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90_HB3270 New Act Creates the Managed Care Utilization Review Act. Requires utilization review agents to be registered with the Department of Public Health. Requires the establishment of program standards for utilization review agents. Prohibits compensation of utilization review agents based on reduction of payment for or denial of claims. LRB9011444JSmg LRB9011444JSmg 1 AN ACT relating to the review of use of health care 2 services. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 1. Short title. This Act may be cited as the 6 Managed Care Utilization Review Act. 7 Section 5. Definitions. For purposes of this Act, the 8 following words shall have the meanings provided in this 9 Section, unless otherwise indicated: 10 "Adverse determination" means a determination by a 11 utilization review agent that an admission, extension of a 12 stay, or other health care service has been reviewed and, 13 based on the information provided, is not medically 14 necessary. 15 "Clinical peer reviewer" or "clinical personnel" means: 16 (1) in the case of physician reviewers, a State 17 licensed physician who is of the same category in the 18 same or similar specialty as the health care provider who 19 typically manages the medical condition, procedure or 20 treatment under review; or 21 (2) in the case of non-physician reviewers, a State 22 licensed or registered health care professional who is 23 in the same profession and same or similar specialty 24 as the health care provider who typically manages the 25 medical condition, procedure, or treatment under review. 26 Nothing herein shall be construed to change any 27 statutorily defined scope of practice. 28 "Department" means the Department of Public Health. 29 "Director" means the Director of Public Health. 30 "Emergency medical screening examination" means a medical 31 screening examination and evaluation by a physician or, to -2- LRB9011444JSmg 1 the extent permitted by applicable laws, by other appropriate 2 personnel under the supervision of a physician to determine 3 whether the need for emergency services exists. 4 "Emergency services" means the provision of health care 5 services for sudden and, at the time, unexpected onset of a 6 health condition that would lead a prudent layperson to 7 believe that failure to receive immediate medical attention 8 would result in serious impairment to bodily function or 9 serious dysfunction of any body organ or part or would place 10 the person's health in serious jeopardy. 11 "Enrollee" means a person enrolled in a managed care 12 plan. 13 "Health care professional" means a physician, registered 14 professional nurse, or other person appropriately licensed or 15 registered pursuant to the laws of this State to provide 16 health care services. 17 "Health care provider" means a health care professional, 18 hospital, facility, or other person appropriately licensed or 19 otherwise authorized to furnish health care services or 20 arrange for the delivery of health care services in this 21 State. 22 "Health care services" means services included in the (i) 23 furnishing of medical care, (ii) hospitalization incident to 24 the furnishing of medical care, and (iii) furnishing of 25 services, including pharmaceuticals, for the purpose of 26 preventing, alleviating, curing, or healing human illness or 27 injury to an individual. 28 "Managed care plan" means a plan that establishes, 29 operates, or maintains a network of health care providers 30 that have entered into agreements with the plan to provide 31 health care services to enrollees where the plan has the 32 obligation to the enrollee to arrange for the provision of or 33 pay for services through: 34 (1) organizational arrangements for ongoing quality -3- LRB9011444JSmg 1 assurance, utilization review programs, or dispute 2 resolution; or 3 (2) financial incentives for persons enrolled in 4 the plan to use the participating providers and 5 procedures covered by the plan. 6 A managed care plan may be established or operated by any 7 entity including, but not necessarily limited to, a licensed 8 insurance company, hospital or medical service plan, health 9 maintenance organization, limited health service 10 organization, preferred provider organization, third party 11 administrator, independent practice association, or employer 12 or employee organization. 13 For purposes of this definition, "managed care plan" 14 shall not include the following: 15 (1) strict indemnity health insurance policies or 16 plans issued by an insurer that does not require approval 17 of a primary care provider or other similar coordinator 18 to access health care services; and 19 (2) managed care plans that offer only dental or 20 vision coverage. 