California Senate Bill SB1410 Introduced / Bill

 BILL NUMBER: SB 1410INTRODUCED BILL TEXT INTRODUCED BY Senator Hernandez FEBRUARY 24, 2012 An act to amend Sections 1374.32 and 1374.33 of the Health and Safety Code, and to amend Sections 10169.2 and 10169.3 of the Insurance Code, relating to health care coverage. LEGISLATIVE COUNSEL'S DIGEST SB 1410, as introduced, Hernandez. Independent medical review. Existing law provides for licensing and regulation of health care service plans by the Department of Managed Health Care. Existing law provides for licensing and regulation of health insurers by the Insurance Commissioner. Existing law requires the department and the commissioner to establish an independent medical review system under which a patient may seek an independent medical review whenever health care services have been denied, modified, or delayed by a health care service plan or health insurer and the patient has previously filed a grievance that remains unresolved after 30 days. Existing law requires medical professionals selected by an independent medical review organization to review medical treatment decisions to meet certain minimum requirements, including that the medical professional be a clinician knowledgeable in the treatment of the patient's medical condition, knowledgeable about the proposed treatment, and familiar with guidelines and protocols in the area of treatment under review. This bill would instead require the medical professional to be a clinician expert in the treatment of the enrollee's medical condition and knowledgeable about the proposed treatment through recent or current actual clinical experience treating patients with the same or similar condition. Existing law requires the Director of Managed Health Care and the Insurance Commissioner to adopt the determination of an independent medical review organization as a director or commissioner decision. Existing law requires the decisions to be made available, on request, to the public at cost. Existing law requires certain information to be removed from the decision, including the name of the health plan. This bill would require the decisions to be made available at no charge on the Internet Web site of the Department of Managed Health Care or Department of Insurance, as applicable. The bill would delete the requirement to remove the name of the health plan. This bill would also require the 2 departments to consult with each other regarding the establishment of a common searchable database for these decisions, and would specify the information that is to be made available in that regard. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1374.32 of the Health and Safety Code is amended to read: 1374.32. (a)  By January 1, 2001, the   The  department shall contract with one or more independent medical review organizations in the state to conduct reviews for purposes of this article. The independent medical review organizations shall be independent of any health care service plan doing business in this state. The director may establish additional requirements, including conflict-of-interest standards, consistent with the purposes of this article, that an organization shall be required to meet in order to qualify for participation in the Independent Medical Review System and to assist the department in carrying out its responsibilities. (b) The independent medical review organizations and the medical professionals retained to conduct reviews shall be deemed to be medical consultants for purposes of Section 43.98 of the Civil Code. (c) The independent medical review organization, any experts it designates to conduct a review, or any officer, director, or employee of the independent medical review organization shall not have any material professional, familial, or financial affiliation, as determined by the director, with any of the following: (1) The plan. (2) Any officer, director, or employee of the plan. (3) A physician, the physician's medical group, or the independent practice association involved in the health care service in dispute. (4) The facility or institution at which either the proposed health care service, or the alternative service, if any, recommended by the plan, would be provided. (5) The development or manufacture of the principal drug, device, procedure, or other therapy proposed by the enrollee whose treatment is under review, or the alternative therapy, if any, recommended by the plan. (6) The enrollee or the enrollee's immediate family. (d) In order to contract with the department for purposes of this article, an independent medical review organization shall meet all of the following requirements: (1) The organization shall not be an affiliate or a subsidiary of, nor in any way be owned or controlled by, a health plan or a trade association of health plans. A board member, director, officer, or employee of the independent medical review organization shall not serve as a board member, director, or employee of a health care service plan. A board member, director, or officer of a health plan or a trade association of health plans shall not serve as a board member, director, officer, or employee of an independent medical review organization. (2) The organization shall submit to the department the following information upon initial application to contract for purposes of this article and, except as otherwise provided, annually thereafter upon any change to any of the following information: (A) The names of all stockholders and owners of more than 5 percent of any stock or options, if a publicly held organization. (B) The names of all holders of bonds or notes in excess of one hundred thousand dollars ($100,000), if any. (C) The names of all corporations and organizations