requires two-thirds majority vote (§§ 3, 8, 27)                                                                                                      

                                                                                                  

 

Senate Bill No. 171–Senator O’Connell

 

February 20, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Requires managed care organizations to establish system for independent review of final adverse determinations concerning allocations of health care resources and services. (BDR 57‑243)

 

FISCAL NOTE:  Effect on Local Government: Yes.

                           Effect on the State: Yes.

 

~

 

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

 

AN ACT relating to health care; making various changes relating to the rights of persons under certain policies, contracts and plans of health insurance to obtain independent review of determinations by certain health insurers that allocations of health care services and resources provided or proposed to be provided to insured persons are not medically necessary and appropriate, or are experimental or investigational; providing a penalty; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 679B.240 is hereby amended to read as

1-2  follows:

1-3  679B.240  To ascertain compliance with law, or relationships

1-4  and transactions between any person and any insurer or proposed

1-5  insurer, the Commissioner may, as often as he deems advisable,

1-6  examine the accounts, records, documents and transactions relating

1-7  to such compliance or relationships of:

1-8  1.  Any insurance agent, solicitor, broker, surplus lines broker,

1-9  general agent, adjuster, insurer representative, bail agent, motor club

1-10  agent or any other licensee or any other person the Commissioner

2-1  has reason to believe may be acting as or holding himself out as any

2-2  of the foregoing.

2-3  2.  Any person having a contract under which he enjoys in fact

2-4  the exclusive or dominant right to manage or control an insurer.

2-5  3.  Any insurance holding company or other person holding the

2-6  shares of voting stock or the proxies of policyholders of a domestic

2-7  insurer, to control the management thereof, as voting trustee or

2-8  otherwise.

2-9  4.  Any subsidiary of the insurer.

2-10      5.  Any person engaged in this state in, or proposing to be

2-11  engaged in this state in, or holding himself out in this state as so

2-12  engaging or proposing, or in this state assisting in, the promotion,

2-13  formation or financing of an insurer or insurance holding

2-14  corporation, or corporation or other group to finance an insurer or

2-15  the production of its business.

2-16      6.  Any independent review organization, as defined in section

2-17  6 of this act.

2-18      Sec. 2.  NRS 679B.290 is hereby amended to read as follows:

2-19      679B.290  1.  Except as otherwise provided in subsection 2:

2-20      (a) The expense of examination of an insurer, or of any person

2-21  referred to in subsection 1, 2 , [or] 5 or 6 of NRS 679B.240, must be

2-22  borne by the person examined. Such expense includes only the

2-23  reasonable and proper hotel and travel expenses of the

2-24  Commissioner and his examiners and assistants, including expert

2-25  assistance, reasonable compensation as to such examiners and

2-26  assistants and incidental expenses as necessarily incurred in the

2-27  examination. As to expense and compensation involved in any such

2-28  examination , the Commissioner shall give due consideration to

2-29  scales and limitations recommended by the National Association of

2-30  Insurance Commissioners and outlined in the examination manual

2-31  sponsored by that association.

2-32      (b) The person examined shall promptly pay to the

2-33  Commissioner the expenses of the examination upon presentation

2-34  by the Commissioner of a reasonably detailed written statement

2-35  thereof.

2-36      2.  The Commissioner may bill an insurer for the examination

2-37  of any person referred to in subsection 1 of NRS 679B.240 and shall

2-38  adopt regulations governing such billings.

2-39      Sec. 3.  Chapter 683A of NRS is hereby amended by adding

2-40  thereto the provisions set forth as sections 4 to 11, inclusive, of this

2-41  act.

2-42      Sec. 4.  As used in sections 4 to 11, inclusive, of this act,

2-43  unless the context otherwise requires, the words and terms defined

2-44  in sections 5, 6 and 7 of this act have the meanings ascribed to

2-45  them in those sections.

3-1  Sec. 5.  “External review” means a system in which an

3-2  independent review organization provides a decision concerning

3-3  whether or not an allocation of health care resources and services

3-4  provided or proposed to be provided to an insured is medically

3-5  necessary and appropriate, or is experimental or investigational.

3-6  The term does not include responding to requests made by an

3-7  insured for clarification of his coverage.

3-8  Sec. 6.  “Independent review organization” means an

3-9  organization certified by the Commissioner to accept assignments

3-10  of requests for external review.

3-11      Sec. 7.  “Insured” means a natural person who has

3-12  contracted for or participates in coverage under a policy of health

3-13  insurance, a policy of group health insurance, a health benefit

3-14  plan, a contract for hospital, medical or dental services, a contract

3-15  with a health maintenance organization, a contract for limited

3-16  health services, or any other program providing payment,

3-17  reimbursement or indemnification for the costs of health care for

3-18  himself or his dependents, or both.

