69th OREGON LEGISLATIVE ASSEMBLY--1997 Regular Session
Enrolled
Senate Bill 21
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Health and
Human Resources Committee)
CHAPTER ................
AN ACT
Relating to health insurance; creating new provisions; amending
ORS 743.801, 743.803, 743.806, 743.808, 750.055 and 750.333;
and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 743.808 is amended to read:
743.808. (1) All insurers offering a { - policy of health
insurance - } { + health benefit plan + } in this state that
requires an enrollee to designate a participating primary care
physician shall:
(a) Permit the enrollee to change participating primary care
physicians at will, except that the enrollee may be restricted to
making changes no more frequently than two times in any 12-month
period and may be limited to designating only those participating
primary care physicians accepting new patients.
(b) Have available for employer purchasers of group health
plans with more than 25 employees a point-of-service benefit plan
providing for payment for the services of a provider on a { +
fee-for-service or + } discounted fee-for-service basis with
reasonable access to a broad array of licensed providers in the
insurer's geographic service area. Any higher premium for the
point-of-service benefit plan may not exceed true actuarial cost,
including administrative costs, to the insurer.
{ + (2) A health maintenance organization that is exempt from
federal income tax under Internal Revenue Code section 501(c)(3)
or (4) shall not be required to offer a point-of-service benefit
plan as required by subsection (1)(b) of this section if offering
such a plan could result in loss of federal tax-exempt status.
Until such time as the Federal Government establishes guidelines
for health maintenance organizations exempt from federal income
tax that offer point-of-service benefit plans, such a health
maintenance organization shall not be required to offer a
point-of-service benefit plan if:
(a) Enrollment in Internal Revenue Code section 501(m)
coverages exceeds five percent of its business; or
(b) Revenue from Internal Revenue Code section 501(m) coverages
exceeds five percent of its revenue.
(3) A health maintenance organization that is federally
qualified under 42 U.S.C. 300e et seq. shall not be required to
Enrolled Senate Bill 21 (SB 21-A) Page 1
offer a point-of-service benefit plan in a manner or to an extent
that is inconsistent with federal law and regulation. + }
{ - (c) 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, the practitioners providing care, and
enrollees' rights and responsibilities; - }
{ - (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. - }
{ - (d) Provide a copy of policies on enrollees' rights and
responsibilities to all participating providers and directly to
enrollees. - }
{ - (e) Have a timely and organized system for resolving
enrollee complaints and formal grievances, including: - }
{ - (A) Procedures for registering and responding to
complaints and grievances in a timely fashion; - }
{ - (B) Documentation of the substance of complaints,
grievances and actions taken; and - }
{ - (C) An appeal process for grievances that includes at
least the following: - }
{ - (i) The enrollee has a right to a review by a grievance
panel. - }
{ - (ii) The enrollee has a right to a second review with
different individuals. - }
{ - (iii) At least one of the levels of review permits the
enrollee to appear before the panel. - }
{ - (iv) There is an expedited procedure for emergency
cases. - }
{ - (f) Inform enrollees about services provided, access to
services, charges and scheduling, including: - }
{ - (A) Benefits and services included and excluded and how
to obtain them; - }
{ - (B) The organization's policy on referrals for specialty
care; - }
{ - (C) Provisions for after-hours and emergency care; - }
{ - (D) Charges to enrollees, if applicable, including policy
on payment of charges, copayments and fees for which the enrollee
is responsible; - }
{ - (E) Procedures for notifying enrollees affected by
termination or change in any benefits, termination of any
services or termination of any service delivery office or
site; - }
{ - (F) Procedures for appealing decisions adversely
affecting the enrollee's coverage, benefits or relationship to
the organization; - }
{ - (G) Procedures for changing practitioners; - }
{ - (H) Procedures for voicing complaints or grievances;
and - }
{ - (I) Procedures for recommending changes in policies and
services. - }
{ - (g) Take steps to ensure that the points of access to
primary care, specialty care and hospital services are identified
for enrollees, and that enrollees are provided information about
how to obtain the names, qualifications and titles of the
practitioners providing or responsible for their care. - }
Enrolled Senate Bill 21 (SB 21-A) Page 2
{ - (h) Ensure that confidentiality of specified patient
information and records is protected. - }
{ - (2) Insurers that have been accredited by the National
Committee for Quality Assurance are deemed to have met the
requirements of subsection (1)(c) to (h) of this section. - }
{ - (3) A health maintenance organization that is exempt from
federal income tax under Internal Revenue Code Section 501(c)(3)
or (4) shall not be required to offer a point-of-service benefit
plan as required by subsection (1)(b) of this section if offering
such plan could result in loss of federal tax-exempt status.
