Assembly Bill No. 338

Assembly Bill No. 338-Assemblymen Giunchigliani, Buckley, Freeman, Anderson, Collins, Segerblom, de Braga, Parks, Koivisto, Herrera, Amodei, Neighbors, Goldwater, Arberry, Bache, Manendo, Price, Marvel, Ohrenschall, Williams, Perkins and Berman

April 8, 1997
____________

Referred to Committee on Commerce

SUMMARY--Makes various changes concerning managed care organizations. (BDR 57-37)

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; requiring managed care organizations to provide coverage for emergency health care services in certain circumstances; prohibiting certain managed care organizations from terminating a contract with a provider of health care except for just cause; requiring managed care organizations to enter into a contract with any provider of health care who agrees to certain conditions; requiring all managed care organizations to obtain a certificate of authority; authorizing the commissioner of insurance to examine the financial solvency and business practices of all managed care organizations; making the requirements applicable to the Nevada Industrial Insurance Act and the Nevada Occupational Diseases Act; 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 Title 57 of NRS is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 2 to 16, inclusive, of this act.
Sec. 2 As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 3 to 7, inclusive, of this act have the meanings ascribed to them in those sections.
Sec. 3 "Fee-for-service" means a method of providing or arranging for the provision of nonelective health care services 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 the coverage of a specific service.
Sec. 4 "Insured" means a person covered by a policy of health insurance which provides health care services through managed care, or any other person who is a beneficiary of health care services rendered by a managed care organization or pursuant to a contract with a managed care organization.
Sec. 5 "Managed care" means all methods of providing or arranging for the provision of health care services, other than a method based on fee-for-service as defined in section 3 of this act.
Sec. 6 "Managed care organization" means an organization that provides or arranges for the provision of health care services using a method based on managed care, including, without limitation, an insurer or other organization that provides health care services through managed care. The term includes, without limitation, a health maintenance organization, a preferred provider organization, a point-of-service plan and an exclusive provider 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 1. The provisions of this chapter apply to each organization and insurer that provides or arranges for the provision of health care services through managed care in this state, including, without limitation, an insurer that issues a policy of health insurance, an insurer that issues a policy of group health insurance, a carrier serving small employers, a fraternal benefit society, a hospital or medical service corporation and a health maintenance organization.
2. In addition to the provisions of this chapter, each managed care organization shall comply with any other applicable provision of this Title.
Sec. 9 1. If an insured receives an emergency health care service because he reasonably believes that immediate medical attention is necessary, the managed care organization shall provide coverage for the emergency health care service, whether or not:
(a) The condition actually required immediate medical attention; or
(b) The managed care organization otherwise would have denied coverage.
2. Coverage for an emergency health care service pursuant to this section must be provided regardless of whether the service was provided at a facility or by a provider of health care that is not otherwise covered by the managed care organization.
3. For the purposes of this section, an insured shall be deemed to have a reasonable belief that immediate medical attention is necessary if a reasonable person would believe that failure to receive immediate medical attention will result in serious:
(a) Danger to the health of the insured;
(b) Impairment of a bodily function of the insured;
(c) Dysfunction of an organ or other part of the body of the insured; or
(d) Danger to the health of an unborn child.
4. A policy of insurance subject to the provisions of this section that is delivered, issued for delivery or renewed on or after October 1, 1997, has the legal effect of including the coverage required by this section, and any provision of the policy or the renewal which is in conflict with this section is void.
Sec. 10 A managed care organization shall not require a provider of health care to pay a fee for entering into a contract with the managed care organization for the provision of health care services in an amount greater than the reasonable administrative costs, and in no event may such a fee exceed $1,000.
Sec. 11 1. A managed care organization that contracts with certain providers of health care for the provision of health care services to insureds shall not terminate a contract with a provider of health care without just cause. Such a managed care organization shall establish a procedure for terminating the contract of a provider of health care.
2. The procedure established pursuant to subsection 1 must include, without limitation:
(a) An initial investigation and review by a review board of the reasons for terminating the contract;
(b) A procedure for appealing a decision of the review board; and
(c) At least 30 days notice to the provider of health care before terminating his contract.
3. A review board created pursuant to subsection 2 must include, without limitation, at least one provider of health care who is employed by or has a contract with the managed care organization, and at least one provider of health care who practices in the same field of health care as the provider of health care who is being reviewed.
4. For the purposes of this section, just cause for terminating a contract with a provider of health care includes, without limitation, taking such action:
(a) Because the provider of health care has committed malpractice;
(b) To prevent the provider of health care from endangering a patient or to discipline the provider of health care for endangering a patient;
(c) When the provider of health care has abused alcohol or a controlled substance in a manner which affected his ability to perform his job; or
