Current Status Bill Number:10 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19970114 Primary Sponsor:McConnell All Sponsors:McConnell, Courtney, Passailaigue, Patterson, Jackson, Matthews, Hayes, Reese and Giese Drafted Document Number:gjk\23187ac.97 Residing Body:Senate Current Committee:Banking and Insurance Committee 02 SBI Subject:Patients' Insurance and Benefits Protection Act, Medical
Body Date Action Description Com Leg Involved
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Senate 19970114 Introduced, read first time, 02 SBI
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND CHAPTER 33, TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 3 SO AS TO ENACT THE SOUTH CAROLINA PATIENTS' INSURANCE AND BENEFITS PROTECTION ACT WHICH REQUIRES CERTIFICATION TO OFFER A MANAGED CARE PLAN, WHICH ESTABLISHES CERTIFICATION STANDARDS, AND WHICH FURTHER PROVIDES CERTAIN REQUIREMENTS AND PROHIBITIONS THAT MANAGED CARE PLANS MUST COMPLY WITH IN ORDER TO BE CERTIFIED; AND TO DESIGNATE SECTIONS 38-33-10 THROUGH 38-33-310 AS ARTICLE 1, CHAPTER 33, TITLE 38 TO BE ENTITLED "GENERAL PROVISIONS".
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 33, Title 38 of the 1976 Code is amended by adding:
South Carolina Patients' Insurance and Benefits Protection
Section 38-33-605. This article may be cited as the 'South Carolina Patients' Insurance and Benefits Protection Act'.
Section 38-33-610. (A) The General Assembly finds that it is a vital government concern that the citizens of this State have access to quality health care services and that informed consumers will be better able to identify and select plans that offer quality health care services if they are provided specific information before they enroll in health plans. As the health care market becomes increasingly dominated by health care plans that use managed care techniques that include decisions as to the appropriateness of care, the General Assembly finds that it is a vital government function to protect patients from managed care practices which have the effect of denying or limiting appropriate care. The General Assembly further finds it is the public policy of this State that physicians and health care providers be encouraged to advocate for medically appropriate health care for their patients.
(B) To achieve these ends, the General Assembly declares it necessary for the director of the Department of Insurance to certify qualified managed care plans to conduct business in this State for the director to establish standards for certification.
Section 38-33-615. As used in this article:
(1) 'Director' means the director of the Department of Insurance.
(2) 'Emergency services' or 'emergency care' means those health care services that are provided for a condition of recent onset and sufficient severity including, but not limited to, severe pain that would lead a prudent layperson, possessing an average knowledge of medicine and health to believe that the condition, sickness, or injury is of a nature that failure to obtain immediate medical care could result in:
(a) placing the patient's health in serious jeopardy;
(b) serious impairment to bodily functions; or
(c) serious dysfunction of a bodily organ or part.
(3) 'Enrollee' means an individual who has elected to contract for or participate in a managed care plan for that individual or for that individual and that individual's eligible dependents.
(4) 'Health care provider' or 'provider' means a physician, dentist, podiatrist, pharmacist, optometrist, psychologist, clinical social worker, advanced practice nurse, registered optician, licensed professional counselor, physical therapist, marriage and family therapist, chiropractor, occupational therapist, speech language pathologist, audiologist, dietitian, physician's assistant, or durable medical equipment supplier.
(5) 'Limited utilization incentive plan' means a compensation arrangement between the plan and a health care provider group that has the effect of reducing or limiting services to patients.
(6) 'Managed care contractor' means a person who:
(a) establishes, operates, or maintains a network of participating providers;
(b) conducts or arranges for utilization review activities;
(c) contracts with an insurance company, a hospital or medical service plan, an employer, an employee organization, or any other entity providing coverage for health care services to operate a managed care plan.
(7) 'Managed care entity' includes an insurance company, hospital or medical service plan, hospital, health care provider network, physician hospital organization, health care provider, health maintenance organization, health care corporation, employer or employee organization, or managed care contractor that offers a managed care plan.
(8) 'Managed care plan' means a major medical, hospitalization, or dental plan that provides for the financing and delivery of health care services to persons enrolled in the plan through:
(a) arrangements with selected providers to furnish health care services;
(b) explicit standards for the selection of participating providers;
(c) cost savings for persons enrolled in the plan to use the participating providers and procedures provided for by the plan.
