Code of Vermont Rules › Agency 21 - DEPARTMENT OF FINANCIAL REGULATION › Sub-Agency 040 - DIVISION OF HEALTH CARE ADMINISTRATION › Chapter 010 - RULE H-2009-03: CONSUMER PROTECTION AND QUALITY REQUIREMENTS FOR MANAGED CARE ORGANIZATIONS › Section 21 040 010 - RULE H-2009-03: CONSUMER PROTECTION AND QUALITY REQUIREMENTS FOR MANAGED CARE ORGANIZATIONS

Current through June, 2024
Part 1 GENERAL PROVISIONS
Section 1.1 Purpose
The purpose of this rule is to set forth the consumer
				  protection and quality requirements that managed care organizations shall meet
				  in order to further the purposes of its enabling statutes.
Section 1.2 Authority
This rule is issued pursuant to the authority vested in the
				  Commissioner of the Department of Financial Regulation by
				  18 V.S.A. §
												9414 and
				  8 V.S.A.
				  §§ 15, 4089a, 4089b, and 4724.
Section 1.3 Applicability, Scope and
				Delegation
(A) All managed care organizations,
				including but not limited to health insurers, health maintenance organizations,
				preferred provider organizations, exclusive provider organizations, mental
				health review agents and all other financing mechanisms, systems and other
				entities that manage health care delivery for members or subscribers of any
				comprehensive major medical health benefit plan subject to the Department's
				jurisdiction shall:
1. participate in
				Blueprint for Health as required under
				18 V.S.A. §
													706 or another program approved by the
				Department;
2. be accredited by the
				National Committee for Quality Assurance (NCQA) or other national independent
				accreditation organization approved by the Department;
3. operate in compliance with Parts 1 and 2
				of this rule; and
4. be responsible
				for the activities of their delegates in meeting the applicable
				standards.
(B) The
				Department shall promulgate a list of approved independent accreditation
				organizations that it has determined meet the following criteria:
1. The independent accreditation organization
				has demonstrated to the satisfaction of the Department that it is capable of
				reviewing and analyzing a managed care organization's quality management
				program as required by Sections 6.2. and 6.3 of this rule;
2. The independent accreditation organization
				has experience in assessing quality of care and quality improvement for managed
				care organizations;
3. The
				standards used by the independent accreditation organization are made available
				to the Department; and
4. The
				independent accreditation organization is capable of preparing and submitting
				to the managed care organization a written report summarizing the scope of its
				review, its findings, and its recommendations for improvement, if
				any.
(C) In addition to
				Subsection (A) above, managed care organizations that use or administer
				utilization management mechanisms for members or subscribers of any
				comprehensive major medical health benefit plan subject to the Department's
				jurisdiction are also subject to Part 3 of this rule.
(D) In addition to Subsection (A) above,
				managed care organizations that use or administer pharmaceutical benefit
				management mechanisms for members or subscribers of any comprehensive major
				medical health benefit plan subject to the Department's jurisdiction are also
				subject to Part 4 of this rule.
(E)
				In addition to Subsections (A), (C) and (D) above, managed care organizations
				that contract with providers, use or administer networks, designate particular
				providers as preferred to otherwise use or administer any restrictions or
				incentives pertaining to use of certain providers by members or subscribers of
				any comprehensive major medical health benefit plan subject to the Department's
				jurisdiction are also subject to Part 5 of this rule. Such organization shall
				post electronically and submit an annual attestation certifying the managed
				care organization's compliance with the requirements of this part to the
				Commissioner in writing on or before July 15th.
(F) In addition to Subsections (A), (C), (D)
				and (E) above, Part 6 of this rule shall apply to managed care organizations
				including, in relevant part, the mental health review agents under contract
				with managed care organizations, when they issue and/or participate in
				administering comprehensive major medical health benefit plans and products
				subject to the Department's jurisdiction that use utilization management
				mechanisms and financial incentives for members to use certain providers.
The Department in its sole discretion may choose to waive
				  parts of the requirements in Part 6 for these managed care organizations and
				  mental health review agents.