21 "Utilization review" means the review, undertaken by a 22 entity other than the managed care plan itself, to determine 23 whether health care services that have been provided, are 24 being provided or are proposed to be provided to an 25 individual by a managed care plan, whether undertaken prior 26 to, concurrent with, or subsequent to the delivery of 27 such services are medically necessary. For the purposes 28 of this Act, none of the following shall be considered 29 utilization review: 30 (1) denials based on failure to obtain health care 31 services from a designated or approved health care 32 provider as required under an enrollee's contract; 33 (2) the review of the appropriateness of the 34 application of a particular coding to a patient, -4- LRB9011444JSmg 1 including the assignment of diagnosis and procedure; 2 (3) any issues relating to the determination of 3 the amount or extent of payment other than determinations 4 to deny payment based on an adverse determination; and 5 (4) any determination of any coverage issues other 6 than whether health care services are or were medically 7 necessary. 8 "Utilization review agent" means any company, 9 organization, or other entity performing utilization review, 10 except: 11 (1) an agency of the State or federal government; 12 (2) an agent acting on behalf of the federal 13 government, but only to the extent that the agent is 14 providing services to the federal government; 15 (3) an agent acting on behalf of the State and 16 local government for services provided pursuant to 17 Title XIX of the federal Social Security Act, but only to 18 the extent that the agent is providing services to the 19 State or local government; 20 (4) a hospital's internal quality assurance program 21 except if associated with a health care financing 22 mechanism. 23 "Utilization review plan" means: 24 (1) a description of the process for developing the 25 written clinical review criteria; 26 (2) a description of the types of written clinical 27 information which the plan might consider in its clinical 28 review including, but not limited to, a set of specific 29 written clinical review criteria; 30 (3) a description of practice guidelines and 31 standards used by a utilization review agent in making a 32 determination of medical necessity; 33 (4) the procedures for scheduled review and 34 evaluation of the written clinical review criteria; and -5- LRB9011444JSmg 1 (5) a description of the qualifications and 2 experience of the health care professionals who 3 developed the criteria, who are responsible for periodic 4 evaluation of the criteria and of the health care 5 professionals or others who use the written clinical 6 review criteria in the process of utilization review. 7 Section 10. Registration of utilization review agents. 8 (a) A utilization review agent who conducts the practice 9 of utilization review shall biennially register with the 10 Director and report, in a statement subscribed and affirmed 11 as true under the penalties of perjury, the information 12 required pursuant to subsection (b) of this Section. 13 (b) The report shall contain a description of the 14 following: 15 (1) the utilization review plan; 16 (2) a description of the grievance procedures by 17 which an enrollee, the enrollee's designee, or his or her 18 health care provider may seek reconsideration of adverse 19 determinations by the utilization review agent in 20 accordance with this Act; 21 (3) procedures by which a decision on a request for 22 utilization review for services requiring 23 pre-authorization shall comply with timeframes 24 established pursuant to this Act; 25 (4) a description of an emergency care policy, 26 consistent with this Act. 27 (5) a description of personnel utilized to conduct 28 utilization review, including a description of the 29 circumstances under which utilization review may be 30 conducted by: 31 (A) administrative personnel, 32 (B) health care professionals who are not 33 clinical peer reviewers, and -6- LRB9011444JSmg 1 (C) clinical peer reviewers; 2 (6) a description of the mechanisms employed to 3 assure that administrative personnel are trained in the 4 principles and procedures of intake screening and data 5 collection and are appropriately monitored by a 6 licensed health care professional while performing an 7 administrative review; 8 (7) a description of the mechanisms employed to 9 assure that health care professionals conducting 10 utilization review are: 11 (A) appropriately licensed or registered; and 12 (B) trained in the principles, procedures, 13 and standards of the utilization review agent; 14 (8) a description of the mechanisms employed to 15 assure that only a clinical peer reviewer shall render an 16 adverse determination; 17 (9) provisions to ensure that appropriate personnel 18 of the utilization review agent are reasonably accessible 19 by toll-free telephone: 20 (A) not less than 40 hours per week during 21 normal business hours, to discuss patient care and 22 allow response to telephone requests, and to ensure 23 that the utilization review agent has a telephone 24 system capable of accepting, recording, or providing 25 instruction to incoming telephone calls during 26 other than normal business hours and to ensure 27 response to accepted or recorded messages not later 28 than the next business day after the date on which 29 the call was received; or 30 (B) notwithstanding the provisions of item (A), 31 in the case of a request submitted pursuant to 32 subsection (c) of Section 20 or an expedited appeal 33 filed pursuant to subsection (b) of Section 25, a 34 response is provided within 24 hours; -7- LRB9011444JSmg 1 (10) the policies and procedures to ensure that 2 all applicable State and federal laws to protect the 3 confidentiality of individual medical and treatment 4 records are followed; 5 (11) a copy of the materials to be disclosed to an 6 enrollee or prospective enrollee pursuant to this Act; 7 (12) a description of the mechanisms employed by 8 the utilization review agent to assure that all 9 contractors, subcontractors, subvendors, agents, and 10 employees affiliated by contract or otherwise with such 11 utilization review agent will adhere to the standards and 12 requirements of this Act; and 13 (13) a list of the payors for which the 14 utilization review agent is performing utilization 15 review in this State. 