that the independent medical review organization controls or is affiliated with, and the nature and extent of any ownership or control, including the affiliated organization's type of business. (D) The names and biographical sketches of all directors, officers, and executives of the independent medical review organization, as well as a statement regarding any past or present relationships the directors, officers, and executives may have with any health care service plan, disability insurer, managed care organization, provider group, or board or committee of a plan, managed care organization, or provider group. (E) (i) The percentage of revenue the independent medical review organization receives from expert reviews, including, but not limited to, external medical reviews, quality assurance reviews, and utilization reviews. (ii) The names of any health care service plan or provider group for which the independent medical review organization provides review services, including, but not limited to, utilization review, quality assurance review, and external medical review. Any change in this information shall be reported to the department within five business days of the change. (F) A description of the review process including, but not limited to, the method of selecting expert reviewers and matching the expert reviewers to specific cases. (G) A description of the system the independent medical review organization uses to identify and recruit medical professionals to review treatment and treatment recommendation decisions, the number of medical professionals credentialed, and the types of cases and areas of expertise that the medical professionals are credentialed to review. (H) A description of how the independent medical review organization ensures compliance with the conflict-of-interest provisions of this section. (3) The organization shall demonstrate that it has a quality assurance mechanism in place that does the following: (A) Ensures that the medical professionals retained are appropriately credentialed and privileged. (B) Ensures that the reviews provided by the medical professionals are timely, clear, and credible, and that reviews are monitored for quality on an ongoing basis. (C) Ensures that the method of selecting medical professionals for individual cases achieves a fair and impartial panel of medical professionals who are qualified to render recommendations regarding the clinical conditions and the medical necessity of treatments or therapies in question. (D) Ensures the confidentiality of medical records and the review materials, consistent with the requirements of this section and applicable state and federal law. (E) Ensures the independence of the medical professionals retained to perform the reviews through conflict-of-interest policies and prohibitions, and ensures adequate screening for conflicts-of-interest, pursuant to paragraph (5). (4) Medical professionals selected by independent medical review organizations to review medical treatment decisions shall be physicians or other appropriate providers who meet the following minimum requirements: (A) The medical professional shall be a clinician  knowledgeable   expert  in the treatment of the enrollee's medical condition  ,   and  knowledgeable about the proposed treatment  , and familiar with guidelines and protocols in the area of treatment under review   through recent or current actual clinical experience treating patients with the same or a similar medical condition as the enrollee  . (B) Notwithstanding any other provision of law, the medical professional shall hold a nonrestricted license in any state of the United States, and for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the condition or treatment under review. The independent medical review organization shall give preference to the use of a physician licensed in California as the reviewer, except when training and experience with the issue under review reasonably requires the use of an out-of-state reviewer. (C) The medical professional shall have no history of disciplinary action or sanctions, including, but not limited to, loss of staff privileges or participation restrictions, taken or pending by any hospital, government, or regulatory body. (5) Neither the expert reviewer, nor the independent medical review organization, shall have any material professional, material familial, or material financial affiliation with any of the following: (A) The plan or a provider group of the plan, except that an academic medical center under contract to the plan to provide services to enrollees may qualify as an independent medical review organization provided it will not provide the service and provided the center is not the developer or manufacturer of the proposed treatment. (B) Any officer, director, or management employee of the plan. (C) The physician, the physician's medical group, or the independent practice association (IPA) proposing the treatment. (D) The institution at which the treatment would be provided. (E) The development or manufacture of the treatment proposed for the enrollee whose condition is under review. (F) The enrollee or the enrollee's immediate family. (6) For purposes of this section, the following terms shall have the following meanings: (A) "Material familial affiliation" means any relationship as a spouse, child, parent, sibling, spouse's parent, or child's spouse. (B) "Material professional affiliation" means any physician-patient relationship, any partnership or employment relationship, a shareholder or similar ownership interest in a professional corporation, or any independent contractor arrangement that constitutes a material financial affiliation with any expert or any officer or director of the