Assembly Bill No. 28

Assembly Bill No. 28-Committee on Health and Human Services

Prefiled on January 16, 1997
____________

Referred to Committee on Health and Human Services

SUMMARY--Requires complaint system established by health maintenance organization to include certain procedures. (BDR 57-1000)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: Yes.

EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.

AN ACT relating to health maintenance organizations; requiring a complaint system established by a health maintenance organization to include certain procedures for reviewing a complaint by an enrollee or a primary care physician; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1 Chapter 695C of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 13, inclusive, of this act.
Sec. 2 "Comprehensive health care services" means medical services, dentistry, drugs, psychiatric and optometric and all other care necessary for the delivery of services to the consumer.
Sec. 3 "Enrollee" means a natural person who has been voluntarily enrolled in a health care plan.
Sec. 4 "Evidence of coverage" means any certificate, agreement or contract issued to an enrollee setting forth the coverage to which he is entitled.
Sec. 5 "Health care plan" means any arrangement whereby any person undertakes to provide, arrange for, pay for or reimburse any part of the cost of any health care services and at least part of the arrangement consists of arranging for or the provision of health care services paid for by or on behalf of the enrollee on a periodic prepaid basis.
Sec. 6 "Health care services" means any services included in the furnishing to any natural person of medical or dental care or hospitalization or incident to the furnishing of such care or hospitalization, as well as the furnishing to any person of any other services for the purpose of preventing, alleviating, curing or healing human illness or injury.
Sec. 7 "Health maintenance organization" means any person that provides or arranges for provision of a health care service and is responsible for the availability and accessibility of the service to its enrollees, which services are paid for or on behalf of the enrollees on a periodic prepaid basis without regard to the dates health services are rendered and without regard to the extent of services actually furnished to the enrollees, except that supplementing the fixed prepayments by nominal additional payments for services in accordance with regulations adopted by the commissioner shall not be deemed to render the arrangement not to be on a prepaid basis. A health maintenance organization, in addition to offering health care services, may offer indemnity or service benefits provided through insurers or otherwise.
Sec. 8 "Primary care physician" means a physician whose responsibilities include, without limitation, providing initial and primary health care services to an insured, maintaining the continuity of care for the insured and referring the insured to a specialist when necessary.
Sec. 9 "Provider" means any physician, hospital or other person who is licensed or otherwise authorized in this state to furnish health care services.
Sec. 10 1. A complaint system established by a health maintenance organization pursuant to NRS 695C.260 must contain a procedure by which an enrollee, his guardian or legal representative or a primary care physician may file a written complaint with the health maintenance organization concerning:
(a) Any final determination of benefits or care; or
(b) Any matter directly or indirectly related to, or associated with, the evidence of coverage or the health care plan or health care services of the health maintenance organization.
2. After a written complaint is filed, the health maintenance organization shall appoint a committee to conduct an initial investigation and review of the complaint. The committee must consist of at least three physicians who may be employed by the health maintenance organization who:
(a) Have sufficient expertise in the medical field at issue to conduct the investigation and review; and
(b) Were not personally involved in any activity or decision that was a source of the complaint.
3. The committee shall complete the investigation and review and issue to the person who filed the complaint:
(a) The decision of the committee;
(b) The reasons for the decision; and
(c) A statement informing the person of the procedure for appealing the decision,
in writing not later than 45 days after the complaint is filed.
4. The committee appointed pursuant to subsection 2 shall allow the person who filed the complaint to appear before the committee to present information.
5. Upon request, the health maintenance organization shall assign an employee of the health maintenance organization to assist an enrollee, his guardian or legal representative in filing a complaint, participating in a meeting of the committee or appealing the decision of the committee.
6. Any investigation and review of a complaint filed pursuant to this section must be conducted before any binding arbitration pursuant to NRS 695C.265 or 695C.267.
Sec. 11 1. A person who files a complaint pursuant to section 10 of this act may appeal the decision issued by the committee by filing a written appeal with the health maintenance organization.
