
(1) The coverage may be made subject to provisions of the
policy that apply to other benefits under the policy, including
but not limited to provisions relating to deductibles and
coinsurance. Deductibles and coinsurance for treatment in health
care facilities or residential programs or facilities shall be no
greater than those under the policy for expenses of
hospitalization in the treatment of illness. Deductibles and
coinsurance for outpatient treatment shall be no greater than
those under the policy for expenses of outpatient treatment of
illness.
(2) Treatment provided in health care facilities, residential
programs or facilities, day or partial hospitalization programs
or outpatient services shall be considered eligible for
reimbursement if it is provided by:
(a) Programs or providers described in ORS 430.010 or approved
by the Department of Human Services under subsection (3) of this
section.
(b) Programs accredited for the particular level of care for
which reimbursement is being requested by the Joint Commission on
Accreditation of Hospitals or the Commission on Accreditation of
Rehabilitation Facilities.
(c) Inpatient programs provided by health care facilities as
defined in ORS 442.015. Residential, outpatient, or day or
partial hospitalization programs offered by or through a health
care facility must meet the requirements of either paragraph (a)
or (b) of this subsection in order to be eligible for
reimbursement.
(d) Residential programs or facilities described in subsection
(3) of this section if the patient is staying overnight at the
facility and is involved in a structured program at least eight
hours per day, five days per week.
(e) Programs in which staff are directly supervised or in which
individual client treatment plans are approved by a person
described in ORS 430.010 (4)(a) and which meet the standards
established under subsection (3) of this section.
(3) Subject to ORS 430.065, the Department of Human Services
shall adopt rules relating to the approval, for insurance
reimbursement purposes, of noninpatient chemical dependency
programs that are not related to the department or any county
mental health program. The department shall adopt rules relating
to the approval, for insurance reimbursement purposes, of
noninpatient programs for mental or nervous conditions that are
not related to the department or any county mental health
program.
(4) A program that provides services for persons with both a
chemical dependency diagnosis and a mental or nervous condition
shall be considered to be a distinct and specialized type of
program for both chemical dependency and mental or nervous
conditions. The Department of Human Services shall develop
specific standards related to such programs for program approval
purposes and shall adopt rules relating to the approval, for
insurance reimbursement purposes, of such noninpatient programs
that are not related to the department and any county mental
health program.
(5) As used in this section:
(a) 'Chemical dependency' means the addictive relationship with
any drug or alcohol characterized by either a physical or
psychological relationship, or both, that interferes with the
individual's social, psychological or physical adjustment to
common problems on a recurring basis. For purposes of this
section, chemical dependency does not include addiction to, or
dependency on, tobacco, tobacco products or foods.
(b) 'Child or adolescent' means a person who is 17 years of age
or younger.
(c) 'Facility' means a corporate or governmental entity or
other provider of services for the treatment of chemical
dependency or for the treatment of mental or nervous conditions.
(d) 'Program' means a particular type or level of service that
is organizationally distinct within a facility.
(6) Notwithstanding the limits for particular types of services
specified in this section, a policy shall not limit the total of
payments for all treatment of any kind under this section for
chemical dependency, together with payments for all treatment of
any kind for mental or nervous conditions, to less than $13,125
for adults and $15,625 for children or adolescents. For persons
requesting payments for treatment of any kind for chemical
dependency, but not requesting payments for treatment of any kind
of mental or nervous condition, a policy shall not limit the
total of payments for all treatment to less than $8,125 for
adults and $13,125 for children and adolescents.
(7) The limits for mental or nervous conditions specified in
this section shall apply to persons with diagnoses of both
chemical dependency and mental or nervous conditions, who are
being treated for both types of diagnosis, as well as persons
with only a diagnosis of a mental or nervous condition.
(8) The higher benefit levels in this section for children or
adolescents are in recognition of the longer period of treatment
and the greater levels of staffing that may be required for
children or adolescents and are intended to permit more services
to meet the needs of children and adolescents.
