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AN ACT relating to prior authorization. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS 304.17A-600 TO 304.17A-633 IS 3
CREATED TO READ AS FOLLOWS: 4
(1) An insurer or its private review agent shall not require a health care provider to 5
obtain prior authorization for a particular health care service if, at the time the 6
health care service was provided, the health care provider qualified for or had an 7
exemption under subsection (2)(a) of this section, or was qualified under the 8
exemption of another health care provider in accordance with subsection (2)(b) 9
of this section, for that health care service. 10
(2) (a) A health care provider shall qualify for an exemption for a particular health 11
care service if, in the most recent evaluation period as described in 12
subsection (3) of this section, the insurer or its private review agent 13
approved not less than ninety percent (90%) of the prior authorization 14
requests submitted by the health care provider for that health care service. 15
(b) Subject to the requirements of paragraph (c) of this subsection, a health 16
care provider shall be qualified under the exemption of another health care 17
provider for a particular health care service if: 18
1. The following requirements are met: 19
a. The health care provider is an advanced practice registered 20
nurse or physician assistant; 21
b. The health care provider's collaborating or supervising 22
physician has an exemption for the health care service under 23
paragraph (a) of this subsection; 24
c. The health care service is within the scope of practice of an 25
advanced practice registered nurse or physician assistant; and 26
d. The health care provider submits the claim for the health care 27 UNOFFICIAL COPY 23 RS BR 830
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service under the collaborating or supervising physician's 1
national provider identifier in a manner consistent with 2
applicable law; or 3
2. The health care provider is a treating provider providing a health care 4
service ordered by a health care provider with an exemption for the 5
health care service under paragraph (a) of this subsection. 6
(c) 1. For health care services provided under paragraph (b) of this 7
subsection, the health care provider shall include the name and 8
national provider identifier of the collaborating or supervising 9
physician, or the ordering health care provider, on the claim forms for 10
the health care service. 11
2. The insurer or its private review agent may provide coding guidance to 12
health care providers submitting claim forms under subparagraph 1. 13
of this paragraph to ensure that information is appropriately captured 14
on the claim. 15
3. If the information required under subparagraph 1. of this paragraph 16
is not included on claim forms submitted for the health care service, 17
the insurer or its private review agent may treat the claim as subject to 18
an otherwise applicable prior authorization requirement. 19
(3) (a) An insurer or its private review agent shall evaluate, once every six (6) 20
months, whether a health care provider qualifies for an exemption under 21
subsection (2)(a) of this section for each health care service: 22
1. Provided by the provider during the evaluation period regardless of 23
the number of prior authorization requests submitted for the health 24
care service during the evaluation period; and 25
2. For which: 26
a. The insurer or private review agent requires prior authorization; 27 UNOFFICIAL COPY 23 RS BR 830
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and 1
b. The provider does not have an exemption under this section. 2
(b) An insurer or its private review agent shall not: 3
1. Include prior authorization requests that have not been finalized in its 4
evaluation under paragraph (a) of this subsection; or 5
2. Require a health care provider to request an exemption in order to 6
qualify for the exemption. 7
(4) (a) Except as provided in paragraph (b) of this subsection, not later than five 8
(5) days after conducting an evaluation under subsection (3) of this section, 9
an insurer or its private review agent shall provide a health care provider 10
with a notice, in accordance with Section 4 of this Act, that includes: 11
1. A statement: 12
a. Notifying the health care provider that the provider has been 13
granted an exemption under this section; and 14
b. Setting forth the duration of the exemption; and 15
2. A list of the health care services and plans to which the exemption 16
applies. 17
(b) An insurer or its private review agent may deny an exemption within five (5) 18
days after conducting an evaluation under subsection (3) of this section if 19
the insurer or private review agent provides the health care provider with 20
the following, in accordance with Section 4 of this Act: 21
1. Actual statistics and data for the relevant evaluation period; 22
2. Detailed information sufficient to demonstrate that the health care 23
provider does not meet the criteria for an exemption under subsection 24
(2)(a) of this section for the particular health care service; and 25
3. A plain language explanation of how the health care provider may 26
appeal by seeking an external review of the denial under Section 3 of 27 UNOFFICIAL COPY 23 RS BR 830
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this Act. 1
(5) If a health care provider submits a prior authorization request for a health care 2
service for which the health care provider qualifies for an exemption under 3
subsection (2)(a) of this section, the insurer or its private review agent shall 4
promptly provide the health care provider with a notice, in accordance with 5
Section 4 of this Act, that includes: 6
(a) The information required under subsection (4)(a) of this section; and 7
(b) The insurer's payment requirements. 8
(6) An exemption that a health care provider qualifies for or has under subsection 9
(2)(a) of this section shall remain in effect until it is rescinded under Section 2 of 10
this Act. 11
(7) When a health care provider's exemption has been denied under subsection (4)(b) 12
of this section or rescinded under Section 2 of this Act, the health care provider 13
may qualify for or have an exemption under subsection (2)(a) of this section for 14
the same health care service beginning six (6) months after the effective date of 15
the rescission or denial. 16
SECTION 2. A NEW SECTION OF KRS 304.17A-600 TO 304.17A-633 IS 17
CREATED TO READ AS FOLLOWS: 18
(1) (a) Subject to this section and except as provided in subsection (6) of Section 3 19
of this Act, an insurer or its private review agent may, during the months of 20
January and July of each year, rescind an exemption granted in accordance 21
with subsection (2)(a) of Section 1 of this Act, if the insurer or private 22
review agent: 23