16 (c) Upon receipt of the report, the Director 17 shall issue an acknowledgment of the filing. 18 (d) A registration issued under this Act shall be valid 19 for a period of not more than 2 years, and may be renewed for 20 additional periods of not more than 2 years each. 21 Section 15. Utilization review program standards. 22 (a) A utilization review agent shall adhere to 23 utilization review program standards consistent with the 24 provisions of this Act, which shall, at a minimum, include: 25 (1) appointment of a medical director, who is a 26 licensed physician; provided, however, that the 27 utilization review agent may appoint a clinical director 28 when the utilization review performed is for a discrete 29 category of health care service and provided further that 30 the clinical director is a licensed health care 31 professional who typically manages the category of 32 service; responsibilities of the medical director, or, 33 where appropriate, the clinical director, shall -8- LRB9011444JSmg 1 include, but not be limited to, the supervision and 2 oversight of the utilization review process; 3 (2) development of written policies and procedures 4 that govern all aspects of the utilization review 5 process and a requirement that a utilization review 6 agent shall maintain and make available to enrollees and 7 health care providers a written description of the 8 procedures, including the procedures to appeal an adverse 9 determination; 10 (3) utilization of written clinical review criteria 11 developed pursuant to a utilization review plan; 12 (4) consistent with the applicable Sections of this 13 Act, establishment of a process for rendering utilization 14 review determinations, which shall, at a minimum, 15 include written procedures to assure that utilization 16 reviews and determinations are conducted within the 17 required timeframes, procedures to notify an enrollee, 18 an enrollee's designee, and an enrollee's health care 19 provider of adverse determinations, and the procedures 20 for appeal of adverse determinations, including the 21 establishment of an expedited appeals process for 22 denials of continued inpatient care or when delay would 23 significantly increase the risk to an enrollee's health; 24 (5) establishment of a requirement that 25 appropriate personnel of the utilization review agent are 26 reasonably accessible by toll-free telephone: 27 (A) not less than 40 hours per week during 28 normal business hours to discuss patient care and 29 allow response to telephone requests, and to ensure 30 that the utilization review agent has a telephone 31 system capable of accepting, recording or providing 32 instruction to incoming telephone calls during 33 other than normal business hours and to ensure 34 response to accepted or recorded messages not less -9- LRB9011444JSmg 1 than one business day after the date on which the 2 call was received; or 3 (B) in the case of a request submitted 4 pursuant to subsection (c) of Section 20 or an 5 expedited appeal filed pursuant to subsection 6 (b) of Section 25, a response is provided within 24 7 hours; 8 (6) establishment of appropriate policies and 9 procedures to ensure that all applicable State and 10 federal laws to protect the confidentiality of individual 11 medical records are followed; 12 (7) establishment of a requirement that emergency 13 services, as defined in this Act, rendered to an enrollee 14 shall not be subject to prior authorization nor 15 shall reimbursement for those services be denied on 16 retrospective review, except as authorized in this Act. 17 (b) A utilization review agent shall assure adherence to 18 the requirements stated in subsection (a) of this Section by 19 all contractors, subcontractors, subvendors, agents, and 20 employees affiliated by contract or otherwise with the 21 utilization review agent. 22 Section 20. Utilization review determinations. 23 (a) Utilization review shall be conducted by: 24 (1) administrative personnel trained in the 25 principles and procedures of intake screening and data 26 collection, provided, however, that administrative 27 personnel shall only perform intake screening, data 28 collection, and non-clinical review functions and shall 29 be supervised by a licensed health care professional; 30 (2) a health care professional who is 31 appropriately trained in the principles, procedures, 32 and standards of the utilization review agent; provided, 33 however, that a health care professional who is not a -10- LRB9011444JSmg 1 clinical peer reviewer may not render an adverse 2 determination; and 3 (3) a clinical peer reviewer where the review 4 involves an adverse determination. 