(d) To prevent the provider of health care from sexually abusing a patient or to discipline the provider of health care for sexually abusing a patient.
Sec. 12 Each managed care organization that contracts with certain providers of health care for the provision of health care services to insureds shall enter into a contract with any provider of health care for the provision of covered health care services to its insureds if:
1. The provider of health care is qualified under the laws of this state to provide such care; and
2. The provider of health care agrees to accept the rates, terms and conditions established for other providers of health care by the managed care organization.
Sec. 13 1. Each provider of health care who provides health care services pursuant to a contract with a managed care organization shall cause notice to be provided to insureds that it serves regarding the procedure to follow if an insured has a complaint concerning health care services covered by the managed care organization.
2. Such notice may be provided by:
(a) Posting the notice in a conspicuous place in each place where health care services are provided; or
(b) Providing a written copy of the procedure to each insured at the time that he receives health care services.
Sec. 14 Each managed care organization shall authorize coverage for an insured who wishes to receive covered health care services from an alternative or a nontraditional provider of health care, including, without limitation, a chiropractor, a doctor of Oriental medicine in any form or an advanced practitioner of homeopathy. Such services must be authorized without the requirement of first receiving any type of authorization or referral.
Sec. 15 1. A managed care organization that is not required to obtain a certificate of authority pursuant to any other provision of this Title shall apply to the commissioner for a certificate of authority and shall not provide health care services in this state, except as authorized by a certificate of authority issued by the commissioner and then in full force.
2. The commissioner shall adopt regulations setting forth the manner in which such a managed care organization may apply for and obtain a certificate of authority.
3. The commissioner may impose a fee upon a managed care organization that obtains a certificate of authority pursuant to this section for obtaining and maintaining a certificate of authority in an amount not to exceed the fee imposed upon an insurer pursuant to subsection 1 of NRS 680B.010 for obtaining and maintaining a certificate of authority.
Sec. 16 The commissioner may examine the financial solvency and business practices of a managed care organization that obtains a certificate of authority pursuant to section 15 of this act in the same manner and to the same extent as authorized for the examination of an insurer pursuant to chapter 679B of NRS.
Sec. 17 NRS 695C.055 is hereby amended to read as follows:
695C.0551. The provisions of NRS 449.465, 679B.158 and 680B.025 to 680B.060, inclusive, subsections 2, 4, 18, 19 and 32 of NRS 680B.010 and NRS 689C.015 to 689C.350, inclusive, and sections 2 to 16, inclusive, of this act apply to a health maintenance organization.
2. For the purposes of subsection 1, unless the context otherwise requires that a provision apply only to insurers, any reference in those sections to "insurer" must be replaced by "health maintenance organization."
Sec. 18 Chapter 608 of NRS is hereby amended by adding thereto a new section to read as follows:
1. Each employer that provides benefits for health care to his employees through a managed care organization shall post a notice, in a conspicuous place in each place of employment, stating the procedure to follow if an employee has a complaint concerning health care services covered by the managed care organization.
2. For the purposes of this section, "managed care organization" has the meaning ascribed to it in section 6 of this act.
Sec. 19 Chapter 616A of NRS is hereby amended by adding thereto a new section to read as follows:
The provisions of sections 2 to 16, inclusive, of this act apply to a managed care organization that provides comprehensive medical and health care services to employees for injuries and diseases that are compensable pursuant to chapters 616A to 617, inclusive, of NRS.
Sec. 20 NRS 616A.280 is hereby amended to read as follows:
616A.280 ["Organization for managed care" means any person who:
1. Provides or arranges for the provision of medical and health care services;
2. Establishes objectives, standards and protocols for such services;
3. Organizes providers of health care to ensure the availability and accessibility of such services; and
4. Establishes a system that allows for the submission of reports to the manager or a self-insured employer that are necessary to evaluate the effectiveness and cost of delivering medical and health care services to injured employees.] "Managed care organization" has the meaning ascribed to it in section 6 of this act.
Sec. 21 NRS 616B.221 is hereby amended to read as follows:
616B.2211. Except as otherwise provided in this section and NRS 616B.206, each employer insured by the system shall pay a deductible toward the total amount of accident benefits required to be paid for each claim filed by an employee pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS. The amount of the employer's premium must not be adjusted based on the deductible required to be paid pursuant to this subsection. The amount of the required deductible:
(a) For an employer not described in paragraph (b), is an amount equal to the amount of those accident benefits or $100, whichever is less.
(b) For an employer who has been identified pursuant to NRS 616B.206 as having excessive losses, is an amount equal to the amount of those accident benefits or $1,000, whichever is less.
2. In addition to paying the deductible required by subsection 1, the manager may offer an employer insured by the system the option of selecting coverage that requires the employer to pay an additional deductible, in an amount agreed to by the manager and the employer. If an employer chooses such coverage:
(a) The premium he is required to pay must be reduced by the manager based on the amount of the additional deductible paid by the employer. The amount of the reduction must be determined by the manager after giving consideration to the solvency of the employer and his ability to pay the additional deductible.