(G) Each managed care organization, including
				a mental health review agent and any delegate subject to this rule, in whole or
				in part, is accountable for ensuring that it operates in compliance with all
				applicable requirements of
				18 V.S.A. §
												9414 and
				8 V.S.A.
				§§ 4089a § 4089b, and 4724, this rule and any other applicable
				laws and rules, regardless of whether it is functioning as a delegate or the
				delegating entity. If a managed care organization delegates any activities or
				functions to other persons or entities, the managed care organization may not
				delegate its responsibility for the activities or functions, is accountable for
				ensuring that its delegates operate in compliance with all applicable
				requirements and shall maintain effective oversight of those activities, which
				shall include:
1. A written description of
				the delegate's activities and responsibilities, including reporting
				requirements;
2. Evidence of formal
				approval of the delegate's program by the managed care organization;
				and
3. A process by which the
				managed care organization at least annually evaluates the performance of the
				delegate and any sub-delegates, including but not limited to a process by which
				the managed care organization documents, tracks, addresses and resolves
				complaints from members and providers regarding the delegate's conduct and/or
				the conduct of any other managed care organization that performs any activities
				on its behalf.
Section
				1.4 Definitions
(A) "Adverse
				benefit determination" means a denial, reduction, modification or termination
				of, or a failure to provide or make payment (in whole or in part) for, a
				benefit, including but not limited to:
1. a
				denial, reduction, termination or failure to provide or make payment that is
				based on a determination of a participant's or beneficiary's eligibility to
				participate in a health benefit plan;
2. a denial, reduction, modification or
				termination of, or a failure to provide or make payment (in whole or in part)
				for, a benefit resulting from the application of any utilization review;
				and
3. a failure to cover an item
				or service for which benefits are otherwise provided because it is determined
				to be experimental or investigational or not medically necessary or
				appropriate.
(B)
				"Blueprint for Health" means the state's plan for chronic care infrastructure,
				prevention of chronic conditions, and chronic care management program, and
				includes an integrated approach to patient self- management, community
				development, health care system and professional practice change, and
				information technology initiatives.
(C) "Case management" means a coordinated set
				of activities conducted to support the member and his/her health care provider
				in managing serious, complicated, protracted or other health
				conditions.
(D) "Chronic care"
				means health services provided by a health care professional for an established
				clinical condition that is expected to last a year or more and that requires
				ongoing clinical management attempting to restore the individual to highest
				function, minimize the negative effects of the condition, and prevent
				complications related to chronic conditions. Examples of conditions that are or
				may be considered chronic include diabetes, hypertension, cardiovascular
				disease, cancer, asthma, pulmonary disease, substance abuse, mental illness,
				spinal cord injury, and hyperlipidemia.
(E) "Chronic care management" means a system
				of coordinated health care interventions and communications for individuals
				with chronic conditions, including significant patient self-care efforts;
				systemic supports for the physician and patient relationship; and a plan of
				care emphasizing prevention of complications utilizing evidence-based practice
				guidelines, patient empowerment strategies, and evaluation of clinical,
				humanistic, and economic outcomes on an ongoing basis with the goal of
				improving overall health.
(F)
				"Clinical peer" means a health care provider in a specialty that typically
				provides the procedure or treatment, or diagnoses or manages the medical
				condition under review and who holds a non-restricted license in a state of the
				United States. A general internist or family practitioner who does not
				typically provide the procedure or treatment, or does not typically diagnose or
				manage the medical condition does not meet the definition of clinical peer, nor
				does a Pharm D meet the definition of clinical peer, but a. Pharm D could serve
				on the first level grievance panel of reviewers and assist a clinical peer
				during the first level grievance procedures.
(G) "Clinical review criteria" means the
				written screening procedures, clinical protocols, practice guidelines and
				utilization management and review guidelines used by the managed care
				organization to determine the necessity and appropriateness of health care
				services.
(H) "Commissioner" means
				the commissioner of the Vermont Department of Financial Regulation or his or
				her designee.
(I) "Concurrent
				review" means utilization review conducted during a member's stay in a hospital
				or other facility, or other ongoing course of treatment.