(9) Payments shall not be made under this section for
educational programs to which drivers are referred by the
judicial system, nor for volunteer mutual support groups.
(10) Except as permitted by subsections (1), (6) and (12) of
this section, the policy shall not limit payments for inpatient
treatment in hospitals and other health care facilities
thereunder:
(a) For chemical dependency to an amount less than $5,625 for
adults and $5,000 for children or adolescents; and
(b) For mental or nervous conditions to an amount less than
$5,000 for adults and $7,500 for children or adolescents.
(11) Except as permitted by subsections (1), (6) and (12) of
this section, the policy shall not limit payments for treatment
in residential programs or facilities or day or partial
hospitalization programs:
(a) For chemical dependency to an amount less than $4,375 for
adults and $3,750 for children or adolescents; and
(b) For mental or nervous conditions to an amount less than
$1,250 for adults and $3,125 for children or adolescents.
(12) Notwithstanding the minimum benefits for particular types
of services specified in subsections (10) and (11) of this
section, and except as permitted by subsection (1) of this
section, the policy shall not limit total payments for inpatient,
residential and day or partial hospitalization program care or
treatment:
(a) For chemical dependency to an amount less than $10,625 for
children or adolescents; and
(b) For mental or nervous conditions to an amount less than
$10,625 for adults and $13,125 for children or adolescents.
(13) Except as permitted by subsections (1) and (6) of this
section, in the case of benefits for outpatient services, the
policy shall not limit payments:
(a) For chemical dependency to an amount less than $1,875 for
adults and $2,500 for children or adolescents; and
(b) For mental or nervous conditions to an amount less than
$2,500.
(14) If so specified in the policy, outpatient coverage may
include follow-up in-home service associated with any health care
facility, residential, day or partial hospitalization or
outpatient services. The policy may limit coverage for in-home
service to persons who have completed their initial health care
facility, residential, day or partial hospitalization or
outpatient treatment and did not terminate that initial treatment
against advice. The policy may also limit coverage for in-home
service by defining the circumstances of need under which payment
will or will not be made.
(15) Under ORS 430.021 and 430.315, the Legislative Assembly
has found that health care cost containment is necessary and
intends to encourage insurance policies designed to achieve cost
containment by assuring that reimbursement is limited to
appropriate utilization under criteria incorporated into such
policies, either directly or by reference.
(16) A group health insurance policy may provide, with respect
to treatment for chemical dependency or mental or nervous
conditions, that any one or more of the following cost
containment methods shall be in effect and the method or methods
used by an insurer in one part of the state may be different from
the method or methods used by that insurer in another part of the
state:
(a) Proportion of coinsurance required for treatment in
residential programs or facilities, day or partial
hospitalization programs or outpatient services less than the
proportion of coinsurance required for treatment in health care
facilities.
(b) Subject to the patient or client confidentiality provisions
of ORS 40.235 relating to physicians, ORS 40.240 relating to
nurse practitioners, ORS 40.230 relating to psychologists and ORS
40.250 and 675.580 relating to licensed clinical social workers,
review for level of treatment of admissions and continued stays
for treatment in health care facilities, residential programs or
facilities, day or partial hospitalization programs and
outpatient services by either insurer staff or personnel under
contract to the insurer, or by a utilization review contractor,
who shall have the authority to certify for or deny level of
payment:
(A) This review shall be made according to criteria made
available to providers in advance upon request.
