South Carolina General Assembly
114th Session, 2001-2002

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Bill 4023


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                      4023
Type of Legislation:              General Bill GB
Introducing Body:                 House
Introduced Date:                  20010425
Primary Sponsor:                  Lloyd
All Sponsors:                     Lloyd, McLeod, Bales, Breeland, 
                                  Cobb-Hunter, Govan, J.H. Neal and Weeks
Drafted Document Number:          l:\council\bills\pt\1179sd01.doc
Residing Body:                    House
Current Committee:                Medical, Military, Public and Municipal 
                                  Affairs Committee 27 H3M
Subject:                          Health care plans, procedures for 
                                  enrollees to access information on; Insurance, 
                                  Medical and health


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
House   20010425  Introduced, read first time,           27 H3M
                  referred to Committee


              Versions of This Bill

View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INSURANCE, BY ADDING CHAPTER 34 SO AS TO PROVIDE FOR THE MANNER IN WHICH AND PROCEDURES UNDER WHICH PERSONS ENROLLED IN HEALTH CARE PLANS SHALL HAVE ACCESS TO INFORMATION REGARDING THEIR PLAN, ACCESS TO HEALTH CARE SERVICES AND PROVIDERS INCLUDING CHOICES AMONG PROVIDERS UNDER THEIR PLAN, STANDARDS ON WHICH HEALTH CARE DECISIONS ARE MADE, A PROCESS FOR APPEALING THESE DECISIONS, AND TO PROVIDE FOR THE PROTECTION OF THE PRIVACY OF HEALTH CARE INFORMATION.

Be it enacted by the General Assembly of the State of South Carolina:

"CHAPTER 34

Health Care Plans, Providers, and Procedures

    Section 38-34-10.    It is the intent of the General Assembly in enacting this chapter that enrollees covered by health plans receive quality health care designed to maintain and improve their health. The purpose of this chapter is to ensure that health plan enrollees:

    (1)    have improved access to information regarding their health plans;

    (2)    have sufficient and timely access to appropriate health care services and choice among health care providers;

    (3)    are assured that health care decisions are made by appropriate medical personnel;

    (4)    have access to a quick and impartial process for appealing plan decisions;

    (5)    are protected from unnecessary invasions of health care privacy; and

    (6)    are assured that personal health care information will be used only as necessary to obtain and pay for health care or to improve the quality of care.

    Section 38-34-20.    Third party payors shall not release health care information disclosed under this chapter, except to the extent that health care providers are authorized to do so by law.

    Section 38-34-30.    (A)    In making a correction or amendment to a patient's health care record, the health care provider shall:

        (1)    add the amending information as a part of the health record; and

        (2)    mark the challenged entries as corrected or amended entries and indicate the place in the record where the corrected or amended information is located, in a manner practicable under the circumstances.

    (B)    If the health care provider maintaining the record of the patient's health care information refuses to make the patient's proposed correction or amendment, the provider shall:

        (1)    permit the patient to file as a part of the record of the patient's health care information a concise statement of the correction or amendment requested and the reasons for the correction or amendment; and

        (2)    mark the challenged entry to indicate that the patient claims the entry is inaccurate or incomplete and indicate the place in the record where the statement of disagreement is located, in a manner practicable under the circumstances.

    (C)    A health care provider who receives a request from a patient to amend or correct the patient's health care information, shall forward any changes made in the patient's health care information or health record, including any statement of disagreement, to any third-party payor or insurer to which the health care provider has disclosed the health care information that is the subject of the request.

    Section 38-34-40.    This chapter does not restrict a health care provider, third-party payor, or an insurer from complying with obligations imposed by federal or state health care payment programs or by federal or state law.

    Section 38-34-50.    (A)    Health care insurers shall adopt policies and procedures that conform administrative, business, and operational practices to protect an enrollee's right to privacy or right to confidential health care services granted under state or federal laws.

    (B)    The Director of the Department of Insurance may promulgate regulations to implement this chapter after considering relevant standards adopted by national managed care accreditation organizations and the national association of insurance commissioners, and after considering the affect of those standards on the ability of carriers to undertake enrollee care management and disease management programs.