1. Makes a determination, based on a retrospective review of a random 24
sample of not less than five (5) and not more than twenty (20) claims 25
submitted by the health care provider for the particular health care 26
service during the most recent evaluation period, that less than ninety 27 UNOFFICIAL COPY 23 RS BR 830
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percent (90%) of the claims met the medical necessity criteria that 1
would have been used during the relevant evaluation period by the 2
insurer or private review agent when conducting a prior authorization 3
review for that health care service; and 4
2. Notifies the health care provider of the rescission in accordance with 5
Section 4 of this Act and paragraph (b) of this subsection. 6
(b) The notification required under paragraph (a) of this subsection shall 7
include: 8
1. An identification of the health care services and plans for which the 9
exemption is being rescinded; 10
2. The date the notification was issued; 11
3. The date the rescission is effective under subsection (2)(c)2. of this 12
section; 13
4. A statement that includes: 14
a. The total number of payable claims submitted by or in 15
connection with the health care provider during the most recent 16
evaluation period that were eligible to be evaluated for the health 17
care service subject to the rescission; 18
b. Identification of each claim included in the random sample; 19
c. The insurer's or private review agent's determination of whether 20
each claim met the insurer's or private review agent's screening 21
criteria; and 22
d. For any claim determined to not have met the insurer's or 23
private review agent's screening criteria: 24
i. The principal reasons for the determination, including, if 25
applicable, a statement that the determination was based on 26
a failure to submit specified medical records; 27 UNOFFICIAL COPY 23 RS BR 830
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ii. The clinical basis for the determination; 1
iii. A description of the screening criteria sources that were 2
used as guidelines in making the determination; and 3
iv. The professional specialty of the health care provider who 4
made the determination; 5
5. A plain language explanation of how the health care provider may 6
appeal by seeking an external review of the rescission under Section 3 7
of this Act; 8
6. A form, prescribed by the commissioner under Section 7 of this Act, to 9
be filled out by the health care provider to request an external review 10
of the rescission under Section 3 of this Act that includes: 11
a. The name, address, contact information, and national provider 12
identifier of the health care provider; 13
b. An indication of whether the health care provider is requesting 14
the independent review entity to review the same random sample 15
of claims or a different random sample of claims, as provided in 16
subsection (3)(a) of Section 3 of this Act; 17
c. The date the appeal is being requested; and 18
d. An instruction for the health care provider to: 19
i. Return the form to the insurer or private review agent 20
before the date the rescission becomes effective under 21
subsection (2)(c)2. of this section; and 22
ii. Include applicable medical records for any determination 23
that was based on a failure to provide medical records; and 24
7. The address and contact information for returning, by mail or 25
electronic means, the form referenced in subparagraph 6. of this 26
paragraph. 27 UNOFFICIAL COPY 23 RS BR 830
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(c) An insurer or its private review agent shall not rescind an exemption of a 1
health care provider that has less than five (5) claims subject to review 2
under paragraph (a) of this subsection. 3
(2) (a) 1. Except as provided in subparagraph 2. of this paragraph, the review 4
periods under subsection (1)(a) of this section shall be January 5
through June and July through December of each year. 6
2. If six (6) months has not elapsed since the date of the notification 7
under subsection (4)(a) or (5) of Section 1 of this Act, whichever is 8
earlier, the review period shall be extended to include the next full 9
review period set forth in subparagraph 1. of this paragraph. 10
(b) An insurer or private review agent shall not include claims that have not 11
been finalized in its review under subsection (1)(a) of this section. 12
(c) A rescission determination under subsection (1) of this section shall: 13
1. Be made by an individual: 14
a. Licensed to practice medicine in this state; and 15
b. When relating to a physician, who has the same or similar 16
specialty as the physician; and 17
2. Take effect: 18
a. Except as provided in subdivision b. of this subparagraph, on the 19
thirtieth day after the date the insurer or its private review agent 20
notifies the health care provider of the rescission; or 21
b. If the health care provider timely requests an external review of 22
the rescission under subsection (1)(a)1. of Section 3 of this Act, 23
on the fifth day after the date the independent review entity 24
affirms the rescission. 25
(3) If a notice under subsection (1) of this section is sent in a manner inconsistent 26
with the requirements of Section 4 of this Act, the notice shall be defective and 27 UNOFFICIAL COPY 23 RS BR 830
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any exemption referenced in the defective notice shall remain in effect. 1
SECTION 3. A NEW SECTION OF KRS 304.17A-600 TO 304.17A-633 IS 2
CREATED TO READ AS FOLLOWS: 3
(1) (a) 1. Except as provided in paragraph (b) of this subsection, a health care 4
provider may, within thirty (30) days of receiving an exemption denial 5
under Section 1 of this Act or an exemption rescission under Section 2 6
of this Act, submit a request for an external review of the rescission or 7
denial to the insurer or its private review agent. An external review 8
requested under this subparagraph shall be conducted by an 9
independent review entity. 10
2. Requests for an external review under subparagraph 1. of this 11
paragraph shall be forwarded by the insurer or its private review agent 12
to the independent review entity within twenty-four (24) hours of 13
receipt by the insurer or private review agent. 14
3. The department shall establish a system for each insurer or its private 15
review agent to be assigned an independent review entity for external 16
reviews conducted under subparagraph 1. of this paragraph. 17
4. The system established under subparagraph 3. of this paragraph shall: 18
a. Be prospective; and 19
b. Require insurers and private review agents to utilize independent 20
review entities on a rotating basis so that an insurer or private 21
review agent does not have the same independent review entity 22
for two (2) consecutive external reviews. 23
5. For purposes of the system established under subparagraph 3. of this 24
paragraph, the department shall contract with not less than two (2) 25
