[31 Pa.B. 3043]
[Continued from previous Web Page] Section 9.673. Plan provision of prescription drug benefits to enrollees.
The Department received numerous comments on this proposed section. One commentator supported the provisions of this proposed section that would require the plan to disclose to an enrollee or prospective enrollee within a specified time limit from when the inquiry is made, as to whether a particular drug is on its formulary and the recognition that disputes about exceptions to the formulary should be treated as grievances.
One commentator commented that the proposed section was not protective of older persons, since it permitted plans to impose drug formularies without requiring them to tell prospective members whether their medications would be covered.
The Department appreciates the concern expressed by this comment, however, the Department believes it has done what could be done within the constraints of the language of Act 68 to ensure that information is provided to all enrollees albeit by enrollee or prospective enrollee request. Subsection (a) of the regulation requires a plan to disclose to an enrollee that it uses a formulary and that limitations may result. Subsection (b) requires the plan to tell an enrollee, prospective enrollee or health care provider, upon request, if a particular drug is or is not on the formulary and if not, what other drugs in the class are covered or how to access the formulary. The Department has added language to the proposed section to allow for a verbal as well as a written enrollee or prospective enrollee request, to provide greater access to necessary information for enrollees to make informed decisions.
Several commentators stated that proposed subsection (a) should require plans to inform prospective enrollees if the list of available drugs is to be strictly limited. One commentator commented that it was insufficient for the proposed subsection to require notice of potential limitations in the formulary. The commentator urged that information on all drug exclusions should be provided to current and potential enrollees. One commentator stated that the marketing material should also include the procedure for obtaining an exception to the drug formulary.
The Department has made no change to proposed subsection (a). Disclosure of the existence of a formulary and what the requirement to use a formulary entails in the marketing material does make the information available to prospective enrollees. Disclosure of a list of all drugs excluded by the formulary would be a prohibitively large amount of information of questionable usefulness to the vast majority of enrollees, and extremely expensive to provide. Disclosure of the procedure for requesting an exception to the formulary is not included in Act 68 as an automatic disclosure, but must be made available to the enrollee upon written request.
Further, subsection (b) requires a plan to answer a prospective enrollee's inquiry about a specific drug. The Department has also added the requirement that the plans provide a list of those drugs in the same class that are on the formulary in any negative response, or instruct the enrollee how to obtain access to formulary alternatives, for example, through use of a website. This serves to give the enrollee and prospective enrollee useful information about what alternate drugs are covered by the plan rather than a simple answer that the requested drug is not on the formulary. Enrollees may then discuss the formulary options with their prescribing physicians and make informed decisions.
Several of the comments on subsection (b), including one from IRRC, related to the Department's proposed requirement that a plan respond in writing, within 30 days of its receipt, to an enrollee's or prospective enrollee's request concerning whether a specific drug is on the formulary. All of these commentators commented that the time period was too long, and some suggested time frames of from 1 day to 5 days.
Two commentators commented that potential enrollees should be able to obtain classes of disease specific drugs included on the formulary immediately upon a verbal or written request.
The Department recognizes that most inquiries and responses are verbal. In fact, it has been suggested that a written response should not be required. Plans are able to satisfy the enrollee by a verbal response at the time of the call, therefore, the enrollee has the necessary information. However, written notification is the only way to confirm that the activity did occur, and within the required time frame. The Department recognizes that some plans do have formularies on the Internet and can respond more quickly, however, the Department has decided to adhere to a maximum of a 30-day written response time. Further, the Department agrees that plans should be able to accept a verbal request. The Department will continue to require the plan to provide a response in writing, even if the information is provided at the time of the verbal inquiry. Although health care providers are generally provided with the formulary, the Department also agrees that a health care provider should be able to make the request for a patient. The Department has made changes to the proposed subsection to implement its decision on these matters.
One commentator commended the Department's formulary exception process. The commentator also recommended that the Department require that a formulary exception be granted by the plan when an enrollee has a chronic condition that is difficult to manage and has been finally stabilized on another medication.
Several other commentators recommended changes to the exception process including: that the Department specify conditions when a plan must approve an exception; that Department approval of the exception process be required; that the exception process be separate from the grievance process; that coverage must be provided if the drug is medically necessary; that plans consider information from other persons, including family, when reviewing for medical necessity; that plans be prohibited from forcing providers to use the formulary; that plans be prohibited from denying coverage for a drug because it is not on the formulary; that specific time frames for processing an exception request be set, ranging from 1-business day to 48 hours; that all denials of requests for an exception to the drug formulary be processed as expedited grievances; and that providers be given notice of proposed formulary changes along with the opportunity to comment. Additional comments included: recommending requirements that the plan's formulary committee include a primary care physician in active practice and licensed in this Commonwealth; that the enrollee be provided coverage for the excluded drug throughout the exception request and appeal processes; that an enrollee getting drugs later excluded through changes to the formulary receive continued coverage under a ''grandfathering'' provision, and, that a consistent and uniform policy regarding amounts of drugs to be dispensed be required across all plans.
One commentator also recommended changing the language to state that a provider ''may request'' to prescribe and obtain coverage rather than ''may prescribe and obtain coverage.''