independent medical review organization. "Material professional affiliation" does not include affiliations that are limited to staff privileges at a health facility. (C) "Material financial affiliation" means any financial interest of more than 5 percent of total annual revenue or total annual income of an independent medical review organization or individual to which this subdivision applies. "Material financial affiliation" does not include payment by the plan to the independent medical review organization for the services required by this section, nor does "material financial affiliation" include an expert's participation as a contracting plan provider where the expert is affiliated with an academic medical center or a National Cancer Institute-designated clinical cancer research center. (e) The department shall provide, upon the request of any interested person, a copy of all nonproprietary information, as determined by the director, filed with it by an independent medical review organization seeking to contract under this article. The department may charge a nominal fee to the interested person for photocopying the requested information. SEC. 2. Section 1374.33 of the Health and Safety Code is amended to read: 1374.33. (a) Upon receipt of information and documents related to a case, the medical professional reviewer or reviewers selected to conduct the review by the independent medical review organization shall promptly review all pertinent medical records of the enrollee, provider reports, as well as any other information submitted to the organization as authorized by the department or requested from any of the parties to the dispute by the reviewers. If reviewers request information from any of the parties, a copy of the request and the response shall be provided to all of the parties. The reviewer or reviewers shall also review relevant information related to the criteria set forth in subdivision (b). (b) Following its review, the reviewer or reviewers shall determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee and any of the following: (1) Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service. (2) Nationally recognized professional standards. (3) Expert opinion. (4) Generally accepted standards of medical practice. (5) Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. (c) The organization shall complete its review and make its determination in writing, and in layperson's terms to the maximum extent practicable, within 30 days of the receipt of the application for review and supporting documentation, or within less time as prescribed by the director. If the disputed health care service has not been provided and the enrollee's provider or the department certifies in writing that an imminent and serious threat to the health of the enrollee may exist, including, but not limited to, serious pain, the potential loss of life, limb, or major bodily function, or the immediate and serious deterioration of the health of the enrollee, the analyses and determinations of the reviewers shall be expedited and rendered within three days of the receipt of the information. Subject to the approval of the department, the deadlines for analyses and determinations involving both regular and expedited reviews may be extended by the director for up to three days in extraordinary circumstances or for good cause. (d) The medical professionals' analyses and determinations shall state whether the disputed health care service is medically necessary. Each analysis shall cite the enrollee's medical condition, the relevant documents in the record, and the relevant findings associated with the provisions of subdivision (b) to support the determination. If more than one medical professional reviews the case, the recommendation of the majority shall prevail. If the medical professionals reviewing the case are evenly split as to whether the disputed health care service should be provided, the decision shall be in favor of providing the service. (e) The independent medical review organization shall provide the director, the plan, the enrollee, and the enrollee's provider with the analyses and determinations of the medical professionals reviewing the case, and a description of the qualifications of the medical professionals. The independent medical review organization shall keep the names of the reviewers confidential in all communications with entities or individuals outside the independent medical review organization, except in cases where the reviewer is called to testify and in response to court orders. If more than one medical professional reviewed the case and the result was differing determinations, the independent medical review organization shall provide each of the separate reviewer's analyses and determinations. (f) The director shall immediately adopt the determination of the independent medical review organization, and shall promptly issue a written decision to the parties that shall be binding on the plan. (g) After removing the  names   name  of the  parties, including, but not limited to, the  enrollee,  the names of  all medical providers,  the plan, and any of the insurer's   the names of the health care service plan's  employees or contractors,  and the name of any other party, other than the plan,  director decisions adopting a determination of an independent medical review organization shall be made available by the department to the public  upon request, at the department's cost and   on the department's Internet Web site,  after considering applicable laws governing disclosure of public records, confidentiality, and personal privacy.  