5 (b) A utilization review agent shall make a utilization 6 review determination involving health care services that 7 require pre-authorization and provide notice of the 8 determination, as soon as possible, to the enrollee or 9 enrollee's designee and the enrollee's health care provider 10 by telephone upon, and in writing within 2 business days of 11 receipt of the necessary information. 12 (c) A utilization review agent shall make a 13 determination involving continued or extended health care 14 services or additional services for an enrollee 15 undergoing a course of continued treatment prescribed by a 16 health care provider and provide notice of the determination 17 to the enrollee or the enrollee's designee by notice within 18 24 hours to the enrollee's health care provider by telephone 19 upon, and in writing within 2 business days after receipt of 20 the necessary information. Notification of continued or 21 extended services shall include the number of extended 22 services approved, the new total of approved services, the 23 date of onset of services, and the next review date. 24 (d) A utilization review agent shall make a utilization 25 review determination involving health care services that have 26 already been delivered, within 30 days of receipt of the 27 necessary information. 28 (e) Notice of an adverse determination made by a 29 utilization review agent shall be given in writing in 30 accordance with the grievance procedures of this Act. The 31 notice shall also specify what, if any, additional 32 necessary information must be provided to, or obtained by, 33 the utilization review agent in order to render a decision on 34 the appeal. -11- LRB9011444JSmg 1 (f) In the event that a utilization review agent 2 renders an adverse determination without attempting to 3 discuss the matter with the enrollee's health care 4 provider who specifically recommended the health care 5 service, procedure, or treatment under review, the health 6 care provider shall have the opportunity to request an 7 immediate reconsideration of the adverse determination. 8 Except in cases of retrospective reviews, the 9 reconsideration shall occur in a prompt manner, not to 10 exceed 24 hours after receipt of the necessary information, 11 and shall be conducted by the enrollee's health care 12 provider and the clinical peer reviewer making the initial 13 determination or a designated clinical peer reviewer if the 14 original clinical peer reviewer cannot be available. In 15 the event that the adverse determination is upheld after 16 reconsideration, the utilization review agent shall provide 17 notice as required pursuant to subsection (e) of this 18 Section. Nothing in this Section shall preclude the enrollee 19 from initiating an appeal from an adverse determination. 20 Section 25. Appeal of adverse determinations by 21 utilization review agents. 22 (a) An enrollee, the enrollee's designee, and, in 23 connection with retrospective adverse determinations, the 24 enrollee's health care provider may appeal an adverse 25 determination rendered by a utilization review agent. 26 (b) A utilization review agent shall establish 27 mechanisms that facilitate resolution of the appeal 28 including, but not limited to, the sharing of information 29 from the enrollee's health care provider and the utilization 30 review agent by telephonic means or by facsimile. The 31 utilization review agent shall provide reasonable access to 32 its clinical peer reviewer in a prompt manner. 33 (c) Appeals shall be reviewed by a clinical peer -12- LRB9011444JSmg 1 reviewer other than the clinical peer reviewer who 2 rendered the adverse determination. 3 Section 30. Required and prohibited practices. 4 (a) A utilization review agent shall have written 5 procedures for assuring that patient-specific information 6 obtained during the process of utilization review will be: 7 (1) kept confidential in accordance with applicable 8 State and federal laws; and 9 (2) shared only with the enrollee, the 10 enrollee's designee, the enrollee's health care provider, 11 and those who are authorized by law to receive the 12 information. 13 (b) Summary data shall not be considered confidential 14 if it does not provide information to allow identification of 15 individual patients. 16 (c) Any health care professional who makes 17 determinations regarding the medical necessity of health care 18 services during the course of utilization review shall be 19 appropriately licensed or registered. 20 (d) A utilization review agent shall not, with respect 21 to utilization review activities, permit or provide 22 compensation or anything of value to its employees, agents, 23 or contractors based on: 24 (1) either a percentage of the amount by which a 25 claim is reduced for payment or the number of claims or 26 the cost of services for which the person has denied 27 authorization or payment; or 28 (2) any other method that encourages the 29 rendering of an adverse determination. 