independent review entities. 26
(b) 1. A health care provider may submit a request for an external review of 27 UNOFFICIAL COPY 23 RS BR 830
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any rescission notice alleged to be sent in a manner inconsistent with 1
Section 4 of this Act. An external review requested under this 2
subparagraph shall be conducted by the department. 3
2. The commissioner shall promulgate an administrative regulation to 4
establish procedures for an external review requested under 5
subparagraph 1. of this paragraph. 6
(c) An insurer or its private review agent shall: 7
1. Not require a health care provider to engage in an internal appeal 8
before requesting an external review under this subsection; and 9
2. Provide options for a health care provider to submit a request for an 10
external review under paragraph (a)1. of this subsection by mail, 11
electronic mail, or other electronic methods. 12
(2) For an external review of an exemption denial under Section 1 of this Act, the 13
independent review entity shall base its decision on the criteria established under 14
subsection (2)(a) of Section 1 of this Act. 15
(3) For an external review of an exemption rescission under Section 2 of this Act by 16
an independent review entity under subsection (1)(a)1. of this section: 17
(a) A health care provider may request that the independent review entity, as 18
part of its review, consider, if available, another random sample of not less 19
than five (5) and not more than twenty (20) claims submitted to the insurer 20
or its private review agent by the health care provider during the relevant 21
evaluation period for the relevant health care service; 22
(b) The independent review entity shall base its decision on the criteria 23
established under subsection (1)(a) of Section 2 of this Act as determined by 24
the medical necessity of the following sample of claims: 25
1. The claims reviewed by the insurer or its private review agent under 26
subsection (1)(a) of Section 2 of this Act; and 27 UNOFFICIAL COPY 23 RS BR 830
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2. If the health care provider makes a request under paragraph (a) of 1
this subsection, the additional claims submitted for review under this 2
subsection; and 3
(c) In making its decision, the independent review entity shall take into account 4
all of the following: 5
1. Information submitted by the insurer or its private review agent and 6
the health care provider, including: 7
a. The relevant medical records for the claims being reviewed; 8
b. The standards, criteria, and clinical rationale used by the insurer 9
or private review agent to make its determination; and 10
c. The insurer's health plan; 11
2. Findings, studies, research, and other relevant documents of 12
government agencies and nationally recognized organizations, 13
including the National Institutes of Health, the National Cancer 14
Institute, the National Academy of Sciences, the United States Food 15
and Drug Administration, the Centers for Medicare and Medicaid 16
Services of the United States Department of Health and Human 17
Services, and the Agency for Health Care Research and Quality; and 18
3. Relevant findings in peer-reviewed medical or scientific literature, 19
published opinions of nationally recognized medical specialists, and 20
clinical guidelines adopted by relevant national medical societies. 21
(4) (a) The independent review entity shall issue an external review decision to the 22
health care provider, insurer or its private review agent, and department not 23
later than thirty (30) days after the date the health care provider files a 24
request under subsection (1)(a)1. of this section. 25
(b) The external review decision issued under this subsection shall include: 26
1. The findings for either the health care provider or the insurer or its 27 UNOFFICIAL COPY 23 RS BR 830
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private review agent regarding each exemption under review; 1
2. The relevant provisions of the insurer's health plan and how the 2
provisions applied; and 3
3. The relevant provisions of any nationally recognized and peer-4
reviewed medical or scientific documents used in the external review. 5
(5) If an insurer's or its private review agent's denial or rescission is overturned by 6
an independent review entity under this section, the insurer or private review 7
agent: 8
(a) Shall be bound by the decision; 9
(b) Shall not attempt to rescind the exemption reviewed by the independent 10
review entity before the end of the next evaluation period that occurs; and 11
(c) May only deny or rescind the exemption reviewed by the independent review 12
entity after the insurer or private review agent complies with this section 13
and Sections 1 and 2 of this Act. 14
(6) An insurer or its private review agent shall pay: 15
(a) For any external review requested under this section; and 16
(b) A reasonable fee determined by the Kentucky Board of Medical Licensure 17
for any copies of medical records or other documents requested from a 18
health care provider during an external review requested under this section. 19
(7) The external review process shall be confidential and shall not be subject to KRS 20
61.805 to 61.850 or KRS 61.870 to 61.884. 21
(8) (a) The insurer, private review agent, or health care provider involved in an 22
external review under subsection (1)(a)1. of this section may submit a 23
written complaint to the department regarding any independent review 24
entity's actions believed to be an inappropriate application of this section. 25
(b) 1. The department shall promptly review the complaint, and if the 26
department determines that the actions of the independent review 27 UNOFFICIAL COPY 23 RS BR 830
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entity were inappropriate, the department shall take corrective 1
measures, including decertification or suspension of the independent 2
review entity from further participation in external reviews. 3
2. The department's actions under subparagraph 1. of this paragraph 4
shall be subject to the powers and administrative procedures set forth 5
in this subtitle. 6
SECTION 4. A NEW SECTION OF KRS 304.17A-600 TO 304.17A-633 IS 7
CREATED TO READ AS FOLLOWS: 8
(1) For purposes of sending forms and notices to a health care provider under 9
Sections 1 to 7 of this Act, an insurer or its private review agent shall solicit from 10
each health care provider the provider's preferred: 11
(a) Method of contact; and 12
(b) Contact information. 13
(2) An insurer or its private review agent shall: 14
(a) Send all forms and notices required to be sent to a health care provider 15
under Sections 1 to 7 of this Act, or administrative regulations promulgated 16
pursuant thereto, in the manner designated by the health care provider 17
