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1998 SESSION

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SB 712 Health maintenance organizations; health insurance plans.

Introduced by: Stephen H. Martin | all patrons    ...    notes | add to my profiles

SUMMARY:

Managed care health insurance plans; penalties. Provides a framework for statutory and regulatory oversight of managed care health insurance plans. Managed care health insurance plans ("MCHIPs") are defined as arrangements by which a health carrier undertakes to provide, arrange for, pay for, or reimburse any of the cost of health care services for a covered person on a prepaid or insured basis which (i) contains one or more incentive arrangements, including any credentialing requirements intended to influence the cost or level of health care services between the health carrier and one or more providers with respect to the delivery of health care services, and (ii) requires or creates benefit payment differential incentives for covered persons to use providers that are directly or indirectly managed, owned, under contract with or employed by the health carrier. For purposes of this bill, the prohibition of balance billing by a provider is not considered a benefit payment differential.

All MCHIPs must, at the time of initial application for licensure by the Bureau of Insurance, simultaneously apply to the Department of Health for quality assurance certification. All MCHIPs presently licensed must receive quality assurance certification by July 1, 2000, and no plan may be operated in a manner that is materially different from the information submitted during the licensure process. No certificate of quality assurance will be issued by the Department of Health until the Health Commissioner has examined and is satisfied that the MCHIP has in place procedures for guaranteeing the quality of care provided by MCHIPs, including measures addressing (i) complaint resolution and consumer satisfaction; (ii) access, availability, and continuity of care; (iii) preventive care; (iv) credentialing; (v) consumer and provider education and awareness; (vi) utilization review; and (vii) improvement of community health status.

Additionally, the Department may establish criteria for review of an MCHIP licensee's administration and internal organization with regard to the quality of care provided and policies concerning patient information, consent and confidentiality. Those MCHIPs receiving certificates of quality assurance may be reviewed periodically for complaint investigation and compliance with the quality of care certification standards. Failure of an MCHIP to fulfill its obligation to furnish quality health care services as per the quality of care certification standards will subject such MCHIP to civil penalties imposed by the State Health Commissioner. Such penalties will not exceed $1,000 per incident of noncompliance or $10,000 for a series of related incidents of noncompliance. Fines payable under this bill are paid into the Literary Fund.

The bill also establishes, within the Department of Health, a system of utilization review standards and appeals for MCHIPs. All MCHIP utilization review programs must establish reasonable and prudent standards and criteria, with established procedures for adverse decisions and an appeal process. Persons covered under an MCHIP must receive, at the time of enrollment, a (i) list of the names and locations of all affiliated providers, (ii) description of the service area within which the MCHIP will provide health care services, (iii) description of the complaint procedures, and (iv) notice that the MCHIP is subject to regulation by both the Bureau of Insurance and the Virginia Department of Health. Under current law, such utilization review is conducted by the Bureau of Insurance.

This bill requires MCHIPs to establish and maintain a complaint system to provide reasonable procedures for the resolution of written complaints. Complaint systems will be examined by the Health Commissioner to determine compliance with respect to quality of care and may require necessary corrections or modifications.

The bill also creates, in Title 38.2, a new chapter addressing the establishment and licensing requirements of MCHIPs. MCHIPs must provide, at enrollment or at the time of issuance of coverage, a (i) list of names and locations of all affiliated providers, (ii) description of the service areas within which the MCHIP will provide health care services, (iii) description of the method for resolving complaints, and (iv) notice that the MCHIP is subject to regulation by both the SCC and the Department of Health.

Included in this new chapter are requirements for MCHIP provider contracts, including termination notices, liability provisions, and essential language that must be included in any "hold harmless" clause. Finally, the bill establishes criteria for coordinated examinations by the Department of Health and the SCC, and the criteria by which the SCC may suspend or revoke a license issued to a health carrier.

The Commissioner of the Department of Health will report annually to the Joint Commission on Health Care the status of the ongoing requirements of this bill, including, but not limited to (i) the criteria developed by which managed health insurance plans are reviewed and evaluated; (ii) the number of quality assurance certificates issued by the Department; (iii) the number of quality assurance certificates denied by the Department and the reasons for the denial; (iv) the status of the periodic reviews for complaint investigations and compliance with the quality of care certificate standards established by this bill; and (v) the number and amount of civil penalties which were imposed during that year for noncompliance.


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