Pursuant to this requirement, the department shall consult with and coordinate with the Department of Insurance   in the planning and   implementation of a common, searchable database that contains information about each director and Insurance Commissioner decision pursuant to subdivision (h).   (h) (1) Information regarding each director and commissioner decision provided by the database referenced in subdivision (g) shall include all of the following:   (A) Enrollee or insured demographic profile information, including age, gender, and ethnicity.   (B) The department that contracted the independent medical review organization that made the determination.   (C) Length of time to complete the independent medical review.   (D) Credentials and qualifications of the reviewer.   (E) The nature of the statutory criteria set forth in subdivision (b) that the reviewer used to make the case decision.   (F) A detailed case summary that includes the specific standards, criteria, and medical and scientific evidence, if any, that led to the case decision.   (2) The database referenced in subdivision (g) shall also include both of the following:   (A) The annual rate of independent medical review among the total insured population.   (B) The number, type, and resolution of independent medical review cases by health plan.  SEC. 3. Section 10169.2 of the Insurance Code is amended to read: 10169.2. (a)  By January 1, 2001, the   The  department shall contract with one or more independent medical review organizations in the state to conduct reviews for purposes of this article. The independent medical review organizations shall be independent of any disability insurer doing business in this state. The commissioner may establish additional requirements, including conflict-of-interest standards, consistent with the purposes of this article, that an organization shall be required to meet in order to qualify for participation in the Independent Medical Review System and to assist the department in carrying out its responsibilities. (b) The independent medical review organizations and the medical professionals retained to conduct reviews shall be deemed to be medical consultants for purposes of Section 43.98 of the Civil Code. (c) The independent medical review organization, any experts it designates to conduct a review, or any officer, director, or employee of the independent medical review organization shall not have any material professional, familial, or financial affiliation, as determined by the commissioner, with any of the following: (1) The insurer. (2) Any officer, director, or employee of the insurer. (3) A physician, the physician's medical group, or the independent practice association involved in the health care service in dispute. (4) The facility or institution at which either the proposed health care service, or the alternative service, if any, recommended by the insurer, would be provided. (5) The development or manufacture of the principal drug, device, procedure, or other therapy proposed by the insured whose treatment is under review, or the alternative therapy, if any, recommended by the insurer. (6) The insured or the insured's immediate family. (d) In order to contract with the department for purposes of this article, an independent medical review organization shall meet all of the following requirements: (1) The organization shall not be an affiliate or a subsidiary of, nor in any way be owned or controlled by, a disability insurer or a trade association of insurers. A board member, director, officer, or employee of the independent medical review organization shall not serve as a board member, director, or employee of a disability insurer. A board member, director, or officer of a disability insurer or a trade association of insurers shall not serve as a board member, director, officer, or employee of an independent medical review organization. (2) The organization shall submit to the department the following information upon initial application to contract for purposes of this article and, except as otherwise provided, annually thereafter upon any change to any of the following information: (A) The names of all stockholders and owners of more than 5 percent of any stock or options, if a publicly held organization. (B) The names of all holders of bonds or notes in excess of one hundred thousand dollars ($100,000), if any. (C) The names of all corporations and organizations that the independent medical review organization controls or is affiliated with, and the nature and extent of any ownership or control, including the affiliated organization's type of business. (D) The names and biographical sketches of all directors, officers, and executives of the independent medical review organization, as well as a statement regarding any past or present relationships the directors, officers, and executives may have with any health care service plan, disability insurer, managed care organization, provider group, or board or committee of an insurer, a plan, a managed care organization, or a provider group. (E) (i) The percentage of revenue the independent medical review organization receives from expert reviews, including, but not limited to, external medical reviews, quality assurance reviews, and utilization reviews. (ii) The names of any insurer or provider group for which the independent medical review organization provides review services, including, but not limited to, utilization review, quality assurance review, and external medical review. Any change in this information shall be reported to the department within five business days of the change. (F) A description of the review process including, but not limited to, the method of selecting expert reviewers and matching the expert reviewers to specific cases. (G) A description of the system the independent medical review organization uses to