under subsection (1) of this section; and 18
(b) Provide a process for health care providers to update the preferences 19
designated under subsection (1) of this section. 20
SECTION 5. A NEW SECTION OF KRS 304.17A-600 TO 304.17A-633 IS 21
CREATED TO READ AS FOLLOWS: 22
(1) An insurer or its private review agent shall not retrospectively: 23
(a) Deny, or reduce payment to a health care provider for, a health care service 24
for which the health care provider qualified or had an exemption under 25
subsection (2)(a) of Section 1 of this Act, or qualified under the exemption 26
of another health care provider under subsection (2)(b) of Section 1 of this 27 UNOFFICIAL COPY 23 RS BR 830
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Act, based on medical necessity or appropriateness of care unless the health 1
care provider: 2
1. Knowingly and materially misrepresented the health care service in a 3
request for payment submitted to the insurer or private review agent 4
with the specific intent to deceive and obtain an unlawful payment 5
from the insurer or private review agent; or 6
2. Failed to substantially perform the health care service; or 7
(b) Deny a health care service on the basis of a rescission under Section 2 of 8
this Act, regardless of whether an independent review entity affirms the 9
insurer's or private review agent's determination. 10
(2) Notwithstanding any other law to the contrary, an insurer or its private review 11
agent shall not conduct a retrospective review of a health care service for which 12
the health care provider qualified or had an exemption under subsection (2)(a) of 13
Section 1 of this Act, or qualified under the exemption of another health care 14
provider under subsection (2)(b) of Section 1 of this Act, except: 15
(a) To determine if the health care provider continues to qualify for an 16
exemption; or 17
(b) When the insurer or private review agent has reasonable cause to suspect a 18
basis for denial exists under subsection (1)(a) of this section. 19
SECTION 6. A NEW SECTION OF KRS 304.17A-600 TO 304.17A-633 IS 20
CREATED TO READ AS FOLLOWS: 21
Nothing in Sections 1 to 7 of this Act shall be construed to: 22
(1) Authorize a health care provider to provide a health care service outside the scope 23
of the provider's applicable license; or 24
(2) Require an insurer or its private review agent to pay for a health care service 25
described in subsection (1) of this section that is performed in violation of the 26
laws of this state. 27 UNOFFICIAL COPY 23 RS BR 830
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SECTION 7. A NEW SECTION OF KRS 304.17A-600 TO 304.17A-633 IS 1
CREATED TO READ AS FOLLOWS: 2
For every process relating to an exemption from prior authorization requirements 3
under Sections 1 to 7 of this Act, the commissioner shall, by administrative regulation, 4
establish standardized forms that shall be used by insurers and private review agents. 5
Section 8. KRS 304.17A-600 is amended to read as follows: 6
As used in KRS 304.17A-600 to 304.17A-633: 7
(1) (a) "Adverse determination" means a determination by an insurer or its designee 8
that the health care services furnished or proposed to be furnished to a 9
covered person are: 10
1. Not medically necessary, as determined by the insurer, or its designee or 11
experimental or investigational, as determined by the insurer, or its 12
designee; and 13
2. Benefit coverage is therefore denied, reduced, or terminated. 14
(b) "Adverse determination" does not mean a determination by an insurer or its 15
designee that the health care services furnished or proposed to be furnished to 16
a covered person are specifically limited or excluded in the covered person's 17
health benefit plan; 18
(2) "Authorized person" means a parent, guardian, or other person authorized to act on 19
behalf of a covered person with respect to health care decisions; 20
(3) "Concurrent review" means utilization review conducted during a covered person's 21
course of treatment or hospital stay; 22
(4) "Covered person" means a person covered under a health benefit plan; 23
(5) "External review" means a review that is conducted by an independent review 24
entity[ which meets specified criteria as established in KRS 304.17A-623, 304.17A-25
625, and 304.17A-627]; 26
(6) "Health benefit plan" has the same meaning as in KRS 304.17A-005, except that for 27 UNOFFICIAL COPY 23 RS BR 830
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purposes of KRS 304.17A-600 to 304.17A-633, the term includes short-term 1
coverage policies; 2
(7) "Independent review entity" means an individual or organization certified by the 3
department to perform external reviews[ under KRS 304.17A-623, 304.17A-625, 4
and 304.17A-627]; 5
(8) "Insurer" means any of the following entities authorized to issue health benefit 6
plans[ as defined in subsection (6) of this section]: 7
(a) An insurance company;[,] 8
(b) A health maintenance organization; 9
(c) A self-insurer or multiple employer welfare arrangement not exempt from 10
state regulation by ERISA; 11
(d) A provider-sponsored integrated health delivery network; 12
(e) A self-insured employer-organized association; 13
(f) A nonprofit hospital, medical-surgical, or health service corporation; or 14
(g) Any other entity authorized to transact health insurance business in Kentucky; 15
(9) "Internal appeals process" means a formal process, as set forth in KRS 304.17A-16
617, established and maintained by the insurer, its designee, or agent whereby the 17
covered person, an authorized person, or a provider may contest an adverse 18
determination rendered by the insurer, its designee, or private review agent; 19
(10) "Nationally recognized accreditation organization": 20
(a) Means a private nonprofit entity that: 21
1. Sets national utilization review and internal appeal standards; and 22
2. Conducts review of insurers, agents, or independent review entities for 23
the purpose of accreditation or certification; and 24
(b) Shall include the Accreditation Association for Ambulatory Health Care 25
(AAAHC), the National Committee for Quality Assurance (NCQA), the 26
American Accreditation Health Care Commission (URAC), the Joint 27 UNOFFICIAL COPY 23 RS BR 830
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Commission, or any other organization identified by the department; 1
(11) "Private review agent" or "agent": 2
(a) Means a person or entity performing utilization review that is either affiliated 3
with, under contract with, or acting on behalf of any insurer or other person 4
providing or administering health benefits to citizens of this Commonwealth; 5
and 6
(b) Does not include an independent review entity that[which] performs external 7
reviews[review] of adverse determinations; 8
(12) "Prospective review": 9
(a) Means a utilization review that is conducted prior to the provision of health 10
care services; and[. "Prospective review" also ] 11
