I

106TH CONGRESS

1ST SESSION H. R. 2309

To require group health plans and health insurance issuers to provide

independent review of adverse coverage determinations.

IN THE HOUSE OF REPRESENTATIVES

JUNE 22, 1999

Mr. SESSIONS introduced the following bill; which was referred to the

Committee on Education and the Workforce

A BILL

To require group health plans and health insurance issuers

to provide independent review of adverse coverage determinations.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Independent Medical

5 Review Act of 1999’’.

6 SEC. 2. SPECIAL RULES FOR GROUP HEALTH PLANS.

7 Section 503 of the Employee Retirement Income Se8 curity Act of 1974 (29 U.S.C. 1133) is amended—

9 (1) by inserting ‘‘(a) IN GENERAL.—’’ after

10 ‘‘SEC. 503.’’;
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1 (2) by inserting ‘‘(other than a group health

2 plan)’’ after ‘‘employee benefit plan’’; and

3 (3) by adding at the end the following new sub4 sections:

5 ‘‘(b) SPECIAL RULES FOR GROUP HEALTH PLANS.—

6 ‘‘(1) IN GENERAL.—The claims procedures re7 quired by this section shall include—

8 ‘‘(A) notification to a participant or bene9 ficiary of the participant or beneficiary’s right

10 to appeal an adverse determination to a utiliza11 tion review agent;

12 ‘‘(B) notification to a participant or bene13 ficiary of the participant or beneficiary’s right

14 to appeal an adverse determination of a utiliza15 tion review agent to an independent review or16 ganization;

17 ‘‘(C) notification to a participant or bene18 ficiary of the procedures for appealing an ad19 verse determination to an independent review

20 organization;

21 ‘‘(D) notification to a participant or bene22 ficiary who has a life-threatening condition of

23 the participant or beneficiary’s right to imme24 diate review by an independent review organiza-
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1 tion and the procedures to obtain such review;

2 and

3 ‘‘(E) procedures for a fair, de novo deter4 mination of medical necessity by the inde5 pendent review organization without regard to

6 the definition used by the plan.

7 ‘‘(c) APPEAL OF ADVERSE DETERMINATION.—In a

8 case in which an employee benefit plan denies a claim for

9 benefits under the plan to a participant or beneficiary,

10 such participant or beneficiary may appeal such adverse

11 determination to a utilization review agent. The proce12 dures for appeals shall be reasonable and shall include the

13 following:

14 ‘‘(1) A provision indicating that a participant or

15 beneficiary, a person acting on behalf of the partici16 pant or beneficiary, or the participant or bene17 ficiary’s physician or health care provider may ap18 peal the adverse determination orally or in writing.

19 ‘‘(2) A provision that the utilization review

20 agent shall send to the appealing party, within 5

21 working days after receipt of a written appeal, a let22 ter acknowledging the date of the utilization review

23 agent’s receipt of the appeal and including a reason24 able list of documents needed to be submitted by the
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1 appealing party to the utilization review agent for

2 the appeal.

3 ‘‘(3) In a case in which a utilization review

4 agent receives an oral appeal of adverse determina5 tion, the utilization review agent shall send a one

6 page appeal form to the appealing party.

7 ‘‘(4) A provision that appeal decisions shall be

8 made by a physician, provided that, if the appeal is

9 denied and within 10 working days the health care

10 provider sets forth in writing good cause for having

11 a particular type of a specialty provider review the

12 case, the denial shall be reviewed by a health care

13 provider in the same or similar specialty as typically

14 manages the medical, dental, or specialty condition,

15 procedure, or treatment under discussion for review

16 of the adverse determination, and such specialty re17 view shall be completed within 15 working days of

18 receipt of the request.

19 ‘‘(5) A method for an expedited appeal proce20 dure for emergency care denials, denials of care for

21 life threatening conditions, and denials of continued

22 stays for hospitalized patients. Such procedure shall

23 include a review by a health care provider who has

24 not previously reviewed the case who is of the same

25 or a similar specialty as typically manages the med-
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1 ical condition, procedure, or treatment under review.

2 The time frame in which such appeal must be com3 pleted shall be based on the medical or dental imme4 diacy of the condition, procedure, or treatment, but

5 may in no event exceed one working day from the

6 date all information necessary to complete the ap7 peal is received.