3-19      Sec. 8.  1.  No organization may accept an assignment to

3-20  perform an external review, or offer or agree to do so, unless it

3-21  has obtained a certificate as an independent review organization

3-22  from the Commissioner.

3-23      2.  To apply to the Commissioner for certification as an

3-24  independent review organization, an organization must:

3-25      (a) File an application on a form provided by the

3-26  Commissioner that includes or is accompanied by any information

3-27  required by the Commissioner; and

3-28      (b) Pay the application fee required by the Commissioner

3-29  pursuant to subsection 4.

3-30      3.  Certification pursuant to this section must be renewed on

3-31  or before March 1 of each year by providing the information

3-32  required pursuant to subsection 2 and paying the renewal fee

3-33  required by the Commissioner pursuant to subsection 4.

3-34      4.  The Commissioner shall charge such fees pursuant to this

3-35  section as he determines to be sufficient to pay any administrative

3-36  costs necessary for the certification and renewal of certification of

3-37  each organization pursuant to this section.

3-38      Sec. 9.  1.  Except as otherwise provided in subsection 4,

3-39  before the Commissioner may certify an independent review

3-40  organization, the organization must:

3-41      (a) Demonstrate to the satisfaction of the Commissioner that it

3-42  is able to carry out, on a timely basis, the duties of an independent

3-43  review organization as set forth in sections 4 to 11, inclusive, and

3-44  21 to 33, inclusive, of this act. This demonstration must include,

3-45  without limitation, proof that the organization employs, contracts

4-1  with or otherwise retains only persons who are qualified by reason

4-2  of their education, training, professional licensing and experience

4-3  to perform the duties assigned to them.

4-4  (b) Provide assurances acceptable to the Commissioner that

4-5  the organization will:

4-6       (1) Conduct its external review activities in conformity with

4-7  the provisions of sections 4 to 11, inclusive, and 21 to 33,

4-8  inclusive, of this act;

4-9       (2) Provide its decisions in a clear, consistent, thorough

4-10  and timely manner; and

4-11          (3) Avoid conflicts of interest.

4-12      2.  For the purposes of this section, an independent review

4-13  organization has a conflict of interest if the organization or an

4-14  employee, agent or contractor of the organization who performs

4-15  external review has a material professional, familial or financial

4-16  interest in any person who has a substantial interest in the

4-17  outcome of the review, including, without limitation:

4-18      (a) The insured;

4-19      (b) The insurer or any officer, director or management

4-20  employee of the insurer;

4-21      (c) The provider of health care services provided or proposed

4-22  to be provided, his partner or any other member of his medical

4-23  group or practice;

4-24      (d) The hospital or other licensed health care facility at which

4-25  the service or treatment subject to review has been or will be

4-26  provided; or

4-27      (e) A developer, manufacturer or other person with a

4-28  substantial interest in the principal procedure, equipment, drug,

4-29  device or other instrumentality that is the subject of the review.

4-30      3.  The Commissioner shall not certify an independent review

4-31  organization that is affiliated with a:

4-32      (a) Health care plan; or

4-33      (b) National, state or local trade association.

4-34      4.  An independent review organization that is certified or

4-35  accredited by a nationally recognized accrediting body shall be

4-36  deemed to have satisfied all the conditions and qualifications

4-37  required for certification pursuant to this section.

4-38      5.  As used in this section, “provider of health care” means

4-39  any physician or other person who is licensed, certified or

4-40  otherwise authorized in this or any other state to furnish any

4-41  health care service.

4-42      Sec. 10.  An independent review organization, its employees,

4-43  agents or contractors, acting in good faith, are not liable for

4-44  damages arising from the performance of an external review

4-45  except for damages caused by their gross negligence.

5-1  Sec. 11.  A person who violates any provision of sections 4 to

5-2  11, inclusive, of this act, in addition to any criminal penalty, shall

5-3  be punished by an administrative fine of not more than $1,000.

5-4  Sec. 12.  NRS 683A.376 is hereby amended to read as follows:

5-5  683A.376  As used in NRS 683A.375 to 683A.379, inclusive:

5-6  1.  “Agent who performs utilization review” includes any

5-7  person who performs such review except a person acting on behalf

5-8  of the Federal Government, but only to the extent that the person

5-9  provides the service for the Federal Government or an agency

5-10  thereof.

5-11      2.  “Insured” means a natural person who has contracted for or

5-12  participates in coverage under a policy of insurance, a contract with

5-13  a health maintenance organization, a plan for hospital, medical or

5-14  dental services , or any other program providing payment,

5-15  reimbursement or indemnification for the costs of health care for

5-16  himself, his dependents[,] or both.