(b) The manager may require the employer to execute and deliver to the system a performance bond in an amount determined by the manager and conditioned upon the ability of the employer to pay the additional
deductible.
The manager may not require an employer to pay an additional deductible pursuant to this subsection.
3. Except as otherwise provided in subsection 4, at the end of each billing period, but not less than quarterly, the manager shall bill each employer for the amount he owes pursuant to subsection 1 or 2 for the preceding billing period. If an employer fails to pay this amount to the system on or before the date on which his next payment for premium is due:
(a) The system shall not continue to insure the employer; and
(b) The system may use any security on deposit pursuant to NRS 616B.218 to recover the amount owed to the system in accordance with this section.
4. If the manager contracts with one or more [organizations for] managed care organizations pursuant to NRS 616B.515 and 616B.518, the system shall bill the employer for the amount owed pursuant to subsection 1 or 2 for each claim. If the employer fails to reimburse the system, the system may use any security on deposit pursuant to NRS 616B.218 to recover the amount owed to the system in accordance with this section.
5. The administrator shall impose an administrative fine of not more than $1,000 against any employer who fails to comply with any of the provisions of this section.
Sec. 22 NRS 616B.500 is hereby amended to read as follows:
616B.5001. An insurer may enter into a contract to have his plan of insurance administered by a third-party administrator.
2. An insurer shall not enter into a contract with any person for the administration of any part of the plan of insurance unless that person maintains an office in this state and has a valid certificate issued by the commissioner pursuant to NRS 683A.085. The system may, as a part of a contract entered into with [an organization for] a managed care organization pursuant to NRS 616B.515, require the organization to act as its third-party administrator.
Sec. 23 NRS 616B.515 is hereby amended to read as follows:
616B.5151. Except as otherwise provided in NRS 616B.518, the manager may enter into a contract or contracts with one or more [organizations for] managed care [, including health maintenance organizations,] organizations to provide comprehensive medical and health care services to injured employees whose employers are insured by the system for injuries and diseases that are compensable under chapters 616A to 617, inclusive, of NRS. The contract or contracts must be awarded pursuant to reasonable competitive bidding procedures as established by the manager.
2. After the selection of [an organization for] a managed care [,] organization, the bids received by the manager and the records related to the bidding are subject to review by any member of the public upon request.
3. [An organization for] A managed care [or a health maintenance] organization shall not discriminate against or exclude a provider of health care from participation in the organization's proposed plan for providing medical and health care services because of race, creed, sex, national origin, age or disability.
Sec. 24 NRS 616B.518 is hereby amended to read as follows:
616B.518The manager shall not enter into a contract with [an organization for] a managed care organization unless the organization's proposed plan for providing medical and health care services ensures that, if medical and health care services are to be provided by the organization, an injured employee residing or employed in a county may choose the services of any provider of health care located in that county or an adjacent county if the employee's residence is not within a 20-mile radius of a provider of health care who has contracted with the organization to participate in the plan and provide the services required by the employee. If such services are not available, the injured employee may choose the services of any provider of health care located in the state. The fees charged by a provider of health care chosen by an injured employee pursuant to this section may not exceed the fees established in accordance with NRS 616C.260 or the usual fee charged by that provider, whichever is less.
Sec. 25 NRS 616B.521 is hereby amended to read as follows:
616B.521If the manager enters into a contract with one or more [organizations for] managed care organizations to provide comprehensive medical and health care services to injured employees whose employers are insured by the system, an employer insured by the system may select the [organization for] managed care organization in whose plan he wishes to participate if the selection is made in a manner prescribed by the manager. If the employer fails to make the selection, the manager may make the selection on behalf of the employer.
Sec. 26 NRS 616B.524 is hereby amended to read as follows:
616B.5241. Any employee:
(a) Who was injured by an accident arising out of and in the course of his employment before January 6, 1994, and whose claim is open; or
(b) Whose claim has been reopened pursuant to NRS 616C.390,
shall participate in a plan for managed care established by the system in accordance with the regulations adopted for this purpose by the manager.
2. If the manager enters into a contract with [an organization for] a managed care organization or renews such a contract on or after July 1, 1995, the contract must require the [organization for] managed care organization to provide, in accordance with standards established for this purpose by the manager, services to injured employees insured by the system who have not otherwise been required to participate in a plan for managed care. The contract may not require such an injured employee to change from his treating physician or chiropractor to another physician or chiropractor in order to receive compensation or benefits, unless his treating physician or chiropractor refuses to accept:
(a) If the physician or chiropractor is a member of one [organization for] managed care [,] organization, the terms of that organization's plan for managed care.
(b) If the physician or chiropractor is a member of more than one such organization and one of those organizations has entered into a contract with the employer's insurer, the terms of the employer's organization's plan for managed care.