The Department reviewed the comments, and agrees that a time limit should be set on the exception request process. The Department has added language to proposed subsection (c) requiring that exception requests be processed within 2 business days of receipt, consistent with a prospective utilization review request (see section 2152(a)(4)(I) of Article XXI (40 P. S. § 991.2152(a)(4)(I)), and that a denial must include the basis and clinical rationale for the decision. See section 2152(a)(6) of Article XXI. The Department will not amend the regulation to provide that coverage will be required during the review period just as it will not require coverage for any other health care service under prospective review. The Department has added language, however, to clarify that if the exception to the formulary is granted, the plan must provide coverage for the exception to the extent that it has disclosed it would in the description of coverage, benefits, and benefit maximums required by section 2136(a)(1) of Article XXI (40 P. S. § 991.2136(a)(1).
The Department is also requiring plans to provide at least 30 days notice to health care providers of formulary changes that remove drugs from the formulary, unless the Food and Drug Administration (FDA) either approves a new drug or withdraws approval of a drug. This will serve as notice to providers that patients should be transitioned to alternate medications on the formulary or that formulary exceptions must be requested. See subsection (e).
With respect to the comment that the regulations should require plans to provide a comment period before making changes to the drug formulary, and require plans to include a physician on the formulary review committee, the Department's authority is limited to the requiring that a plan set up an exception procedure to seek coverage of nonformulary drugs. The Department cannot require plans to allow a comment period or require the plans to include a primary care physician licensed in this Commonwealth and in active clinical practice on the review committee. Further, once a plan deletes drugs from the formulary, the Department cannot require the coverage to extend beyond the effective date of the change, but the Department can require 30 days advance notice in instances when drugs are removed from the formulary, and it has done so.
With respect to the comment concerning prohibiting plans from requiring physicians to prescribe from the formulary, physicians are not limited to prescribing only those drugs on a formulary. Further, the Department is unaware of any instance in which a provider contract requires or ''forces'' the provider to prescribe only formulary drugs. The Department, however, is unable to require coverage for any drug a physician prescribes. This would have the effect of mandating a benefit, which the Department has no authority to do. The Department has, however, included in the regulations the conditions under which a plan must consider an exception to provide coverage for a drug not included.
Commentators, including IRRC, recommended that the Department add language to proposed subsection (d) requiring that the plan provide its policy and process for obtaining an exception to enrollees and prospective enrollees upon request. One commentator recommended that the policy and process also be sent to nonparticipating providers.
The Department has added language to implement the first recommendation. As to the second comment, the Department's original intent was to require automatic distribution to participating health care providers of the plan's policy and process for obtaining an exception to its drug formulary even though Act 68 only makes this item required upon request. The language in this subsection was limited to providers because the exception process is to be a process by which a provider may prescribe and obtain coverage for certain drugs and types of drugs enumerated in subsection (c).
Seven commentators, including IRRC, questioned the proposal that all refusals to grant exceptions should be treated as grievances. Several commentators commented that if a drug is not covered as result of an exclusion the member should be directed to file a complaint. Others commented that the denial of an exception should always be considered a complaint.
After reconsideration of this issue, the Department agrees that challenge to a plan's refusal to grant a formulary exception may not always be a grievance, however, it may not always be a complaint. If a drug, class of drugs or drugs used to treat a specific condition are specifically excluded from coverage in the enrollee contract, appeals for coverage of specific exclusions would be considered complaints, as the issue is a contractual limitation regardless of medical necessity and appropriateness. If the appeal involves the medical necessity and appropriateness of one drug versus another, the appeal is a grievance and must be processed as a grievance. The Department intends to categorize as grievances all requests for formulary exceptions that were based upon medical necessity and appropriateness. The Department has changed the language of this subsection to clarify whether an appeal is a complaint or grievance.
One commentator requested clarification of whether this provision would apply to closed formularies. This subsection applies whether or not the formulary is closed.
Section 9.674. Quality assurance standards.
The Department received many comments on this proposed section. One commentator was pleased that the proposed regulations required quality assurance programs. Several commentators, including IRRC, commented on the lack of specific standards or outcome measurements in the proposed regulations. Several of these commentators stated that the requirement that plans have a quality assurance process in place and follow that process was insufficient for quality assurance purposes. These commentators stated that the Department should be involved in the determination of quality standards and the evaluation of quality. One commentator recommended that the Department require plans to have a quality improvement plan when quality assurance standards are not met.
For over 10 years, all health plans in this Commonwealth have been reviewed and assessed by the NCQA according to its quality assurance/quality improvement (QA/QI) standards. The NCQA is the only entity currently approved by the Department to conduct external quality assurance assessments. The NCQA's review includes evaluation of a plan's quality management and improvement program, including the structure, operations, provider contracting, access and availability of providers, member satisfaction, health management systems, clinical practice guidelines, continuity of care and coordination, clinical measurement activities, intervention and follow-up for clinical issues, effectiveness of that program and oversight and performance of any subcontractors. The NCQA's quality assurance standards also include standards for utilization management, credentialing and recredentialing, member rights and responsibilities, preventive health services and medical records. These NCQA standards do not set quality goals, but rather focus on meaningful structure, process and systems that must be present, documented and verifiable in a legitimate, thorough, committed, integrated and responsible QA/QI effort.
The Department believes that QA/QI is, and must be, a cyclical and constant process of evaluation, goal setting, development and implementation of interventions, performance measures and reevaluation of goals. The QA/QI is the continuous and progressive advancement toward goals designed in pursuit of the very best that can be achieved. The focus of a continuous quality improvement program is the relentless drive to attain 100% perfection. Regulatory standards will serve to define minimally acceptable quality to the degree that quality can be defined at this point in time given current knowledge of healthcare and healthcare delivery. Due to rapid advances in medical technology and treatment, such standards may serve to chain plans to outmoded or possibly unsafe practices simply because regulations require it. For example, to require that all children be fully immunized by the age of 2 represents the best thinking and current state of medicine at the present time. This thinking may be revised to raise the age at which full immunization should occur or to lower it, based on scientific advances. Plans would be forced to choose between regulatory compliance or the dictates of Nationally recognized standards of care. And while it is true that regulations can be amended, the rapid advances in medicine would likely make this an annual if not semi-annual occurrence should the Department start setting performance standards in regulation.