5-17      3.  “Utilization review” means a system that provides, at a

5-18  minimum, for review of the medical necessity and appropriateness

5-19  of the allocation of health care resources and services provided or

5-20  proposed to be provided to an insured or to any person claiming

5-21  benefits against a policy of the insured. The term does not include

5-22  responding to requests made by an insured for clarification of his

5-23  coverage.

5-24      Sec. 13.  Chapter 689A of NRS is hereby amended by adding

5-25  thereto a new section to read as follows:

5-26      No policy of health insurance that provides, delivers, arranges

5-27  for, pays for or reimburses any cost of health care services

5-28  through managed care may be delivered or issued for delivery in

5-29  this state unless it provides a system for resolving complaints of an

5-30  insured concerning such services that complies with the provisions

5-31  of NRS 695G.200 to 695G.230, inclusive, and sections 21 to 33,

5-32  inclusive, of this act.

5-33      Sec. 14.  NRS 689B.0285 is hereby amended to read as

5-34  follows:

5-35      689B.0285  1.  Each insurer that issues a policy of group

5-36  health insurance in this state shall establish a system for resolving

5-37  [any] complaints of an insured concerning health care services

5-38  covered under the policy. The system must be approved by the

5-39  Commissioner in consultation with the State Board of Health.

5-40      2.  A system for resolving complaints pursuant to subsection 1

5-41  must include an initial investigation, a review of the complaint by a

5-42  review board and a procedure for appealing a determination

5-43  regarding the complaint. The majority of the members on a review

5-44  board must be insureds who receive health care services pursuant to

5-45  a policy of group health insurance issued by the insurer.

6-1  3.  The Commissioner or the State Board of Health may

6-2  examine the system for resolving complaints established pursuant to

6-3  this section at such times as either deems necessary or appropriate.

6-4  4.  Each insurer that issues a policy of group health insurance

6-5  in this state that provides, delivers, arranges for, pays for or

6-6  reimburses any cost of health care services through managed care

6-7  must provide a system for resolving complaints of an insured

6-8  concerning such services that complies with the provisions of NRS

6-9  695G.200 to 695G.230, inclusive, and sections 21 to 33, inclusive,

6-10  of this act.

6-11      Sec. 15.  NRS 689C.156 is hereby amended to read as follows:

6-12      689C.156  1.  As a condition of transacting business in this

6-13  state with small employers, a carrier shall actively market to a small

6-14  employer each health benefit plan which is actively marketed in this

6-15  state by the carrier to any small employer in this state. The health

6-16  insurance plans marketed pursuant to this section by the carrier must

6-17  include, without limitation, a basic health benefit plan and a

6-18  standard health benefit plan. A carrier shall be deemed to be actively

6-19  marketing a health benefit plan when it makes available any of its

6-20  plans to a small employer that is not currently receiving coverage

6-21  under a health benefit plan issued by that carrier.

6-22      2.  If a health benefit plan marketed pursuant to this section

6-23  provides, delivers, arranges for, pays for or reimburses any cost of

6-24  health care services through managed care, it must provide a

6-25  system for resolving complaints of an insured concerning such

6-26  services that complies with the provisions of NRS 695G.200 to

6-27  695G.230, inclusive, and sections 21 to 33, inclusive, of this act.

6-28      3.  A carrier shall issue to a small employer any health benefit

6-29  plan marketed in accordance with this section if the eligible small

6-30  employer applies for the plan and agrees to make the required

6-31  premium payments and satisfy the other reasonable provisions of the

6-32  health benefit plan that are not inconsistent with NRS 689C.015 to

6-33  689C.355, inclusive, and 689C.610 to 689C.980, inclusive, except

6-34  that a carrier is not required to issue a health benefit plan to a self-

6-35  employed person who is covered by, or is eligible for coverage

6-36  under, a health benefit plan offered by another employer.

6-37      Sec. 16.  Chapter 695B of NRS is hereby amended by adding

6-38  thereto a new section to read as follows:

6-39      Each contract that is authorized pursuant to this chapter must,

6-40  if it provides, delivers, arranges for, pays for or reimburses any

6-41  cost of health care services through managed care, provide a

6-42  system for resolving complaints of an insured concerning such

6-43  services that complies with the provisions of NRS 695G.200 to

6-44  695G.230, inclusive, and sections 21 to 33, inclusive, of this act.

