Assembly Bill No. 30

Assembly Bill No. 30-Committee on Health and Human Services

Prefiled on January 17, 1997
____________

Referred to Committee on Health and Human Services

SUMMARY--Creates office of advocate for rights of patients of managed care organization. (BDR 18-997)

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 care; creating the office of the advocate for the rights of patients of managed care organizations within the office of the attorney general and assigning duties thereto; creating an account in the attorney general's special fund for the office of the advocate; creating the advisory board for the rights of patients of managed care organizations and assigning duties thereto; 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 228 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 16, inclusive, of this act.
Sec. 2 As used in sections 2 to 16, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 3 to 8, inclusive, of this act have the meanings ascribed to them in those sections.
Sec. 3 "Advocate for patients' rights" means the advocate for the rights of patients of managed care organizations.
Sec. 4 "Managed care" means a method of providing or arranging for the provision of health care services, other than a method based on fee-for-service wherein an insurer:
1. Reimburses a provider of health care for each service provided to an insured;
2. Allows an insured to choose any provider of health care and does not encourage the use of any specific provider of health care; and
3. Does not require any preauthorization or referral for a specific service to be covered.
The term includes, without limitation, a health maintenance organization, preferred provider organization, point-of-service plan or exclusive provider organization.
Sec. 5 "Managed care organization" means an organization that provides managed care.
Sec. 6 "Patient" means a person who receives health care through a managed care organization.
Sec. 7 "Provider of health care" means any physician, hospital or other person who is licensed or otherwise authorized in this state to furnish any health care service.
Sec. 8 "Public interest" means the interests or rights of the State of Nevada and of the residents of this state, or a broad class of those residents, that arise from the constitutions, court decisions and statutes of this state and of the United States and from the common law, as those interests and rights relate to the provision of health care through managed care organizations and the regulation of such organizations.
Sec. 9 1. The office of the advocate for the rights of patients of managed care organizations is hereby created within the office of the attorney general.
2. The attorney general shall appoint the advocate for patients' rights for a term of 4 years. The advocate for patients' rights is in the unclassified service of the state. The person appointed:
(a) Must be knowledgeable in the field of health care;
(b) Must be independent of and have no pecuniary interest in any provider of health care, insurer, managed health organization or other industry related to the provision of health care;
(c) Except as otherwise provided in NRS 284.143, shall devote all of his time to the business of his office and shall not pursue any other business or vocation or hold any other office of profit; and
(d) Must not be a member of any political convention or a member of any committee of any political party.
3. The attorney general may remove the advocate for patients' rights from office for inefficiency, neglect of duty or malfeasance in office.
Sec. 10 The advocate for patients' rights may:
1. Employ the staff necessary to carry out his duties and the functions of his office, in accordance with the personnel practices and procedures established within the office of the attorney general. The staff must include:
(a) A person licensed to practice law in this state, who shall serve as staff counsel;
(b) A person knowledgeable in the field of medicine;
(c) A person knowledgeable in accounting, finance or economics, or one or more related disciplines, as those disciplines relate to the fees charged by and the solvency of managed care organizations; and
(d) An administrative assistant,
who must be in the unclassified service of the state. The advocate for patients' rights has sole discretion to employ and remove the members of his staff who are in the unclassified service.
2. Purchase necessary equipment.
3. Lease or make other suitable arrangements for office space, except that any lease which extends beyond the term of 1 year must be reviewed and approved by a majority of the members of the state board of examiners.
4. Apply for an order or subpoena for the appearance of witnesses or the production of books, papers and documents in any proceeding in which the advocate for patients' rights is a party or intervener, in the same manner as any other party or intervener, and make arrangements for and pay the fees or costs of any witnesses and consultants necessary to the proceeding. If any person ordered to appear or produce books, papers or documents pursuant to this subsection fails to obey the order, the commissioner of insurance or state board of health, as appropriate, shall apply for a subpoena commanding the attendance of the witness or the production of the book, paper or document.
5. Perform such other functions and make such other arrangements as may be necessary to carry out his duties and the functions of his office.
Sec. 11 1. The account for the advocate for patients' rights is hereby created within the attorney general's special fund created pursuant to NRS 228.096. All money collected for the use of the advocate for patients' rights must be deposited in the state treasury for credit to the account.
2. Money in the account may be used only to defray the costs of maintaining the office of the advocate for patients' rights and for carrying out the provisions of sections 2 to 16, inclusive, of this act.
3. All claims against the account must be paid as other claims against the state are paid.
Sec. 12 All gifts and grants of money that the advocate for patients' rights is authorized to accept must be deposited with the state treasurer for credit to the account for the advocate for patients' rights.
Sec. 13 The advocate for patients' rights may:
1. Conduct or contract for studies, surveys, research or expert testimony relating to matters affecting the public interest or the interests of patients.