(J) "Confidentiality code" means the
				confidentiality code adopted by the Department of Financial Regulation on
				December 1, 1993 and any subsequent revisions.
(K) "Contracted provider" means a provider
				employed by, under contract or subcontract with, in a network, designated as
				preferred or otherwise in an arrangement with a managed care organization for
				the purpose of furnishing health care services to the members of the managed
				care organization, regardless of the specific terms of or the terminology
				applied by the managed care organization to its relationship with the
				provider.
(L) "Credentialing
				verification" or "credentialing reverification" means the process of obtaining
				and verifying information about a health care provider and evaluating that
				health care provider relative to the managed care organization's standards when
				that health care provider applies to become or remain a contracted provider
				with the managed care organization.
(M) "Delegate" means an entity to which a
				managed care organization gives authority to carry out certain functions that
				the managed care organization would otherwise perform, or the act of giving
				authority to carry out certain functions to another entity.
(N) "Department" means the Department of
				Financial Regulation.
(O)
				"Discharge plan" means the plan that results from the formal process for
				determining, before discharge from a health care facility, the coordination and
				management of the care that a member will receive following the
				discharge.
(P) "Dose restriction"
				means imposing a restriction on the number of doses of prescription drug that
				will be covered during a specific time period.
"Dose restriction" does not include a restriction on the
				  number of doses when the prescription drug that is subject to the restriction
				  cannot be supplied by or has been withdrawn from the market by the drug's
				  manufacturer.
(Q) "Emergency
				medical condition" means a medical condition manifesting itself by acute
				symptoms of sufficient severity (including severe pain) so that a prudent
				layperson, who possesses an average knowledge of health and medicine, could
				reasonably expect the absence of immediate medical attention to result in a
				condition described in clause (i), (ii), or (iii) of section 1867(e)(l)(A) of
				the Social Security Act (
				42 U.S.C.
				1395 dd(e)(l)(A)). (In that provision of the
				Social Security Act, clause (i) refers to placing the health of the individual
				(or, with respect to a pregnant woman, the health of the woman or her unborn
				child) in serious jeopardy; clause (ii) refers to serious impairment to bodily
				functions; and clause (iii) refers to serious dysfunction of any bodily organ
				or part.
(R) "Emergency services"
				means, with respect to an emergency medical condition:
1. A medical screening examination (as
				required under section 1867 of the Social Security Act,
				42 U.S.C.
				1395 dd) that is within the capability of the
				emergency department of a hospital, including ancillary services routinely
				available to the emergency department to evaluate such emergency medical
				condition, and
2. Such further
				medical examination and treatment, to the extent they are within the
				capabilities of the staff and facilities available at the hospital, as are
				required under section 1867 of the Social Security Act (
				42 U.S.C.
				1395 dd) to stabilize the patient.
(S) "File'', where used in the
				context of information to be provided to the Department by a managed care
				organization, means to file an original document by delivering it, and any
				copies as requested by the Department, to the Department of Financial
				Regulation and, if requested by the Department, to an organization designated
				by the Department under Section 1.6(D). The Department may also, at its
				discretion, permit documents to be filed electronically.
(T) "Grievance" means a complaint submitted
				by or on behalf of a member regarding the:
1.
				Adverse benefit determination;
2.
				Availability, delivery or quality of health care services;
3. Claims payment, handling or reimbursement
				for health care services; or
4.
				Matters relating to the contractual relationship between a member and a managed
				care organization or the health insurer offering the health benefit
				plan.
(U) "Gynecological
				health care services" means preventive and routine reproductive health and
				gynecological care, including annual screening, counseling, and treatment of
				gynecological disorders and diseases in accordance with the most current
				published recommendations of the American College of Obstetricians and
				Gynecologists.
(V) "Gynecological
				health care provider" means a health care provider or health care facility that
				is primarily engaged in providing gynecological health care services.
(W) "Health benefit plan" means a policy,
				contract, certificate or agreement entered into, offered or issued by a health
				insurer to provide, deliver, arrange for, pay for, or reimburse any of the
				costs of health care services.
