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OLR Bill Analysis
SB 6
AN ACT CONCERNING UTILIZATION REVIEW AND HEALTH CARE
CONTRACTS, HEALTH INSURANCE COVERAGE FOR NEWBORNS
AND STEP THERAPY.
SUMMARY
This bill makes the following changes in the insurance statutes:
1. establishes conditions under which health carriers (e.g., insurers
and HMOs) must exempt providers from certain utilization
review (e.g., prior authorization) based on their approval rates
for health care services and treatments over the prior six months;
2. prohibits health carriers from requiring a prospective or
concurrent review of a recurring health care service or
prescription drug already approved through utilization review;
3. requires health carriers to implement a program to electronically
receive and respond to certain utilization review requests;
4. shortens several of the maximum timeframes for health insurers
or independent review organizations (IROs) to notify an insured
or his or her authorized representative of utilization review
decisions;
5. extends, from 61 days after birth to the later of 121 days after the
birth or the hospital discharge date, the time period within which
the insured person must (a) notify the insurer, HMO, or hospital
or medical service corporation about the birth and (b) pay any
required premium or subscription fee to continue the newborn’s
coverage beyond that period; and
6. expands when health carriers are prohibited from requiring that
an insured use step therapy to include a prohibition against 2023SB-00006-R000337-BA.DOCX
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requiring that step therapy be used for prescribed drugs to treat
a behavioral health condition or a disabling, chronic, or life-
threatening condition or disease.
EFFECTIVE DATE: October 1, 2023
§ 1 — PROSPECTIVE AND CONC URRENT REVIEW EXEMPTION
Exemption Threshold and Notification
Broadly, utilization review refers to a process in which health carriers
determine whether a specific medical service is reimbursable under an
individual’s plan or insurance policy. Prospective reviews (which occur
before a service is provided) and concurrent reviews (which occur while
a person is undergoing treatment) are two types of utilization reviews.
In practice, many prospective or concurrent reviews are “prior
authorization” reviews, which require a health care provider to obtain
approval before a medical service is covered.
Beginning with health care contracts entered into, renewed, or
amended on or after January 1, 2024, the bill prohibits health carriers
that perform utilization review from requiring that a participating
provider obtain a prospective or concurrent review for a specific health
care service or course of treatment (i.e., services) if the carrier approved
90% of the provider’s reviews for the service in the preceding six months
(i.e., “evaluation period” as described below). Under the bill, carriers
generally must conduct an evaluation every six months to determine
whether providers qualify for this exemption. However, no
participating providers are required to request an exemption in order to
qualify for one.
Within five business days after a provider qualifies for an exemption,
the health carrier must provide it a written notice that (1) states that it
qualifies for an exemption, (2) identifies the exemption’s duration, and
(3) lists the provider’s exempt services and health benefit plans to which
the exemption applies.
Scope of the Evaluation
Under the bill, the evaluation that carriers must conduct depends on 2023SB-00006-R000337-BA.DOCX
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whether the participating provider has a prospective or concurrent
review exemption for the service.
For non-exempt services, the evaluation is a review of the provider’s
prospective or concurrent review exemption requests during the most
recent evaluation period to (1) determine the percentage of requests that
were approved or (2) evaluate whether to grant or deny a prospective
or concurrent review exemption.
For exempt services, the evaluation is a retrospective review of a
random sample of the payable claims the provider submitted during the
most recent evaluation period to (1) determine the percentage of claims
that would have been approved based on the health carrier’s applicable
medical necessity data at the time the service was provided and (2)
evaluate whether to continue or rescind the exemption.
Evaluation Period
Under the bill, the evaluation period is the six-month period before
an evaluation. For initial exemptions or denials, the evaluation period is
any six-month period beginning on January 1 or July 1, 2024, or any
subsequent six-month period beginning January or July 1. After this
initial determination, the evaluation period is the six-month period
starting on the first day following the end of the evaluation period that
the denial or recission was based on.
If an exemption is being rescinded (as described below), the
evaluation period is the six-month period after the health carrier notifies
the provider of the rescission. However, no more than two months may
elapse between the end of this evaluation period and the date the
provider receives the notice.