    Section 38-34-60.    (A)    A carrier that offers a health plan may not offer to sell a health plan to an enrollee or to any group representative, agent, employer, or enrollee representative without first offering to provide, and providing upon request, the following information before purchase or selection:

        (1)    a listing of covered benefits, including prescription drug benefits, if any, a copy of the current formulary, if any is used, definitions of terms such as generic versus brand name, and policies regarding coverage of drugs, such as how they become approved or taken off the formulary, and how consumers may be involved in decisions about benefits;

        (2)    a listing of exclusions, reductions, and limitations to covered benefits, and any definition of medical necessity or other coverage criteria upon which they may be based;

        (3)    a statement of the carrier's policies for protecting the confidentiality of health information;

        (4)    a statement of the cost of premiums and any enrollee cost-sharing requirements;

        (5)    a summary explanation of the carrier's grievance process;

        (6)    a statement regarding the availability of a point-of-service option, if any, and how the option operates; and

        (7)    a convenient means of obtaining lists of participating primary care and specialty care providers, including disclosure of network arrangements that restrict access to providers within any plan network.

    The offer to provide the information referenced in this subsection must be clearly and prominently displayed on any information provided to any prospective enrollee or to any prospective group representative, agent, employer, or enrollee representative.

    (B)    Upon the request of any person, including a current enrollee, prospective enrollee, or the Director of the Department of Insurance, a carrier must provide written information regarding any health care plan it offers, that includes the following written information:

        (1)    any documents, instruments, or other information referred to in the medical coverage agreement;

        (2) a full description of the procedures to be followed by an enrollee for consulting a provider other than the primary care provider and whether the enrollee's primary care provider, the carrier's medical director, or another entity must authorize the referral;

        (3)    procedures, if any, that an enrollee must first follow for obtaining prior authorization for health care services;

        (4)    a written description of any reimbursement or payment arrangements, including, but not limited to, capitation provisions, fee-for-service provisions, and health care delivery efficiency provisions, between a carrier and a provider or network;

        (5)    descriptions and justifications for provider compensation programs, including any incentives or penalties that are intended to encourage providers to withhold services or minimize or avoid referrals to specialists;

        (6)    an annual accounting of all payments made by the carrier which have been counted against any payment limitations, visit limitations, or other overall limitations on a person's coverage under his plan;

        (7)    a copy of the carrier's grievance process for claim or service denial and for dissatisfaction with care; and

        (8)    accreditation status with one or more national accreditation organizations, and whether the carrier tracks its health care effectiveness performance using the health employer data information set, whether it publicly reports this data, and how interested persons can access this data.

    (C)    Each carrier shall provide to all enrollees and prospective enrollees a list of available disclosure items.

    (D)    Nothing in this chapter requires a carrier or a health care provider to divulge proprietary information to an enrollee, including the specific contractual terms and conditions between a carrier and a provider.

    (E)    No carrier may advertise or market any health plan to the public as a plan that covers services that help prevent illness or promote the health of enrollees unless it:

        (1)    provides all clinical preventive health services provided by the basic health plan, authorized by this chapter;

        (2)    monitors and reports annually to enrollees on standardized measures of health care and satisfaction of all enrollees in the health plan. The Department of Insurance shall recommend appropriate standardized measures for this purpose, after consideration of national standardized measurement systems adopted by national accreditation organizations and state agencies that purchase managed health care services; and

        (3)    makes available upon request to enrollees its integrated plan to identify and manage the most prevalent diseases within its enrolled population, including cancer, heart disease, and stroke.

    (F)    No carrier may preclude or discourage its providers from informing an enrollee of the care he or she requires, including various treatment options, and whether in the providers' view the care is consistent with the plan's health coverage criteria, or otherwise covered by the enrollee's medical coverage agreement with the carrier.

    No carrier may prohibit, discourage, or penalize a provider otherwise practicing in compliance with law from advocating on behalf of an enrollee with a carrier. Nothing in this chapter shall be construed to authorize a provider to bind a carrier to pay for any service.

    (G)    No carrier may preclude or discourage enrollees or those paying for their coverage from discussing the comparative merits of different carriers with their providers. This prohibition specifically includes prohibiting or limiting providers participating in those discussions even if critical of a carrier.

    (H)    Each carrier must communicate enrollee information required in this chapter by means that ensure that a substantial portion of the enrollee population can make use of the information.

    Section 38-34-70.    (A)    Each enrollee in a health plan must have adequate choice among health care providers.

    (B)    Each carrier must allow an enrollee to choose a primary care provider who is accepting new enrollees from a list of participating providers. Enrollees also must be permitted to change primary care providers at any time with the change becoming effective no later than the beginning of the month following the enrollee's request for the change.

