Home > 106th Congressional Bills > S. 3058 (pcs) To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to protect consumers in managed care plans and other health coverage. [Placed on Calendar Senate] %%Filename:...S. 3058 (pcs) To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to protect consumers in managed care plans and other health coverage. [Placed on Calendar Senate] %%Filename:...
determination on a claim for benefit under paragraph (1),
(2)(A), or (3) by the applicable deadline established under the
respective paragraph, the failure shall be treated under this
subtitle as a denial of the claim as of the date of the
deadline.
(5) Reference to special rules for emergency services,
maintenance care, and post-stabilization care.--For waiver of
prior authorization requirements in certain cases involving
emergency services and maintenance care and post-stabilization
care, see subsections (a)(1) and (b) of section 113,
respectively.
(e) Notice of Denials of Claims for Benefits.--
(1) In general.--Notice of a denial of claims for benefits
under a utilization review program shall be provided in printed
form and written in a manner calculated to be understood by the
participant, beneficiary, or enrollee and shall include--
(A) the reasons for the denial (including the
clinical rationale);
(B) instructions on how to initiate an appeal under
section 102; and
(C) notice of the availability, upon request of the
individual (or the individual's designee) of the
clinical review criteria relied upon to make such
denial.
(2) Specification of any additional information.--Such a
notice shall also specify what (if any) additional necessary
information must be provided to, or obtained by, the person
making the denial in order to make a decision on such an
appeal.
(f) Claim for Benefits and Denial of Claim for Benefits Defined.--
For purposes of this subtitle:
(1) Claim for benefits.--The term ``claim for benefits''
means any request for coverage (including authorization of
coverage), for eligibility, or for payment in whole or in part,
for an item or service under a group health plan or health
insurance coverage.
(2) Denial of claim for benefits.--The term ``denial''
means, with respect to a claim for benefits, means a denial, or
a failure to act on a timely basis upon, in whole or in part,
the claim for benefits and includes a failure to provide
benefits (including items and services) required to be provided
under this title.
SEC. 102. INTERNAL APPEALS PROCEDURES.
(a) Right of Review.--
(1) In general.--Each group health plan, and each health
insurance issuer offering health insurance coverage--
(A) shall provide adequate notice in writing to any
participant or beneficiary under such plan, or enrollee
under such coverage, whose claim for benefits under the
plan or coverage has been denied (within the meaning of
section 101(f)(2)), setting forth the specific reasons
for such denial of claim for benefits and rights to any
further review or appeal, written in a manner
calculated to be understood by the participant,
beneficiary, or enrollee; and
(B) shall afford such a participant, beneficiary,
or enrollee (and any provider or other person acting on
behalf of such an individual with the individual's
consent or without such consent if the individual is
medically unable to provide such consent) who is
dissatisfied with such a denial of claim for benefits a
reasonable opportunity (of not less than 180 days) to
request and obtain a full and fair review by a named
fiduciary (with respect to such plan) or named
appropriate individual (with respect to such coverage)
of the decision denying the claim.
(2) Treatment of oral requests.--The request for review
under paragraph (1)(B) may be made orally, but, in the case of
an oral request, shall be followed by a request in writing.
(b) Internal Review Process.--
(1) Conduct of review.--
(A) In general.--A review of a denial of claim
under this section shall be made by an individual who--
(i) in a case involving medical judgment,
shall be a physician or, in the case of limited
scope coverage (as defined in subparagraph (B),
shall be an appropriate specialist;
(ii) has been selected by the plan or
issuer; and
(iii) did not make the initial denial in
the internally appealable decision.
(B) Limited scope coverage defined.--For purposes
of subparagraph (A), the term ``limited scope
coverage'' means a group health plan or health
insurance coverage the only benefits under which are
for benefits described in section 2791(c)(2)(A) of the
Public Health Service Act (42 U.S.C. 300gg-91(c)(2)).