Additionally, the state-of-the-art of measuring and defining quality is by most accounts in its infancy. Quality is most always defined on a highly individual and therefore subjective level. As an illustration, a surgeon may have successfully reattached a severed hand, which results in moderate mobility for the patient. The surgeon believes this to be a quality outcome. The patient may not be able to retain employment unless able to grasp objects, and the patient, therefore, believes the outcome to be poor quality because the patient has less than full mobility. A prosthesis which would have allowed the patient to grasp objects would have allowed continued employment and could have been a more preferable and therefore a more quality outcome from the patient's perspective.
The Department believes that the approach it has taken in the regulations, imposing requirements for a meaningful, sustainable and dynamic quality program accountable to the board of directors and the agency for results as well as process, is a more realistic approach to achieving continuous quality improvement than attempting to define a set of quality standards in regulation.
Several commentators commented on the lack of a consumer satisfaction survey in this section. All plans currently are required to undergo an external quality assurance assessment by an agency approved by the Department. The NCQA is, and has been, the only agency approved to perform these reviews for the last 10 years. Therefore, all plans are reviewed consistently and equally against NCQA requirements. One of these requirements is to conduct a member satisfaction survey using the Consumer Assessment of Health Plans Survey (CAHPS) survey instrument and standardized methodology, developed independently by a consortium of Harvard Medical School, RAND, Research Triangle Institute, Westat and the Agency for Healthcare Research and Quality. In addition to requiring periodic assessment of consumer satisfaction through the external quality assurance assessment review, the Department will be conducting its own survey of member satisfaction using this standardized survey tool in fiscal year 2000--2001 and intends to make the results available to the public.
One commentator raised concerns about the fact that the Department relies upon external reviews by the NCQA, or another approved accrediting body. The commentator commented that this external review was being done by an accrediting body hired by the plan and paid for by the plan. The commentator also stated that the plan determines the scope of review.
A plan does not determine the scope of review. Rather, the Department determines the scope of review when it evaluates and approves accrediting bodies to perform external reviews. By evaluating the NCQA standards and requirements and by approving the NCQA to conduct external quality reviews, the Department has defined the scope of the review not the plans. See § 9.654 (relating to HMO external quality assurance assessment).
Several commentators recommended the addition of specific language concerning the quality assurance plan, including standards for health promotion, detection of disease, injury prevention, and early identification of special chronic and acute care needs. A few commentators also recommended including in this section maximum appointment waiting times for all types of health care services. One commentator recommended that the QA plan require fair utilization standards that would be applied consistently and equitably, but with attention to the individual. This same commentator recommended that the Department add three clinical improvement study activities and a minimum of ten quality improvement initiatives to the regulation. The commentator also recommended that the Department add a requirement that plans include a ''medical necessity'' definition that complies with Act 68, and provides quality health care for enrollees of all ages, including those with chronic health care conditions.
The Department agrees that health promotion, detection of disease, injury prevention, clinical improvement activities, quality improvement initiatives and early identification of special chronic and acute care needs should be included in the regulation as components of a quality assurance program. It has added this requirement as subsection (c), but has not specified the number of initiatives in each category that a plan must undertake each year. The Department does not want to set a minimum number in regulation that could rapidly prove insufficient or substandard for the purpose of improving healthcare services. The Department has also added the requirement that the plan notify health care providers and enrollees of these standards, and that the plan involve health care providers and enrollees in updating the QA plan.
Concerns about development and application of fair and consistent utilization review standards are addressed in subsection (c)(1)(v). That regulation requires a plan to set access and availability standards, approved by the plan's quality assurance committee comprised of health care providers, and to conduct an annual study of access and availability to be included in the plan's annual report of quality assurance activities. See subsection (b)(10). The Department will continue to closely monitor the access and availability standards, studies and audits. The Department has not, however, set appointment times in standards. Plans are not solely in control of this dynamic which is extremely variable and highly dependent on the existing delivery system in a community, the overall demographics and health care purchasing habits of a community, seasonality stressors, introduction and proliferation of technology, and provider motivation.
One commentator recommended that the Department delete the language in proposed subsection (b)(1) that states a description of the plan's quality assurance program must be provided upon request, and replace it with language requiring the information to be submitted at the time of the application for a certificate of authority, or when changes to the QA program are made. This would allow the Department and interested parties to review the information.
After reviewing the language of the proposed paragraph, the Department has decided to revise the regulations to address the commentator's recommendation. Information relating to studies, evaluation of results, actions recommended and implemented, and aggregate data are more appropriately included in subsection (b)(10), which requires that the plan annually provide a report of the annual quality assurance activities to the plan's board and to the Department. The Department has, therefore, moved that language from subsection (b)(1) to subsection (b)(10). The Department has also revised § 9.604 (relating to plan reporting requirements), to make it clear that the description of the quality assurance program (subsection (b)(1)), the description of the annual quality assurance work plan (subsection (b)(9)) and the annual report of quality assurance activities (subsection (b)(10)) are submitted to the Department as part of the annual report. See § 9.604(a)(9). Two commentators supported the proposal in subsection (b)(3) that the activities of the plan's quality assurance program be overseen by a quality assurance committee that includes plan participating physicians in active clinical practice.
