GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	1 

HOUSE BILL 1530*

Short Title:  Internal Review Panelists.	(Public)

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Sponsors: Representatives Nye, Insko, Nesbitt, Cunningham, and Justus. 

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Referred to:  Insurance.

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May 15, 2000

A BILL TO BE ENTITLED
AN ACT TO REQUIRE UTILIZATION REVIEW AND GRIEVANCE PROCEDURES PURSUANT TO G.S. 58-50-61 AND G.S. 58-50-62 TO INCLUDE ON THE REVIEW OR GRIEVANCE PANEL PROVIDERS LICENSED, CERTIFIED, OR REGISTERED IN NORTH CAROLINA IN THE SAME MEDICAL OR ALLIED OCCUPATION AS THE PROVIDERS WHO ARE PARTIES TO THE REVIEW OR GRIEVANCE.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-50-61(d) reads as rewritten:
"(d)	Program Operations. – In every utilization review program, an insurer or URO shall use documented clinical review criteria that are based on sound clinical evidence and that are periodically evaluated to assure ongoing efficacy. An insurer may develop its own clinical review criteria or purchase or license clinical review criteria. Criteria for determining when a patient needs to be placed in a substance abuse treatment program shall be either (i) the diagnostic criteria contained in the most recent revision of the American Society of Addiction Medicine Patient Placement Criteria for the Treatment of Substance-Related Disorders or (ii) criteria adopted by the insurer or its URO. The Department, in consultation with the Department of Health and Human Services, may require proof of compliance with this subsection by a plan or URO.
Qualified health care professionals shall administer the utilization review program and oversee review decisions under the direction of a medical doctor. A medical doctor licensed to practice medicine in this State shall evaluate the clinical appropriateness of noncertifications. Compensation to persons involved in utilization review shall not contain any direct or indirect incentives for them to make any particular review decisions. Compensation to utilization reviewers shall not be directly or indirectly based on the number or type of noncertifications they render. In issuing a utilization review decision, an insurer shall: obtain all information required to make the decision, including pertinent clinical information; employ a process to ensure that utilization reviewers apply clinical review criteria consistently; ensure that at least one provider holding a valid North Carolina license, registration, or certification in the same medical or allied health occupation as the providers who are parties to the review, or if the provider is a medical doctor, at least one clinical peer of the party provider;  and issue the decision in a timely manner pursuant to this section."
Section 2.  G.S. 58-50-62 reads as rewritten:
"§ 58-50-62.  Insurer grievance procedures.
(a)	Purpose and Intent. – The purpose of this section is to provide standards for the establishment and maintenance of procedures by insurers to assure that covered persons have the opportunity for appropriate resolutions of their grievances.
(b)	Availability of Grievance Process. – Every insurer shall have a grievance process whereby a covered person may voluntarily request a review of any decision, policy, or action of the insurer that affects that covered person. The grievance process may provide for an immediate informal consideration by the insurer of a grievance. If the insurer does not have a procedure for informal consideration or if an informal consideration does not resolve the grievance, the grievance process shall provide for first- and second-level reviews of grievances; except that an appeal of a noncertification that has been reviewed under G.S. 58-50-61 shall be reviewed as a second-level grievance under this section.
(c)	Grievance Procedures. – Every insurer shall have written procedures for receiving and resolving grievances from covered persons. A description of the grievance procedures shall be set forth in or attached to the certificate of coverage and member handbook provided to covered persons. The description shall include a statement informing the covered person that the grievance procedures are voluntary and shall also inform the covered person about the availability of the Commissioner's office for assistance, including the telephone number and address of the office.
(d)	Maintenance of Records. – Every insurer shall maintain records of each grievance received and the insurer's review of each grievance, as well as documentation sufficient to demonstrate compliance with this section. The maintenance of these records, including electronic reproduction and storage, shall be governed by rules adopted by the Commissioner that apply to insurers. The insurer shall retain these records for three years or until the Commissioner has adopted a final report of a general examination that contains a review of these records for that calendar year, whichever is later.
(e)	First-Level Grievance Review. – A grievance may be submitted by a covered person or his or her provider acting on the covered person's behalf.
(1)	The insurer does not have to allow a covered person to attend the first-level grievance review. A covered person may submit written material. Within three business days after receiving a grievance, the insurer shall provide the covered person with the name, address, and telephone number of the coordinator and information on how to submit written material.