(2) Time limits for internal reviews.--
(A) In general.--Having received such a request for
review of a denial of claim, the plan or issuer shall,
in accordance with the medical exigencies of the case
but not later than the deadline specified in
subparagraph (B), complete the review on the denial and
transmit to the participant, beneficiary, enrollee, or
other person involved a decision that affirms,
reverses, or modifies the denial. If the decision does
not reverse the denial, the plan or issuer shall
transmit, in printed form, a notice that sets forth the
grounds for such decision and that includes a
description of rights to any further appeal. Such
decision shall be treated as the final decision of the
plan. Failure to issue such a decision by such deadline
shall be treated as a final decision affirming the
denial of claim.
(B) Deadline.--
(i) In general.--Subject to clauses (ii)
and (iii), the deadline specified in this
subparagraph is 14 days after the date of
receipt of the request for internal review.
(ii) Extension permitted where notice of
additional information required.--If a group
health plan or health insurance issuer--
(I) receives a request for internal
review;
(II) determines that additional
information is necessary to complete
the review and make the determination
on the request; and
(III) notifies the requester, not
later than five business days after the
date of receiving the request, of the
need for such specified additional
information,
the deadline specified in this subparagraph is
14 days after the date the plan or issuer
receives the specified additional information,
but in no case later than 28 days after the
date of receipt of the request for the internal
review. This clause shall not apply if the
deadline is specified in clause (iii).
(iii) Expedited cases.--In the case of a
situation described in subsection (c)(1)(A),
the deadline specified in this subparagraph is
72 hours after the time of the request for
review.
(c) Expedited Review Process.--
(1) In general.--A group health plan, and a health
insurance issuer, shall establish procedures in writing for the
expedited consideration of requests for review under subsection
(b) in situations--
(A) in which the application of the normal
timeframe for making a determination could seriously
jeopardize the life or health of the participant,
beneficiary, or enrollee or such an individual's
ability to regain maximum function; or
(B) described in section 101(d)(2) (relating to
requests for continuation of ongoing care which would
otherwise be reduced or terminated).
(2) Process.--Under such procedures--
(A) the request for expedited review may be
submitted orally or in writing by an individual or
provider who is otherwise entitled to request the
review;
(B) all necessary information, including the plan's
or issuer's decision, shall be transmitted between the
plan or issuer and the requester by telephone,
facsimile, or other similarly expeditious available
method; and
(C) the plan or issuer shall expedite the review in
the case of any of the situations described in
subparagraph (A) or (B) of paragraph (1).
(3) Deadline for decision.--The decision on the expedited
review must be made and communicated to the parties as soon as
possible in accordance with the medical exigencies of the case,
and in no event later than 72 hours after the time of receipt
of the request for expedited review, except that in a case
described in paragraph (1)(B), the decision must be made before
the end of the approved period of care.
(d) Waiver of Process.--A plan or issuer may waive its rights for
an internal review under subsection (b). In such case the participant,
beneficiary, or enrollee involved (and any designee or provider
involved) shall be relieved of any obligation to complete the review
involved and may, at the option of such participant, beneficiary,
enrollee, designee, or provider, proceed directly to seek further
appeal through any applicable external appeals process.
SEC. 103. EXTERNAL APPEALS PROCEDURES.
(a) Right to External Appeal.--
(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
provide for an external appeals process that meets the
requirements of this section in the case of an externally
appealable decision described in paragraph (2), for which a
timely appeal is made either by the plan or issuer or by the
participant, beneficiary, or enrollee (and any provider or
other person acting on behalf of such an individual with the
individual's consent or without such consent if such an
individual is medically unable to provide such consent). The
appropriate Secretary shall establish standards to carry out
such requirements.