Two other commentators recommended that the Department change the proposed regulation to require health care providers or professionals other than physicians to be a part of the committee. One of these commentators also recommended that participating physicians not employed by the plan should also be included on the committee.
The Department reviewed these comments, and agrees that the quality assurance committee would benefit from a broader array of health care providers participating on the committee. The Department has changed the language of the regulation to require the committee to include plan participating health care providers instead of just physicians. This will allow for greater involvement by all providers participating in the plan. Further, if plans choose to use a treatment team approach and involve nonphysicians on the committee, the Department would not object.
With respect to the comment that participating physicians not employed by the plan be included in the committee, the Department has made no change. The prohibition against plan employment for members of the committee is not necessary, as the function of the committee is to review clinical issues and not business practice. Further, if this suggestion was made in an attempt to avoid conflict of interest, it would not be enough to prohibit physicians employed by the plan from serving on the committee. The Department would also have to prohibit a participating provider since participating providers can and do draw significant income from reimbursement for health care services provided. The Department has reinforced the purpose of and charge to the committee in the regulations; it believes this will reinforce the duty of those on the committee to serve as practicing physicians first and foremost.
Two commentators recommended that the Department define ''active clinical practice,'' since it is used in subsection (b)(3) and in other parts of the regulations. The Department agrees that it would be useful to include this definition, and has included the definition from Act 68 in § 9.602.
IRRC commented on proposed subsection (b)(4), stating that the Department needed to define the appropriate individuals and their responsibilities regarding quality assurance structures and processes. The Department has not changed this proposed paragraph. The Department cannot define the organizational structure of the corporation and has no desire to get to this level of detail. It is up to the plan to define the appropriate individuals to participate in the QA process, the relationships within the organization and how their responsibilities are to be defined and assigned.
IRRC commented that proposed subsection (b)(9) and (10) were similar, and recommended that they be combined. Paragraph (9) pertains to the plan's duty to report to the Department its quality assurance work plan, while paragraph (10) pertains to the plan's duty to report on its quality assurance activities to the plan's board of directors and the Department.
The Department has reviewed proposed paragraphs (9) and (10). The Department has decided against combining these paragraphs. The Department requires the details of what QA activities are to be undertaken, and how the plan proposes to carry out these activities. The board of directors should be reviewing the results of the activities in addition to the Department. The plan may, if it chooses to do so, combine these reports, if the plan notifies the Department that it is combining the documents. Other revisions to paragraph (10) previously discussed further warrant the separation of the two paragraphs.
Several commentators had general comments relating to the proposed subsection. One commentator commented that the 3-year review period for external reviews was too long, and that annual reporting was necessary. Another commentator recommended that the Department evaluate each plan's quality improvement efforts for effectiveness on an annual basis and make the results of that evaluation public.
The Department does require annual reporting. The annual report by the QA committee to the board of directors is part of the annual report sent to the Department by the plan, and is available to the public. See § 9.604(a)(9) (relating to annual reports). Further, the Department will review the plan's annual quality assurance work plan, or schedule of activities, including objectives, scope, and planned projects or activities for the upcoming year. See § 9.674(b)(9) (relating to quality assurance standards.)
One commentator recommended that the Department reconcile proposed subsection (b)(10) with proposed § 9.604. The commentator commented that the section made sense in fulfilling responsibilities under section 2111 of Article XXI; however, the combined reporting requirements in proposed § 9.604 and this proposed section go beyond what was envisioned by Act 68. The commentator stated that the reports were not needed by the Department to ensure compliance with that act.
The Department has reviewed both sections, and finds no inconsistencies. The sections may be read together, and together require that the Department be provided with sufficient information to carry out its responsibilities under the HMO Act, the PPO Act and Act 68.
Section 9.675. Delegation of medical management.
The Department received several comments on this proposed section. One commentator supported the proposed section as making a substantial contribution to the Department's goals. Another commentator supported the Department's language in proposed subsection (c) prohibiting compensation to contractors performing medical management from including incentives to deny payment for services.
One commentator requested clarification from the Department concerning the applicability of this proposed section to ancillary service plans for any functions other than UR. The commentator stated that current NCQA standards do not require any oversight of vision or dental subcontractors.
If ancillary service plans subcontract with an HMO to provide benefits and services that are sold and billed by the HMO, and part of that service involves medical management as defined by the Department's regulations, rather than simple benefits administration, then this section would apply.
The commentator also asked what latitude the Department would grant regarding a National accrediting organization's requirements for subcontractor oversight. For example, if a subcontractor is approved by the NCQA as a credentialed verification organization (CVO), then the commentator stated that the plan should be relieved of oversight functions for credentialing delegation, consistent with the NCQA's accrediting standards.
A plan is never relieved of oversight completely even under the NCQA standards. The degree of oversight and vigilance that a plan must exercise over a subcontractor may be relaxed to some degree by the plan's confidence in the subcontractor's accreditation from the NCQA. However, the Department takes the position that the plan is always responsible for plan activities whether performed by the plan or a subcontractor, and the terms of the medical management contract must make that clear. The contract must also enable the plan to monitor and take corrective action on a timely basis.
Two commentators raised issues concerning the concept of subcontracting medical management functions. One commentator commented that the absence of controls on subcontracting was troublesome. The commentator was concerned by delegation of medical management if the Department approves the medical management agreement without explicit standards for UR in an integrated delivery system. The commentator also raised concerns that an HMO would be at risk for plan obligations and responsibilities with minimal protections for important functions such as credentialing and quality assurance performed by subcontractors.