2. After a written appeal is filed, the health maintenance organization shall appoint a committee to conduct a second investigation and review of the complaint. The committee must consist of:
(a) At least one member of the governing body of the health maintenance organization; and
(b) At least one physician who may be employed by the health maintenance organization who:
(1) Has sufficient expertise in the medical field at issue to conduct the investigation and review;
(2) Was not personally involved in any activity or decision that was a source of the complaint; and
(3) Did not participate in any way with the investigation and review conducted pursuant to section 10 of this act.
3. The committee shall complete the investigation and review and issue to the person who filed the complaint:
(a) The decision of the committee;
(b) The reasons for the decision; and
(c) A statement informing the person of the procedure for appealing the decision,
in writing not later than 45 days after the complaint is filed.
4. The committee appointed pursuant to subsection 2 shall allow the person who filed the complaint to appear before the committee to present information.
5. Upon request, the health maintenance organization shall assign an employee of the health maintenance organization to assist an enrollee, his guardian or legal representative in filing a complaint, participating in a meeting of the committee or appealing the decision of the committee.
6. Any investigation and review of a complaint filed pursuant to this section must be conducted before any binding arbitration pursuant to NRS 695C.265 or 695C.267.
Sec. 12 In addition to the requirements set forth in sections 10 and 11 of this act, a complaint system established pursuant to NRS 695C.260 must include an expedited procedure for investigating and reviewing a complaint that involves an imminent and serious threat to the health of an enrollee, including, without limitation, potential loss or impairment of life, limb or major bodily function. Such an expedited procedure must provide for a decision within 2 days after the complaint is received by the health maintenance organization.
Sec. 13 1. A health maintenance organization required to appoint a committee to conduct an investigation and review of a complaint pursuant to section 10, 11 or 12 of this act shall not terminate a contract with, refuse to contract with, refuse to compensate or otherwise penalize a physician who participates on a committee solely because of an action, statement or decision of the physician related to the investigation or review of a complaint.
2. Any record or document examined during an investigation and review of a complaint pursuant to section 10, 11 or 12 of this act is confidential. A member of a committee or any officer, agent or employee of the health maintenance organization shall not use or disclose any information received in the course of carrying out the provisions of section 10, 11 or 12 of this act which is confidential or which is provided to the health maintenance organization on the basis that the information is to remain confidential.
Sec. 14 NRS 695C.030 is hereby amended to read as follows:
695C.030As used in this chapter, unless the context otherwise requires [:
1. "Commissioner" means the commissioner of insurance.
2. "Comprehensive health care services" means medical services, dentistry, drugs, psychiatric and optometric and all other care necessary for the delivery of services to the consumer.
3. "Enrollee" means a natural person who has been voluntarily enrolled in a health care plan.
4. "Evidence of coverage" means any certificate, agreement or contract issued to an enrollee setting forth the coverage to which he is entitled.
5. "Health care plan" means any arrangement whereby any person undertakes to provide, arrange for, pay for or reimburse any part of the cost of any health care services and at least part of the arrangement consists of arranging for or the provision of health care services paid for by or on behalf of the enrollee on a periodic prepaid basis.
6. "Health care services" means any services included in the furnishing to any natural person of medical or dental care or hospitalization or incident to the furnishing of such care or hospitalization, as well as the furnishing to any person of any other services for the purpose of preventing, alleviating, curing or healing human illness or injury.
7. "Health maintenance organization" means any person which provides or arranges for provision of a health care service or services and is responsible for the availability and accessibility of such service or services to its enrollees, which services are paid for or on behalf of the enrollees on a periodic prepaid basis without regard to the dates health services are rendered and without regard to the extent of services actually furnished to the enrollees, except that supplementing the fixed prepayments by nominal additional payments for services in accordance with regulations adopted by the commissioner shall not be deemed to render the arrangement not to be on a prepaid basis. A health maintenance organization, in addition to offering health care services, may offer indemnity or service benefits provided through insurers or otherwise.
8. "Provider" means any physician, hospital or other person who is licensed or otherwise authorized in this state to furnish health care services.] , the words and terms defined in sections 2 to 9, inclusive, of this act have the meanings ascribed to them in those sections.