    (C)    Each carrier must have a process whereby an enrollee with a complex or serious medical or psychiatric condition may receive a standing referral to a participating specialist for an extended period of time.

    (D)    Each carrier must provide for appropriate and timely referral of enrollees to a choice of specialists within the plan if specialty care is warranted. If the type of medical specialist needed for a specific condition is not represented on the specialty panel, enrollees must have access to nonparticipating specialty health care providers.

    (E)    Each carrier shall provide enrollees with direct access to the participating chiropractor of the enrollee's choice for covered chiropractic health care without the necessity of prior referral.

    Nothing in this chapter shall prevent carriers from restricting enrollees to seeing only providers who have signed participating provider agreements or from utilizing other managed care and cost containment techniques and processes. For purposes of this subsection, 'covered chiropractic health care' means covered benefits and limitations related to chiropractic health services as stated in the plan's medical coverage agreement, with the exception of any provisions related to prior referral for services.

    (F)    Each carrier must provide, upon the request of an enrollee, access by the enrollee to a second opinion regarding any medical diagnosis or treatment plan from a qualified participating provider of the enrollee's choice.

    (G)    Each carrier must cover services of a primary care provider whose contract with the plan or whose contract with a subcontractor is being terminated by the plan or subcontractor without cause under the terms of that contract for at least sixty days following notice of termination to the enrollees or, in group coverage arrangements involving periods of open enrollment, only until the end of the next open enrollment period. The provider's relationship with the carrier or subcontractor must be continued on the same terms and conditions as those of the contract the plan or subcontractor is terminating, except for any provision requiring that the carrier assign new enrollees to the terminated provider.

    (H)    Every carrier shall meet the standards set forth in this section and any regulations adopted by the director to implement this chapter.

    Section 38-34-80.    (A)    Carriers that offer a health plan shall maintain a documented utilization review program description and written utilization review criteria based on reasonable medical evidence. The program must include a method for reviewing and updating criteria. Carriers shall make clinical protocols, medical management standards, and other review criteria available upon request to participating providers.

    (B)    A carrier shall not be required to use medical evidence or standards in its utilization review of religious nonmedical treatment or religious nonmedical nursing care.

    Section 38-34-90.    A health carrier that offers a health plan shall not retrospectively deny coverage for emergency and nonemergency care that had prior authorization under the plan's written policies at the time the care was rendered.

    Section 38-34-100.    (A)    Each carrier that offers a health plan must have a fully operational, comprehensive grievance process that complies with the requirements of this section and any regulations adopted by the director to implement this section.

    (B)    Each carrier must process as a complaint an enrollee's expression of dissatisfaction about customer service or the quality or availability of a health service. Each carrier must implement procedures for registering and responding to oral and written complaints in a timely and thorough manner.

    (C)    Each carrier must provide written notice to an enrollee or the enrollee's designated representative, and the enrollee's provider, of its decision to deny, modify, reduce, or terminate payment, coverage, authorization, or provision of health care services or benefits, including the admission to or continued stay in a health care facility.

    (D)    Each carrier must process as an appeal an enrollee's written or oral request that the carrier reconsider its resolution of a complaint made by an enrollee; or its decision to deny, modify, reduce, or terminate payment, coverage, authorization, or provision of health care services or benefits, including the admission to, or continued stay in, a health care facility.

    (E)    To process an appeal, each carrier must:

        (1)    provide written notice to the enrollee when the appeal is received;

        (2)    assist the enrollee with the appeal process;

        (3)    make its decision regarding the appeal within thirty days of the date the appeal is received. An appeal must be expedited if the enrollee's provider or the carrier's medical director reasonably determines that following the appeal process response timelines could seriously jeopardize the enrollee's life, health, or ability to regain maximum function. The decision regarding an expedited appeal must be made within seventy-two hours of the date the appeal is received;

        (4)    cooperate with a representative authorized in writing by the enrollee;

        (5)    consider information submitted by the enrollee;

        (6)    investigate and resolve the appeal; and

        (7)    provide written notice of its resolution of the appeal to the enrollee and, with the permission of the enrollee, to the enrollee's providers. The written notice must explain the carrier's decision and the supporting coverage or clinical reasons and the enrollee's right to request independent review of the carrier's decision as provided by this chapter.

    (F)    Written notice required by this section must explain:

        (1)    the carrier's decision and the supporting coverage or clinical reasons; and

        (2) the carrier's appeal process, including information, as appropriate, about how to exercise the enrollee's rights to obtain a second opinion, and how to continue receiving services as provided in this section.