identify and recruit medical professionals to review treatment and treatment recommendation decisions, the number of medical professionals credentialed, and the types of cases and areas of expertise that the medical professionals are credentialed to review. (H) A description of how the independent medical review organization ensures compliance with the conflict-of-interest provisions of this section. (3) The organization shall demonstrate that it has a quality assurance mechanism in place that does the following: (A) Ensures that the medical professionals retained are appropriately credentialed and privileged. (B) Ensures that the reviews provided by the medical professionals are timely, clear, and credible, and that reviews are monitored for quality on an ongoing basis. (C) Ensures that the method of selecting medical professionals for individual cases achieves a fair and impartial panel of medical professionals who are qualified to render recommendations regarding the clinical conditions and the medical necessity of treatments or therapies in question. (D) Ensures the confidentiality of medical records and the review materials, consistent with the requirements of this section and applicable state and federal law. (E) Ensures the independence of the medical professionals retained to perform the reviews through conflict-of-interest policies and prohibitions, and ensures adequate screening for conflicts-of-interest, pursuant to paragraph (5). (4) Medical professionals selected by independent medical review organizations to review medical treatment decisions shall be physicians or other appropriate providers who meet the following minimum requirements: (A) The medical professional shall be a clinician  knowledgeable   expert  in the treatment of the insured's medical condition  ,   and  knowledgeable about the proposed treatment  , and familiar with guidelines and protocols in the area of treatment under review   through recent or current actual clinical experience treating patients with the same or a similar medical condition as the insured  . (B) Notwithstanding any other provision of law, the medical professional shall hold a nonrestricted license in the any state of the United States, and for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the condition or treatment under review. The independent medical review organization shall give preference to the use of a physician licensed in California as the reviewer, except when training and experience with the issue under review reasonably requires the use of an out-of-state reviewer. (C) The medical professional shall have no history of disciplinary action or sanctions, including, but not limited to, loss of staff privileges or participation restrictions, taken or pending by any hospital, government, or regulatory body. (5) Neither the expert reviewer, nor the independent medical review organization, shall have any material professional, material familial, or material financial affiliation with any of the following: (A) The disability insurer or a provider group of the insurer, except that an academic medical center under contract to the insurer to provide services to insureds may qualify as an independent medical review organization provided it will not provide the service and provided the center is not the developer or manufacturer of the proposed treatment. (B) Any officer, director, or management employee of the insurer. (C) The physician, the physician's medical group, or the independent practice association (IPA) proposing the treatment. (D) The institution at which the treatment would be provided. (E) The development or manufacture of the treatment proposed for the insured whose condition is under review. (F) The insured or the insured's immediate family. (6) For purposes of this section, the following terms shall have the following meanings: (A) "Material familial affiliation" means any relationship as a spouse, child, parent, sibling, spouse's parent, or child's spouse. (B) "Material professional affiliation" means any physician-patient relationship, any partnership or employment relationship, a shareholder or similar ownership interest in a professional corporation, or any independent contractor arrangement that constitutes a material financial affiliation with any expert or any officer or director of the independent medical review organization. "Material professional affiliation" does not include affiliations that are limited to staff privileges at a health facility. (C) "Material financial affiliation" means any financial interest of more than 5 percent of total annual revenue or total annual income of an independent medical review organization or individual to which this subdivision applies. "Material financial affiliation" does not include payment by the insurer to the independent medical review organization for the services required by this section, nor does "material financial affiliation" include an expert's participation as a contracting provider where the expert is affiliated with an academic medical center or a National Cancer Institute-designated clinical cancer research center. (e) The department shall provide, upon the request of any interested person, a copy of all nonproprietary information, as determined by the commissioner, filed with it by an independent medical review organization seeking to contract under this article. The department may charge a nominal fee to the interested person for photocopying the requested information. (f) The commissioner may contract with the Department of Managed Health Care to administer the independent medical review process established by this article. SEC. 4. Section 10169.3 of the Insurance Code is amended to read: 10169.3. (a) Upon receipt of information