Sec. 15 NRS 695C.050 is hereby amended to read as follows:
695C.0501. Except as otherwise provided in this chapter or in specific provisions of this Title, the provisions of this Title are not applicable to any health maintenance organization granted a certificate of authority under this chapter. This provision does not apply to an insurer licensed and regulated pursuant to this Title except with respect to its activities as a health maintenance organization authorized and regulated pursuant to this chapter.
2. Solicitation of enrollees by a health maintenance organization granted a certificate of authority, or its representatives, must not be construed to violate any provision of law relating to solicitation or advertising by practitioners of a healing art.
3. Any health maintenance organization authorized under this chapter shall not be deemed to be practicing medicine and is exempt from the provisions of chapter 630 of NRS.
4. The provisions of NRS 695C.110, 695C.170 to 695C.200, inclusive, 695C.250, 695C.260 and 695C.265 and sections 10 to 13, inclusive, of this act do not apply to a health maintenance organization that provides health care services through managed care to recipients of Medicaid pursuant to a contract with the welfare division of the department of human resources. This subsection does not exempt a health maintenance organization from any provision of this chapter for services provided pursuant to any other contract.
Sec. 16 NRS 695C.070 is hereby amended to read as follows:
695C.070Each application for a certificate of authority [shall] must be verified by an officer or authorized representative of the applicant, [shall] must be in a form prescribed by the commissioner, and [shall] must set forth or be accompanied by the following:
1. A copy of the basic organizational document, if any, of the applicant, and all amendments thereto;
2. A copy of the bylaws, rules or regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant;
3. A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers in the case of a corporation, and the partners or members in the case of a partnership or association;
4. A copy of any contract made or to be made between any providers or persons listed in subsection 3 and the applicant;
5. A statement generally describing the health maintenance organization, its health care plan or plans, location of facilities at which health care services will be regularly available to enrollees, the type of health care personnel who will provide the health care services;
6. A copy of the form of evidence of coverage to be issued to the enrollees;
7. A copy of the form of the group contract, if any, which is to be issued to employers, unions, trustees or other organizations;
8. Certified financial statements showing the applicant's assets, liabilities and sources of financial support;
9. The proposed method of marketing the plan, a financial plan which includes a three-year projection of the initial operating results anticipated and the sources of working capital as well as any other sources of funding;
10. A power of attorney duly executed by the applicant, appointing the commissioner and his duly authorized deputies, as the true and lawful attorney of such applicant in and for this state upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in this state may be served;
11. A statement reasonably describing the geographic area to be served;
12. A description of the complaint procedures to be [utilized] used as required [under] pursuant to NRS 695C.260 [;] and sections 10 to 13, inclusive, of this act;
13. A description of the procedures and programs to be implemented to meet the quality of health care requirements in NRS 695C.080;
14. A description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of program content under subsection 2 of NRS 695C.110; and
15. Such other information as the commissioner may require to make the determinations required in NRS 695C.080.
Sec. 17 NRS 695C.170 is hereby amended to read as follows:
695C.1701. Every enrollee residing in this state is entitled to evidence of coverage under a health care plan. If the enrollee obtains coverage under a health care plan through an insurance policy, whether by option or otherwise, the insurer shall issue the evidence of coverage. Otherwise, the health maintenance organization shall issue the evidence of coverage.
2. Evidence of coverage or amendment thereto must not be issued or delivered to any person in this state until a copy of the form of the evidence of coverage or amendment thereto has been filed with and approved by the commissioner.
3. An evidence of coverage:
(a) Must not contain any provisions or statements which are unjust, unfair, inequitable, misleading, deceptive, which encourage misrepresentation or which are untrue, misleading or deceptive as defined in subsection 1 of NRS 695C.300; and
(b) Must contain a clear and complete statement, if a contract, or a reasonably complete summary if a certificate, of:
(1) The health care services and the insurance or other benefits, if any, to which the enrollee is entitled under the health care plan;
(2) Any limitations on the services, kind of services, benefits, or kind of benefits, to be provided, including any deductible or copayment feature;
(3) Where and in what manner the services may be obtained;
(4) The total amount of payment for health care services and the indemnity or service benefits, if any, which the enrollee is obligated to pay; [and]
(5) A provision for benefits payable for expenses incurred for the treatment of the abuse of alcohol or drugs, as provided in NRS 695C.174 [.] ; and
(6) The complaint system established pursuant to NRS 695C.260 explaining the method used by the health maintenance organization for resolving a complaint of an enrollee.