 

7-1  Sec. 17.  NRS 695B.181 is hereby amended to read as follows:

7-2  695B.181  1.  Except as otherwise provided in NRS 695B.182

7-3  and section 16 of this act and subject to the approval of the

7-4  Commissioner, any contract which is authorized pursuant to this

7-5  chapter may include a provision which requires the parties to the

7-6  contract to submit for binding arbitration any dispute between the

7-7  parties concerning any matter directly or indirectly related to, or

7-8  associated with, the contract. If such a provision is included in the

7-9  contract:

7-10      (a) A person who elects to be covered by the contract must be

7-11  given the opportunity to decline to participate in binding arbitration

7-12  at the time he elects to be covered by the contract.

7-13      (b) It must clearly state that the parties to the contract who have

7-14  not declined to participate in binding arbitration agree to forego

7-15  their right to resolve any such dispute in a court of law or equity.

7-16      2.  Except as otherwise provided in subsection 3, the arbitration

7-17  must be conducted pursuant to the rules for commercial arbitration

7-18  established by the American Arbitration Association. The insurer is

7-19  responsible for any administrative fees and expenses relating to the

7-20  arbitration, except that the insurer is not responsible for attorney’s

7-21  fees and fees for expert witnesses unless those fees are awarded by

7-22  the arbitrator.

7-23      3.  If a dispute required to be submitted to binding arbitration

7-24  requires an immediate resolution to protect the physical health of a

7-25  person insured under the contract, any party to the dispute may

7-26  waive arbitration and seek declaratory relief in a court of competent

7-27  jurisdiction.

7-28      4.  If a provision described in subsection 1 is included in a

7-29  contract, the provision shall not be deemed unenforceable as an

7-30  unreasonable contract of adhesion if the provision is included in

7-31  compliance with the provisions of subsection 1.

7-32      Sec. 18.  NRS 695C.260 is hereby amended to read as follows:

7-33      695C.260  Every health maintenance organization shall

7-34  establish a complaint system which complies with the provisions of

7-35  NRS 695G.200 to 695G.230, inclusive[.] , and sections 21 to 33,

7-36  inclusive, of this act.

7-37      Sec. 19.  NRS 695F.230 is hereby amended to read as follows:

7-38      695F.230  1.  Each prepaid limited health service organization

7-39  shall establish a system for the resolution of written complaints

7-40  submitted by enrollees and providers.

7-41      2.  The provisions of subsection 1 do not prohibit an enrollee or

7-42  provider from filing a complaint with the Commissioner or limit the

7-43  Commissioner’s authority to investigate such a complaint.

7-44      3.  Each prepaid limited health service organization that

7-45  provides, delivers, arranges for, pays for or reimburses any cost of

8-1  health care services through managed care shall provide a system

8-2  for resolving complaints of an insured concerning such services

8-3  that complies with the provisions of NRS 695G.200 to 695G.230,

8-4  inclusive, and sections 21 to 33, inclusive, of this act.

8-5  Sec. 20.  Chapter 695G of NRS is hereby amended by adding

8-6  thereto the provisions set forth as sections 21 to 33, inclusive, of this

8-7  act.

8-8  Sec. 21.  As used in NRS 695G.200 to 695G.230, inclusive,

8-9  and sections 21 to 33, inclusive, of this act, unless the context

8-10  otherwise requires, the words and terms defined in sections 22, 23

8-11  and 24 of this act have the meanings ascribed to them in those

8-12  sections.

8-13      Sec. 22.  “Adverse determination” means the decision of a

8-14  managed care organization that an allocation of health care

8-15  resources and services which is provided or proposed to be

8-16  provided to an insured is not medically necessary and appropriate,

8-17  or is experimental or investigational. The term does not include

8-18  the decision of a managed care organization that such an

8-19  allocation is not a covered benefit.

8-20      Sec. 23.  “External review” has the meaning ascribed to it in

8-21  section 5 of this act.

8-22      Sec. 24.  “Independent review organization” has the meaning

8-23  ascribed to it in section 6 of this act.

8-24      Sec. 25.  1.  For the purposes of NRS 695G.200 to 695G.230,

8-25  inclusive, and sections 21 to 33, inclusive, of this act, an adverse

8-26  determination is final if the insured has exhausted all procedures

8-27  provided in the health care plan for reviewing the determination

8-28  within the managed care organization.

8-29      2.  A final adverse determination shall be deemed to exist for

8-30  the purpose of assigning it to an independent review organization

8-31  for external review if:

8-32      (a) An insured has exhausted all procedures provided in the

8-33  health care plan for reviewing a determination within a managed

8-34  care organization, but the managed care organization has failed to

8-35  render a decision within the time allotted by the plan for it to do

8-36  so; or

8-37      (b) A managed care organization assigns a matter concerning

8-38  an insured to an independent review organization for external

8-39  review without requiring the insured to exhaust all procedures

8-40  provided in the health care plan for reviewing the determination

8-41  within the managed care organization.