(B) To facilitate implementation of utilization review programs
by insurers, the Director of Human Services shall draft an
advisory or model set of criteria for appropriate utilization of
inpatient, residential, day or partial hospitalization, and
outpatient facilities, programs and services by adults, children
and adolescents, and persons with both a chemical dependency
diagnosis and a mental or nervous condition. These criteria shall
be consistent with this section and shall not be binding on any
insurer or other party. However, at the time of contract
negotiation or amendment, with the agreement of the parties to
the contract, any insurer may adopt the criteria or similar
criteria with or without modification. The director shall revise
these criteria at least every two years. In developing and
revising these criteria, the director shall organize a technical
advisory panel including representatives of the Department of
Consumer and Business Services, the Department of Human Services,
the insurance industry, the business community and providers of
each level of care. The director shall place substantial weight
on the advice of this panel.
(C) Review shall be performed by or under the direction of a
medical or osteopathic physician licensed by the Board of Medical
Examiners for the State of Oregon; a psychologist licensed by the
State Board of Psychologist Examiners; a nurse practitioner
registered by the Oregon State Board of Nursing; or a clinical
social worker licensed by the State Board of Clinical Social
Workers, with physician consultation readily available. The
reviewer shall have expertise in the evaluation of mental or
nervous condition services or chemical dependency services.
(D) Review may involve prior approval, concurrent review of the
continuation of treatment, post-treatment review or any
combination of these. However, if prior approval is required,
provision shall be made to allow for payment of urgent or
emergency admissions, subject to subsequent review. If prior
approval is not required, insurers shall permit treatment
providers, policyholders or persons acting on their behalf to
make advance inquiries regarding the appropriateness of a
particular admission to a treatment program. Insurers shall
provide a timely response to such inquiries. Approval of a
particular admission does not represent a guarantee of future
payment.
(E) An appeals process shall be provided.
(F) An insurer may choose to review all providers on a sampling
or audit basis only; or to review on a less frequent basis those
providers who consistently supply full documentation, consistent
with confidentiality statutes on each case in a timely fashion to
the insurer.
(17) For purposes of subsection (16)(b) of this section, a
utilization review contractor is a professional review
organization or similar entity which, under contract with an
insurance carrier, performs certification of reimbursability of
level of treatment for admissions and maintained stays in
treatment programs, facilities or services.
(18) For purposes of subsection (16)(b) of this section, when
implemented through an insurance contract, reimbursability of
inpatient treatment requires demonstration that medical
circumstances require 24-hour nursing care, or physician or nurse
assessment, treatment or supervision that cannot be readily made
available on an outpatient basis, or in:
(a) The current living situation;
(b) An alternative, nontreatment living situation;
(c) An alternative residential program or facility; or
(d) A day or partial hospitalization program.
(19) For purposes of subsection (16)(b) of this section, when
implemented through an insurance contract, reimbursability of
treatment at the residential, day or partial hospitalization
level of treatment shall require demonstration that outpatient
services, if appropriate and less costly than residential, day or
partial hospitalization services:
(a) Are not presently appropriate and available;
(b) Cannot be readily and timely made available; and
(c) Cannot meet documented needs for nonmedical supervision,
protection, assistance and treatment, either in the current
living situation or in a readily and timely available
alternative, nontreatment living situation, taking into account
the extent of both the available positive support and existing
negative influences in the occupational, social and living
situations; risks to self or others; and readiness to participate
consistently in treatment.
(20) For purposes of subsection (16)(b) of this section,
reimbursability of treatment at the level for outpatient
facility, service or program shall require demonstration that
treatment is justified, considering the individual's history, and
the current medical, occupational, social and psychological
situation, and the overall prognosis.
(21) Discrete medical or neurologic diagnostic or treatment
services including any professional component of that service,
costing in excess of $300, occurring concurrently with but not
directly related to treatment of mental or nervous conditions
shall not be charged against the inpatient benefit level.
(22) The benefits described in this section shall renew in full
either on the first day of the 25th month of coverage following
the first use of services for the treatment of chemical
dependency or mental or nervous conditions, or both, or on the
first day following two consecutive contract years.