8 ‘‘(6) A provision that after the utilization re9 view agent has sought review of the appeal of the

10 adverse determination, the utilization review agent

11 shall issue a response letter to the patient, person

12 acting on behalf of the patient, or the patient’s phy13 sician or health care provider explaining the resolu14 tion of the appeal. Such letter shall include a state15 ment of the specific medical, dental, or contractual

16 reasons for the resolution, the clinical basis for such

17 decision, and the specialization of any physician or

18 other provider consulted.

19 ‘‘(7) Written notification to the appealing party

20 of the determination of the appeal, as soon as prac21 tical, but in no case later than 30 days after the

22 date of the utilization review agent receives the ap23 peal.

24 ‘‘(d) INDEPENDENT REVIEW OF ADVERSE DETER25 MINATIONS.—
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1 ‘‘(1) IN GENERAL.—In a case in which an ap2 peal of an adverse determination is denied by a utili3 zation review agent, a participant or beneficiary may

4 seek review of such adverse determination from an

5 independent review organization.

6 ‘‘(2) ELEMENTS OF INDEPENDENT REVIEW

7 PROCESS.—

8 ‘‘(A) IN GENERAL.—The independent re9 view process under this subsection shall be con10 ducted by an independent review organization

11 and shall ensure—

12 ‘‘(i) a timely response by the inde13 pendent review organization;

14 ‘‘(ii) confidentiality of medical records

15 transmitted for use in the review process;

16 ‘‘(iii) the independence of each health

17 care provider or physician making review

18 determinations as part of an independent

19 review organization; and

20 ‘‘(iv) timely notice to the participant

21 or beneficiary of the results of the inde22 pendent review, including the clinical basis

23 for the determination.

24 ‘‘(B) INFORMATION PROVIDED TO THE

25 INDEPENDENT REVIEW ORGANIZATION.—Not
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1 later than 3 business days after the date that

2 an independent review organization receives a

3 request for a review of an adverse determina4 tion of a utilization review agent, such utiliza5 tion review agent shall provide to the appro6 priate independent review organization—

7 ‘‘(i) any medical records of the partic8 ipant or beneficiary that are relevant to

9 the review;

10 ‘‘(ii) any documents used by the utili11 zation review agent in making the deter12 mination that is to be reviewed by the or13 ganization;

14 ‘‘(iii) written notification to the par15 ticipant or beneficiary indicating the clin16 ical basis for the denial of the appeal;

17 ‘‘(iv) any documentation and written

18 information submitted to the utilization re19 view agent in support of the appeal; and

20 ‘‘(v) a list of each physician or health

21 care provider who has provided care to the

22 participant or beneficiary and who may

23 have medical records relevant to the ap24 peal.
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1 ‘‘(C) TIMELINES FOR DETERMINATIONS BY

2 INDEPENDENT REVIEW ORGANIZATION.—

3 ‘‘(i) IN GENERAL.—An independent

4 review organization shall make its deter5 mination not later than the earlier of—

6 ‘‘(I) the 15th day after the date

7 the independent review organization

8 receives the information necessary to

9 make the determination; or

10 ‘‘(II) the 20th day after the date

11 the independent review organization

12 receives the request that the deter13 mination be made.

14 ‘‘(ii) LIFE-THREATENING CONDI15 TION.—In the case of a life-threatening

16 condition, an independent review organiza17 tion shall make its determination not later

18 than the earlier of—

19 ‘‘(I) the 5th day after the date

20 the independent review organization

21 receives the information necessary to

22 make the determination; or

23 ‘‘(II) the 8th day after the date

24 the independent review organization
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1 receives the request that the deter2 mination be made.

3 ‘‘(3) CERTIFICATION OF INDEPENDENT REVIEW

4 ORGANIZATIONS.—

5 ‘‘(A) IN GENERAL.—To be treated as an

6 independent review organization, an organiza7 tion must be certified by the Secretary.

8 ‘‘(B) APPLICATION FOR CERTIFICATION.—

9 To be certified by the Secretary as an inde10 pendent review organization, an organization

11 shall submit on an annual basis to the Sec12 retary an application which shall include the

13 following information:

14 ‘‘(i) Any applicant that is a publicly

15 held organization shall include the name of

16 each stockholder or owner of more than 5

17 percent of any stock or options.