(c) If the physician or chiropractor is not a member of any [organization for] managed care organization or if the provisions of paragraph (b) do not apply, the terms adopted by the manager pursuant to this subsection.
3. If the treating physician or chiropractor of an injured employee refuses to comply with the required terms, as applicable pursuant to subsection 2, the injured employee shall select another physician or chiropractor who agrees to comply with the applicable terms.
4. The provisions of this section do not affect the amount of compensation and benefits to which such an injured employee is otherwise entitled.
Sec. 27 NRS 616B.527 is hereby amended to read as follows:
616B.527A self-insured employer or an association of self-insured public or private employers may:
1. Enter into a contract or contracts with one or more [organizations for] managed care organizations to provide comprehensive medical and health care services to employees for injuries and diseases that are compensable under chapters 616A to 617, inclusive, of NRS.
2. Enter into a contract or contracts with providers of health care, including, without limitation, physicians who provide primary care, specialists, pharmacies, physical therapists, radiologists, nurses, diagnostic facilities, laboratories, hospitals and facilities that provide treatment to outpatients, to provide medical and health care services to employees for injuries and diseases that are compensable under chapters 616A to 617, inclusive, of NRS.
3. Use the services of [an organization for] a managed care organization that has entered into a contract with the manager pursuant to NRS 616B.515, but is not required to use such services.
4. Require employees to obtain medical and health care services for their industrial injuries from those organizations and persons with whom the self-insured employer or association has contracted pursuant to subsections 1 and 2, or as the self-insured employer or association otherwise prescribes.
5. Require employees to obtain the approval of the self-insured employer or the association before obtaining medical and health care services for their industrial injuries from a provider of health care who has not been previously approved by the self-insured employer or the association.
Sec. 28 NRS 616B.530 is hereby amended to read as follows:
616B.530As used in NRS 616B.533 and 616B.536, unless the context otherwise requires:
1. "Common agreement" means a contract between two or more providers of health care to form [an organization for] a managed care organization to provide comprehensive medical and health care services pursuant to a contract entered into with the manager in accordance with NRS 616B.515 and 616B.518.
2. "Provider of health care" means a:
(a) Health facility, as defined in NRS 439A.015; or
(b) A practitioner, as defined in NRS 439A.0195.
Sec. 29 NRS 616B.533 is hereby amended to read as follows:
616B.5331. Two or more licensed providers of health care who wish to organize a group of providers of health care to enter into a common agreement may apply to the commissioner for a preliminary permit by submitting to the commissioner:
(a) An application on a form prescribed by the commissioner which must include the names and addresses of the organizers and any other information that the commissioner determines necessary;
(b) An affidavit signed by the organizers stating that the only purpose of communication among them is to discuss forming [an organization for] a managed care organization to provide comprehensive medical and health care services pursuant to a common agreement; and
(c) A nonrefundable application fee of $100.
2. Upon receipt of an application made pursuant to subsection 1, the commissioner shall review the information submitted and issue a preliminary permit within 30 days after receipt of a complete application and all other information and the fee required by subsection 1.
3. A preliminary permit authorizes the organizers to whom the permit is issued to discuss forming [an organization for] a managed care organization to provide comprehensive medical and health care services pursuant to a common agreement with other providers of health care for 1 year after the date of the issuance of the permit.
4. A preliminary permit issued pursuant to this section may be renewed by the commissioner for additional 1-year periods upon receipt of:
(a) An application for renewal submitted on a form prescribed by the commissioner which includes such information as the commissioner determines necessary; and
(b) A fee of $100.
Sec. 30 NRS 616B.536 is hereby amended to read as follows:
616B.5361. Two or more licensed providers of health care may apply to the commissioner for a permit to form [an organization for] a managed care organization to provide comprehensive medical and health care services pursuant to a common agreement by submitting to the commissioner:
(a) An application on a form prescribed by the commissioner which must include the names and addresses of all providers of health care who are included in the agreement and any other information that the commissioner determines necessary;
(b) A copy of the proposed agreement; and
(c) A nonrefundable application fee of $500.
2. Upon receipt of an application made pursuant to subsection 1, the commissioner shall review the information submitted and issue a permit if he finds that:
(a) The stated purpose of the agreement is to form [an organization for] a managed care organization to provide comprehensive medical and health care services under a common agreement;
(b) Only licensed providers of health care are included in the agreement;
(c) The concentration of health care services represented in the common agreement will not adversely affect competition among the organizations currently providing or indemnifying or arranging for health care services;
(d) None of the providers of health care will be required under the agreement to be compensated or reimbursed at an amount less than reasonably necessary to defray the cost of the services provided; and
(e) The requirements of subsection 1 have been met.
3. A permit issued pursuant to this section authorizes the providers of health care to whom the permit is issued to form [an organization for] a managed care organization to provide comprehensive medical and health care services pursuant to the common agreement for 1 year after the date of the issuance of the permit.
4. A permit issued pursuant to this section may be renewed by the commissioner for additional 1-year periods upon receipt of:
(a) An application for renewal submitted on a form prescribed by the commissioner which includes such information as the commissioner determines necessary; and
(b) A fee of $500.
5. If the providers of health care included in a common agreement wish to modify any provision of the agreement, including the addition of providers of health care, they shall submit an application for modification to the commissioner on a form prescribed by the administrator with a nonrefundable application fee of $100. If the modification would result in an agreement which meets the requirements of this section, the commissioner shall approve the modification. The commissioner shall approve or deny an application for the modification of an agreement within 60 days after receipt of a complete application and the required fee.
6. If, after a public hearing on the matter, the commissioner finds that a change in the conditions in the marketplace has occurred which has rendered an agreement restrictive to competition in the provision of health care services, the commissioner shall revoke the permit for the agreement. Any such revocation becomes effective 60 days after the commissioner provides notice of the decision to the providers of health care included in the agreement.
7. The revocation of an agreement pursuant to subsection 6 is a final decision for the purposes of judicial review.
Sec. 31 NRS 616C.090 is hereby amended to read as follows:
616C.0901. The administrator shall establish a panel of physicians and chiropractors who have demonstrated special competence and interest in industrial health to treat injured employees under chapters 616A to 616D, inclusive, of NRS. Every employer whose insurer has not entered into a contract with [an organization for] a managed care organization pursuant to NRS 616B.515 shall maintain a list of those physicians and chiropractors on the panel who are reasonably accessible to his employees.
2. An injured employee whose insurer has not entered into a contract with [an organization for] a managed care organization may choose his treating physician or chiropractor from the panel of physicians and chiropractors. If the injured employee is not satisfied with the first physician or chiropractor he so chooses, he may make an alternative choice of physician or chiropractor from the panel if the choice is made within 90 days after his injury. The insurer shall notify the first physician or chiropractor in writing. The notice must be postmarked within 3 working days after the insurer receives knowledge of the change. The first physician or chiropractor must be reimbursed only for the services he rendered to the injured employee up to and including the date of notification. Any further change is subject to the approval of the insurer, which must be granted or denied within 10 days after a written request for such a change is received from the injured employee. If no action is taken on the request within 10 days, the request shall be deemed granted. Any request for a change of physician or chiropractor must include the name of the new physician or chiropractor chosen by the injured employee.
3. An injured employee employed or residing in any county in this state whose insurer has entered into a contract with [an organization for] a managed care organization must choose his treating physician or chiropractor pursuant to the terms of that contract. If the employee, after choosing his treating physician or chiropractor, moves to a county which is not served by the [organization for] managed care organization and the insurer determines that it is impractical for the employee to continue treatment with the physician or chiropractor, the employee must choose a treating physician or chiropractor who has agreed to the terms of that contract unless the insurer authorizes the employee to choose another physician or chiropractor.
4. Except when emergency medical care is required and except as otherwise provided in NRS 616C.055, the insurer is not responsible for any charges for medical treatment or other accident benefits furnished or ordered by any physician, chiropractor or other person selected by the employee in disregard of the provisions of this section or for any compensation for any aggravation of the employee's injury attributable to improper treatments by such physician, chiropractor or other person.
5. The administrator may order necessary changes in a panel of physicians and chiropractors and shall suspend or remove any physician or chiropractor from a panel for good cause shown.
6. An injured employee may receive treatment by more than one physician or chiropractor if the insurer provides written authorization for such treatment.
Sec. 32 NRS 616C.135 is hereby amended to read as follows:
616C.1351. A provider of health care who accepts a patient as a referral for the treatment of an industrial injury or an occupational disease may not charge the patient for any treatment related to the industrial injury or occupational disease, but must charge the insurer. The provider of health care may charge the patient for any other unrelated services which are requested in writing by the patient.
2. The insurer is liable for the charges for approved services if the charges do not exceed:
(a) The fees established in accordance with NRS 616C.260 or the usual fee charged by that person or institution, whichever is less; and
(b) The charges provided for by the contract between the provider of health care and the insurer or the contract between the provider of health care and the [organization for] managed care [.] organization.
3. If a provider of health care, [an organization for] a managed care [,] organization, an insurer or an employer violates the provisions of this section, the administrator shall impose an administrative fine of not more than $250 for each violation.
Sec. 33 NRS 616C.260 is hereby amended to read as follows:
616C.2601. All fees and charges for accident benefits must not:
(a) Exceed the fees and charges usually paid in the state for similar treatment.
(b) Be unfairly discriminatory as between persons legally qualified to provide the particular service for which the fees or charges are asked.