Any subsequent change may be evidenced in a separate document issued to the enrollee.
4. A copy of the form of the evidence of coverage to be used in this state and any amendment thereto is subject to the requirements for filing and approval of subsection 2 unless it is subject to the jurisdiction of the commissioner under the laws governing health insurance, in which event the provisions for filing and approval of those laws apply. To the extent that such provisions do not apply to the requirements in subsection 3, such provisions are amended to incorporate the requirements of subsection 3 in approving or disapproving an evidence of coverage required by subsection 2.
Sec. 18 NRS 695C.260 is hereby amended to read as follows:
695C.2601. Every health maintenance organization shall establish a complaint system which has been approved by the commissioner after consultation with the state board of health to resolve complaints initiated by enrollees concerning health care services. [Such system shall provide] The system must:
(a) Include the procedures set forth in sections 10 to 13, inclusive, of this act; and
(b) Provide any additional reasonable procedures necessary for the resolution of complaints.
2. Each health maintenance organization shall submit to the commissioner and the state board of health an annual report in a form prescribed by the commissioner after consultation with the state board of health which [shall] must include:
(a) A description of the procedures of [such] its complaint system; and
(b) The total number of complaints handled through [such] the complaint system and a compilation of causes underlying the complaints filed.
[2.] 3. The health maintenance organization shall maintain records of complaints filed with it concerning other than health care services and shall submit to the commissioner a summary report at such times and in such format as the commissioner may require. [Such] Any complaints involving other persons [shall] must be referred to such persons with a copy to the commissioner.
[3.] 4. The commissioner or the state board of health may examine [such] the complaint system, subject to the limitations concerning medical records of individuals set forth in subsection 3 of NRS 695C.310.
Sec. 19 NRS 695C.265 is hereby amended to read as follows:
695C.2651. If a health maintenance organization, for any final determination of benefits or care, requires an independent evaluation of the medical or chiropractic care of any person for whom such care is provided under the evidence of coverage:
(a) The evidence of coverage must include a procedure for binding arbitration to resolve disputes concerning independent medical evaluations pursuant to the rules of the American Arbitration Association; and
(b) Only a physician or chiropractor who is certified to practice in the same field of practice as the primary treating physician or chiropractor or who is formally educated in that field may conduct the independent evaluation.
2. The independent evaluation must include a physical examination of the patient, unless he is deceased, and a personal review of all X-rays and reports prepared by the primary treating physician or chiropractor. A certified copy of all reports of findings must be sent to the primary treating physician or chiropractor and the insured person within 10 working days after the evaluation. If the insured person disagrees with the finding of the evaluation, he must submit an appeal to the insurer pursuant to the procedure for binding arbitration set forth in the evidence of coverage within 30 days after he receives the finding of the evaluation. Upon its receipt of an appeal, the insurer shall so notify in writing the primary treating physician or chiropractor.
3. The insurer shall not limit or deny coverage for care related to a disputed claim while the dispute is in arbitration, except that, if the insurer prevails in the arbitration, the primary treating physician or chiropractor may not recover any payment from either the insurer, insured person or the patient for services that he provided to the patient after receiving written notice from the insurer pursuant to subsection 2 concerning the appeal of the insured person.
4. Participation in binding arbitration must not be required until after any investigation and review of a complaint is completed pursuant to section 10, 11 or 12 of this act.