8-42      Sec. 26.  1.  For the purposes of NRS 695G.200 to 695G.230,

8-43  inclusive, and sections 21 to 33, inclusive, of this act, an allocation

8-44  of health care resources and services that is provided or proposed

9-1  to be provided to an insured is medically necessary and

9-2  appropriate if it is:

9-3  (a) Consistent with the diagnosis and treatment of an insured’s

9-4  illness or injury according to generally accepted standards of

9-5  medical practice;

9-6  (b) Needed to improve a specific health condition of an insured

9-7  or to preserve his existing state of health;

9-8  (c) Clinically appropriate with regard to the type, frequency,

9-9  extent, location and duration of care;

9-10      (d) Not solely for the convenience of the insured, his provider

9-11  of health care, or the hospital or other licensed health care facility

9-12  at which the care takes place; and

9-13      (e) The most clinically appropriate level of health care that can

9-14  be safely provided to the insured.

9-15      2.  An allocation of health care resources and services that is

9-16  provided or proposed to be provided to an insured is not medically

9-17  necessary and appropriate solely because it is prescribed by a

9-18  provider of health care.

9-19      Sec. 27. 1.  A managed care organization shall:

9-20      (a) Develop standards for selecting independent review

9-21  organizations for the performance of external reviews;

9-22      (b) File a copy of those standards with the Commissioner; and

9-23      (c) Upon its initial compliance with paragraph (b), pay the

9-24  Commissioner a fee of $50.

9-25      2.  Except as otherwise provided in subsection 3, a managed

9-26  care organization shall, before it enters into a contract with an

9-27  independent review organization for the performance of external

9-28  reviews, obtain the approval of the Commissioner of the standards

9-29  used by the managed care organization to select independent

9-30  review organizations. The standards must include, without

9-31  limitation:

9-32      (a) Standards to ensure the independence of the independent

9-33  review organizations; and

9-34      (b) Standards to ensure the independence of each employee,

9-35  agent or contractor of the independent review organizations who

9-36  performs external review.

9-37      3.  The Commissioner shall approve or object to the standards

9-38  within 30 days after receiving a copy of the standards from the

9-39  managed care organization. If the Commissioner fails to approve

9-40  or object to the standards within 30 days, the standards shall be

9-41  deemed to be approved.

9-42      Sec. 28. A managed care organization shall:

9-43      1.  Enter into contracts for the performance of external

9-44  reviews with four or more independent review organizations.

10-1      2.  File with the Commissioner a copy of each contract the

10-2  managed care organization enters into with an independent review

10-3  organization for the performance of external reviews.

10-4      3.  Assign requests for external review on a rotating basis

10-5  among the independent review organizations with which it has

10-6  contracts for the performance of external reviews.

10-7      Sec. 29.  1.  A managed care organization shall grant a

10-8  request for external review of a final adverse determination if:

10-9      (a) The insured or an authorized representative of the insured

10-10  serves a request for external review, in writing, on the managed

10-11  care organization not more than 60 days after the insured receives

10-12  actual notice of the final adverse determination; and

10-13     (b) Providing the health care service is likely to involve a cost

10-14  to the managed care organization greater than $500.

10-15     2.  A managed care organization may request an external

10-16  review.

10-17     Sec. 30.  1.  Except as otherwise provided in section 31 of

10-18  this act, if a managed care organization grants a request for

10-19  external review of a final adverse determination, it shall:

10-20     (a) Assign the request to an independent review organization

10-21  not later than 5 working days thereafter; and

10-22     (b) Provide that independent review organization with all

10-23  relevant documents in its possession not later than 5 working days

10-24  after the date of the assignment.

10-25     2.  An independent review organization that accepts a request

10-26  for external review shall:

10-27     (a) Demand any additional documents or other evidence not

10-28  later than 5 working days after it receives the documents submitted

10-29  by the managed care organization pursuant to subsection 1;

10-30     (b) Complete its external review not later than 15 days after it

10-31  receives all documents and other evidence provided or demanded

10-32  pursuant to this section unless the insured and the managed care

10-33  organization consent to a longer period of time;

10-34     (c) Provide notification of its decision to the insured, his

10-35  provider of health care and the managed care organization not

10-36  later than 5 working days after the external review is completed;

10-37  and

10-38     (d) Provide its decision in writing to the insured, his provider

10-39  of health care and the managed care organization not later than 5

10-40  working days after the notification is given.