(2)	An insurer shall issue a written decision to the covered person and, if applicable, to the covered person's provider, within 30 days after receiving a grievance. The person or persons reviewing the grievance shall not be the same person or persons who initially handled the matter that is the subject of the grievance and, if the issue is a clinical one, at least one of whom shall be a provider holding a valid North Carolina license, registration, or certification in the same medical or allied occupation as the providers who are parties to the grievance, or if the provider is a medical doctor, at least one clinical peer of the party provider with appropriate expertise to evaluate the matter. The written decision issued in a first-level grievance review shall contain:
a.	The professional qualifications and licensure of the person or persons reviewing the grievance.
b.	A statement of the reviewers' understanding of the grievance.
c.	The reviewers' decision in clear terms and the contractual basis or medical rationale in sufficient detail for the covered person to respond further to the insurer's position.
d.	A reference to the evidence or documentation used as the basis for the decision.
e.	A statement advising the covered person of his or her right to request a second-level grievance review and a description of the procedure for submitting a second-level grievance under this section.
(f)	Second-Level Grievance Review. – An insurer shall establish a second-level grievance review process for covered persons who are dissatisfied with the first-level grievance review decision or a utilization review appeal decision.
(1)	An insurer shall, within 10 business days after receiving a request for a second-level grievance review, make known to the covered person:
a.	The name, address, and telephone number of a person designated to coordinate the grievance review for the insurer.
b.	A statement of a covered person's rights, which include the right to request and receive from an insurer all information relevant to the case; attend the second-level grievance review; present his or her case to the review panel; submit supporting materials before and at the review meeting; ask questions of any member of the review panel; and be assisted or represented by a person of his or her choice, which person may be without limitation to: a provider, family member, employer representative, or attorney. If the covered person chooses to be represented by an attorney, the insurer may also be represented by an attorney.
(2)	An insurer shall convene a second-level grievance review panel for each request. The panel shall comprise persons who were not previously involved in any matter giving rise to the second-level grievance, are not employees of the insurer or URO, and do not have a financial interest in the outcome of the review. A person who was previously involved in the matter may appear before the panel to present information or answer questions. All of the persons reviewing a second-level grievance involving a noncertification or a clinical issue shall be providers who have appropriate expertise, including at least one provider holding a valid North Carolina license, registration, or certification in the same medical or allied occupation as the providers who are parties to the grievance, or if the provider is a medical doctor, at least one clinical peer of the party provider.  An insurer may use one of the insurer's employees on the second-level grievance review panel in the same matter if the second-level grievance review panel comprises three or more persons.
(g)	Second-Level Grievance Review Procedures. – An insurer's procedures for conducting a second-level grievance review shall include:
(1)	The review panel shall schedule and hold a review meeting within 45 days after receiving a request for a second-level review.
(2)	The covered person shall be notified in writing at least 15 days before the review meeting date.
(3)	The covered person's right to a full review shall not be conditioned on the covered person's appearance at the review meeting.
(h)	Second-Level Grievance Review Decisions. – An insurer shall issue a written decision to the covered person and, if applicable, to the covered person's provider, within seven business days after completing the review meeting. The decision shall include:
(1)	The professional qualifications and licensure of the members of the review panel.
(2)	A statement of the review panel's understanding of the nature of the grievance and all pertinent facts.
(3)	The review panel's recommendation to the insurer and the rationale behind that recommendation.
(4)	A description of or reference to the evidence or documentation considered by the review panel in making the recommendation.
(5)	In the review of a noncertification or other clinical matter, a written statement of the clinical rationale, including the clinical review criteria, that was used by the review panel to make the recommendation.
(6)	The rationale for the insurer's decision if it differs from the review panel's recommendation.
(7)	A statement that the decision is the insurer's final determination in the matter.
(8)	Notice of the availability of the Commissioner's office for assistance, including the telephone number and address of the Commissioner's office.
(i)	Expedited Second-Level Procedures. – An expedited second-level review shall be made available where medically justified as provided in G.S. 58-50-61(l), whether or not the initial review was expedited. The provisions of subsections (f), (g), and (h) of this section apply to this subsection except for the following timetable: When a covered person is eligible for an expedited second-level review, the insurer shall conduct the review proceeding and communicate its decision within four days after receiving all necessary information. The review meeting may take place by way of a telephone conference call or through the exchange of written information.
(j)	No insurer shall discriminate against any provider based on any action taken by the provider under this section or G.S. 58-50-61 on behalf of a covered person.
(k)	Violation. – A violation of this section subjects an insurer to G.S. 58-2-70."
Section 3.  This act is effective when it becomes law.