(2) Externally appealable decision defined.--
(A) In general.--For purposes of this section, the
term ``externally appealable decision'' means a denial
of claim for benefits (as defined in section
101(f)(2))--
(i) that is based in whole or in part on a
decision that the item or service is not
medically necessary or appropriate or is
investigational or experimental; or
(ii) in which the decision as to whether a
benefit is covered involves a medical judgment.
(B) Inclusion.--Such term also includes a failure
to meet an applicable deadline for internal review
under section 102.
(C) Exclusions.--Such term does not include--
(i) specific exclusions or express
limitations on the amount, duration, or scope
of coverage that do not involve medical
judgment; or
(ii) a decision regarding whether an
individual is a participant, beneficiary, or
enrollee under the plan or coverage.
(3) Exhaustion of internal review process.--Except as
provided under section 102(d), a plan or issuer may condition
the use of an external appeal process in the case of an
externally appealable decision upon a final decision in an
internal review under section 102, but only if the decision is
made in a timely basis consistent with the deadlines provided
under this subtitle.
(4) Filing fee requirement.--
(A) In general.--Subject to subparagraph (B), a
plan or issuer may condition the use of an external
appeal process upon payment to the plan or issuer of a
filing fee that does not exceed $25.
(B) Exception for indigency.--The plan or issuer
may not require payment of the filing fee in the case
of an individual participant, beneficiary, or enrollee
who certifies (in a form and manner specified in
guidelines established by the Secretary of Health and
Human Services) that the individual is indigent (as
defined in such guidelines).
(C) Refunding fee in case of successful appeals.--
The plan or issuer shall refund payment of the filing
fee under this paragraph if the recommendation of the
external appeal entity is to reverse or modify the
denial of a claim for benefits which is the subject of
the appeal.
(b) General Elements of External Appeals Process.--
(1) Contract with qualified external appeal entity.--
(A) Contract requirement.--Except as provided in
subparagraph (D), the external appeal process under
this section of a plan or issuer shall be conducted
under a contract between the plan or issuer and one or
more qualified external appeal entities (as defined in
subsection (c)).
(B) Limitation on plan or issuer selection.--The
applicable authority shall implement procedures--
(i) to assure that the selection process
among qualified external appeal entities will
not create any incentives for external appeal
entities to make a decision in a biased manner;
and
(ii) for auditing a sample of decisions by
such entities to assure that no such decisions
are made in a biased manner.
(C) Other terms and conditions.--The terms and
conditions of a contract under this paragraph shall be
consistent with the standards the appropriate Secretary
shall establish to assure there is no real or apparent
conflict of interest in the conduct of external appeal
activities. Such contract shall provide that all costs
of the process (except those incurred by the
participant, beneficiary, enrollee, or treating
professional in support of the appeal) shall be paid by
the plan or issuer, and not by the participant,
beneficiary, or enrollee. The previous sentence shall
not be construed as applying to the imposition of a
filing fee under subsection (a)(4).
(D) State authority with respect qualified external
appeal entity for health insurance issuers.--With
respect to health insurance issuers offering health
insurance coverage in a State, the State may provide
for external review activities to be conducted by a
qualified external appeal entity that is designated by
the State or that is selected by the State in a manner
determined by the State to assure an unbiased
determination.
(2) Elements of process.--An external appeal process shall
be conducted consistent with standards established by the
appropriate Secretary that include at least the following:
(A) Fair and de novo determination.--The process
shall provide for a fair, de novo determination.
However, nothing in this paragraph shall be construed
as providing for coverage of items and services for
which benefits are specifically excluded under the plan
or coverage.
(B) Standard of review.--An external appeal entity
shall determine whether the plan's or issuer's decision
is in accordance with the medical needs of the patient
involved (as determined by the entity) taking into
account, as of the time of the entity's determination,
the patient's medical condition and any relevant and
reliable evidence the entity obtains under subparagraph
(D). If the entity determines the decision is in
accordance with such needs, the entity shall affirm the
decision and to the extent that the entity determines
the decision is not in accordance with such needs, the
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