10-41     Sec. 31.  1.  A managed care organization shall grant a

10-42  request for external review of a final adverse determination on an

10-43  expedited basis if:

10-44     (a) Requested by an insured or an insured’s provider of health

10-45  care; and

11-1      (b) The insured’s provider of health care substantiates that

11-2  failure to proceed on an expedited basis could jeopardize the life

11-3  or health of the insured.

11-4      2.  A managed care organization shall grant or deny a request

11-5  for external review on an expedited basis not later than 72 hours

11-6  after it receives substantiation from the insured’s provider of

11-7  health care that failure to proceed on an expedited basis could

11-8  jeopardize the life or health of the insured.

11-9      3.  If a managed care organization grants a request for

11-10  external review on an expedited basis, it shall:

11-11     (a) Assign the request to an independent review organization

11-12  not later than 1 working day thereafter; and

11-13     (b) Provide that independent review organization with all

11-14  relevant documents in its possession at the time it assigns the

11-15  request.

11-16     4.  An independent review organization that accepts an

11-17  assignment for external review on an expedited basis shall:

11-18     (a) Complete its external review not later than 2 working days

11-19  after the independent review organization receives the assignment

11-20  unless the insured and the managed care organization consent to

11-21  a longer period of time;

11-22     (b) Provide notification of its decision by telephone to the

11-23  insured, his provider of health care and the managed care

11-24  organization not later than 1 working day after the external review

11-25  is completed; and

11-26     (c) Provide its decision in writing to the insured, his provider

11-27  of health care and the managed care organization not later than 5

11-28  working days after the external review is completed.

11-29     Sec. 32.  The decision of an independent review organization

11-30  on a request for external review must be based on:

11-31     1.  Documentary evidence provided by the parties pursuant to

11-32  section 30 or 31 of this act.

11-33     2.  Medical evidence, including, without limitation:

11-34     (a) The likelihood that the health care service, if provided,

11-35  would produce a significant positive outcome;

11-36     (b) Professional standards of safety and effectiveness for

11-37  diagnosis, care and treatment that are generally recognized in the

11-38  United States;

11-39     (c) Reports in peer-reviewed literature;

11-40     (d) Evidence-based medicine, including, without limitation,

11-41  reports and guidelines published by nationally recognized

11-42  professional organizations that include supporting scientific data;

11-43  and

12-1      (e) Opinions of independent physicians who are experts in the

12-2  health specialty involved to the extent that the opinions are based

12-3  on the consensus of physicians who practice in that specialty.

12-4      3.  The terms and conditions regarding benefits set forth in

12-5  the evidence of coverage issued by the managed care organization

12-6  to the insured.

12-7      Sec. 33.  If the decision of an independent review

12-8  organization on a request for external review is in favor of the

12-9  insured, the decision is final, conclusive and binding upon the

12-10  managed care organization.

12-11     Sec. 34.  NRS 695G.080 is hereby amended to read as follows:

12-12     695G.080  1.  “Utilization review” means the various methods

12-13  that may be used by a managed care organization to review the

12-14  amount and appropriateness of the provision of a specific health

12-15  care service to an insured.

12-16     2.  The term does not include an external review conducted

12-17  pursuant to NRS 695G.200 to 695G.230, inclusive, and sections 21

12-18  to 33, inclusive, of this act.

12-19     Sec. 35.  NRS 695G.200 is hereby amended to read as follows:

12-20     695G.200  1.  Each managed care organization shall establish

12-21  a system for resolving complaints of an insured concerning:

12-22     (a) Payment or reimbursement for covered health care services;

12-23     (b) Availability, delivery or quality of covered health care

12-24  services, including, without limitation, an adverse determination

12-25  made pursuant to utilization review[;] or a final adverse

12-26  determination; or

12-27     (c) The terms and conditions of a health care plan.

12-28  The system must be approved by the Commissioner in consultation

12-29  with the State Board of Health.

12-30     2.  If an insured makes an oral complaint, a managed care

12-31  organization shall inform the insured that if he is not satisfied with

12-32  the resolution of the complaint, he must file the complaint in writing

12-33  to receive further review of the complaint.

12-34     3.  Each managed care organization shall:

12-35     (a) Upon request, assign an employee of the managed care

12-36  organization to assist an insured or other person in filing a complaint

12-37  , [or] appealing a decision of the review board[;] or requesting an

12-38  external review;

12-39     (b) Authorize an insured who appeals a decision of the review

12-40  board to appear before the review board to present testimony at a

12-41  hearing concerning the appeal; and

12-42     (c) Authorize an insured to introduce any documentation into

12-43  evidence at a hearing of a review board and require an insured to

12-44  provide the documentation required by his health care plan to the

13-1  review board not later than 5 [business] working days before a

13-2  hearing of the review board.