    (G)    When an enrollee requests that the carrier reconsider its decision to modify, reduce, or terminate an otherwise covered health service that an enrollee is receiving through the health plan and the carrier's decision is based upon a finding that the health service, or level of health service, is no longer medically necessary or appropriate, the carrier must continue to provide that health service until the appeal is resolved. If the resolution of the appeal or any review sought by the enrollee under this chapter affirms the carrier's decision, the enrollee may be responsible for the cost of this continued health service.

    (H)    Each carrier must provide a clear explanation of the grievance process upon request, upon enrollment to new enrollees, and annually to enrollees and subcontractors.

    (I)    Each carrier must ensure that the grievance process is accessible to enrollees who are limited English speakers, who have literacy problems, or who have physical or mental disabilities that impede their ability to file a grievance.

    (J)    Each carrier must track each appeal until final resolution, maintain, and make accessible to the Director of the Department of Insurance for a period of three years, a log of all appeals, and identify and evaluate trends in appeals.

    Section 38-34-110.    (A)    A process for the fair consideration of disputes relating to decisions by carriers that offer a health plan to deny, modify, reduce, or terminate coverage of or payment for health care services for an enrollee is established by this section .

    (B)    An enrollee may seek review by a certified independent review organization of a carrier's decision to deny, modify, reduce, or terminate coverage of or payment for a health care service, after exhausting the carrier's grievance process and receiving a decision that is unfavorable to the enrollee, or after the carrier has exceeded the timelines for grievances provided in Section 38-34-100, without good cause and without reaching a decision.

    (C)    The Director of the Department of Insurance must establish and use a rotational registry system for the assignment of a certified independent review organization to each dispute. The system shall be flexible enough to ensure that an independent review organization has the expertise necessary to review the particular medical condition or service at issue in the dispute.

    (D)    Carriers must provide to the appropriate certified independent review organization, not later than the third business day after the date the carrier receives a request for review, a copy of:

        (1)    any medical records of the enrollee that relevant to the review;

        (2)    any documents used by the carrier in making the determination to be reviewed by the certified independent review organization;

        (3)    any documentation and written information submitted to the carrier in support of the appeal; and

        (4)    a list of each physician or health care provider who has provided care to the enrollee and who may have medical records relevant to the appeal. Health information or other confidential or proprietary information in the custody of a carrier may be provided to an independent review organization, subject to regulations promulgated by the director.

    (E)    The medical reviewers from a certified independent review organization shall make determinations regarding the medical necessity or appropriateness of, and the application of health plan coverage provisions to, health care services for an enrollee. The medical reviewers' determinations must be based upon their expert medical judgment, after consideration of relevant medical, scientific, and cost-effectiveness evidence, and medical standards of practice in the State of South Carolina. Except as provided in this subsection, the certified independent review organization must ensure that determinations are consistent with the scope of covered benefits as outlined in the medical coverage agreement. Medical reviewers may override the health plan's medical necessity or appropriateness standards if the standards are determined upon review to be unreasonable or inconsistent with sound, evidence-based medical practice.

    (F)    Once a request for an independent review determination has been made, the independent review organization must proceed to a final determination, unless requested otherwise by both the carrier and the enrollee or the enrollee's representative.

    (G)    Carriers must timely implement the certified independent review organization's determination, and must pay the certified independent review organization's charges.

    (H)    When an enrollee requests independent review of a dispute under this section, and the dispute involves a carrier's decision to modify, reduce, or terminate an otherwise covered health service that an enrollee is receiving at the time the request for review is submitted and the carrier's decision is based upon a finding that the health service, or level of health service, is no longer medically necessary or appropriate, the carrier must continue to provide the health service if requested by the enrollee until a determination is made under this section. If the determination affirms the carrier's decision, the enrollee may be responsible for the cost of the continued health service.

    (I)    A certified independent review organization may notify the office of the director if, based upon its review of disputes under this section, it finds a pattern of substandard or egregious conduct by a carrier.

    (J)    This section does not supplant any existing authority of the office of the director to oversee and enforce carrier compliance with applicable statutes and regulations.

    Section 38-34-120.    (A)    The director shall promulgate regulations providing a procedure and criteria for certifying one or more organizations to perform independent review of health care disputes described in Section 38-34-110.

