BILL NUMBER: AB 2847 AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 13, 2008 INTRODUCED BY Assembly Member Krekorian (Principal coauthor: Assembly Member Huffman) FEBRUARY 22, 2008 An act to amend Section 1374.33 of, to add Sections 1368.013 and 1374.37 to, and to repeal Section 1371.25 of , the Health and Safety Code, and to add Sections 10169.4 and 10169.6 to the Insurance Code, relating to health careservice planscoverage . LEGISLATIVE COUNSEL'S DIGEST AB 2847, as amended, Krekorian. Health careservice plans: liability.coverage.Existing(1) Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law provides that a willful violation of provisions governing health care service plans is a crime. Under those laws, an enrollee or insured denied certain health care services may appeal that denial through specified grievance and medical review processes. This bill would require a plan or insurer to disprove medical necessity during any grievance or medical review process, as specified. The bill would also allow a treating provider to directly appeal the denial of enrollee or insured health care services to the Department of Managed Health Care or Department of Insurance, as applicable.Under existing law(2) Under the Knox-Keene Health Care Service Plan Act of 1975 , a plan, an entity contracting with a plan, and providers are eachberesponsible for their own acts or omissions and are not liable for the acts or omissions of, or the costs of defending, others, except as specified. Existing law makes contractual provisions to the contrary void and unenforceable. This bill would repeal those provisions. Vote: majority. Appropriation: no. Fiscal committee:noyes . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1368.013 is added to the Health and Safety Code , to read: 1368.013. Notwithstanding any other provision of law, the plan has the burden of proof in any medical necessity determination or any determination to deny, reduce, limit, or delay health care services, including, but not limited to, any determination made pursuant to this article. For purposes of this section, "burden of proof" means that there shall be a presumption of medical necessity, unless the plan proves otherwise in accordance with the standard established in Section 115 of the Evidence Code.SECTION 1.SEC. 2. Section 1371.25 of the Health and Safety Code is repealed. SEC. 3. Section 1374.33 of the Health and Safety Code is amended to read: 1374.33. (a) (1) Upon receipt of information and documents related to a case, the medical professional reviewer or reviewers selected to conduct the review by the independent medical review organization shall promptly review all pertinent medical records of the enrollee, provider reports, as well as any other information submitted to the organization as authorized by the department or requested from any of the parties to the dispute by the reviewers. If reviewers request information from any of the parties, a copy of the request and the response shall be provided to all of the parties. The reviewer or reviewers shall also review relevant information related to the criteria set forth in subdivision (b). (2) Notwithstanding any other provision of law, the plan has the burden of proof in any medical review conducted pursuant to this article. For purposes of this subdivision, "burden of proof" means that there shall be a presumption of medical necessity, unless the plan proves otherwise in accordance with the standard established in Section 115 of the Evidence Code. (b) Following its review, the reviewer or reviewers shall determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee and any of the following: (1) Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service. (2) Nationally recognized professional standards. (3) Expert opinion. (4) Generally accepted standards of medical practice. (5) Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. (c) The organization shall complete its review and make its determination in writing, and in layperson's terms to the maximum extent practicable, within 30 days of the receipt of the application for review and supporting documentation, or within less time as prescribed by the director. If the disputed health care service has not been provided and the enrollee's provider or the department certifies in writing that an imminent and serious threat to the health of the enrollee may exist, including, but not limited to, serious pain, the potential loss of life, limb, or major bodily function, or the immediate and serious deterioration of the health of the enrollee, the analyses and determinations of the reviewers shall be expedited and rendered within three days of the receipt of the information. Subject to the approval of the department, the deadlines for analyses and determinations involving both regular and expedited reviews may be extended by the director for up to three days in extraordinary circumstances or for good cause. (d) The medical professionals' analyses and determinations shall state whether the disputed health care service is medically necessary. Each analysis shall cite the enrollee's medical condition, the relevant documents in the record, and the relevant findings associated with the provisions of subdivision (b) to support the determination. If more than one medical professional reviews the case, the recommendation of the majority shall prevail. If the medical professionals reviewing the case are evenly split as to whether the disputed health care service should be provided, the decision shall be in favor of providing the service. (e) The independent medical review organization shall provide the director, the plan, the enrollee, and the enrollee's provider with the analyses and determinations of the medical professionals reviewing the case, and a description of the qualifications of the medical professionals. The independent medical review organization shall keep the names of the reviewers confidential in all communications with entities or individuals outside the independent medical review organization, except in cases where the reviewer is called to testify and in response to court orders. If more than one medical professional reviewed the case and the result was differing determinations, the independent medical review organization shall provide each of the separate reviewer's analyses and determinations. (f) The director shall immediately adopt the determination of the independent medical review organization, and shall promptly issue a written decision to the parties that shall be binding on the plan. (g) After removing the names of the parties, including, but not limited to, the enrollee, all medical providers, the plan, and any of the insurer's employees or contractors, director decisions adopting a determination of an independent medical review organization shall be made available by the department to the public upon request, at the department's cost and after considering applicable laws governing disclosure of public records, confidentiality, and personal privacy. SEC. 4. Section 1374.37 is added to the Health and Safety Code , to read: 1374.37. A treating provider may directly apply to the department for an independent medical review of a decision to deny, modify, or delay health care services with respect to a specific enrollee pursuant to this article. SEC. 5. Section 10169.4 is added to the Insurance Code , to read: 10169.4. Notwithstanding any other provision of law, the insurer has the burden of proof in any medical necessity determination or any determination to deny, reduce, limit, or delay health care services, including, but not limited to, any determination made pursuant to this article. For purposes of this section, "burden of proof" means that there shall be a presumption of medical necessity, unless the insurer proves otherwise in accordance with the standard established in Section 115 of the Evidence Code. SEC. 6. Section 10169.6 is added to the Insurance Code , to read: 10169.6. A treating provider may directly apply to the department for an independent medical review of a decision to deny, modify, or delay health care services with respect to a specific insured pursuant to this article.