13-3      4.  The Commissioner or the State Board of Health may

13-4  examine the system for resolving complaints established pursuant to

13-5  this section at such times as either deems necessary or appropriate.

13-6      Sec. 36.  NRS 695G.210 is hereby amended to read as follows:

13-7      695G.210  1.  A system for resolving complaints created

13-8  pursuant to NRS 695G.200 to 695G.230, inclusive, and sections 21

13-9  to 33, inclusive, of this act must include, without limitation, an

13-10  initial investigation, a review of the complaint by a review board ,

13-11  [and] a procedure for appealing a decision of a review board and

13-12  procedures for obtaining an external review of a final adverse

13-13  determination . [regarding the complaint.] The majority of the

13-14  members of [the] each review board must be insureds who receive

13-15  health care services from the managed care organization.

13-16     2.  Except as otherwise provided in subsection 3, a review

13-17  board shall complete its review regarding a complaint or appeal and

13-18  notify the insured of its determination not later than 30 days after

13-19  the complaint or appeal is filed, unless the insured and the review

13-20  board have agreed to a longer period of time.

13-21     3.  If a complaint involves an imminent and serious threat to the

13-22  health of the insured, the managed care organization shall inform the

13-23  insured immediately of his right to an expedited review of his

13-24  complaint[.] by a review board. If an expedited review is required,

13-25  the review board shall notify the insured in writing of its

13-26  determination within 72 hours after the complaint is filed.

13-27     4.  Notice provided to an insured by a review board regarding a

13-28  complaint must include, without limitation, an explanation of any

13-29  further rights of the insured regarding the complaint that are

13-30  available under his health care plan.

13-31     Sec. 37.  NRS 695G.220 is hereby amended to read as follows:

13-32     695G.220  1.  Each managed care organization shall submit to

13-33  the Commissioner and the State Board of Health an annual report

13-34  regarding its system for resolving complaints established pursuant to

13-35  NRS 695G.200 to 695G.230, inclusive, and sections 21 to 33,

13-36  inclusive, of this act. The report must be on a form prescribed by

13-37  the Commissioner in consultation with the State Board of Health

13-38  which includes, without limitation:

13-39     (a) A description of the procedures used for resolving

13-40  complaints of an insured;

13-41     (b) The total number of complaints , [and] appeals and requests

13-42  for external review handled through the system for resolving

13-43  complaints since the last report and a compilation of the causes

13-44  underlying the complaints filed;

14-1      (c) The current status of each complaint , [and] appeal and

14-2  request for external review filed; and

14-3      (d) The average amount of time that was needed to resolve a

14-4  complaint . [and an appeal, if any.]

14-5      2.  Each managed care organization shall maintain records of

14-6  complaints filed with it which concern something other than health

14-7  care services and shall submit to the Commissioner a report

14-8  summarizing [such] the complaints at such times and in such format

14-9  as the Commissioner may require.

14-10     Sec. 38.  NRS 695G.230 is hereby amended to read as follows:

14-11     695G.230  1.  Following approval by the Commissioner, each

14-12  managed care organization shall provide written notice to an

14-13  insured, in clear and comprehensible language that is understandable

14-14  to an ordinary layperson, explaining the [right] rights of the insured

14-15  [to file a written complaint and to obtain an expedited review

14-16  pursuant to NRS 695G.210.] under the system for resolving

14-17  complaints established pursuant to NRS 695G.200 to 695G.230,

14-18  inclusive, and sections 21 to 33, inclusive, of this act. Such notice

14-19  must be provided to an insured:

14-20     (a) At the time he receives his certificate of coverage or

14-21  evidence of coverage;

14-22     (b) Any time that the managed care organization denies

14-23  coverage of a health care service or limits coverage of a health care

14-24  service to an insured; and

14-25     (c) Any other time deemed necessary by the Commissioner.

14-26     2.  Any time that a managed care organization denies coverage

14-27  of a health care service to an insured, including, without limitation,

14-28  a health maintenance organization that denies a claim related to a

14-29  health care plan pursuant to NRS 695C.185, it shall notify the

14-30  insured in writing within 10 working days after it denies coverage of

14-31  the health care service of:

14-32     (a) The reason for denying coverage of the service;

14-33     (b) The criteria by which the managed care organization or

14-34  insurer determines whether to authorize or deny coverage of the

14-35  health care service; and

14-36     (c) His [right to file a written complaint and the procedure for

14-37  filing such a complaint.] rights under the system for resolving

14-38  complaints established pursuant to NRS 695G.200 to 695G.230,

14-39  inclusive, and sections 21 to 33, inclusive, of this act and the

14-40  procedures for exercising those rights.