30 (e) If a health care service has been specifically 31 pre-authorized or approved for an enrollee by a 32 utilization review agent, a utilization review agent shall 33 not, pursuant to retrospective review, revise or modify -13- LRB9011444JSmg 1 the specific standards, criteria, or procedures used for 2 the utilization review for procedures, treatment, and 3 services delivered to the enrollee during the same course 4 of treatment. 5 (f) Utilization review shall not be conducted more 6 frequently than is reasonably required to assess whether the 7 health care services under review are medically necessary. 8 The Department may promulgate rules governing the frequency 9 of utilization reviews for managed care plans of differing 10 size and geographic location. 11 (g) When making prospective, concurrent, and 12 retrospective determinations, utilization review agents shall 13 collect only information that is necessary to make the 14 determination and shall not routinely require health care 15 providers to numerically code diagnoses or procedures to 16 be considered for certification, unless required under State 17 or federal Medicare or Medicaid rules or regulations, or 18 routinely request copies of medical records of all patients 19 reviewed. During prospective or concurrent review, copies 20 of medical records shall only be required when necessary 21 to verify that the health care services subject to the review 22 are medically necessary. In these cases, only the necessary 23 or relevant sections of the medical record shall be 24 required. A utilization review agent may request copies of 25 partial or complete medical records retrospectively. 26 (h) In no event shall information be obtained from 27 health care providers for the use of the utilization 28 review agent by persons other than health care professionals, 29 medical record technologists, or administrative personnel who 30 have received appropriate training. 31 (i) The utilization review agent shall not undertake 32 utilization review at the site of the provision of health 33 care services unless the utilization review agent: 34 (1) identifies himself or herself by name and the -14- LRB9011444JSmg 1 name of his or her organization, including displaying 2 photographic identification that includes the name of 3 the utilization review agent and clearly identifies the 4 individual as representative of the utilization review 5 agent; 6 (2) whenever possible, schedules review at least 7 one business day in advance with the appropriate health 8 care provider; 9 (3) if requested by a health care provider, 10 assures that the on-site review staff register with the 11 appropriate contact person, if available, prior to 12 requesting any clinical information or assistance 13 from the health care provider; and 14 (4) obtains consent from the enrollee or the 15 enrollee's designee before interviewing the patient's 16 family or observing any health care service being 17 provided to the enrollee. 18 This subsection does not apply to health care 19 professionals engaged in providing care, case management, or 20 making on-site discharge decisions. 21 (j) A utilization review agent shall not base an adverse 22 determination on a refusal to consent to observing any health 23 care service. 24 (k) A utilization review agent shall not base an adverse 25 determination on lack of reasonable access to a health 26 care provider's medical or treatment records unless the 27 utilization review agent has provided reasonable notice 28 to both the enrollee or the enrollee's designee and the 29 enrollee's health care provider and has complied with all 30 provisions of subsection (i) of this Section. The Department 31 may promulgate rules defining reasonable notice and the time 32 period within which medical and treatment records must be 33 turned over. 34 (l) Neither the utilization review agent nor the entity -15- LRB9011444JSmg 1 for which the agent provides utilization review shall take 2 any action with respect to a patient or a health care 3 provider that is intended to penalize the enrollee, the 4 enrollee's designee, or the enrollee's health care provider 5 for, or to discourage the enrollee, the enrollee's designee, 6 or the enrollee's health care provider from, undertaking an 7 appeal, dispute resolution, or judicial review of an adverse 8 determination. 9 (m) In no event shall an enrollee, an enrollee's 10 designee, an enrollee's health care provider, any other 11 health care provider, or any other person or entity be 12 required to inform or contact the utilization review agent 13 prior to the provision of emergency services as defined in 14 this Act. 15 (n) No contract or agreement between a utilization 16 review agent and a health care provider shall contain any 17 clause purporting to transfer to the health care provider by 18 indemnification or otherwise any liability relating to 19 activities, actions, or omissions of the utilization review 20 agent. 21 (o) A health care professional providing health care 22 services to an enrollee shall be prohibited from serving 23 as the clinical peer reviewer for that enrollee in connection 24 with the health care services being provided to the 25 enrollee.
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