Until such time as the Federal Government establishes guidelines
for health maintenance organizations exempt from federal income
tax that offer point-of-service benefit plans, such a health
maintenance organization shall not be required to offer a
point-of-service benefit plan if: - }
{ - (a) Enrollment in Internal Revenue Code Section 501(m)
coverages exceeds five percent of its business; or - }
{ - (b) Revenue from Internal Revenue Code Section 501(m)
coverages exceeds five percent of its revenue. - }
{ - (4) A health maintenance organization that is federally
qualified under 42 U.S.C.s300e et seq. shall not be required to
offer a point-of-service benefit plan in a manner or to an extent
that is inconsistent with federal law and regulation. - }
SECTION 2. { + Sections 3 to 17 of this Act are added to and
made a part of ORS 743.801 to 743.811 and ORS chapter 743. + }
SECTION 3. { + 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;
(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:
Enrolled Senate Bill 21 (SB 21-A) Page 3
(A) Two levels of review, the second of which shall be by
persons not previously involved in the dispute;
(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;
(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;
(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;
(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;
Enrolled Senate Bill 21 (SB 21-A) Page 4
(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 sections 3 to 6 of this 1997 Act.
(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
the effective date of this 1997 Act;
(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
titles of the providers responsible for an enrollee's care.
(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
Enrolled Senate Bill 21 (SB 21-A) Page 5
(b) Information on how to access the complaint line of the
Department of Consumer and Business Services.
(9) Provide annual summaries to the department of the insurer's
aggregate data regarding grievances and appeals in a format
prescribed by the department to ensure consistent reporting on
the number, nature and disposition of grievances and appeals.
(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. + }
SECTION 4. { + (1) All insurers offering a health benefit plan
in this state that provide utilization review or have utilization
review provided on their behalf shall file an annual summary with
the Department of Consumer and Business Services that describes
all utilization review policies, including delegated utilization
review functions, and documents the insurer's procedures for
monitoring of utilization review activities.
(2) All utilization review activities conducted pursuant to
subsection (1) of this section shall comply with the following:
(a) The criteria used in the utilization review process and the
method of development of the criteria shall be made available for
review to contracting providers upon request.
(b) A doctor of medicine or osteopathy licensed under ORS
chapter 677 shall be responsible for all final recommendations
regarding the necessity or appropriateness of services or the
site at which the services are provided and shall consult as
appropriate with medical and mental health specialists in making
such recommendations.
(c) Any patient or provider who has had a request for treatment
or payment for services denied as not medically necessary or as
experimental shall be provided an opportunity for a timely appeal
before an appropriate medical consultant or peer review
committee.
(d) A provider request for prior authorization of nonemergency
service must be answered within two business days, and qualified
health care personnel must be available for same-day telephone
responses to inquiries concerning certification of continued
length of stay. + }
SECTION 5. { + All insurers offering managed health insurance
in this state shall:
(1) Have a quality assessment program that enables the insurer
to evaluate, maintain and improve the quality of health services
provided to enrollees. The program shall include data gathering
that allows the plan to measure progress on specific quality
improvement goals chosen by the insurer.
(2) File an annual summary with the Department of Consumer and
Business Services that describes quality assessment activities,
including any activities related to credentialing of providers,
and reports any progress on the insurer's quality improvement
goals.
(3) File annually with the department the following
information:
Enrolled Senate Bill 21 (SB 21-A) Page 6
(a) Results of all publicly available federal Health Care
Financing Administration reports and accreditation surveys by
national accreditation organizations.