(23) Health maintenance organizations, as defined in ORS
750.005 { - (3) - } , shall be subject to the following
conditions and requirements in their provision of benefits for
chemical dependency or mental or nervous conditions to enrollees:
(a) Notwithstanding the provisions of subsection (1) of this
section, health maintenance organizations may establish
reasonable provisions for enrollee cost-sharing, so long as the
amount the enrollee is required to pay does not exceed the amount
of coinsurance and deductible customarily required by other
insurance policies which are subject to the provisions of this
chapter for that type and level of service.
(b) Nothing in this section prevents health maintenance
organizations from establishing durational limits which are
actuarially equivalent to the benefits required by this section.
(c) Health maintenance organizations may limit the receipt of
covered services by enrollees to services provided by or upon
referral by providers associated with the health maintenance
organization.
(d) The Department of Human Services shall make rules
establishing objective and quantifiable criteria for determining
when a health maintenance organization meets the conditions and
requirements of this subsection.
(24) Nothing in this section shall prevent an insurer or health
care service contractor other than a health maintenance
organization, except as provided in subsection (23) of this
section, from contracting with providers of health care services
to furnish services to policyholders or certificate holders
according to ORS 743.531 or 750.005, subject to the following
conditions:
(a) An insurer or health care service contractor may establish
limits for contracted services which are actuarially equivalent
to the benefits required by this section, so long as the same
range of treatment settings is made available.
(b) An insurer or health care service contractor, other than a
health maintenance organization, may negotiate with contracting
providers as to the cost of actuarially equivalent benefits, and
such actuarially equivalent benefits for services of contracting
providers shall be deemed to equal the minimum benefit levels
specified in this section.
(c) An insurer or health care service contractor is not
required to contract with all eligible providers, and payment for
covered services of contracting providers may be in alternative
methods or amounts rather than as specified in this section.
(d) Insurers and health care service contractors other than
health maintenance organizations shall pay benefits toward the
covered charges of noncontracting providers of services for the
treatment of chemical dependency or mental or nervous conditions
at the same level of deductible or coinsurance as would apply to
covered charges of noncontracting providers of other health
services under the same group policy or contract. The insured
shall have the right to use the services of a noncontracting
provider of services for the treatment of chemical dependency or
mental or nervous conditions. Policies described in this
subsection shall be subject to the provisions of subsection (1)
of this section, whether or not the services for chemical
dependency or mental or nervous conditions are provided by
contracting or noncontracting providers.
(e) The department shall make rules establishing objective and
quantifiable criteria for determining that a contract meets the
conditions and requirements of this subsection and that
actuarially equivalent services of contracting providers equal or
exceed services obtainable with the minimum benefits specified in
this section.
(25) The intent of the Legislative Assembly in adopting this
section is to reserve benefits for different types of care to
encourage cost effective care and to assure continuing access to
levels of care most appropriate for the insured's condition and
progress.
(26) The director, after notice and hearing, may adopt
reasonable rules not inconsistent with this section that are
considered necessary for the proper administration of these
provisions.
SECTION 6. ORS 750.015 is amended to read:
750.015. (1) Except as provided in subsection (2) of this
section, not less than one-third of the group of persons vested
with the management of the affairs of a health care service
contractor, as defined in ORS 750.005 { - (2)(a) - } { +
(4)(a) + }, shall be representatives of the public who are not
practicing doctors or employees or trustees of a participant
hospital.
(2)(a) Notwithstanding subsection (1) of this section, the
group of persons vested with the management of the affairs of a
nonprofit private organization described in this subsection shall
have at least two representatives of the public who are not
practicing doctors, as defined in ORS 750.005, or employees or
trustees of a participant hospital.
(b) This subsection applies to a nonprofit private organization
that is a health maintenance organization, as defined in ORS
442.015, that is controlled by a single nonprofit hospital or by
a group of nonprofit hospitals under common ownership and that
operates in a county with a population of 200,000 or more.
SECTION 7. { + This 2003 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2003 Act takes effect on its
passage. + }
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