(b) Includes any insurer's or agent's requirement that a covered person or provider 12
notify the insurer or agent prior to providing a health care service, including 13
but not limited to prior authorization, step therapy protocol, preadmission 14
review, pretreatment review, utilization, and case management; 15
(13) "Qualified personnel" means a licensed physician, registered nurse, licensed 16
practical nurse, medical records technician, or other licensed medical personnel 17
who, through training and experience, shall render consistent decisions based on the 18
review criteria; 19
(14) "Registration" means an authorization issued by the department to an insurer or a 20
private review agent to conduct utilization review; 21
(15) "Retrospective review": 22
(a) Means utilization review that is conducted after health care services have been 23
provided to a covered person; and 24
(b) Does not include the review of a claim that is limited to an evaluation of 25
reimbursement levels[,] or adjudication of payment; 26
(16) [(a) ]"Urgent health care services": 27 UNOFFICIAL COPY 23 RS BR 830
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(a) Means health care or treatment with respect to which the application of the 1
time periods for making nonurgent determination: 2
1. Could seriously jeopardize the life or health of the covered person or the 3
ability of the covered person to regain maximum function; or 4
2. In the opinion of a physician with knowledge of the covered person's 5
medical condition, would subject the covered person to severe pain that 6
cannot be adequately managed without the care or treatment that is the 7
subject of the utilization review; and[.] 8
(b) Includes[Urgent health care services include] all requests for hospitalization 9
and outpatient surgery; 10
(17) (a) "Utilization review" means a review of the medical necessity and 11
appropriateness of hospital resources and medical services given or proposed 12
to be given to a covered person for purposes of determining the availability of 13
payment. 14
(b) Areas of review include concurrent, prospective, and retrospective review; 15
and 16
(18) "Utilization review plan" means a description of the procedures governing 17
utilization review activities performed by an insurer or a private review agent. 18
Section 9. KRS 304.17A-605 is amended to read as follows: 19
(1) Sections 1 to 7 of this Act and KRS 304.17A-600, 304.17A-603, 304.17A-605, 20
304.17A-607, 304.17A-609, 304.17A-611, 304.17A-613, and 304.17A-615 set 21
forth the requirements and procedures regarding utilization review and shall apply 22
to: 23
(a) Any insurer or its private review agent that provides or performs utilization 24
review in connection with a health benefit plan or a limited health service 25
benefit plan; and 26
(b) Any private review agent that performs utilization review functions on behalf 27 UNOFFICIAL COPY 23 RS BR 830
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of any person providing or administering health benefit plans or limited health 1
service benefit plans. 2
(2) Where an insurer or its agent provides or performs utilization review, and in all 3
instances where internal appeals as set forth in KRS 304.17A-617 are involved, the 4
insurer or its agent shall be responsible for: 5
(a) Monitoring all utilization reviews and internal appeals carried out by or on 6
behalf of the insurer; 7
(b) Ensuring that all requirements of KRS 304.17A-600 to 304.17A-633 are met; 8
(c) Ensuring that all administrative regulations promulgated in accordance with 9
KRS 304.17A-609, 304.17A-613, and 304.17A-629 are complied with; and 10
(d) Ensuring that appropriate personnel have operational responsibility for the 11
performance of the insurer's utilization review plan. 12
(3) A private review agent that operates solely under contract with the federal 13
government for utilization review or patients eligible for hospital services under 14
Title XVIII of the Social Security Act shall not be subject to the registration 15
requirements set forth in KRS 304.17A-607, 304.17A-609, and 304.17A-613. 16
Section 10. KRS 304.17A-607 is amended to read as follows: 17
(1) An insurer or private review agent shall not provide or perform utilization reviews 18
without being registered with the department. A registered insurer or private review 19
agent shall: 20
(a) Have available the services of sufficient numbers of registered nurses, 21
medical records technicians, or similarly qualified persons supported by 22
licensed physicians with access to consultation with other appropriate 23
physicians to carry out its utilization review activities; 24
(b) Ensure that[, for any contract entered into on or after January 1, 2020,]: 25
1. For the provision of utilization review services, only licensed 26
physicians, who are of the same or similar specialty and subspecialty, 27 UNOFFICIAL COPY 23 RS BR 830
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when possible, as the ordering provider, shall: 1
a.[1.] Make a utilization review decision to deny, reduce, limit, or 2
terminate a health care benefit or to deny, or reduce payment for a 3
health care service because that service is not medically necessary, 4
experimental, or investigational except: 5
i. In the case of a health care service rendered by a chiropractor 6
or optometrist,[ where] the denial shall be made respectively 7
by a chiropractor or optometrist duly licensed in Kentucky; 8
and 9
ii. As otherwise provided in subparagraph 2. of this 10
paragraph; and 11
b.[2.] Supervise qualified personnel conducting case reviews; 12
2. For the provision of utilization review services relating to prior 13
authorization, only physicians licensed in this state, who are of the 14
same or similar specialty and subspecialty as the ordering provider, 15
shall conduct the utilization review services; and 16
3. For the provision of utilization review services relating to prior 17
authorization for prescription drugs, the drug shall be the basis for the 18
prior authorization decision regardless of the dosage; 19
(c) Have available the services of sufficient numbers of practicing physicians in 20
appropriate specialty areas to assure the adequate review of medical and 21
surgical specialty and subspecialty cases; 22
(d) Not disclose or publish individual medical records or any other confidential 23
medical information in the performance of utilization review activities except 24
as provided in the Health Insurance Portability and Accountability Act, 25
Subtitle F, secs. 261 to 264 and 45 C.F.R. Parts[secs.] 160 to 164 and other 26
applicable laws and administrative regulations; 27 UNOFFICIAL COPY 23 RS BR 830
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(e) Provide a toll free telephone line for covered persons, authorized persons, and 1
providers to contact the insurer or private review agent and be accessible to 2