2. Examine any books, accounts, minutes, records or other papers or property of any insurer that issues a policy of health insurance which provides health care services through managed care or any managed care organization in the same manner and to the same extent as authorized by law for the commissioner of insurance and state board of health. Any insurer that issues a policy of health insurance which provides health care services through managed care and any managed care organization shall, upon request, provide such information to the advocate for patients' rights within 30 days. Any information obtained pursuant to this subsection must be given the same level of confidentiality as required if obtained by the commissioner of insurance or the state board of health.
3. Petition for, request, initiate, appear or intervene in any proceeding concerning:
(a) The fees charged or services provided by any insurer that issues a policy of health insurance which provides health care services through managed care or any managed care organization; and
(b) Any related matter before the commissioner of insurance and state board of health, or any court, regulatory body, board, commission or agency having jurisdiction over any matter in which the public interest or the interests of any particular class of patients are involved.
The advocate for patients' rights may represent the public interest or the interests of any particular class of patients in any such proceeding, and he is a real party in interest in the proceeding.
Sec. 14 Each insurer that issues a policy of health insurance which provides health care services through managed care and each managed care organization that conducts business in this state shall provide the advocate for patients' rights with copies of any proposed changes in fees or service, correspondence, legal papers and other documents that are served on, delivered to or mailed to the commissioner of insurance, division of insurance of the department of business and industry or state board of health.
Sec. 15 1. The advocate for patients' rights has sole discretion to represent or refrain from representing the public interest and any class of patients in any proceeding.
2. In exercising his discretion, the advocate for patients' rights shall consider the importance and extent of the public interest or the patients' interests involved and whether those interests would be adequately represented without his participation.
3. If the advocate for patients' rights determines that there would be a conflict between the public interest and any particular class of patients or any inconsistent interests among the classes of patients involved in a particular matter, he may choose to represent one of the interests, to represent no interest or to represent one interest through his office and any other interest through an outside counsel engaged on a case basis.
Sec. 16 The provisions of sections 2 to 16, inclusive, of this act do not apply to:
1. Any insurer that issues a policy of health insurance which provides health care services through managed care; or
2. Any managed care organization,
that provides health care services to recipients of Medicaid pursuant to a contract with the welfare division of the department of human resources.
Sec. 17 Chapter 439B of NRS is hereby amended by adding thereto the provisions set forth as sections 18, 19 and 20 of this act.
Sec. 18 As used in sections 18, 19 and 20 of this act, unless the context otherwise requires, "managed care organization" has the meaning ascribed to it in section 5 of this act.
Sec. 19 1. The advisory board for the rights of patients of managed care organizations, consisting of seven members appointed by the governor, is hereby created.
2. The governor shall appoint to the board:
(a) Two members who represent providers of health care;
(b) Two members who represent managed care organizations; and
(c) Three members of the general public who are residents of this state. At least one, but not more than two, of the members of the general public must be persons who receive health care through a managed care organization or through an insurer that issues a policy of health insurance which provides health care services through managed care.
3. After the initial terms, the members of the advisory board serve terms of 3 years. No member of the advisory board may serve more than two consecutive terms.
4. The governor shall appoint a chairman of the advisory board from among its members.
5. If a vacancy occurs during the term of a member, the governor shall appoint a person similarly qualified to replace that member for the remainder of the unexpired term.
6. The governor may remove a member from the advisory board if the member neglects his duty or commits malfeasance in office.
7. Members of the advisory board serve without compensation, and are not entitled to receive a per diem allowance or travel expenses.
8. As used in this section, "provider of health care" means any physician, hospital or other person who is licensed or otherwise authorized in this state to furnish any health care services.
Sec. 20 1. The advisory board for the rights of patients of managed care organizations must be knowledgeable regarding current issues and developments in the provision of health care through managed care organizations and the regulation of such organizations. The advisory board shall meet at least two times each year and may meet at any time upon the call of the chairman. The advisory board may hear such testimony as it deems necessary to satisfy the requirements of this section.
2. The advisory board shall submit a report, not later than January 1 of each year, to the governor and the office of the advocate for the rights of patients of managed care organizations created pursuant to section 9 of this act. The report must outline the current and projected effectiveness and efficiency of the provision of health care through managed care organizations and the regulation of such organizations and may contain suggestions for any necessary legislation to improve that effectiveness and efficiency.
Sec. 21 The members of the advisory board for the rights of patients of managed care organizations created pursuant to section 19 of this act must be appointed by the governor to serve initial terms as follows:
1. To terms which expire on June 30, 1999:
(a) One member who represents providers of health care;
(b) One member who represents managed care organizations; and
(c) One member who is a member of the general public.
2. To terms which expire on June 30, 2000:
(a) One member who represents providers of health care;
(b) One member who represents managed care organizations; and
(c) Two members who are members of the general public.
Sec. 22 This act becomes effective on July 1, 1997.