Independent Medical Review Act of 1999

Summary: Requires group health plan claims procedures to include procedures for a fair, de novo determination of medical necessity by the independent review organization without regard to the definition used by the plan, as well as notifications to participants or beneficiaries of their rights to: (1) appeal adverse determinations to utilization review agents of the plan; (2) appeal adverse determinations of such utilization review agents to independent review organizations (with procedures for such appeal); and (3) obtain immediate review by an independent review organization in cases of  life-threatening conditions (with procedures for obtaining such review).
Sets forth requirements for: (1) procedures for appeals of adverse decisions to the plan's utilization review agent; (2) the independent review process; and (3) certification of independent review organizations by the Secretary of Labor.
Treats the independent review organization's determination as the final decision of the plan, but allows a court to vacate or modify such determination under certain circumstances.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Independent Medical Review Act of 
1999''.

SEC. 2. SPECIAL RULES FOR GROUP HEALTH PLANS.

    Section 503 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1133) is amended--
            (1) by inserting ``(a) In General.--'' after ``Sec. 503.'';
            (2) by inserting ``(other than a group health plan)'' after 
        ``employee benefit plan''; and
            (3) by adding at the end the following new subsections:
    ``(b) Special Rules for Group Health Plans.--
            ``(1) In general.--The claims procedures required by this 
        section shall include--
                    ``(A) notification to a participant or beneficiary 
                of the participant or beneficiary's right to appeal an 
                adverse determination to a utilization review agent;
                    ``(B) notification to a participant or beneficiary 
                of the participant or beneficiary's right to appeal an 
                adverse determination of a utilization review agent to 
                an independent review organization;
                    ``(C) notification to a participant or beneficiary 
                of the procedures for appealing an adverse 
                determination to an independent review organization;
                    ``(D) notification to a participant or beneficiary 
                who has a life-threatening condition of the participant 
                or beneficiary's right to immediate review by an 
                independent review organization and the procedures to 
                obtain such review; and
                    ``(E) procedures for a fair, de novo determination 
                of medical necessity by the independent review 
                organization without regard to the definition used by 
                the plan.
    ``(c) Appeal of Adverse Determination.--In a case in which an 
employee benefit plan denies a claim for benefits under the plan to a 
participant or beneficiary, such participant or beneficiary may appeal 
such adverse determination to a utilization review agent. The 
procedures for appeals shall be reasonable and shall include the 
following:
            ``(1) A provision indicating that a participant or 
        beneficiary, a person acting on behalf of the participant or 
        beneficiary, or the participant or beneficiary's physician or 
        health care provider may appeal the adverse determination 
        orally or in writing.
            ``(2) A provision that the utilization review agent shall 
        send to the appealing party, within 5 working days after 
        receipt of a written appeal, a letter acknowledging the date of 
        the utilization review agent's receipt of the appeal and 
        including a reasonable list of documents needed to be submitted 
        by the appealing party to the utilization review agent for the 
        appeal.
            ``(3) In a case in which a utilization review agent 
        receives an oral appeal of adverse determination, the 
        utilization review agent shall send a one page appeal form to 
        the appealing party.
            ``(4) A provision that appeal decisions shall be made by a 
        physician, provided that, if the appeal is denied and within 10 
        working days the health care provider sets forth in writing 
        good cause for having a particular type of a specialty provider 
        review the case, the denial shall be reviewed by a health care 
        provider in the same or similar specialty as typically manages 
        the medical, dental, or specialty condition, procedure, or 
        treatment under discussion for review of the adverse 
        determination, and such specialty review shall be completed 
        within 15 working days of receipt of the request.
            ``(5) A method for an expedited appeal procedure for 
        emergency care denials, denials of care for life threatening 
        conditions, and denials of continued stays for hospitalized 
        patients. Such procedure shall include a review by a health 
        care provider who has not previously reviewed the case who is 
        of the same or a similar specialty as typically manages the 
        medical condition, procedure, or treatment under review. The 
        time frame in which such appeal must be completed shall be 
        based on the medical or dental immediacy of the condition, 
        procedure, or treatment, but may in no event exceed one working 
        day from the date all information necessary to complete the 
        appeal is received.
            ``(6) A provision that after the utilization review agent 
        has sought review of the appeal of the adverse determination, 
        the utilization review agent shall issue a response letter to 
        the patient, person acting on behalf of the patient, or the 
        patient's physician or health care provider explaining the 
        resolution of the appeal. Such letter shall include a statement 
        of the specific medical, dental, or contractual reasons for the 
        resolution, the clinical basis for such decision, and the 
        specialization of any physician or other provider consulted.
            ``(7) Written notification to the appealing party of the 
        determination of the appeal, as soon as practical, but in no 
        case later than 30 days after the date of the utilization 
        review agent receives the appeal.
    ``(d) Independent Review of Adverse Determinations.--
            ``(1) In general.--In a case in which an appeal of an 
        adverse determination is denied by a utilization review agent, 
        a participant or beneficiary may seek review of such adverse 
        determination from an independent review organization.
            ``(2) Elements of independent review process.--
                    ``(A) In general.--The independent review process 
                under this subsection shall be conducted by an 
                independent review organization and shall ensure--
                            ``(i) a timely response by the independent 
                        review organization;
                            ``(ii) confidentiality of medical records 
                        transmitted for use in the review process;
                            ``(iii) the independence of each health 
                        care provider or physician making review 
                        determinations as part of an independent review 
                        organization; and
                            ``(iv) timely notice to the participant or 
                        beneficiary of the results of the independent 
                        review, including the clinical basis for the 
                        determination.
                    ``(B) Information provided to the independent 
                review organization.--Not later than 3 business days 
                after the date that an independent review organization 
                receives a request for a review of an adverse 
                determination of a utilization review agent, such 
                utilization review agent shall provide to the 
                appropriate independent review organization--
                            ``(i) any medical records of the 
                        participant or beneficiary that are relevant to 
                        the review;
                            ``(ii) any documents used by the 
                        utilization review agent in making the 
                        determination that is to be reviewed by the 
                        organization;