covered persons, authorized persons, and providers for forty (40) hours a 3
week during normal business hours in this state; 4
(f) Where an insurer, its agent, or private review agent provides or performs 5
utilization review, be available to conduct utilization review during normal 6
business hours and extended hours in this state on Monday and Friday through 7
6:00 p.m., including federal holidays; 8
(g) Provide decisions to covered persons, authorized persons, and all providers on 9
appeals of adverse determinations and coverage denials of the insurer or 10
private review agent, in accordance with this section and administrative 11
regulations promulgated in accordance with KRS 304.17A-609; 12
(h) Except for retrospective review of an emergency admission where the covered 13
person remains hospitalized at the time the review request is made, which 14
shall be considered a concurrent review, or as otherwise provided in this 15
subtitle, provide a utilization review decision in accordance with the 16
timeframes in paragraph (i) of this subsection and 29 C.F.R. Part 2560, 17
including written notice of the decision; 18
(i) 1. Render a utilization review decision concerning urgent health care 19
services, and notify the covered person, authorized person, or provider 20
of that decision not[no] later than twenty-four (24) hours after obtaining 21
all necessary information to make the utilization review decision; and 22
2. If the insurer or agent requires a utilization review decision of nonurgent 23
health care services, render a utilization review decision and notify the 24
covered person, authorized person, or provider of the decision within 25
five (5) days of obtaining all necessary information to make the 26
utilization review decision. 27 UNOFFICIAL COPY 23 RS BR 830
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For purposes of this paragraph, "necessary information" is limited to: 1
a. The results of any face-to-face clinical evaluation; 2
b. Any second opinion that may be required; and 3
c. Any other information determined by the department to be 4
necessary to making a utilization review determination; 5
(j) Provide written notice of review decisions to the covered person, authorized 6
person, and providers. The written notice may be provided in an electronic 7
format, including e-mail or facsimile, if the covered person, authorized 8
person, or provider has agreed in advance in writing to receive the notices 9
electronically. An insurer or agent that denies a step therapy exception, as 10
defined in KRS 304.17A-163, or denies coverage or reduces payment for a 11
treatment, procedure, drug that requires prior approval, or device shall include 12
in the written notice: 13
1. A statement of the specific medical and scientific reasons for denial or 14
reduction of payment or identifying that provision of the schedule of 15
benefits or exclusions that demonstrates that coverage is not available; 16
2. The medical license number and the title of the reviewer making the 17
decision; 18
3. Except for retrospective review, a description of alternative benefits, 19
services, or supplies covered by the health benefit plan, if any; and 20
4. Instructions for initiating or complying with the insurer's internal appeal 21
procedure, as set forth in KRS 304.17A-617, stating, at a minimum, 22
whether the appeal shall be in writing, and any specific filing 23
procedures, including any applicable time limitations or schedules, and 24
the position and phone number of a contact person who can provide 25
additional information; 26
(k) Afford participating physicians an opportunity to review and comment on all 27 UNOFFICIAL COPY 23 RS BR 830
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medical and surgical and emergency room protocols, respectively, of the 1
insurer and afford other participating providers an opportunity to review and 2
comment on all of the insurer's protocols that are within the provider's legally 3
authorized scope of practice; and 4
(l) Comply with its own policies and procedures on file with the department or, if 5
accredited or certified by a nationally recognized accrediting entity, comply 6
with the utilization review standards of that accrediting entity where they are 7
comparable and do not conflict with state law. 8
(2) (a) The insurer's or private review agent's failure to make a determination and 9
provide written notice within the time frames set forth in this section shall be 10
deemed to be a prior authorization for the health care services or benefits 11
subject to the review. 12
(b) This subsection[provision] shall not apply where the failure to make the 13
determination or provide the notice results from circumstances which are 14
documented to be beyond the insurer's control. 15
(3) (a) An insurer or private review agent shall submit a copy of any changes to its 16
utilization review policies or procedures to the department. 17
(b) No change to utilization review policies and procedures shall be effective or 18
used until after it has been filed with and approved by the commissioner. 19
(4) (a) A private review agent shall provide to the department the names of the 20
entities for which the private review agent is performing utilization review in 21
this state. 22
(b) Notice shall be provided to the department within thirty (30) days of any 23
change. 24
Section 11. KRS 304.17A-621 is amended to read as follows: 25
The Independent External Review Program is hereby established in the department. The 26
program shall provide covered persons with a formal, independent review to address 27 UNOFFICIAL COPY 23 RS BR 830
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disagreements between the covered person and the covered person's insurer regarding an 1
adverse determination made by the insurer, its designee, or a private review agent. This 2
section and KRS 304.17A-623 and 304.17A-625 establish requirements and procedures 3
governing the program[external review and independent review entities]. 4
Section 12. KRS 304.17A-627 is amended to read as follows: 5
(1) To be certified as an independent review entity under this chapter, an organization 6
shall submit to the department an application on a form required by the department. 7
The application shall include the following: 8
(a) The name of each stockholder or owner of more than five percent (5%) of any 9
stock or options for an applicant; 10
(b) The name of any holder of bonds or notes of the applicant that exceeds one 11
hundred thousand dollars ($100,000); 12
(c) The name and type of business of each corporation or other organization that 13
the applicant controls or with which it is affiliated and the nature and extent of 14
the affiliation or control; 15
(d) The name and a biographical sketch of each director, officer, and executive of 16
the applicant and any entity listed under paragraph (c) of this subsection and a 17