(b) The insurer's health promotion and disease prevention
activities, if any, including a summary of screening and
preventive health care activities covered by the insurer. In
addition to the summary required in this paragraph, the
consortium established pursuant to section 13 of this 1997 Act
shall develop recommendations for, and the department shall adopt
rules requiring, reporting of an insurer's health promotion and
disease prevention activities related to:
(A) Two specific preventive measures;
(B) One specific chronic condition; and
(C) One specific acute condition. + }
SECTION 6. { + All insurers offering managed health insurance
in this state shall:
(1) File an annual summary with the Department of Consumer and
Business Services that documents the scope of the insurer's
network and the insurer's ongoing monitoring to ensure that all
covered services are reasonably accessible to enrollees.
(2) Establish a means to provide to the insurer's managed care
plan enrollees, purchasers and providers a meaningful opportunity
to 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. { + All insurers offering managed health insurance
in this state shall include in contracts with providers a
provision requiring that in the event the insurer fails to pay
for health care services covered by the health benefit plan, the
provider shall not bill or otherwise attempt to collect from
enrollees for amounts owed by insurers, and enrollees shall not
be liable to the provider for any sums owed by the insurer.
Nothing in this section shall be construed to in any manner limit
the applicability of ORS 750.095 (2). + }
SECTION 8. { + The Department of Consumer and Business
Services shall enforce insurer compliance with the federal
Newborns' and Mothers' Health Protection Act of 1996. + }
SECTION 9. { + (1) All insurers offering a health benefit
plan, including a plan providing accident only or student health
coverage, shall provide coverage without prior authorization for:
(a) Emergency medical screening exams; and
(b) Stabilization of an emergency medical condition.
(2) All insurers described in subsection (1) of this section
shall provide information to enrollees in plain language
regarding:
(a) What constitutes an emergency medical condition;
(b) The coverage provided for emergency services;
(c) How and where to obtain emergency services; and
(d) The appropriate use of 9-1-1. + }
SECTION 10. { + The Director of the Department of Consumer and
Business Services shall appoint a Health Care Consumer Protection
Advisory Committee with fair representation of health care
Enrolled Senate Bill 21 (SB 21-A) Page 7
consumers, providers and insurers. The committee shall advise the
director regarding the implementation of ORS 743.801 to 743.811
and other issues related to health care consumer protection. + }
SECTION 11. { + The Department of Consumer and Business
Services shall develop by rule reporting requirements as
necessary for the consistent and efficient implementation of
sections 3 to 6 of this 1997 Act. In order to minimize
duplicative reporting requirements, the department shall accept
copies of reports prepared for national accreditation
organizations as sufficient to meet the reporting requirements
developed pursuant to this section to the extent that the reports
include the information required by the department pursuant to
this section. + }
SECTION 12. { + (1) All clinical decisions regarding length of
stay in a health care facility as defined in ORS 442.015,
transfer between levels of care and follow-up care shall be the
decision of the treating provider in consultation with the
patient, as appropriate.
(2) An insurer may not terminate or restrict the practice
privileges of any provider solely on the basis of one or more
decisions made pursuant to subsection (1) of this section. + }
SECTION 13. { + (1) The Oregon Health Plan Administrator shall
establish a consortium of interested parties that shall:
(a) Develop, on a voluntary basis, standardized, quantitative
performance measurements of managed health insurance
organizations for use by health care consumers, purchasers and
providers to continuously assess the quality of clinical and
service-related aspects of health care arranged for or provided
by managed health insurance organizations;
(b) Encourage managed health insurance organizations to
collect, on a voluntary basis, the performance measurements
specified in paragraph (a) of this subsection and share that
information with the consortium;
(c) Develop, test, refine and produce one or more managed
health care performance scorecards to provide consumers and
purchasers with accurate, reliable and timely comparisons of
managed health insurance organizations with respect to:
(A) Organizational characteristics;
(B) Clinical quality measurements;
(C) Service-related quality measurements; and
(D) Member and patient satisfaction; and
(d) Carry out the activities specified in this subsection with
the objective of:
(A) Utilizing, to the greatest extent feasible and desirable,
nationally developed quality assessment tools; and
(B) Minimizing duplicative quality assessment activities and
associated administrative costs.