(X)
				"Health care facility" means all institutions, whether public or private,
				proprietary or nonprofit, which offer diagnosis, treatment, inpatient or
				ambulatory care to two or more unrelated persons, and the buildings in. which
				those services are offered. The term shall not apply to any facility operated
				by religious groups relying solely on spiritual means through prayer or
				healing, but includes all institutions included in
				18 V.S.A. §
												9432, except health maintenance
				organizations.
(Y) "Health care
				provider" or "provider" means a person, partnership or corporation, other than
				a facility or institution, licensed or certified or authorized by law to
				provide professional health care services to an individual during that
				individual's health care, treatment or confinement.
(Z) "Health care services" or "services"
				means services for the diagnosis, prevention, treatment, cure or relief of a
				health condition, illness, injury or disease.
(AA) "Health insurer" means any health
				insurance company, nonprofit hospital and medical service corporation, managed
				care organization, and, to the extent permitted under federal law, any
				administrator of an insured, self- insured, or publicly funded health care
				benefit plan offered by public and private entities.
(BB) "Independent accreditation organization"
				means an organization recognized by the Department as qualified to review some
				or all of a managed care organization's quality management and consumer
				protection activities according to the criteria established in this
				rule.
(CC) "Independent external
				review" means a review of a health care decision, by an independent review
				organization pursuant to
				8
				V.S.A. §
												4089f, as applicable and as may
				be amended.
(DD) "Manage health
				care delivery" means to apply any design or mechanism to a health benefit plan
				to affect access to or the quality, coordination or cost of the health care
				available to members under the health benefit plan, including but not limited
				to the use of any form of utilization management; pharmaceutical benefit
				management networks, preferred providers or any other restrictions or
				incentives for members to use certain providers; and/or disease, care or case
				management.
(EE) "Managed care
				organization" means any financing mechanism or system that manages health care
				delivery for its members or subscribers, including but not limited to health
				maintenance organizations, preferred provider organizations, exclusive provider
				organizations and any other health care delivery system or organization that
				manages health care delivery for its members or subscribers, or that issues a
				health insurance policy, plan, or subscriber contract which operates to manage
				health care delivery. The term managed care organization includes a mental
				health review agent as defined in
				8 V.S.A. §
												4089a, a health insurer as defined in
				18 V.S.A. §
												9402, a managed care organization as defined
				in
				18 V.S.A. §
												9402, a delegate of a health insurer or
				managed care organization, and any person or entity that meets the definition
				of a managed care organization under law.
(FF) "Medical director" means a
				Vermont-licensed physician who is board- certified or board-eligible in his or
				her field of specialty as determined by the American Board of Medical
				Specialties (ABMS) or the American Osteopathic Association (AOA), and who is
				charged by a managed care organization with responsibility for overseeing all
				clinical activities of the health benefit plan, or his or her
				designee.
(GG) "Medical or
				scientific evidence" means the following sources:
1. Peer-reviewed scientific studies published
				in or accepted for publication by medical journals that meet nationally
				recognized requirements for scientific manuscripts and that submit most of
				their published articles for review by experts who are not part of the
				editorial staff.
2. Peer-reviewed
				literature, biomedical compendia and other medical literature that meet the
				criteria of the National Institutes of Health's National Library of Medicine
				for indexing in Excerpta Medica (EMBASE), Medline, and PubMed Medline, and
				resources from the Cochrane Library, HSTAT, and the National Guideline
				Clearinghouse.
3. Medical journals
				recognized by the federal Secretary of Health and Human Services, under Section
				1861(t)(2) of the federal Social Security Act.
4. The following standard reference
				compendia: the American Hospital Formulary Service-Drug Information (AHFS Drug
				Information), the American Dental Association Accepted Dental Therapeutics and
				Monograph Series on Dental Materials and Therapeutics, The United States
				Pharmacopeia, The National Formulary and the USPDI.