description of any relationship the named individual has with an insurer as 18
defined in KRS 304.17A-600 or a provider of health care services; 19
(e) The percentage of the applicant's revenues that are anticipated to be derived 20
from independent reviews; 21
(f) A description of the minimum qualifications employed by the independent 22
review entity to select health care professionals to perform external review, 23
their areas of expertise, and the medical credentials of the health care 24
professionals currently available to perform external reviews; and 25
(g) The procedures to be used by the independent review entity in making review 26
determinations. 27 UNOFFICIAL COPY 23 RS BR 830
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(2) If at any time there is a material change in the information included in the 1
application[,] required under[provided for in] subsection (1) of this section, the 2
independent review entity shall submit updated information to the department. 3
(3) An independent review entity shall not be a subsidiary of,[ or] in any way affiliated 4
with, or owned[,] or controlled by an insurer or a trade or professional association 5
of payors. 6
(4) An independent review entity shall not be a subsidiary of,[ or] in any way affiliated 7
with, or owned[,] or controlled by a trade or professional association of providers. 8
(5) Health care professionals who are acting as reviewers for the independent review 9
entity shall hold in good standing a nonrestricted license in a state of the United 10
States. 11
(6) Health care professionals who are acting as reviewers for the independent review 12
entity shall: 13
(a) Hold a current certification by a recognized American medical specialty board 14
or other recognized health care professional boards in the area appropriate to 15
the subject of the review;[,] 16
(b) Be a specialist in the treatment of the covered person's medical condition 17
under review;[,] and 18
(c) Have actual clinical experience in that medical condition. 19
(7) The independent review entity shall: 20
(a) Have a quality assurance mechanism to ensure the timeliness and quality of 21
the review;[,] 22
(b) The qualifications and independence of the physician reviewer;[,] and 23
(c) The confidentiality of medical records and review material. 24
(8) Neither the independent review entity nor any reviewers of the entity[,] shall have 25
any material, professional, familial, or financial conflict of interest with any of the 26
following: 27 UNOFFICIAL COPY 23 RS BR 830
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(a) For external reviews conducted in accordance with Section 11 of this Act 1
and KRS 304.17A-623 and 304.17A-625 2
1. The insurer involved in the review; 3
2.[(b)] Any officer, director, or management employee of the insurer; 4
3.[(c)] The provider proposing the service or treatment or any associated 5
independent practice association; 6
4.[(d)] The institution at which the service or treatment would be 7
provided; 8
5.[(e)] The development or manufacture of the principal drug, device, 9
procedure, or other therapy proposed for the covered person whose 10
treatment is under review; or 11
6.[(f)] The covered person; and 12
(b) For external reviews conducted in accordance with subsection (1)(a)1. of 13
Section 3 of this Act: 14
1. The requesting health care provider; 15
2. The insurer or private review agent involved in the review; 16
3. Any officer, director, or management employee of the insurer or 17
private review agent; or 18
4. The development or manufacture of the principal drug, device, 19
procedure, or other therapy involved in the health care service that is 20
the subject of the exemption determination being reviewed. 21
(9) As used in this section, "conflict of interest" shall not be interpreted to include: 22
(a) A contract under which an academic medical center or other similar medical 23
center provides health care services to covered persons, except for academic 24
medical centers that may provide the service under review; 25
(b) Provider affiliations which are limited to staff privileges; or 26
(c) A specialist reviewer's relationship with an insurer as a contracting health care 27 UNOFFICIAL COPY 23 RS BR 830
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provider, except for a specialist reviewer proposing to provide the service 1
under review. 2
(10) On an annual basis, the independent review entity shall report to the department the 3
following information: 4
(a) For external reviews conducted under Section 11 of this Act and KRS 5
304.17A-623 and 304.17A-625: 6
1. The number of independent review decisions in favor of covered 7
persons; 8
2.[(b)] The number of independent review decisions in favor of insurers; 9
3.[(c)] The average turnaround time for an independent review decision; 10
4.[(d)] The number of cases in which the independent review entity did 11
not reach a decision in the time specified in statute or administrative 12
regulation; and 13
5.[(e)] The reasons for any delay; and 14
(b) For external reviews conducted under subsection (1)(a)1. of Section 3 of 15
this Act: 16
1. The number of external review decisions in favor of health care 17
providers; 18
2. The number of external review decisions in favor of insurers and 19
private review agents; 20
3. The average turnaround time for an independent review decision; 21
4. The number of cases in which the independent review entity did not 22
reach a decision in the time specified in statute or administrative 23
regulation; and 24
5. The reasons for any delay. 25
Section 13. KRS 304.17A-633 is amended to read as follows: 26
(1) The commissioner shall report every six (6) months to the Interim Joint Committee 27 UNOFFICIAL COPY 23 RS BR 830
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on Banking and Insurance[,] and to the Governor on: 1
(a) The state of the Independent External Review Program established under 2
Section 11 of this Act; and 3
(b) The external reviews conducted under Section 3 of this Act. 4
(2) The report required under subsection (1) of this section shall include a summary 5
of: 6
(a) The number of reviews conducted;[,] 7
(b) Medical specialties affected;[,] and 8
(c) [a summary of ]The findings and recommendations made by the independent 9
external review entity. 10
Section 14. KRS 304.17A-706 is amended to read as follows: 11
(1) An insurer may contest a clean claim only in the following instances: 12
(a) The insurer has reasonable documented grounds to believe that the clean 13
claim involves a preexisting condition, coordination of benefits within the 14
meaning of KRS 304.18-085, or that another insurer is primarily responsible 15
for the claim; 16
(b) The insurer will conduct a retrospective review of the services identified on 17
the claim, except that an insurer shall not contest a clean claim under this 18
paragraph based solely on a lack of prior authorization; 19