Length of Exemption
Under the bill, a participating provider’s exemption remains in effect
until 30 days after the health carrier notifies it of a decision to rescind
the exemption unless the provider appeals. In that case, the exemption
is in effect until the five days after the IRO (see below) affirms the health
carrier’s decision. 2023SB-00006-R000337-BA.DOCX
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Under the bill, if a health carrier does not finalize a rescission
determination, the provider automatically qualifies for an exemption.
(The bill does not specify how a recission determination is “finalized.”)
Providers Submitting Exemption Eligible Claims
Under the bill, carriers must notify providers if they submit a claim
for a health service which qualifies for an exemption. Specifically, a
carrier must promptly provide a written notice that (1) states that the
provider qualifies for an exemption, (2) identifies the exemption’s
duration, (3) lists the provider’s exempt services and health benefit
plans to which the exemption applies, and (4) describes the carrier’s
payment requirements.
Rescissions
The bill allows health carriers to rescind a participating provider’s
exemption only during the following time periods and under the
following circumstances:
1. during January or July of each year;
2. if it determines, based on a retrospective review of a random
sample of between five and 20 claims submitted by the provider
during the most recent evaluation period, that less than 90% of
the claims for health care services or treatments met the medical
necessity criteria the carrier would have used to evaluate the
claims; and
3. if it notifies the provider in writing at least 30 days before the
recission is effective and includes (a) the sample information it
used to make the determination and (b) a plain language
description of the appeal and independent review process (see
below).
Exemption Denials
The bill prohibits carriers from denying exemptions unless they
provide the participating provider the statistics, data, and other
information sufficient to demonstrate that the provider failed to meet
the exemption criteria for each health care service or treatment. 2023SB-00006-R000337-BA.DOCX
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Independent Review Process
IRO Request and Timeline. The bill establishes a process for
providers to appeal a carrier’s decision to rescind an exemption with an
IRO. It allows a provider to request that an IRO review a health carrier’s
decision to rescind an exemption. It additionally prohibits carriers from
requiring that a provider engage in an internal review process before
requesting a review of an adverse determination of an exemption.
(Presumably, an adverse determination is a determination that an
exemption should be rescinded.) IROs must complete the review within
30 calendar days of when the provider files the request.
The participating provider may request that the IRO consider a
random sample of between five and 20 claims it submitted to the health
carrier for the specified health service or treatment during the
evaluation period that led to the recission. If the provider requests this,
the IRO must base its determination on the medical necessity of the
same claims that the insurer used in rescinding the exemption.
IRO determinations are binding on the carrier and the provider,
except to the extent to which either party has other remedies available
under state or federal law.
Fees. The bill requires health carriers issuing adverse determinations
of a provider’s exemption (presumably a recission) must pay (1) the IRO
for the cost of conducting the review and (2) reasonable fees for copies
of all documents, communication, information, and evidence relating to
the adverse determination. The bill requires the insurance commissioner
to adopt regulations to implement these fees.
Overturned Determinations. If an IRO overturns a health carrier’s
determination of an exemption, the carrier (1) cannot attempt to rescind
the exemption before the end of the next evaluation period and (2) may
only rescind the exemption if it complies with the bill’s notification and
other recission requirements described above.
Reconsideration
Under the bill, a provider who has had an exemption denied or 2023SB-00006-R000337-BA.DOCX
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rescinded is eligible for reconsideration at the end of the six-month
evaluation period that follows the one that formed the basis for the
recission or denial.
Patient and Provider Protections
The bill prohibits health carriers from retroactively denying services
because a provider’s exemption was rescinded, even if the rescission
was affirmed by an IRO. It also prohibits carriers from denying or
reducing a payment to a provider for a service for which it qualified for
an exemption based on medical necessity or appropriateness of care
except in certain cases of fraud (i.e., the provider knowingly and
materially misrepresented the service in a claim submitted to the health
carrier or failed to substantially perform it).
Additionally, the bill prohibits health carriers from retrospectively
reviewing a service (presumably for a particular health care provider)
that is subject to an exemption except (1) to determine if a provider
qualifies for an exemption or (2) if they have reasonable cause to believe
that the provider knowingly and materially misrepresented the service
or failed to substantially perform it.
Regulations
The bill requires the insurance commissioner to adopt regulations
implementing the exemption provisions.
§ 2 — ELECTRONIC PRIOR AU THORIZATIONS
By January 1, 2024, the bill requires health carriers to establish a
secure system to electronically receive and respond to prospective and
concurrent review requests and other requests for prospective or
concurrent utilization reviews, including supporting clinical
information, submitted by hospitals and health care professionals.