(9) 'Out of network' or 'point of service' refers to health care items or services provided to an enrollee by providers who do not belong to the provider network in the managed care plant.
(10) 'Patient' means a person who seeks or receives health care services under a managed care plan.
(11) 'Qualified managed care plan' means a managed care plan that the director certifies as meeting the requirements of this article.
Section 38-33-620. (A) In addition to other requirements of law before offering a managed care plan to a resident in this State, a managed care entity first must obtain a certificate from the director indicating that the managed care plan meets the requirements of this article. The director may impose costs established in regulation on managed care entities as the director considers necessary to carry out the provisions of this article.
(B) The director shall establish procedures for the periodic review and recertification of qualified managed care plans.
(C) The director shall terminate the certification of a qualified managed care plan, revoke or suspend the license of a managed care entity, or impose a monetary penalty if the director determines that the plan no longer meets the applicable requirements for certification or violates a provision of this article. Before effecting a sanction, the director shall provide the plan with notice and opportunity for a hearing on the proposed sanctions. Nothing in this section may be construed to preclude other remedies at law.
(D) The director shall establish a process for certification through alternative methods providing that:
(1) an eligible organization, as defined in Section 1876(b) of the federal Social Security Act, is deemed to meet the requirements of subsections (A) and (B) for certification as a qualified managed care plan; or
(2) if the director finds that a national accreditation body has established requirements for accreditation of a managed care entity which offers a managed care plan that are at least equivalent to the requirements established under this article and that the eligible organization and its plans comply with the requirements of the national accreditation body, then the organization and its plans must be deemed to meet the requirements of subsections (A) and (B).
Section 38-33-625. The director shall establish standards for the certification of qualified managed care plans that conduct business in this State. The standards must require:
(1) a managed care entity to disclose to enrollees and prospective enrollees who inquire as individuals into a plan or plans offered by the managed care entity the information required by this item. In the case of an employer negotiating for a health care plan on behalf of his employees, sufficient copies of disclosure information must be made available to employees upon request. Disclosure of information under this item must be readable, understandable, and on a standardized form containing information regarding all of the following for each plan in effect:
(a) the health care services or other benefits under the plan offered as well as limitations on services, kinds of services, benefits, or kinds of benefits to be provided;
(b) rules regarding copayments, prior authorization, or review requirements including, but not limited to, preauthorization review, concurrent review, postservice review, or postpayment review that could result in the patient's being denied coverage or provision of a particular service;
(c) potential liability for cost sharing for out of network services including, but not limited to, providers, drugs, and devices or surgical procedures that are not on a list or a formulary;
(d) the financial obligations of the enrollee, including premiums, deductibles, copayments, and maximum limits on out-of-pocket expenses for items and services, both in and out of network;
(e) the number, mix, and distribution of participating providers. An enrollee or a participating provider, an enrollee, or a prospective enrollee must be entitled to a list of individual participating providers upon request;
(f) enrolled rights and responsibilities, including an explanation of the grievance process provided under this article;
(g) an explanation of what constitutes an emergency situation and what constitutes emergency services;
(h) the existence of any limited utilization incentive plans;
(i) the existence of restrictive formularies or prior approval requirements for prescription drugs. An enrolled or a prospective enrolled is entitled, upon request, to a description of specific drug and therapeutic class restrictions;
(j) the existence of limitations on choice of health care providers;
(k) a statement as to where and in what manner additional information is available;
(l) a statement that a summary of the number, nature, and outcome results of grievances filed in the previous three years must be available for inspection. Copies of the summary must be made available at reasonable costs.
Information required to be disclosed pursuant to this subsection must be disclosed to each enrolled under this article at the time of enrollment and at least annually thereafter.
A managed care plan licensed by the Department of Insurance is deemed to have met the certification requirements of this subsection.