Another commentator found it disturbing that plans are permitted to subcontract functions to unlicensed entities.
There is no provision in statute for the Department to certify or license all types of contractors; however, the entity over which the Department has regulatory authority, that is, the managed care plan, remains responsible for the subcontracted functions, regardless of whether the subcontractor is licensed or not. Contractors undertaking utilization review as an aspect of medical management must be certified and therefore must meet the standards in Subchapter K before they can perform UR functions. This means that the Department will take action against a plan if its contractor is not performing in accordance with the law. The action may take the form of a fine, a ban on admissions, or a revocation or suspension of certification in the case of an HMO.
Further, there is nothing in Act 68 or the HMO Act that would prohibit a plan from contracting for these functions. The Department is taking steps to oversee these arrangements by including standards that plans must meet before the contracting can take place, and by requiring more reporting to the plan by these entities to ensure more plan oversight than has previously been occurring.
One commentator commented that plans should be required to disclose medical management delegation to enrollees and health care providers. Since the regulated entity is responsible for the provision or arrangement of the provision of services to the enrollee, the fact that certain functions are delegated should make no difference to that enrollee. The Department has made no changes to this proposed section based upon this commentator. If there is a breakdown in services caused by the delegation, it is the plan that will answer to the Department. Further, disclosure of medical management contracts to enrollees is not required by section 2136 of Article XXI.
The Department received several comments on proposed subsection (a). One commentator supported the requirement that a plan obtain approval from the Department for any contract that would delegate medical management functions to another entity.
IRRC and another commentator both commented on the lack of a timeline for the Department's review of a medical management contract in the proposed subsection. The commentator recommended that the Department include language in the regulation permitting a plan to deem the contract approved if the Department does not approve it or request further information within a specific time period.
The Department specifically removed all reference to what are referred to as ''deemer provisions'' from the proposed regulations, and does not intend to reintroduce them. The Department has a responsibility under the law to ensure that certain actions by plans meet the standards of Act 68 and the HMO Act. As medical management almost invariably involves UR, much more scrutiny of contract terms is now required given the requirements and prohibitions in Act 68. To deem something approved without actually reviewing and approving it is to abdicate responsibility under those statutes, since contracts that do not meet the standards of the regulations may be approved by this mechanism. The Department must, therefore, review these contracts.
The Department is aware, however, of the concerns of plans that delay on the Department's part could create difficulties for plan operations. The Department has, therefore, included language that will require a plan to submit a contract prior to its use, but if the Department fails to review the contract within that time frame, the plan may use the contract. The contract will be presumed to meet the requirements of all applicable laws. If the contract is in violation of law, the plan must correct that violation. The plan is responsible for ensuring that the contract meets the requirements of Act 68, and any other applicable law. The Department may, within that 45-day period, request further information or changes from the plan; such a request would toll the 45-day review period.
One commentator also raised concerns that plans have contracts in place without previously being required to obtain Department approval. The commentator asked whether the Department intended to ''grandfather-in'' existing contracts, and strongly urged that this proposed section should only apply to contracts coming into existence or renewed after the effective date of the final-form regulations. The commentator also raised concerns that plans that have contracts in effect at the time of the effective date of the final-form regulations could face sanctions if language changes were not made to the proposed regulations. The Department will not require refiling of contracts already approved.
One commentator requested that the Department clarify its statutory authority to require submission and prior review of medical management contracts between a plan and a contractor. The commentator stated that plans should be free to contract with vendors without prior review and approval by the Department, and that it was the Department's responsibility to review the results of the medical management, and not the vendor relationships. The commentator also raised concerns regarding confidential and proprietary nature of the information contained in the contracts.
The Department has authority to promulgate regulations relating to contractual relationships between the managed care plan and providers, including medical management arrangements, under Act 68, the PPO Act and the HMO Act. The Department has the authority to require HMOs to renegotiate provider contracts when they provide for excessive payments, fail to include reasonable incentives for cost control, or otherwise substantially and unreasonably contribute to the escalation of costs of providing health care services, or they are otherwise inconsistent with the purposes of the HMO Act. See section 8(a) of the HMO Act (40 P. S. § 1558(a)). If the Department has already determined that a certain contractual provision will always be disapproved, or that certain language must be included in a contract to obtain approval, the Department has the ability to prohibit or require that information in a contract, or to require renegotiation. The Department can, therefore, pre-approve contracts under the HMO Act, given this renegotiation authority.
The PPO Act requires that Insurance consult with the Department in determining whether arrangements and provisions for a PPO which assumes financial risk, which may lead to under-treatment or poor quality care, are adequately addressed by quality and utilization controls. See section 630 of the PPO Act (40 P. S. § 764a(e)). These provider contracts are mechanisms by which the managed care plan can address quality and utilization.
Finally, section 2111(1) of Article XXI requires a managed care plan to assure availability and access of adequate health care providers to enable enrollees to have access to quality and continuity of care. Unless the Department reviews these medical management arrangements before their initiation, the Department could be permitting an arrangement that would impact the health and safety of the enrollee, and would be abdicating responsibility under the Article XXI.
The Department certifies the original medical management operations of the plan through the application process and readiness review. The Department monitors changes in structure, process and outcomes through the annual and quarterly reports. Delegation of medical management as a critical function to an unknown entity requires the same level of review by the Department as that of a start-up plan, that is, the Department must verify that the operations will be sufficient before allowing the plan to provide coverage to a single enrollee who would be placed in jeopardy if the subcontractor is not ready to perform medical management functions. All these provisions, taken together, permit the Department to review and approve medical management contracts.