§ 3 — UTILIZATION REVIEW REQUEST TIME FRAMES
Existing law establishes a structure and timeframe for health carriers
and IROs to conduct benefit reviews and notify a covered individual
whether a specific medical service is reimbursable by his or her health
insurance plan. 2023SB-00006-R000337-BA.DOCX
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The bill shortens several of the maximum timeframes a health insurer
or IRO can take, after receiving all the required health information, to
notify an insured or the insured’s authorized representative of
decisions. Specifically, the bill shortens the maximum response time for
decisions about the following requests:
1. a non-urgent prospective or concurrent review request, from 15
calendar days to 72 hours;
2. a one-time extension of non-urgent prospective or concurrent
review requests due to circumstances beyond the carrier’s control
and following proper notice, from 15 calendar days to 72 hours;
3. urgent care requests, from 48 hours (or 72 hours if the request or
response time falls on a weekend) to 24 hours.
By law, urgent review requests must be done as soon as possible,
taking into account the insured’s medical condition.
Notification and Processing
The bill also changes how a health carrier must process incomplete
review requests. Under current law, a health carrier must notify an
insured and the insured’s authorized representative within five
calendar days of a request that does not meet the carrier’s filing
requirements (or within 24 hours for an urgent care request). Under the
bill for prospective and concurrent review requests, a carrier must
instead (1) process requests 24 hours a day, seven days a week,
including holidays and (2) acknowledge receipt of these requests as
soon as practicable and within 24 hours unless federal law requires a
faster response.
Current law allows health carriers to notify patients orally, so long as
a written notice follows. The bill repeals this explicit authorization.
Additionally, the bill prohibits health carriers from requiring that
health care professionals or hospitals submit additional information
with a prospective or concurrent review that is not reasonably available
at the time the request is submitted. 2023SB-00006-R000337-BA.DOCX
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§§ 4 & 5 — NEWBORN HEALTH INSU RANCE COVERAGE
By law, certain health insurance policies that cover family members
must cover newborns from birth. The coverage must include injury and
sickness benefits, including the care and treatment of congenital defects
and birth abnormalities.
The bill extends, from 61 days after birth to the later of 121 days after
the birth or the hospital discharge date, the time period within which
the insured person must (1) notify the insurer, HMO, or hospital or
medical service corporation about the birth and (2) pay any required
premium or subscription fee to continue the newborn’s coverage
beyond that period. As under current law, if notification and payment
is not provided within the specified period, claims originating during
that period are not prejudiced.
The bill applies to individual and group health insurance policies
delivered, issued, renewed, amended, or continued in Connecticut that
cover (1) basic hospital expenses; (2) basic medical-surgical expenses; (3)
major medical expenses; (4) accidents; or (5) hospital or medical
services, including those provided under an HMO plan. It also applies
to individual health insurance policies that cover limited benefits.
Because of the federal Employee Retirement Income Security Act, state
insurance benefit mandates do not apply to self-insured benefit plans.
§§ 6 & 7 — STEP THERAPY PROHIB ITIONS
Step therapy is a protocol for establishing the sequence for
prescribing drugs for specific medical conditions; it generally requires
patients to try less expensive drugs before higher cost drugs. The bill
prohibits individual and group health insurers from requiring an
insured to use step therapy for prescribed drugs to treat a behavioral
health condition or a disabling, chronic, or life-threatening condition or
disease, provided the drug is prescribed in accordance with federal
Food and Drug Administration indications. Current law limits this
prohibition to drugs used to treat stage IV metastatic cancer. By law,
step therapy cannot be used for longer than 60 days. 2023SB-00006-R000337-BA.DOCX
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§ 8 — PROHIBITION ON REVIEWS OF RECURRIN G HEALTH CARE
SERVICES AND PRESCRI PTION DRUGS
The bill prohibits health carriers from requiring a prospective or
concurrent review of a recurring health care service or prescription drug
after they have certified the service or drug through utilization review.
The bill specifies that it does not require a health carrier to cover a health
care service or prescription drug that a policy’s coverage conditions
completely exclude for a specific health condition.
COMMITTEE ACTION
Insurance and Real Estate Committee
Joint Favorable
Yea 7 Nay 5 (03/14/2023)