5. Findings, studies or research conducted by
				or under the auspices of federal government agencies and nationally recognized
				federal research institutes, including the Agency for Health Care Research and
				Quality, National Institutes of Health, National Cancer Institute, National
				Academy of Sciences, Centers for Medicare and Medicaid Services, and any
				national board recognized by the National Institutes of Health for the purpose
				of evaluating the medical value of health services.
6. Peer-reviewed abstracts accepted for
				presentation at major medical association meetings.
(HH) "Medically-necessary care" means health.
				care services, including diagnostic testing, preventive services and aftercare,
				that are appropriate in terms of type, amount, frequency, level, setting, and
				duration to the member's diagnosis or condition. Medically-necessary care must
				be informed by generally accepted medical or scientific evidence and consistent
				with generally accepted practice parameters as recognized by health care
				professions in the same specialties as typically provide the procedure or
				treatment, or diagnose or manage the medical condition; must be informed by the
				unique needs of each individual patient and each presenting situation; and
1. Help restore or maintain the member's
				health; or
2. Prevent deterioration
				of or palliate the member's condition; or
3. Prevent the reasonably likely onset of a
				health problem or detect an incipient problem.
(II) "Member" means any individual who has
				entered into a contract with a health insurer or managed care organization for
				the provision of health care services, or on whose behalf such an arrangement
				has been made, as well as the individual's dependents covered by the
				contract.
(JJ) "Mental health care
				provider" means any person, corporation, facility or institution certified or
				licensed by this state to provide mental health care or substance abuse
				services, including but not limited to a physician, a nurse with recognized
				psychiatric specialties, hospital or other health care facility, psychologist,
				clinical social worker, mental health counselor, alcohol or drug abuse
				counselor.
(KK) "Mental health
				condition" means any condition or disorder involving mental illness or alcohol
				or substance abuse that falls under any of the diagnostic categories listed in
				the mental disorders section of the international classification of disease, as
				periodically revised.
(LL) "Mental
				health professional" means any person, certified or licensed by this state to
				provide mental health care services, including but not limited to a physician,
				a nurse with recognized psychiatric specialties, psychologist, clinical social
				worker, mental health counselor, alcohol or drug abuse counselor.
(MM) "Peer review committee" means a
				committee as defined in
				26 V.S.A. §
												1441, and for purposes of this rule includes
				any quality management, credentialing or other similar committee established by
				a managed care organization pursuant to
				18 V.S.A. §
												9414(c)(l) and this
				rule.
(NN) "Person" means a natural
				person, partnership, unincorporated association, corporation, limited liability
				company, municipality, the state of Vermont or a department, agency or
				subdivision of the state, or other legal entity.
(OO) "Pharmaceutical benefit management
				program" ("PBMP") means any mechanisms or procedures used to manage
				prescription drug benefits, including but not limited to formularies, dose
				restrictions, prior or other authorization requirements, step therapy and/or
				substitution requirements.
(PP)
				"Post-service Review" means review of any claim for a benefit that is not a
				pre-service or concurrent review claim as defined by this rule.
(QQ) "Pre-service Review" means review of any
				claim for a benefit with respect to which the terms of coverage condition
				receipt of the benefit, in whole or in part, on approval of the benefit in
				advance of obtaining health care.
(RR) "Primary care provider" means a health
				care provider who, within that provider's scope of practice as defined under
				the relevant state licensing law, provides primary care services, and who is
				designated as a primary care provider by a managed care organization.
(SS) "Primary care services" include services
				provided by providers specifically trained for and skilled in first-contact and
				continuing care for persons with undiagnosed signs, symptoms or health
				concerns, not limited by problem origin (biological, behavioral or social),
				organ system or diagnosis. Primary care services include health promotion,
				disease prevention, health maintenance, counseling, patient education, self-
				management support, care planning and the diagnosis and treatment of acute and
				chronic illnesses in a variety of health care settings.
(TT) "Primary verification" means
				verification of a health professional's credentials based upon evidence
				obtained from the issuing source of the credential.
(UU) "Provider Directory" means a
				comprehensive list of all of the health care providers employed by, under
				contract or subcontract with, in a network, designated as preferred or
				otherwise in an arrangement with the managed care organization and available to
				members or subscribers of a particular health benefit plan.