One commentator has suggested that the results of the medical management contract, and not the contract itself, should be the focus of the Department's review, and that, therefore, the Department need not review contracts prior to their use. The Department disagrees with this reasoning. The consequences or results of a medical management contract could be an inappropriate denial of coverage for medically necessary and appropriate services, which, once done, cannot be undone for the affected enrollee in a way which would restore lost health or safety. The Department's focus under Act 68 is access and availability to health care providers that allows an enrollee to receive quality care. See section 2111(1) of Article XXI. If an enrollee is harmed due to a failure of a plan to meet the standards of the act and regulations on these matters, fining the plan does not serve to make that enrollee whole, although other enrollees may be prevented from harm in the future. The Department will enforce the act by reviewing these contracts to prevent this type of harm from occurring in the first instance.
The Department understands the plans' concerns with regard to proprietary and confidential information. It will consider requests to list information as proprietary and confidential. The Department is adding language to subsection (a) which states its intent to keep confidential reimbursement methodologies confidential, unless ordered to do so by a court of law; however, if other information submitted in a filing is neither proprietary, nor is protected by any other law or regulation, the Department most likely cannot keep such information from the public record.
One commentator questioned whether the Department was requiring filing of each medical management contract, or whether the Department was requiring filing of generic contracts. The commentator also asked whether the Department would deem approved those medical delegation plans approved by a National accrediting organization.
The Department is requiring submission of specific contracts, since the Department's intention is to ensure that the contractor will perform its functions as would the plan, and that the plan will be maintaining oversight, and, if necessary, can take remedial action if a problem arises.
Although the Department has permitted contractors involved in arrangements with HMOs to obtain a separate review of its operations by an external quality review organization approved by the Department, the Department does not intend to deem this review as dispositive of whether the arrangement meets its approval. The Department will consider that review (see subsection (c)), but the final decision rests with the Department.
Two commentators recommended that the Department include in proposed subsection (d)(3) a requirement for random sampling to be performed by a plan annually, or to include enough persons to have validity. One of these commentators also recommended that contractors be required to report to a plan on a monthly basis.
The Department's regulation does require random sampling, and the Department has added the requirement that the sampling occur annually. Plans should not be required to obtain statistically significant evidence to have proof of the contractor's failure to perform, evidence produced by random sampling is sufficient to show a contractor's breach. Monthly reporting is very costly to both parties; a plan may choose to require monthly reports if it wishes, however, the Department will not require it. The Department believes quarterly reporting is sufficient for responsible oversight and provides the plan with sufficient data for the plan's required quarterly report to the Department.
One commentator commented that proposed subsection (d)(2), which would require quarterly reporting by the plan regarding the delegated activities, and proposed subsection (d)(5), which would require the contractor to submit written reports of activities to the plan's quality assurance committee on a quarterly basis, seemed to be the same. Since this was not the Department's intention, and since the proposed paragraphs did sound similar, the Department has added language to clarify the differences.
In paragraph (2), the contractor will now be required to report concerning the arrangement or provision of health care services and the impact of the delegated activities on the quality and delivery of health care services. Paragraph (5) will now require the contractor to cooperate and participate in any quality assurance activities and studies undertaken by the plan that pertain to the enrollee population served by the contractor, including submitting written reports of activities and accomplishments on plan-directed and any contractor initiated activities.
One commentator requested that the Department ensure that the requirements for independent review of delegated subcontractors do not conflict with the requirements of any National accrediting body.
There is no need for the Department to make any change to the regulation to address this concern. The Department will keep this comment in mind as additional accrediting bodies are approved to ensure that no conflicting standards are inadvertently set. The Department reserves the right to disagree with any standard of an accrediting body.
Section 9.676. Standards for enrollee rights and responsibilities.
The Department received several comments on this proposed section. Most of the comments expressed concern over the Department's revisions of an earlier set of draft regulations. One commentator provided the Department with comments upon that draft, rather than on the Department's proposed regulations.
After review of the many comments received on this proposed section, some of which argued that the Department did have authority to promulgate a list of enrollee rights and plan responsibilities, and others which argued that the Department did not, the Department has decided to replace the proposed language with language from the NCQA standards regarding a health plan's commitment to enrollee rights and responsibilities. This eliminates any concern that the Department is attempting to require additional disclosure of plans beyond those required by Act 68 and, which is predominantly the purview of Insurance. The Department has substantially retained subsections (b) and (c) of repealed § 9.77 (relating to subscriber rights), since these requirements are unique to this Commonwealth, and would not appear in the NCQA standards.
Several commentators raised concerns that the proposed section did not include Act 68 rights, and requirements that enrollees and other persons be given notice of rights. The Department is not, however, the agency with responsibility for requiring full and accurate disclosure by managed care plans to enrollees. Those responsibilities devolve to Insurance, which is the agency given statutory oversight over subscriber agreements and marketing literature, and which enforces the Unfair Insurance Practices Act. Section 2136(b)(10) of Article XXI, cited by one commentator as proof of the Department's authority to set out these rights, only states that the Department may, along with Insurance, require that plans provide other information those agencies specify to the enrollee or prospective enrollee if they specifically request it. This is not a clear charge to the Department to develop and require plans to provide notice to enrollees, prospective enrollees or providers with a list of rights.
Two commentators recommended that the Department more fully address the needs of non-English speaking enrollees. The Department believes Act 68 is clear that a plan has a responsibility to disclose how it will address the needs of non-English speaking enrollees. See section 2136(a)(5) of Article XXI, and, further, that Insurance is the agency with responsibility for disclosure issues.