2. The administrator shall, giving consideration to the fees and charges being paid in the state, establish a schedule of reasonable fees and charges allowable for accident benefits provided to injured employees whose insurers have not contracted with [an organization for] a managed care organization pursuant to NRS 616B.515. The administrator shall review and revise the schedule on or before October 1 of each year. The administrator may increase or decrease the schedule, but shall not increase the schedule by any factor greater than the corresponding annual increase in the Consumer Price Index (Medical Care Component), unless the advisory council of the division approves such an increase.
3. The administrator may request a health insurer, [health maintenance] managed care organization or provider of accident benefits, an agent or employee of such a person, or an agency of the state, to provide the administrator with such information concerning fees and charges paid for similar services as he deems necessary to carry out the provisions of subsection 2. The administrator shall require a person or entity providing records or reports of fees charged to provide interpretation and identification concerning the information delivered. The administrator may impose an administrative fine of $500 for each refusal to provide the information requested pursuant to this subsection.
4. The division may adopt reasonable regulations necessary to carry out the provisions of this section. The regulations must include provisions concerning:
(a) Standards for the development of the schedule of fees and charges;
(b) The periodic revision of the schedule; and
(c) The monitoring of compliance by providers of benefits with the adopted schedule of fees and charges.
5. The division shall adopt regulations requiring the utilization of a system of billing codes as recommended by the American Medical Association.
Sec. 34 NRS 616C.305 is hereby amended to read as follows:
616C.3051. Except as otherwise provided in subsection 3, any person who is aggrieved by a decision concerning accident benefits made by [an organization for] a managed care organization which has contracted with an insurer must, within 14 days of the decision and before requesting a resolution of the dispute pursuant to NRS 616C.345 to 616C.385, inclusive, appeal that decision in accordance with the procedure for resolving complaints established by the [organization for] managed care [.] organization.
2. The procedure for resolving complaints established by the [organization for] managed care organization must be informal and must include, but is not limited to, a review of the appeal by a qualified physician or chiropractor who did not make or otherwise participate in making the decision.
3. If a person appeals a final determination pursuant to a procedure for resolving complaints established by [an organization for] a managed care organization and the dispute is not resolved within 14 days after it is submitted, he may request a resolution of the dispute pursuant to NRS 616C.345 to 616C.385, inclusive.
Sec. 35 NRS 616D.120 is hereby amended to read as follows:
616D.1201. Except as otherwise provided in this section, if the administrator determines that an insurer, [organization for] managed care [,] organization, health care provider, third-party administrator or employer has:
(a) Through fraud, coercion, duress or undue influence:
(1) Induced a claimant to fail to report an accidental injury or occupational disease;
(2) Persuaded a claimant to settle for an amount which is less than reasonable;
(3) Persuaded a claimant to settle for an amount which is less than reasonable while a hearing or an appeal is pending; or
(4) Persuaded a claimant to accept less than the compensation found to be due him by a hearing officer, appeals officer, court of competent jurisdiction, written settlement agreement, written stipulation or the division when carrying out its duties pursuant to chapters 616A to 617, inclusive, of NRS;
(b) Refused to pay or unreasonably delayed payment to a claimant of compensation found to be due him by a hearing officer, appeals officer, court of competent jurisdiction, written settlement agreement, written stipulation or the division when carrying out its duties pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS, if the refusal or delay occurs:
(1) Later than 10 days after the date of the settlement agreement or stipulation;
(2) Later than 30 days after the date of the decision of a court, hearing officer, appeals officer or division, unless a stay has been granted; or
(3) Later than 10 days after a stay of the decision of a court, hearing officer, appeals officer or division has been lifted;
(c) Refused to process a claim for compensation pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS;
(d) Made it necessary for a claimant to initiate proceedings pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS for compensation found to be due him by a hearing officer, appeals officer, court of competent jurisdiction, written settlement agreement, written stipulation or the division when carrying out its duties pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS;
(e) Failed to comply with the division's regulations covering the payment of an assessment relating to the funding of costs of administration of chapters 616A to 617, inclusive, of NRS;
(f) Failed to provide or unreasonably delayed payment to an injured employee or reimbursement to an insurer pursuant to NRS 616C.165; or
(g) Intentionally failed to comply with any provision of, or regulation adopted pursuant to, this chapter or chapter 616A, 616B, 616C or 617 of NRS,
the administrator shall impose an administrative fine of $1,000 for each initial violation, or a fine of $10,000 for a second or subsequent violation.
2. Except as otherwise provided in chapters 616A to 616D, inclusive, or chapter 617 of NRS, if the administrator determines that an insurer, [organization for] managed care [,] organization, health care provider, third-party administrator or employer has failed to comply with any provision of this chapter or chapter 616A, 616B, 616C or 617 of NRS, or any regulation adopted pursuant thereto, the administrator may take any of the following actions:
(a) Issue a notice of correction for:
(1) A minor violation, as defined by regulations adopted by the division; or
(2) A violation involving the payment of compensation in an amount which is greater than that required by any provision of this chapter or chapter 616A, 616B, 616C or 617 of NRS, or any regulation adopted pursuant thereto.