(VV) "Provider List" means a subset of the
				provider directory created by the managed care organization to meet a
				particular member's health care and geographic accessibility needs, usually
				generated in response to a request from the member or the member's
				representative.
(WW) "Quality
				management program" means a set of procedures and activities designed to
				safeguard or improve the quality of health care and the quality of the managed
				care organization's service to members and providers by assessing the quality
				of care or service, usually against a set of established standards, and taking
				action to improve it.
(XX) "Quality
				improvement" means the effort to improve the quality of health care services
				and outcomes of treatment for members as well as the quality of the managed
				care organization's service to members and providers. Opportunities to improve
				care and service are found primarily by continual examination of, and continual
				feedback and education about how services are provided and the results they
				produce.
(YY) "Quality of care"
				means the degree to which health care services for individuals and populations
				increase the likelihood of desired health outcomes, decrease the probability of
				undesired health outcomes, and are consistent with current professional
				knowledge.
(ZZ) "Referral" means a
				prior authorization from the managed care organization or contracted provider
				that allows a member to have one or more appointments with a health care
				provider for consultation, diagnosis, or treatment of a medical condition, to
				be covered as a benefit under the member's health benefit plan
				contract.
(AAA) "Relevant document,
				record or other information" means, for the purposes of Section 3.3, that a
				document, record or other information shall be considered relevant if such
				document, record or other information was relied upon in making the benefit
				determination or the determination of a grievance, or was submitted, considered
				or generated in the course of making the benefit determination or the
				determination of a grievance, without regard to whether such document, record
				or other information was relied upon in making the benefit determination or the
				determination of a grievance.
(BBB)
				"Secondary verification" means verification of a health professional's
				credentials based on evidence obtained by means other than direct contact with
				the issuing source of the credential.
(CCC) "Service area" means the geographic
				region in or for which a health benefit plan subject to Part 5 or 6 of this
				rule is, consistent with applicable law, marketed, sold, intended by the issuer
				and described in the policy and certificate as the region in which the travel
				and waiting time standards in Section 5.1 of this rule are met and in which
				certificate holders are expected to and are able to access all or most of the
				covered benefits at the benefit level most advantageous to the member. That a
				health benefit plan subject to Part 5 or 6 of this rule may be required to
				authorize coverage for services for individual members in a location outside of
				the service area at the benefit level most advantageous to the member does not
				subject that location to the travel and waiting time requirements of this
				rule.
(DDD) "Stabilize" means, with
				respect to an emergency medical condition, the meaning given in section
				1867(e)(3) of the Social Security Act (
				42 U.S.C.
				1395 dd(e)(3).
(EEE) "Step therapy" means a type of protocol
				that specifies the sequence in which different prescription drugs are to be
				tried for treating a specified medical condition.
(FFF) "Urgently-needed care" or "urgent care"
				means those health care services that are necessary to treat a condition or
				illness of an individual that if not provided promptly (within twenty-four
				hours or a time frame consistent with the medical exigencies of the case)
				presents a serious risk of harm.
(GGG) "Utilization management" means the set
				of organizational functions and related policies, procedures, criteria,
				standards, protocols and measures used by a managed care organization or
				pharmaceutical benefit management program to ensure that it is appropriately
				managing access to and the quality and cost of health care services, including
				prescription drug benefits, provided to its members.
(HHH) "Utilization review" means a set of
				formal techniques designed to monitor the use of, or evaluate the clinical
				necessity, appropriateness, efficacy, or efficiency of, health care services,
				procedures, or settings, including prescription drugs.
(III) "Utilization review guidelines" mean
				the normative standards and clinical review criteria for resource utilization
				for various clinical conditions and medical services that are used by managed
				care organizations in deciding whether to approve or deny health care
				services.
Section 1.5
				Confidentiality of Quality Management and Peer Review Information
(A) Except as otherwise required by
				18 V.S.A. §
												9414, each managed care organization shall
				take the appropriate steps necessary to ensure that information gathered by it
				in its peer review and quality management activities, including those conducted
				in relation to credentialing, recredentialing and associated monitoring, shall
				be maintained as confidential and privileged.