                            ``(iii) written notification to the 
                        participant or beneficiary indicating the 
                        clinical basis for the denial of the appeal;
                            ``(iv) any documentation and written 
                        information submitted to the utilization review 
                        agent in support of the appeal; and
                            ``(v) a list of each physician or health 
                        care provider who has provided care to the 
                        participant or beneficiary and who may have 
                        medical records relevant to the appeal.
                    ``(C) Timelines for determinations by independent 
                review organization.--
                            ``(i) In general.--An independent review 
                        organization shall make its determination not 
                        later than the earlier of--
                                    ``(I) the 15th day after the date 
                                the independent review organization 
                                receives the information necessary to 
                                make the determination; or
                                    ``(II) the 20th day after the date 
                                the independent review organization 
                                receives the request that the 
                                determination be made.
                            ``(ii) Life-threatening condition.--In the 
                        case of a life-threatening condition, an 
                        independent review organization shall make its 
                        determination not later than the earlier of--
                                    ``(I) the 5th day after the date 
                                the independent review organization 
                                receives the information necessary to 
                                make the determination; or
                                    ``(II) the 8th day after the date 
                                the independent review organization 
                                receives the request that the 
                                determination be made.
            ``(3) Certification of independent review organizations.--
                    ``(A) In general.--To be treated as an independent 
                review organization, an organization must be certified 
                by the Secretary.
                    ``(B) Application for certification.--To be 
                certified by the Secretary as an independent review 
                organization, an organization shall submit on an annual 
                basis to the Secretary an application which shall 
                include the following information:
                            ``(i) Any applicant that is a publicly held 
                        organization shall include the name of each 
                        stockholder or owner of more than 5 percent of 
                        any stock or options.
                            ``(ii) The name and type of business of 
                        each corporation or other organization that the 
                        applicant controls or is affiliated with and 
                        the nature and extent of the affiliation or 
                        control.
                            ``(iii) The name of any holder of bonds or 
                        notes of the applicant that exceed $100,000.
                            ``(iv) The name and a biographical sketch 
                        of each director, officer, and executive of the 
                        applicant.
                            ``(v) A description of any relationship the 
                        individuals in clauses (iii) and (iv) have 
                        with--
                                    ``(I) a provider of health 
                                insurance coverage;
                                    ``(II) a health maintenance 
                                organization;
                                    ``(III) a utilization review agent;
                                    ``(IV) a nonprofit health 
                                corporation;
                                    ``(V) a payor;
                                    ``(VI) a health care provider; or
                                    ``(VII) a group representing any of 
                                the entities described in subclauses 
                                (I) through (VII).
                            ``(vi) The percentage of the applicant's 
                        revenues that are anticipated to be derived 
                        from reviews conducted under this subsection.
                            ``(vii) A description of the areas of 
                        expertise of the health care professionals 
                        making review determinations for the applicant.
                            ``(viii) The procedures to be used by the 
                        independent review organization in making 
                        review determinations with respect to reviews 
                        conducted under this section.
            ``(4) Independent review determination binding on plan.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                determination by an independent review organization 
                under this subsection shall be treated as the final 
                decision of the plan.
                    ``(B) Vacation or modification of decision.--The 
                determination by an independent review entity under 
                this section may be vacated or modified by a court 
                under the same circumstances as the decision of an 
                arbitrator may be vacated or modified under sections 10 
                and 11 of title 9, United States Code.
            ``(5) Independence requirement.--An independent review 
        organization may not be a subsidiary of, or in any way owned or 
        controlled by a payor or a trade or professional association of 
        a payor.
            ``(6) Waiver of liability.--An independent review 
        organization conducting a review under this section is not 
        liable for damages arising from the determination made by the 
        organization.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Adverse determination.--The term `adverse 
        determination' means determination by a group health plan or a 
        utilization review agent that the health care services 
        furnished or proposed to be furnished to a participant or 
        beneficiary are not medically necessary.
            ``(2) Health care provider.--The term `health care 
        provider' means--
                    ``(A) any individual who is engaged in the delivery 
                of health care services in a State and who is required 
                by State law or regulation to be licensed or certified 
                by the State to engage in the delivery of such services 
                in the State; and
                    ``(B) any entity that is engaged in the delivery of 
                health care services in a State and that, if it is 
                required by State law or regulation to be licensed or 
                certified by the State to engage in the delivery of 
                such services in the State, is so licensed.
            ``(3) Life-threatening condition.--The term `life-
        threatening condition' means a disease or other medical 
        condition with respect to which death or serious bodily injury 
        is probable unless the course of the disease or condition is 
        interrupted.
            ``(4) Payor.--The term `payor' means--
                    ``(A) an insurer writing health insurance policies;
                    ``(B) any preferred provider organization, or 
                health maintenance organization, self-insurance plan; 
                or
                    ``(C) any person or entity that provides, offers to 
                provide, or administers hospital, outpatient, medical, 
                or other health benefits to an individual treated by a 
                health care provider.
            ``(5) Utilization review agent.--The term `utilization 
        review agent' means an entity that conducts utilization review 
        for--
                    ``(A) an employer with employees who are covered 
                under a group health plan;
                    ``(B) a payor; or
                    ``(C) an administrator.
            ``(6) Working day.--The term `working day' means a weekday, 
        excluding any legal holiday.''.