Several commentators recommended that the Department address the issue of disclosure to enrollees concerning a plan's complaint and grievance system. These commentators raised concerns that enrollees will overlook information provided on an annual basis and which does not come contemporaneously with a denial letter.
With respect to specific concerns surrounding notice of the complaint and grievance system requirements, the Department's regulations require that a plan notify the enrollee in writing that the enrollee has the right to be present at the review. Further, the regulations require that the decision letters of the plan include language notifying the enrollee that the enrollee has a right to appeal, and how to do so. See §§ 9.704 and 9.706. Issues concerning the complaint and grievance procedures are addressed in Subchapter I (relating to complaints and grievances).
Subsection 9.677. Requirements of definitions of medical necessity.
The Department received several comments on this proposed section. Several commentators stated that the Department had the authority to establish either a definition of medical necessity, or standards of reasonableness that a plan would need to satisfy in developing a definition. Five commentators recommended specific definitions for inclusion in the regulation.
Section 2111(3) of Article XXI makes it the responsibility of the plan to adopt and maintain a definition of medical necessity to be used by the plan in determining health care services. Act 68 does not make it the responsibility of the Department to develop such a definition, nor does it require plans to adopt the Department's definition. The definition is inextricably tied to benefits covered and excluded and the corresponding premiums charged. There is no way to predict what impact a regulatory definition of ''medical necessity'' would have on premiums and coverage throughout this Commonwealth.
This regulation requires that a plan's definition of medical necessity be consistent throughout the plan's documents. Eight commentators expressed support for this requirement. If a plan has failed to carry out this requirement, the Department will investigate, and take appropriate action under the regulations and Act 68. The Department has clarified this intention by requiring the definition to comply with the HMO and PPO Acts, Act 68 and the regulations.
One commentator did express concern over the requirement that definitions of ''medical necessity'' be consistent throughout a plan's documents. The commentator recommended that the Department limit this requirement to the plan contract and any other material covered by Act 68. It was the Department's intention, however, to include any document used by an entity defined as a managed care plan under Act 68 to determine coverage. The Department has decided against revising the proposed section.
More than 15 commentators recommended that the Department reinsert language from a draft which predated the proposed regulations. Several commentators raised issues concerning the deletion of language from the draft, which required the CRE performing the external grievance review to examine whether the plan's definition of ''medical necessity'' was unduly restrictive, or whether it deviates from the usual and customary language concerning medical necessity.
The Department reviewed the language in its earlier draft and decided against making any change based on that language. In fact, the earlier draft was faulty in that the term ''usual and customary'' was used, and is an inapplicable standard. Further, if the language were added, CREs would have been able, through external grievance review decisions, to alter the terms of coverage under the contract. This would essentially cede regulatory oversight to the CRE. The statute does not give CREs the authority to dictate the terms of coverage.
These commentators also recommended that the Department reinsert language which would have required the plan to adopt a definition that was consistent with industry standards, was not unduly restrictive and did not rely solely upon the interpretation of the medical director.
Again, the Department has decided to make no change to the proposed section based on the recommended language. Requiring plans to set a community standard could lower one person's access to care, while raising another's, so that there is no real uniformity. Further, as with the term ''usual and customary,'' the Department decided that the original draft was faulty in that there is no real National or industry standard for definitions of medical necessity, and that the requirement would be too subjective. The standard would have been unenforceable as too vague.
Four commentators commented that the Department should add language to the proposed section requiring the plan to consider information provided by the enrollee, the enrollee's family, the enrollee's primary care provider and other providers and agencies that have evaluated the enrollee in making a determination of the medical necessity.
The Department acknowledges that, to the extent the information offered is offered by someone who has clinically evaluated the individual, it could be useful in determining medical necessity. Information from sources other than those of a clinical nature are of less probative value in determining whether there is a medical reason for the service. Since, however, the Department does not intend to define the term, it has not added this language to the regulation.
One commentator commented that any definition included in the regulations must reference the Health Choices definition of medical necessity. Again, the Department has declined to include a definition. Therefore, this comment is moot. The Department of Public Welfare is acting as a purchaser, not a regulator, and is acting in conformance with Federal statute. Commercial plans have different considerations.
Section 9.678. Primary care providers.
The Department received several comments on this proposed section.
One commentator raised concerns that the proposed section contained no maximum doctor to patient ratio. The commentator noted that in the absence of a ratio, 1 doctor could treat 5,000 patients.
The Department has decided against including ratios in the regulations, because, except for a staff model HMO, they are no longer useful. Ratios are useful and necessary when a provider and all of the patients are in only one health plan. The plan can then hire additional providers when the ratio requires it. This is what repealed § 9.76(a)(1) was intended to address. It pertained to staff model HMOs in which the provider was an employee of the plan and called for a ratio of 1 physician to 1,600 patients.
In today's environment, however, providers are rarely employees of the health plan and each plan represents only a fraction of a physician's overall patient population. The physician, to a certain extent, can control this percentage by favoring one plan over another so that not all of the physician's patients are enrolled in any one health plan. Therefore, a physician could meet the ratio requirement for the enrollees of a given health plan, for example, the Department's current ratio of 1 to 1,600, and still be seeing 5,000 patients, 3,400 of whom are covered by other health plans or possibly have no insurance and pay directly for care. Further, unless the provider is an employee of the plan, the plan cannot control the staffing of a physician's office, which may have a different mix of advance practice nurses and other professionals.