(B) Peer review, quality management and other
				similar information made available to the Department or other designated
				organizations under
				18 V.S.A. §
												9414 shall be furnished in a manner that does
				not disclose the identity of individual patients, health care providers or
				other individuals, unless otherwise specified by the Department.
(C) The minutes or records of the peer review
				or quality management committee formed under Parts 5 or 6 of this rule are
				confidential and privileged under
				26 V.S.A. §
												1443, except as otherwise provided in
				18 V.S.A. §
												9414 and this rule.
(D) The Department's confidentiality code
				shall apply to the collection and review of information by the Department or
				its designated organization under
				18 V.S.A. §
												9414 and this rule.
(E) Peer review, quality management and other
				similar information disclosed to the Department pursuant to this rule shall be
				confidential and privileged and shall not be subject to subpoena or available
				for public disclosure, except as otherwise required by
				18 V.S.A. §
												9414 or this rule.
(F) The Department is authorized to use any
				information gathered in the course of its review, including confidential or
				privileged information, in the course of any legal or regulatory action against
				a managed care organization. Information used in a legal or regulatory
				proceeding that is required to be kept confidential, including the records of
				the peer review or quality management committee designated under Parts 5 or 6
				of this rule, shall be filed with the court or appropriate administrative body
				under seal and shall not be available for public disclosure.
Section 1.6 Compliance Assessment
				and Review Generally
(A) The Department in its
				sole discretion may assess and review the performance of managed care
				organizations not otherwise subject to Part 6 7 of this rule by:
1. Applying all or part of the annual and/or
				periodic filing and/or review requirements in Part 6 to a managed care
				organization subject to this rule but not otherwise subject to Part 6, with at
				least one year's notice from the Department to the managed care organization;
				or
2. Assessing data, reports,
				inquiries, complaints, independent external review requests and other
				information available to or requested by the Department. In exercising this
				discretion, the Department may consider factors such as but not limited to the
				nature and extent of care management mechanisms or financial incentives used,
				baseline performance, performance over time, accreditation status, anticipated
				changes in the number of covered lives and/or any other information regarding
				the managed care organization, the affiliated mental health review agent and
				any delegates of these organizations.
(B) Compliance assessment and enforcement
				with respect to delegates, except for mental health review agents subject to
				Part 6 of this rule, that manage health care delivery for members or
				subscribers of any comprehensive major medical health benefit plan subject to
				the Department's jurisdiction may be conducted through the Department's
				assessment of the delegating entity, subject to the Department's discretion.
				The Department may determine that direct examination of a delegate is warranted
				and may elect to directly assess compliance and/or commence enforcement action
				7 against a delegate based on factors such as but not limited to the number of
				Vermont members affected, data and reports regarding the delegate's
				performance, and the volume and severity of complaints regarding the
				delegate.
(C) The Department may at
				any time conduct an evaluation of a managed care organization's performance in
				specific areas of operations. Such focused reviews may be performed in response
				to periodic review findings, a complaint or grievance, a pattern of complaints
				or grievances or other information that has come to the attention of the
				Department. The Department shall advise the managed care organization of the
				specific areas of operations that will be the subject of the review and the
				statutory or regulatory provisions under examination. This review will be
				carried out through the assessment of documentation submitted by the managed
				care organization as required by this rule and by review of any other records
				or other examination as deemed necessary by the Department, and may include an
				on-site review of the managed care organization and/or its delegate.
(D) The Department may, in its discretion,
				designate another organization to review baseline, annual, periodic or other
				filings and to conduct baseline, periodic or focused reviews of a managed care
				organization. Any such organization shall have a confidentiality code
				acceptable to the Department, or shall be subject to the Department's
				confidentiality code. The Department shall notify a managed care organization
				of the identity of such an organization before commencing the
				evaluation.
(E) The Department in
				its capacity as a health oversight agency pursuant to federal law and as
				authorized by
				18 V.S.A. §
												9414 or its designated organization may
				examine and review information protected by the patient's privilege established
				in
				12 V.S.A. §
												1612(a) or otherwise
				required by law to be held confidential.