(2) The consortium established pursuant to subsection (1) of
this section shall be comprised of representatives of:
(a) Health care consumers;
(b) Private-sector and public-sector health care purchasers;
(c) Managed health insurance organizations;
(d) Health care providers, including but not limited to
physicians, nurses and hospitals;
(e) State agencies, including but not limited to the Department
of Consumer and Business Services and the Office of Medical
Assistance Programs;
(f) Oregon institutions of higher education with relevant
professional expertise; and
Enrolled Senate Bill 21 (SB 21-A) Page 8
(g) Other groups or organizations as determined to be
appropriate by the administrator to ensure broad representation
of interests and expertise.
(3) The Office of the Oregon Health Plan Administrator shall:
(a) Provide staffing for the consortium; and
(b) Seek public and private funds to assist in the work of the
consortium. + }
SECTION 14. { + The Office of the Oregon Health Plan
Administrator shall report to the Seventieth Legislative Assembly
on the accomplishments of the consortium established under
section 13 of this 1997 Act and any need for additional statutory
direction to achieve the goals of the consortium. The report
shall include a recommendation on the feasibility of implementing
a statewide enrollee satisfaction survey developed and
administered by the Department of Consumer and Business
Services. + }
SECTION 15. { + No insurer may terminate or otherwise
financially penalize a provider for:
(1) Providing information to or communicating with a patient in
a manner that is not slanderous, defamatory or intentionally
inaccurate concerning:
(a) Any aspect of the patient's medical condition;
(b) Any proposed treatment or treatment alternatives, whether
covered by the insurer's health benefit plan or not; or
(c) The provider's general financial arrangement with the
insurer.
(2)(a) Referring a patient to another provider, whether or not
that provider is under contract with the insurer. If a provider
refers a patient to another provider, the referring provider
shall:
(A) Comply with the insurer's written policies and procedures
with respect to any such referrals; and
(B) Inform the patient that the referral services may not be
covered by the insurer.
(b) Allocation of costs for referral services shall be a matter
of contract between the provider and the insurer. Allocation of
costs to the provider by contract shall not be considered a
penalty under this section. + }
SECTION 16. { + Except in the case of misrepresentation, prior
authorization determinations shall be subject to the following
requirements:
(1) Prior authorization determinations relating to benefit
coverage and medical necessity shall be binding on the insurer if
obtained no more than 30 days prior to the date the service is
provided.
(2) Prior authorization determinations relating to enrollee
eligibility shall be binding on the insurer if obtained no more
than five business days prior to the date the service is
provided. + }
SECTION 17. { + Nothing in sections 3 to 17 of this 1997 Act
shall be construed to require disclosure of information that is
otherwise privileged or confidential under any other provision of
law. + }
SECTION 18. ORS 743.801 is amended to read:
743.801. As used in ORS 743.801 to 743.811:
{ + (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
Enrolled Senate Bill 21 (SB 21-A) Page 9
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) '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.
(5) 'Health benefit plan' has the meaning provided for that
term in ORS 743.730. + }
{ - (1) - } { + (6) + } '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.
{ - (2) - } { + (7) + } 'Insurer' { - means an insurer,
as defined in ORS 731.106, providing health insurance, as defined
in ORS 731.162. - } { + has the meaning provided for that term
in ORS 731.106. + } For purposes of ORS 743.801 to 743.811,
750.055 and 750.333, ' insurer' also includes a health care
service contractor as defined in ORS 750.005.
{ + (8) 'Managed health insurance' means any health benefit
plan that:
(a) Requires an enrollee to use, or creates incentives for an
enrollee to use, providers managed, owned, under contract with or
employed by the insurer; and
(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. + }
{ - (3) - } { + (9) + } '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 chapters 58, 60 or 70, or other similar professional
organizations permitted by statute.
{ + (10) '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. + }
Enrolled Senate Bill 21 (SB 21-A) Page 10
{ - (4) - } { + (11) + } '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) 'Stabilization' means that, within reasonable
medical probability, no material deterioration of an emergency
medical condition is likely to occur.
(13) '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 19. ORS 743.803 is amended to read:
743.803. (1) No medical services contract may 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 medical services contracts 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.
(f) Provide that a physician who is practicing in conformity
with ORS 677.095 may advocate a decision, policy or practice
Enrolled Senate Bill 21 (SB 21-A) Page 11
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. + }
(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.
