HBA-DMH H.B. 1609 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1609 By: Averitt Insurance 3/25/2001 Introduced BACKGROUND AND PURPOSE Under current law, there is not a system in place to allow an insured or health care provider acting on behalf of an insured to request information regarding services, treatment, or supplies that may be rendered to the insured or by the provider. This lack of information has resulted in problems concerning retrospective review and denial of claims. House Bill 1609 authorizes a health benefit plan enrollee or a provider acting on behalf of the enrollee to request a scheduled benefit review to determine whether a service, treatment, or supply being requested is a scheduled benefit. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Sections 3 and 5 Article 21.53X, Insurance Code) and SECTION 3 (Section 5, Article 21.58A, Insurance Code) of this bill. ANALYSIS House Bill 1609 amends the Insurance Code to require an issuer of a health benefit plan (issuer) upon request of the enrollee or a health care provider acting on behalf of the enrollee, to conduct a scheduled benefit review (review). The bill establishes conditions under which a health care provider is considered to be acting on behalf of an enrollee. The bill sets forth notification requirements for the issuer. The bill requires the commissioner of insurance (commissioner) to establish by rule the elements a written notification must contain (Sec. 3 Art. 21.53X). The bill authorizes an issuer of a health benefit plan to delegate its third party administrator or its utilization review agent to perform a scheduled benefit review. The bill requires a utilization review agent that includes the required elements in the written notification issued pursuant to existing provisions related to notification of determinations made by utilization review agents to be deemed to have complied with these provisions. The bill requires the portion of a written notification issued by a utilization review agent that constitutes a determination of a scheduled benefit review to be deemed a written notification (Sec. 4, Art. 21.53X). The bill authorizes the commissioner to adopt reasonable rules as necessary to implement these provisions (Sec. 5, Art. 21.53X). The bill requires a utilization review agent unless otherwise permitted by rule to provide written notification of the agents determination made in a utilization review. The bill authorizes the commissioner by rule to permit a utilization review agent to provide written notification only to the enrollee or a person acting on behalf of the enrollee or only to the enrollee's provider of record in certain circumstances. The bill specifies the contents of a written notification for an affirmative determination and specifies separate requirements for a notification of an adverse determination (Sec. 5, Art. 21.58A). The bill requires a utilization review agent that fails to provide the notification of an adverse determination within the specified time periods to be deemed to have made an affirmative determination and the agent is required to provide a written notification of an affirmative determination (Sec 7, Art. 21.58A). The bill removes provisions specifying the availability of a toll-free telephone system required of utilization review agents (Sec. 7, Art 21.58A). When a prospective utilization review or a concurrent utilization review is made of services proposed to be furnished or being furnished respectively which results in an affirmative determination, the bill prohibits a utilization review agent, a health maintenance organization, or an insurer from subsequently making a retrospective review of the services which were the subject of the affirmative determination. When a utilization review is made of services that are being furnished or proposed to be furnished which results in an affirmative determination, any request for review of an extension of those services must be made by utilization review (Sec. 11, Art. 21.58A). A health benefit plan issuer is not required to provide a review until January 1,2001 (SECTION 16). The bill specifies the health benefit plans to which these provisions do and do not apply (Sec. 2, Art. 21.53X) EFFECTIVE DATE September 1, 2001, and applies only to a utilization review conducted on or after January 1, 2002.