Sec. 20 NRS 695C.267 is hereby amended to read as follows:
695C.2671. Except as otherwise provided in NRS 695C.265 and subject to the approval of the commissioner, a health maintenance organization may include in any evidence of coverage issued by the organization a provision which requires an enrollee to whom the evidence of coverage is issued and the health maintenance organization to submit for binding arbitration any dispute between the enrollee and the organization concerning any matter directly or indirectly related to, or associated with, the evidence of coverage or the health care plan or health care services of the health maintenance organization. If such a provision is included in the evidence of coverage:
(a) An enrollee must be given the opportunity to decline to participate in binding arbitration at the time of his enrollment.
(b) It must clearly state that the health maintenance organization and an enrollee who has not declined to participate in binding arbitration agree to forego their right to resolve any such dispute in a court of law or equity.
2. Except as otherwise provided in subsection 3, the arbitration must be conducted pursuant to the rules for commercial arbitration established by the American Arbitration Association. The health maintenance organization is responsible for any administrative fees and expenses relating to the arbitration, except that the health maintenance organization is not responsible for attorney's fees and fees for expert witnesses unless those fees are awarded by the arbitrator.
3. If a dispute required to be submitted to binding arbitration requires an immediate resolution to protect the physical health of an enrollee, any party to the dispute may waive arbitration and seek declaratory relief in a court of competent jurisdiction.
4. If a provision described in subsection 1 is included in any evidence of coverage issued by a health maintenance organization, the provision shall not be deemed unenforceable as an unreasonable contract of adhesion if the provision is included in compliance with the provisions of subsection 1.
5. Participation in binding arbitration must not be required until after any investigation and review of a complaint is completed pursuant to section 10, 11 or 12 of this act.
Sec. 21 NRS 695C.330 is hereby amended to read as follows:
695C.3301. The commissioner may suspend or revoke any certificate of authority issued to a health maintenance organization under this chapter if he finds that any of the following conditions exist:
(a) The health maintenance organization is operating significantly in contravention of its basic organizational document, its health care plan or in a manner contrary to that described in and reasonably inferred from any other information submitted [under] pursuant to NRS 695C.060, 695C.070 and 695C.140, unless amendments to those submissions have been filed with and approved by the commissioner;
(b) The health maintenance organization issues evidence of coverage or uses a schedule of charges for health care services which do not comply with the requirements of NRS 695C.170 to 695C.200, inclusive;
(c) The health care plan does not furnish comprehensive health care services as provided for in subsection 2 of NRS [695C.030;] 695C.060;
(d) The state board of health certifies to the commissioner that:
(1) The health maintenance organization does not meet the requirements of subsection 2 of NRS 695C.080; or
(2) The health maintenance organization is unable to fulfill its obligations to furnish health care services as required under its health care plan;
(e) The health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees;
(f) The health maintenance organization has failed to put into effect a mechanism affording the enrollees an opportunity to participate in matters relating to the content of programs under NRS 695C.110;
(g) The health maintenance organization has failed to put into effect the system for complaints in the manner required by NRS 695C.260 and in a manner reasonably designed to dispose of valid complaints;
(h) The health maintenance organization or any person on its behalf has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive or unfair manner;
(i) The continued operation of the health maintenance organization would be hazardous to its enrollees; or
(j) The health maintenance organization has otherwise failed to substantially comply with this chapter.
2. A certificate of authority must be suspended or revoked only after compliance with the requirements of NRS 695C.340.
3. When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization shall not, during the period of that suspension, enroll any additional groups or new individual contracts, unless those groups or persons were contracted for before the date of suspension.
4. When the certificate of authority of a health maintenance organization is revoked, the organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It shall engage in no further advertising or solicitation whatsoever. The commissioner may by written order permit such further operation of the organization as he may find to be in the best interest of enrollees to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing coverage for health care.
Sec. 22 NRS 636.347 is hereby amended to read as follows:
636.3471. No licensee may be employed by or contract with a health maintenance organization to provide services therefor unless he has obtained a permit to do so from the board.
2. Written application for a permit must be made on a form prescribed by the board. The board shall adopt reasonable regulations prescribing the procedure for obtaining a permit pursuant to this section.
3. For the purposes of this section, "health maintenance organization" has the meaning ascribed to it in [NRS 695C.030.] section 7 of this act.