1.
				Notwithstanding the provisions of
				26 V.S.A. §
													1443, the Department or its designated
				organization shall have reasonable access to the minutes or records of the
				managed care organization's peer review, quality management and any other
				committee for the sole purpose of reviewing the managed care organization's
				compliance with this rule and other applicable law.
2. Records or minutes of the peer review,
				quality management and any other committees reviewed by the Department or its
				designated organization under this section shall not disclose the identity of
				patients, health care providers or other individuals.
(F) The Department may examine and review the
				data reported or required to be reported to the Department under Titles 8 or 18
				of the Vermont Statutes Annotated, this rule and any other applicable rule, as
				well as examine and review the methodologies used by the managed care
				organization to compute measures used by the managed care organization to
				comply with such laws or rules.
(G)
				The Department or its designated organization shall prepare and keep on file a
				written report summarizing the scope of its review, its findings, its
				recommendations for improvement and determinations regarding areas of
				non-compliance, if any. If prepared by an organization designated by the
				Department, the written report shall include findings and recommendations for
				improvement. The Department shall review the report and shall make a final
				determination on the findings, recommendations for improvement and
				determinations regarding areas of non-compliance, if any.
(H) In addition to making a determination
				under paragraph (G) of this subsection, the Department may require a managed
				care organization to amend or modify its quality management program or other
				programs or activities in order to comply with this rule and other applicable
				law. Failure of the managed care organization to comply with the requirement
				shall be deemed a violation of law.
Section 1.7 Implementation Manual
Implementation of this rule will be guided by the
				  Implementation Manual effective as of January 1, 2015, except where the
				  Implementation Manual is in conflict with the most recent rule, other
				  Department guidance, or Federal or State law. Any portion of the Implementation
				  Manual that was effective January 1, 2015 that was based on language in the
				  previous version of this rule (2009-03 effective December 17, 2009) that has
				  been repealed shall no longer be applicable.
Section 1.8 Payment for Baseline, Annual,
				Periodic and Focused Compliance Reviews
(A)
				Each managed care organization subject to examination, investigation or review
				by the Department under
				18 V.S.A. §
												9414 and this rule shall pay the Department
				the reasonable costs of such activities in an amount to be determined by the
				Commissioner.
(B) A managed care
				organization shall pay the costs due under this subsection within thirty (30)
				days of receipt of an invoice from the Department. The Department, in its sole
				discretion, may offer a payment plan to managed care organizations if costs are
				greatly in excess of anticipated amounts.
(C) Failure of a managed care organization to
				pay any costs assessed under
				18 V.S.A. §
												9414(h) and this rule is a
				violation of Vermont law and shall be subject to any and all sanctions allowed
				by law.
Section 1.9
				Coordination with Other Relevant State Functions
If any department of the Agency of Human Services is
				  designated by statute to conduct activities that specifically relate to any
				  function of a managed care organization specified in this rule, the
				  Commissioner, in the Commissioner's sole discretion, may accept all or part of
				  the agency's assessment of the managed care organization's compliance with
				  requirements pertaining to that function, in whole or in part.
Section 1.10 Enforcement
The Department has the power and responsibility to ensure
				  that each managed care organization acts in accordance with applicable law. In
				  exercising this jurisdiction, the Department may use any or all of the powers
				  granted to it under Title 8 of the Vermont Statutes Annotated and Chapter 221
				  of Title 18 of the Vermont Statutes Annotated in the course of monitoring,
				  investigating or 7 otherwise ensuring compliance by managed care organizations
				  with the requirements of this regulation and any other applicable law or
				  regulation. Approval of a filing or review does not preclude investigation
				  and/or enforcement action by the Department if indicated.
Section 1.11 Severability
If any provision of this rule or the application thereof to
				  any person or circumstance is for any reason held to be invalid, the remainder
				  of the rule and the application of such provisions to other persons or
				  circumstances shall be not affected thereby.
Section 1.12 Effective Date
This rule shall take effect 15 days after
				  adoption.