18 ‘‘(ii) The name and type of business

19 of each corporation or other organization

20 that the applicant controls or is affiliated

21 with and the nature and extent of the af22 filiation or control.

23 ‘‘(iii) The name of any holder of

24 bonds or notes of the applicant that exceed

25 $100,000.
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1 ‘‘(iv) The name and a biographical

2 sketch of each director, officer, and execu3 tive of the applicant.

4 ‘‘(v) A description of any relationship

5 the individuals in clauses (iii) and (iv) have

6 with—

7 ‘‘(I) a provider of health insur8 ance coverage;

9 ‘‘(II) a health maintenance orga10 nization;

11 ‘‘(III) a utilization review agent;

12 ‘‘(IV) a nonprofit health corpora13 tion;

14 ‘‘(V) a payor;

15 ‘‘(VI) a health care provider; or

16 ‘‘(VII) a group representing any

17 of the entities described in subclauses

18 (I) through (VII).

19 ‘‘(vi) The percentage of the appli20 cant’s revenues that are anticipated to be

21 derived from reviews conducted under this

22 subsection.

23 ‘‘(vii) A description of the areas of ex24 pertise of the health care professionals
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1 making review determinations for the ap2 plicant.

3 ‘‘(viii) The procedures to be used by

4 the independent review organization in

5 making review determinations with respect

6 to reviews conducted under this section.

7 ‘‘(4) INDEPENDENT REVIEW DETERMINATION

8 BINDING ON PLAN.—

9 ‘‘(A) IN GENERAL.—Subject to subpara10 graph (B), the determination by an independent

11 review organization under this subsection shall

12 be treated as the final decision of the plan.

13 ‘‘(B) VACATION OR MODIFICATION OF DE14 CISION.—The determination by an independent

15 review entity under this section may be vacated

16 or modified by a court under the same cir17 cumstances as the decision of an arbitrator may

18 be vacated or modified under sections 10 and

19 11 of title 9, United States Code.

20 ‘‘(5) INDEPENDENCE REQUIREMENT.—An inde21 pendent review organization may not be a subsidiary

22 of, or in any way owned or controlled by a payor or

23 a trade or professional association of a payor.

24 ‘‘(6) WAIVER OF LIABILITY.—An independent

25 review organization conducting a review under this
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1 section is not liable for damages arising from the de2 termination made by the organization.

3 ‘‘(e) DEFINITIONS.—For purposes of this section:

4 ‘‘(1) ADVERSE DETERMINATION.—The term

5 ‘adverse determination’ means determination by a

6 group health plan or a utilization review agent that

7 the health care services furnished or proposed to be

8 furnished to a participant or beneficiary are not

9 medically necessary.

10 ‘‘(2) HEALTH CARE PROVIDER.—The term

11 ‘health care provider’ means—

12 ‘‘(A) any individual who is engaged in the

13 delivery of health care services in a State and

14 who is required by State law or regulation to be

15 licensed or certified by the State to engage in

16 the delivery of such services in the State; and

17 ‘‘(B) any entity that is engaged in the de18 livery of health care services in a State and

19 that, if it is required by State law or regulation

20 to be licensed or certified by the State to en21 gage in the delivery of such services in the

22 State, is so licensed.

23 ‘‘(3) LIFE-THREATENING CONDITION.—The

24 term ‘life-threatening condition’ means a disease or

25 other medical condition with respect to which death
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1 or serious bodily injury is probable unless the course

2 of the disease or condition is interrupted.

3 ‘‘(4) PAYOR.—The term ‘payor’ means—

4 ‘‘(A) an insurer writing health insurance

5 policies;

6 ‘‘(B) any preferred provider organization,

7 or health maintenance organization, self-insur8 ance plan; or

9 ‘‘(C) any person or entity that provides, of10 fers to provide, or administers hospital, out11 patient, medical, or other health benefits to an

12 individual treated by a health care provider.

13 ‘‘(5) UTILIZATION REVIEW AGENT.—The term

14 ‘utilization review agent’ means an entity that con15 ducts utilization review for—

16 ‘‘(A) an employer with employees who are

17 covered under a group health plan;

18 ‘‘(B) a payor; or

19 ‘‘(C) an administrator.

20 ‘‘(6) WORKING DAY.—The term ‘working day’

21 means a weekday, excluding any legal holiday.’’.

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