The notice of correction must set forth with particularity the violation committed and the manner in which the violation may be corrected. Nothing in this section authorizes the administrator to modify or negate in any manner a determination or any portion of a determination made by a hearing officer, appeals officer or court of competent jurisdiction or a provision contained in a written settlement agreement or written stipulation.
(b) Impose an administrative fine for:
(1) A second or subsequent violation for which a notice of correction has been issued pursuant to paragraph (a); or
(2) Any other violation of this chapter or chapter 616A, 616B, 616C or 617 of NRS, or any regulation adopted pursuant thereto, for which a notice of correction may not be issued pursuant to paragraph (a).
The fine imposed may not be greater than $250 for an initial violation, or more than $1,000 for any second or subsequent violation.
(c) Order a plan of corrective action to be submitted to the administrator within 30 days after the date of the order.
3. If the administrator determines that a violation of any of the provisions of paragraphs (a) to (d), inclusive, of subsection 1 has occurred, the administrator shall order the insurer, [organization for] managed care [,] organization, health care provider, third-party administrator or employer to pay to the claimant a benefit penalty in an amount equal to 50 percent of the compensation due or $10,000, whichever is less. In no event may a benefit penalty be less than $500. The benefit penalty is for the benefit of the claimant and must be paid directly to him within 10 days after the date of the administrator's determination. Proof of the payment of the benefit penalty must be submitted to the administrator within 10 days after the date of his determination unless an appeal is filed pursuant to NRS 616D.140. Any compensation to which the claimant may otherwise be entitled pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS must not be reduced by the amount of any benefit penalty received pursuant to this subsection.
4. In addition to any fine or benefit penalty imposed pursuant to this section, the administrator may assess against an insurer who violates any regulation concerning the reporting of claims expenditures used to calculate an assessment an administrative penalty of up to twice the amount of any underpaid assessment.
5. If the administrator determines that a person has violated any of the provisions of NRS 616D.200, 616D.220, 616D.240, 616D.300, 616D.310 or 616D.350 to 616D.440, inclusive, the administrator shall impose an administrative fine of not more than $10,000.
6. Two or more fines of $1,000 or more imposed in 1 year for acts enumerated in subsection 1 must be considered by the commissioner as evidence for the withdrawal of:
(a) A certificate to act as a self-insured employer.
(b) A certificate to act as an association of self-insured public or private employers.
(c) A certificate of registration as a third-party administrator.
7. The commissioner may, without complying with the provisions of NRS 616B.327 or 616B.431, withdraw the certification of a self-insured employer, association of self-insured public or private employers or third-party administrator if, after a hearing, it is shown that the self-insured employer, association of self-insured public or private employers or third-party administrator violated any provision of subsection 1.
Sec. 36 NRS 616D.130 is hereby amended to read as follows:
616D.1301. Upon receipt of a complaint for a violation of subsection 1 of NRS 616D.120, or if the administrator has reason to believe that such a violation has occurred, the administrator shall cause to be conducted an investigation of the alleged violation. Except as otherwise provided in subsection 2, the administrator shall, within 30 days after initiating the investigation:
(a) Render a determination. The determination must include his findings of fact and, if he determines that a violation has occurred, one or more of the following:
(1) The amount of any fine required to be paid pursuant to NRS 616D.120.
(2) The amount of any benefit penalty required to be paid to a claimant pursuant to NRS 616D.120.
(3) A plan of corrective action to be taken by the insurer, [organization for] managed care [,] organization, health care provider, third-party administrator or employer, including the manner and time within which the violation must be corrected.
(4) A requirement that notice of the violation be given to the appropriate agency that regulates the activities of the violator.
(b) Notify the commissioner if he determines that a violation was committed by a self-insured employer, association of self-insured public or private employers or third-party administrator.
2. Upon receipt of a complaint for any violation of paragraph (a) or (c) of subsection 1 of NRS 616D.120, or if the administrator has reason to believe that such a violation has occurred, the administrator shall complete the investigation required by subsection 1 within 120 days and, within 30 days after the completion of the investigation, render a determination and notify the commissioner if he determines that a violation was committed by a self-insured employer, association of self-insured public or private employers or third-party administrator.
3. If, based upon the administrator's findings of fact, he determines that a violation has not occurred, he shall issue a determination to that effect.
Sec. 37 NRS 616D.350 is hereby amended to read as follows:
616D.350As used in NRS 616D.350 to 616D.440, inclusive, unless the context otherwise requires:
1. "Charge" means any communication, whether oral, written, electronic or magnetic, which is used to identify specific accident benefits as reimbursable pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS, or which may be used to determine a rate of payment pursuant to those chapters.
2. "Provider of health care" means a person who receives or attempts to receive payment from:
(a) An insurer;
(b) A third-party administrator; or
(c) [An organization for] A managed care organization which has contracted with an insurer or third-party administrator,
for accident benefits provided or alleged to have been provided to an injured employee pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS.
3. "Record" means any medical, professional or business record relating to:
(a) The treatment or care of an injured employee;
(b) Accident benefits provided to an injured employee; or
(c) Rates paid for such accident benefits.
Sec. 38 Section 72 of chapter 580, Statutes of Nevada 1995, at page 2019, is hereby amended to read as follows:

Sec. 72. NRS 616.297 is hereby amended to read as follows:

616.297 A self-insured employer , [or] an association of self-insured public or private employers or a private carrier may:

1. Enter into a contract or contracts with one or more managed care organizations to provide comprehensive medical and health care services to employees for injuries and diseases that are compensable [under] pursuant to chapters 616A to 617, inclusive, of NRS.

2. Enter into a contract or contracts with providers of health care, including, without limitation, physicians who provide primary care, specialists, pharmacies, physical therapists, radiologists, nurses, diagnostic facilities, laboratories, hospitals and facilities that provide treatment to outpatients, to provide medical and health care services to employees for injuries and diseases that are compensable [under] pursuant to chapters 616A to 617, inclusive, of NRS.

3. Use the services of a managed care organization that has entered into a contract with the manager pursuant to NRS 616B.515, but is not required to use such services.

4. Require employees to obtain medical and health care services for their industrial injuries from those organizations and persons with whom the self-insured employer , [or] association or private carrier has contracted pursuant to subsections 1 and 2, or as the self-insured employer , [or] association or private carrier otherwise prescribes.

5. Require employees to obtain the approval of the self-insured employer , [or the] association or private carrier before obtaining medical and health care services for their industrial injuries from a provider of health care who has not been previously approved by the self-insured employer [or the association.] , association or private carrier.

Sec. 39 Section 42 of chapter 580, Statutes of Nevada 1995, at page 2009, is hereby repealed.
Sec. 40 The provisions of this act apply to all contracts for health insurance, managed care or for the provision of health care services entered into or renewed on or after October 1, 1997.

TEXT OF REPEALED SECTION

Section 42 of chapter 580, Statutes of Nevada 1995:

Sec. 42. NRS 616.1114 is hereby amended to read as follows:

616.1114 "Organization for managed care" means any person who:

1. Provides or arranges for the provision of medical and health care services;

2. Establishes objectives, standards and protocols for such services;

3. Organizes providers of health care to ensure the availability and accessibility of such services; and

4. Establishes a system that allows for the submission of reports to [the manager or a self-insured employer] an insurer that are necessary to evaluate the effectiveness and cost of delivering medical and health care services to injured employees.