(c) The insurer has information that the claim was submitted fraudulently; or 20
(d) The covered person's or group's premium has not been paid. 21
(2) (a) If an insurer requires a provider to submit health claim attachments to the 22
claim before the claim will be paid, the insurer shall identify the specific 23
required health claim attachments in its provider manual or other document 24
that sets forth the procedure for filing claims with the insurer. The insurer 25
shall provide sixty (60) days' advance written notice of modifications to the 26
provider manual that materially change the type or content of the health claim 27 UNOFFICIAL COPY 23 RS BR 830
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attachments or other documents to be submitted. 1
(b) If a provider submits a clean claim with the required health claim attachments 2
as specified in the provider manual or other document that sets forth the 3
procedure for filing claims with the insurer, the insurer shall pay or deny the 4
claim within the required claims payment time frame established in KRS 5
304.17A-702. 6
(c) If an insurer conducts a retrospective review of a claim and requires an 7
attachment not specified in the provider manual or other document that sets 8
forth the procedure for filing claims, the insurer shall: 9
1. Notify the provider, in writing or electronically within the claims 10
payment time frame established in KRS 304.17A-702, of the service that 11
will be retrospectively reviewed and the specific information needed 12
from the provider regarding the insurer's review of a claim; 13
2. Complete the retrospective review within twenty (20) business days of 14
the insurer's receipt of the medical information described in this 15
subsection; and 16
3. Subject to paragraph (d) of this subsection, add interest to the amount of 17
the claim, to be paid at a rate of twelve percent (12%) per annum, or at a 18
rate in accordance with KRS 304.17A-730, accruing from the 19
appropriate claim payment time frame established in KRS 304.17A-613 20
after the claim was received by the insurer through the date upon which 21
the claim is paid. 22
(d) If the provider fails to submit the information requested under subparagraph 23
(c) 1. of this subsection within fifteen (15) business days from the date of the 24
receipt of the notice, the insurer shall not be required to pay interest. 25
(3) (a) If a claim or portion thereof is contested by an insurer on the basis that the 26
insurer has not received information reasonably necessary to determine 27 UNOFFICIAL COPY 23 RS BR 830
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insurer liability for the claim or portion thereof, or if the insurer contests the 1
claim on the reasonable and documented belief that the claim involves the 2
coordination of benefits within the meaning of KRS 304.18-085, or questions 3
of pre-existing conditions, the insurer shall, within the applicable claims 4
payment time frame established in KRS 304.17A-702, provide written or 5
electronic notice to the provider, covered person, group policyholder, or other 6
insurer, as appropriate, with an itemization of all new, never-before-provided 7
information that is needed. 8
(b) The insurer shall pay or deny the claim within thirty (30) calendar days of 9
receiving the additional information described in paragraph (a) of this 10
subsection. If the insurer does not receive the additional information described 11
in paragraph (a) of this subsection within fifteen (15) business days from the 12
date of receipt of the notice set forth in paragraph (a) of this subsection, the 13
insurer may deny the claim. Any claim denied under this paragraph may be 14
resubmitted by the provider and any resubmitted claim shall not be denied on 15
the basis of timeliness if the resubmitted claim is made with the timeframe for 16
submitting claims established by the insurer beginning on the date of denial. 17
Section 15. KRS 205.536 is amended to read as follows: 18
(1) A Medicaid managed care organization shall have a utilization review plan, as 19
defined in KRS 304.17A-600, that meets the requirements established in 42 C.F.R. 20
pts. 431, 438, and 456. If the Medicaid managed care organization utilizes a private 21
review agent, as defined in KRS 304.17A-600, the agent shall comply with all 22
applicable requirements of KRS 304.17A-600 to 304.17A-633. 23
(2) In conducting utilization reviews for Medicaid benefits, each Medicaid managed 24
care organization shall use the medical necessity criteria selected by the Department 25
of Insurance pursuant to KRS 304.38-240[,] for making determinations of medical 26
necessity and clinical appropriateness pursuant to the utilization review plan 27 UNOFFICIAL COPY 23 RS BR 830
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required by subsection (1) of this section. 1
(3) To the extent consistent with the federal regulations referenced in subsection (1) of 2
this section, the Department for Medicaid Services or any managed care 3
organization contracted to provide Medicaid benefits pursuant to KRS Chapter 205 4
shall: 5
(a) Not require or conduct a prospective or concurrent review, as defined in KRS 6
304.17A-600, for a prescription drug: 7
1.[(a)] That: 8
a.[1.] Is used in the treatment of alcohol or opioid use disorder; and 9
b.[2.] Contains Methadone, Buprenorphine, or Naltrexone; or 10
2.[(b)] That was approved before January 1, 2022, by the United States 11
Food and Drug Administration for the mitigation of opioid withdrawal 12
symptoms; and 13
(b) Comply with Sections 1 to 7 of this Act. 14
Section 16. KRS 222.422 is amended to read as follows: 15
(1) As used in this section, "third-party payor" means any person required to comply 16
with KRS 304.17A-611(2) or 205.536(3)(a). 17
(2) Prior to the discharge of a patient that has received medication for addiction- 18
treatment, the treating facility shall submit a written discharge plan to the patient, 19
and the patient's third-party payor, if any, which shall describe arrangements for 20
additional services needed following discharge. 21
Section 17. This Act shall apply to contracts delivered, entered, renewed, 22
extended, or amended on or after the effective date of this Act. 23
Section 18. If the Cabinet for Health and Family Services determines that a 24
waiver or any other authorization from a federal agency is necessary to implement 25
Section 15 of this Act for any reason, including the loss of federal funds, the cabinet 26
shall, within 90 days of the effective date of this section, request the waiver or 27 UNOFFICIAL COPY 23 RS BR 830
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authorization, and may only delay implementation of those provisions for which a waiver 1
was deemed necessary until the waiver or authorization is granted. 2
Section 19. Sections 1 to 17 of this Act take effect January 1, 2024. 3