The Department is including in subsection (a) a requirement that each enrollee have access to a primary care provider. The Department is requiring elsewhere in these regulations that a plan maintain a QA plan that sets standards for access, requires provider audits against those standards and develops initiatives or expands the network to address improving access and availability of care. See § 9.674(b)(7) (relating to quality assurance standards). These requirements are more relevant to availability and accessibility to care, given the changing nature of plans, than provider to patient ratios.
One commentator raised the same issues regarding subsection (a) as it did concerning the definition of ''primary care provider.'' It objected to replacement of ''physicians'' with ''providers,'' and stated that, since Act 68 did not alter requirements under the HMO Act, and the Department's previous regulations promulgated under the HMO Act specifically required the use of physicians, the change to providers could not be made. The commentator also stated that neither a CRNP nor a physician's assistant should be permitted to be a primary care provider, and recommended that the proposed section be revised to reflect that fact.
The Department has made no change to the proposed section based upon these comments. As the Department stated earlier, Act 68 created the term ''primary care provider'' and did not limit it to physicians. The fact that the Department's earlier regulations promulgated under the HMO Act, used the term ''physician'' does not require a different outcome. The HMO Act does not state that only physicians can be primary care providers. Further, enrollees have the ability to choose a primary care provider from the network.
Two commentators commented on the lack of training requirements in subsection (b). One of these commentators raised concerns that the proposed section did not require a primary care provider to be trained and experienced in primary care medicine. The commentator commented that persons with HIV are highly susceptible to a variety of opportunistic infections, many of which are life threatening if not treated properly. The commentator contended that if a provider, not trained in primary care medicine, fails to diagnose or properly treat these infections, the consequences could be deadly.
IRRC commented that this proposed subsection would allow a health care provider to operate as a primary care provider. IRRC noted that a health care provider under Act 68 included a wide variety of persons, and requested that the Department clarify which health care providers could operate as primary care providers.
Another commentator provided the Department with a list of criteria that it believed the Department should require physicians to meet before they could be considered to be primary care providers.
The Department's response to these commentators is the same. Act 68 defines a primary care provider as a health care provider who, within the scope of practice, supervises, coordinates, prescribes or otherwise provides or proposes to provide health care services; initiates referral for specialty care; and maintains continuity of care. So long as a health care provider, as defined under Act 68, meets this definition and the Department's additional requirements, that provider may be considered to be a primary care provider by the plan. The plan may set the training requirements it believes to be necessary for a provider to be considered a primary care provider through its credentialing requirements. Patients with any life-threatening, degenerative, or disabling disease or condition, including HIV/AIDS, may seek a standing referral to a specialist or the designation of the specialist to serve as a primary care provider, if they are concerned that the primary care provider they have chosen is not sufficiently expert in the disease to provide the necessary care.
One commentator commented that the proposed subsection should be revised to clarify that certain enrollees are entitled to have a specialist as their primary care provider. In fact, the subsection did provide for this as proposed, and does provide for this as adopted.
One commentator requested that the Department clarify whether a group of physicians practicing from the same location may combine their office hours to reach the number of hours required by subsection (b)(1). The commentator recommended that the proposed paragraph be revised to state: ''Each primary care physician or group of primary care physicians in a medical office must have a provider network physician available for scheduled visits a minimum of 20 hours per week, either individually or in the aggregate.''
The Department has not changed the proposed paragraph to include this recommendation. Each primary care provider must provide office hours (in that office) either directly or through other providers in the group to meet the hour requirement. The intent is for the enrollee to have access to primary care services from a single primary care provider or group of providers for no less than 20 hours per week. The language of paragraph (1) does not preclude the 20 hours-per-week requirement being satisfied by a group of primary care providers.
One commentator commented that the proposed subsection (b)(2) standard could be too restrictive if on-call arrangements could be made only with plan participating providers. The commentator further commented that plans should have the flexibility to review and approve alternative coverage arrangements, so long as enrollees are properly protected.
The Department has changed the language in paragraph (2) to clarify that all on-call arrangements must be with other primary care providers. The Department does not agree that arrangements may automatically be made with nonparticipating providers. Arrangements with nonparticipating primary care providers may be made, but only if the plan approves the arrangement, agrees to cover the services provided by the nonparticipating provider, and agrees to hold the enrollee harmless financially if plan policies and procedures which could result in noncovered services for enrollees are not met by the nonparticipating provider, or if the nonparticipating provider misleads the enrollee into believing a noncovered service will be covered.
One commentator supported the alternate arrangement language of proposed subsection (b)(4) for admitting an enrollee in a hospital, but requested that the Department provide protections to prevent plans from discriminating against providers by refusing to approve alternate arrangements.
The Department has not changed the proposed subsection. Discrimination complaints may be made to the Department, but Act 68's standard is accessibility of adequate providers. See section 2111(1) of Article XXI. This allows plans to determine what types of providers they will choose to use as primary care providers and what alternate arrangements will promote effective and efficient delivery of quality health care services.
One commentator recommended deleting from subsection (b)(4) the term ''admitting privileges,'' and replacing it with the term ''staffing privileges.'' The Department agrees that this change should be made, and has deleted the word ''admitting'' from the regulation. The Department has chosen to delete the word altogether, rather than to replace it with the word ''staffing,'' since the term ''staffing'' may not be used in all hospital bylaws that categorize the various types of privileges at each facility.
One commentator commented that proposed subsection (c) was unclear, since it did not state that under Act 68 plans are required to allow specialists to serve as primary care providers. The commentator requested clarification.
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