and documents related to a case, the medical professional reviewer or reviewers selected to conduct the review by the independent medical review organization shall promptly review all pertinent medical records of the insured, provider reports, as well as any other information submitted to the organization as authorized by the department or requested from any of the parties to the dispute by the reviewers. If reviewers request information from any of the parties, a copy of the request and the response shall be provided to all of the parties. The reviewer or reviewers shall also review relevant information related to the criteria set forth in subdivision (b). (b) Following its review, the reviewer or reviewers shall determine whether the disputed health care service was medically necessary based on the specific medical needs of the insured and any of the following: (A) Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service. (B) Nationally recognized professional standards. (C) Expert opinion. (D) Generally accepted standards of medical practice. (E) Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. (c) The organization shall complete its review and make its determination in writing, and in layperson's terms to the maximum extent practicable, within 30 days of the receipt of the application for review and supporting documentation, or within less time as prescribed by the commissioner. If the disputed health care service has not been provided and the insured's provider or the department certifies in writing that an imminent and serious threat to the health of the insured may exist, including, but not limited to, serious pain, the potential loss of life, limb, or major bodily function, or the immediate and serious deterioration of the health of the insured, the analyses and determinations of the reviewers shall be expedited and rendered within three days of the receipt of the information. Subject to the approval of the department, the deadlines for analyses and determinations involving both regular and expedited reviews may be extended by the commissioner for up to three days in extraordinary circumstances or for good cause. (d) The medical professionals' analyses and determinations shall state whether the disputed health care service is medically necessary. Each analysis shall cite the insured's medical condition, the relevant documents in the record, and the relevant findings associated with the provisions of subdivision (b) to support the determination. If more than one medical professional reviews the case, the recommendation of the majority shall prevail. If the medical professionals reviewing the case are evenly split as to whether the disputed health care service should be provided, the decision shall be in favor of providing the service. (e) The independent medical review organization shall provide the director, the insurer, the insured, and the insured's provider with the analyses and determinations of the medical professionals reviewing the case, and a description of the qualifications of the medical professionals. The independent medical review organization shall keep the names of the reviewers confidential in all communications with entities or individuals outside the independent medical review organization, except in cases where the reviewer is called to testify and in response to court orders. If more than one medical professional reviewed the case and the result was differing determinations, the independent medical review organization shall provide each of the separate reviewer's analyses and determinations. (f) The commissioner shall immediately adopt the determination of the independent medical review organization, and shall promptly issue a written decision to the parties that shall be binding on the insurer. (g) After removing the  names   name  of  the parties, including, but not limited to, the insured,  the names of  all medical providers, the  insurer, and any  names  of the insurer's employees or contractors,  and the name of any other party, other than the health plan,  commissioner decisions adopting a determination of an independent medical review organization shall be made available by the department  to the public upon request, at the department's cost and   on the department's Internet Web site,  after considering applicable laws governing disclosure of public records, confidentiality, and personal privacy.  Pursuant to this requirement, the department shall consult with and coordinate with the Department of Managed Health Care in the planning and   implementation of a common, searchable database that contains information about each commissioner and Director of Managed Health Care decision pursuant to subdivision (h).   (h) (1) Information regarding each commissioner and director decision provided by the database referenced in subdivision (g) shall include all of the following:   (A) Insured or enrollee demographic profile information, including age, gender, and ethnicity.   (B) The department that contracted the independent medical review organization that made the determination.   (C) Length of time to complete the independent medical review.   (D) Credentials and qualifications of the reviewer.   (E) The nature of the statutory criteria set forth in subdivision (b) that the reviewer used to make the case decision.   (F) A detailed case summary that includes the specific standards, criteria, and medical and scientific evidence, if any, that led to the case decision.   (2) The database referenced in subdivision (g) shall also include both of the following:   (A) The annual rate of independent medical review among the total insured population.   (B) The number, type, and resolution of independent medical review cases by health plan.