SECTION 20. ORS 743.806 is amended to read:
743.806. All utilization review performed pursuant to a medical
services contract { + to which an insurer is not a party + }
shall comply with the following:
(1) The criteria used in the review process and the method of
development of the criteria shall be made available for review to
a party to such medical services contract upon request.
(2) A doctor of medicine or osteopathy licensed under ORS
chapter 677 shall be responsible for all final recommendations
regarding the necessity or appropriateness of services or the
site at which the services are provided and shall consult as
Enrolled Senate Bill 21 (SB 21-A) Page 12
appropriate with medical and mental health specialists in making
such recommendations.
(3) Any patient or provider who has had a request for treatment
or payment for services denied as not medically necessary or as
experimental shall be provided an opportunity for a timely appeal
before an appropriate medical consultant or peer review
committee.
(4) A provider request for prior authorization of nonemergency
service must be answered within two business days, and qualified
health care personnel must be available for same-day telephone
responses to inquiries concerning certification of continued
length of stay.
{ - (5) When prior approval for a service or other covered
item is required and obtained, unless there is misrepresentation,
the approval shall be final and may not be rescinded after the
service or other covered item has been provided. - }
SECTION 21. { + ORS 743.801 is added to and made a part of ORS
743.801 to 743.811 and ORS chapter 743. + }
SECTION 22. ORS 750.055, with editorial adjustments to the
series ORS 743.600 to 743.622 and to the series ORS 743.730 to
743.745, 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
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, 731.640 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, 743.523 to 743.527,
743.529, 743.549 to 743.555, 743.556, 743.560, 743.600 to
743.610, 743.650 to 743.656, 743.701, 743.704, 743.706 to
743.712, 743.721, 743.722, 743.727, 743.728, 743.729, 743.808,
743.809, 743.813 and 743.816 { + and sections 3 to 17 of this
1997 Act + }.
(f) ORS 743.522 and 743.528, except that individual policies
may be issued to the persons or families insured in lieu of
issuance of a single group policy as referred to in ORS 743.522.
An individual policy issued under this paragraph shall be
considered the statement of the essential features of the
insurance coverage required under ORS 743.528 (2).
(g) The provisions of ORS chapter 744 relating to the
regulation of agents.
(h) ORS 746.005 to 746.140, 746.160, 746.180, 746.220 to
746.370 and 746.600 to 746.690.
Enrolled Senate Bill 21 (SB 21-A) Page 13
(i) 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.
(j) ORS 735.600 to 735.650.
(k) ORS 743.680 to 743.689.
(L) ORS 744.700 to 744.740.
(m) ORS 743.730 to 743.773.
(n) 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 23. ORS 750.333, as amended by section 30, chapter 603,
Oregon Laws 1995, is amended to read:
750.333. (1) The following provisions of the Insurance Code
apply to trusts carrying out a multiple employer welfare
arrangement:
(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, 743.730 to 743.773 (except 743.760 to 743.773), 743.808,
743.809, 743.813 and 743.816 { + and sections 3 to 17 of this
1997 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 and 743.724. 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.
(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.
Enrolled Senate Bill 21 (SB 21-A) Page 14
(3) The provision of health benefits under ORS 750.301 to
750.341 shall be considered to be the transaction of health
insurance.
SECTION 24. { + The Director of the Department of Consumer and
Business Services may take any action before the operative date
of sections 1 to 9 and 11 to 23 of this Act that is necessary to
enable the Department of Consumer and Business Services to
exercise, on and after the operative date of sections 1 to 9 and
11 to 23 of this Act, all the duties, functions and powers
conferred on the department by this Act. + }
SECTION 25. { + Sections 2 to 9, 11 to 17 and 21 of this Act
and the amendments to ORS 743.801, 743.803, 743.806, 743.808,
750.055 and 750.333 by sections 1, 18, 19, 20, 22 and 23 of this
Act become operative January 1, 1998. + }
SECTION 26. { + This Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this Act takes effect on its
passage. + }
----------
Passed by Senate April 16, 1997
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House June 5, 1997
...........................................................
Speaker of House
Enrolled Senate Bill 21 (SB 21-A) Page 15
Received by Governor:
......M.,............., 1997
Approved:
......M.,............., 1997
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 1997
...........................................................
Secretary of State
Enrolled Senate Bill 21 (SB 21-A) Page 16