    (B)    The regulations must require that the organization ensure:

        (1)    the confidentiality of medical records transmitted to an independent review organization for use in independent reviews;

        (2)    that each health care provider, physician, or contract specialist making review determinations for an independent review organization is qualified. Physicians, other health care providers, and, if applicable, contract specialists must be appropriately licensed, certified, or registered as required in this State or in at least one state with standards substantially comparable to this State. Reviewers may be drawn from nationally recognized centers of excellence, academic institutions, and recognized leading practice sites. Expert medical reviewers shall have substantial, recent clinical experience dealing with the same or similar health conditions. The organization must have demonstrated expertise and a history of reviewing health care in terms of medical necessity, appropriateness, and the application of other health plan coverage provisions;

        (3)    that any physician, health care provider, or contract specialist making a review determination in a specific review is free of any actual or potential conflict of interest or bias. Neither the expert reviewer, nor the independent review organization, nor any officer, director, or management employee of the independent review organization may have any material professional, familial, or financial affiliation with any of the following: the health carrier; professional associations of carriers and providers; the provider; the provider's medical or practice group; the health facility at which the service would be provided; the developer or manufacturer of a drug or device under review; or the enrollee;

        (4)    the fairness of the procedures used by the independent review organization in making the determinations;

        (5)    that each independent review organization make its determination:

            (a)    not later than the earlier of: the fifteenth day after the date the independent review organization receives the information necessary to make the determination or the twentieth day after the date the independent review organization receives the request that the determination be made. In exceptional circumstances, when the independent review organization has not obtained information necessary to make a determination, a determination may be made by the twenty-fifth day after the date the organization received the request for the determination; and

            (b)    in cases of a condition that could seriously jeopardize the enrollee's health or ability to regain maximum function, not later than the earlier of seventy-two hours after the date the independent review organization receives the information necessary to make the determination; or the eighth day after the date the independent review organization receives the request that the determination be made;

        (6)    that timely notice is provided to enrollees of the results of the independent review, including the clinical basis for the determination;

        (7)    that the independent review organization has a quality assurance mechanism in place that ensures the timeliness and quality of review and communication of determinations to enrollees and carriers, and the qualifications, impartiality, and freedom from conflict of interest of the organization, its staff, and expert reviewers; and

        (8)    that the independent review organization meets any other reasonable requirements of the department directly related to the functions the organization is to perform under this section and Section 38-34-110.

    (C)    To be certified as an independent review organization under this chapter, an organization must submit to the department an application in the form required by the department. The application must include:

        (1)    for an applicant that is publicly held, the name of each stockholder or owner of more than five percent of any stock or options;

        (2)    the name of any holder of bonds or notes of the applicant that exceed one hundred thousand dollars;

        (3)    the name and type of business of each corporation or other organization that the applicant controls or is affiliated with and the nature and extent of the affiliation or control;

        (4)    the name and a biographical sketch of each director, officer, and executive of the applicant and any entity listed under item (3) of this subsection and a description of any relationship the named individual has with:

            (a)    a carrier;

            (b)    a utilization review agent;

            (c)    a nonprofit or for-profit health corporation;

            (d)    a health care provider;

            (e)    a drug or device manufacturer; or

            (f)    a group representing any of the entities described by (4)(a) through (e) of this subsection;

        (5)    the percentage of the applicant's revenues that are anticipated to be derived from reviews conducted under Section 38-34-110;

        (6)    a description of the areas of expertise of the health care professionals and contract specialists making review determinations for the applicant; and

        (7)    the procedures to be used by the independent review organization in making review determinations regarding reviews conducted under Section 38-34-110.

    (D)    If at any time there is a material change in the information included in the application under this section, the independent review organization shall submit updated information to the department.

    (E)    An independent review organization may not be a subsidiary of, or in any way owned or controlled by, a carrier or a trade or professional association of health care providers or carriers.

    (F)    An independent review organization, and individuals acting on its behalf, are immune from suit in a civil action when performing functions under this chapter. However, this immunity does not apply to an act or omission made in bad faith or that involves gross negligence or recklessness.

    Section 38-34-130.    Any carrier that offers a health plan and any self-insured health plan subject to the jurisdiction of this State shall designate a medical director who is licensed by South Carolina.

    Section 38-34-140.    The provisions of this chapter are supplemental to all other provisions of law relating to health care insurance and providers, except that to the extent the provisions of this chapter and any other provision of law conflict, the provisions of this chapter shall control."

SECTION    2.    This act takes effect upon approval by the Governor.

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