(2) A managed care entity to demonstrate that its plan:
(a) makes benefits available and accessible to each enrolled electing the managed care plan in the defined service area with reasonable promptness and in a manner which promotes continuity in the provision of health care services;
(b) when medically necessary provides health care services twenty-four hours a day and seven days a week;
(c) provides payment or reimbursement for emergency services and out-of-area services;
(3) A managed care plan to have arrangements, established in regulation for an ongoing quality assurance program for health care service it provides to individuals and the quality assurance program shall:
(a) provide for a utilization review program;
(b) stress health outcomes;
(c) provide for the establishment of written protocols for utilization review, based on current standards of the relevant health care profession;
(d) provide review by physicians and appropriate health care providers of the process followed in the provision of health care services;
(e) monitor and evaluate high volume and high risk services and the care of acute and chronic conditions;
(f) evaluate the continuity and coordination of care that enrollees receive;
(g) has mechanisms to detect underutilization and over utilization of services;
(h) establish a grievance procedure which provides the enrolled with a prompt and meaningful hearing on the issue of denial, in whole or in part, of a health care treatment or service or claim for treatment or service. The hearing must be conducted by a panel of not less than three persons, at least one member of which must be a physician other than the medical director of the plan and at least one member of which must be a health care provider competent by reason of training and licensure in the treatment or procedure which has been denied. The enrolled must be provided prompt notice in writing of the outcome of the grievance procedure. If the outcome of the grievance is favorable to the enrolled, appropriate relief must be granted without delay. If the outcome is adverse to the enrolled, the notice shall include specific findings related to the care, the policies and procedures relied upon in making the determination, the physician's and provider's recommendations, including any recommendations for alternative procedures or services, and a description of the procedures, if any, for reconsideration of the adverse decision.
Section 38-33-630. A managed care plan may not use a financial incentive program that directly compensates a health care provider for ordering or providing less than medically necessary and appropriate care to his patients. Nothing in this section may be construed to prohibit a managed care entity from using a capitated payment arrangement consistent with the intent of this section.
Section 38-33-635. (A) A clause in a managed care participating provider agreement, either express or implied, may not shift legal responsibility and liability for the acts, omissions, or a combination of acts and omissions from the managed care entity to the health care provider and may not require the health care provider to reimburse the managed care organization for damages, costs, attorney's fees, or other sums a court may order or may be paid by the managed care organization by way of settlement of a claim. Each party to a managed care participating provider agreement is responsible for the legal consequences and costs of their own acts or omissions, or both, and is not responsible for the acts or omissions, or both, or the costs of the other party.
(B) A clause in a managed care participating provider agreement may not directly or indirectly limit in any way the participating provider's right to discuss treatment options, method, or accuracy of utilization review, or any other matter encompassed by the provider-patient relationship is unlawful.
(C) As used in this section:
(1) 'Managed care participating provider agreement' means a contract or other legally cognizable obligation in which a health care provider agrees to provide health care services to a managed care entity organization or persons eligible to receive health care benefits through the managed care organization.
(2) 'Participating provider' means a health care provider who has entered into a managed care participating provider agreement with a managed care organization.
Section 38-33-640. A managed care plan shall establish procedures to safeguard the privacy of individually identifiable patient information and to maintain accurate and timely records for patients.
Section 38-33-645. A managed care plan shall require that:
(1) if a patient seeks emergency services and if necessary in the opinion of the emergency health care provider responsible for the patient's emergency care and treatment and warranted by an evaluation, the emergency provider may initiate necessary intervention to stabilize the condition of the patient without seeking or receiving prospective authorization by the managed care entity or managed care plan. If in the opinion of the emergency health care provider a patient's condition has stabilized and the emergency health care provider certifies that the patient can be transported to another facility without suffering detrimental consequences or aggravating the patient's condition, the patient may be relocated to another facility which will provide continued care and treatment as necessary;
(2) when a managed care plan uses a restrictive formulary for prescription drugs, the use shall include a written procedure whereby patients can obtain, without penalty and in a timely fashion, specific drugs and medications not included in the formulary when the formulary's:
(a) equivalent has been ineffective in the treatment of the patient's disease or condition; or
(b) drug causes or is reasonably expect to cause adverse or harmful reactions in the patient.
Section 38-33-650. Nothing in this article applies to workers' compensation insurance or benefits."
SECTION 2. Sections 38-33-10 through 38-33-310 of the 1976 Code are designated as Article 1, Chapter 33, Title 38 entitled "General Provisions".
SECTION 3. This act takes effect July 1, 1997.