14-41     3.  A written notice which is approved by the Commissioner

14-42  shall be deemed to be in clear and comprehensible language that is

14-43  understandable to an ordinary layperson.

 

 

15-1      Sec. 39.  Chapter 287 of NRS is hereby amended by adding

15-2  thereto a new section to read as follows:

15-3      A health insurance program offered by the Board that

15-4  provides, delivers, arranges for, pays for or reimburses any cost of

15-5  health care services through managed care must provide a system

15-6  for resolving complaints of an insured concerning such services

15-7  that complies with the provisions of NRS 695G.200 to 695G.230,

15-8  inclusive, and sections 21 to 33, inclusive, of this act.

15-9      Sec. 40.  NRS 287.010 is hereby amended to read as follows:

15-10     287.010  1.  The governing body of any county, school

15-11  district, municipal corporation, political subdivision, public

15-12  corporation or other public agency of the State of Nevada may:

15-13     (a) Adopt and carry into effect a system of group life, accident

15-14  or health insurance, or any combination thereof, for the benefit of its

15-15  officers and employees, and the dependents of officers and

15-16  employees who elect to accept the insurance and who, where

15-17  necessary, have authorized the governing body to make deductions

15-18  from their compensation for the payment of premiums on the

15-19  insurance.

15-20     (b) Purchase group policies of life, accident or health insurance,

15-21  or any combination thereof, for the benefit of such officers and

15-22  employees, and the dependents of such officers and employees, as

15-23  have authorized the purchase, from insurance companies authorized

15-24  to transact the business of such insurance in the State of Nevada,

15-25  and, where necessary, deduct from the compensation of officers and

15-26  employees the premiums upon insurance and pay the deductions

15-27  upon the premiums.

15-28     (c) Provide group life, accident or health coverage through a

15-29  self-insurance reserve fund and, where necessary, deduct

15-30  contributions to the maintenance of the fund from the compensation

15-31  of officers and employees and pay the deductions into the fund. The

15-32  money accumulated for this purpose through deductions from

15-33  the compensation of officers and employees and contributions of the

15-34  governing body must be maintained as an internal service fund as

15-35  defined by NRS 354.543. The money must be deposited in a state or

15-36  national bank or credit union authorized to transact business in the

15-37  State of Nevada. Any independent administrator of a fund created

15-38  under this section is subject to the licensing requirements of chapter

15-39  683A of NRS, and must be a resident of this state. Any contract

15-40  with an independent administrator must be approved by the

15-41  Commissioner of Insurance as to the reasonableness of

15-42  administrative charges in relation to contributions collected and

15-43  benefits provided. The provisions of NRS 689B.030 to 689B.050,

15-44  inclusive, and 689B.575 apply to coverage provided pursuant to this

16-1  paragraph, except that the provisions of NRS 689B.0359 do not

16-2  apply to such coverage.

16-3      (d) Defray part or all of the cost of maintenance of a self-

16-4  insurance fund or of the premiums upon insurance. The money for

16-5  contributions must be budgeted for in accordance with the laws

16-6  governing the county, school district, municipal corporation,

16-7  political subdivision, public corporation or other public agency of

16-8  the State of Nevada.

16-9      2.  If a school district offers group insurance to its officers and

16-10  employees pursuant to this section, members of the board of trustees

16-11  of the school district must not be excluded from participating in the

16-12  group insurance. If the amount of the deductions from compensation

16-13  required to pay for the group insurance exceeds the compensation to

16-14  which a trustee is entitled, the difference must be paid by the trustee.

16-15     3.  All group insurance offered pursuant to this section that

16-16  provides, delivers, arranges for, pays for or reimburses any cost of

16-17  health care services through managed care must provide a system

16-18  for resolving complaints of an insured concerning such services

16-19  that complies with the provisions of NRS 695G.200 to 695G.230,

16-20  inclusive, and sections 21 to 33, inclusive, of this act.

16-21     Sec. 41.  NRS 287.0402 is hereby amended to read as follows:

16-22     287.0402  As used in NRS 287.0402 to 287.049, inclusive, and

16-23  section 39 of this act, unless the context otherwise requires, the

16-24  words and terms defined in NRS 287.0404 and 287.0406 have the

16-25  meanings ascribed to them in those sections.

16-26     Sec. 42.  The amendatory provisions of this act apply to all

16-27  policies, contracts and plans for health insurance, managed care or

16-28  the provision of health care services entered into or renewed on or

16-29  after July 1, 2004.

16-30     Sec. 43.  This act becomes effective on July 1, 2004.

 

16-31  H