[31 Pa.B. 3043]
[Continued from previous Web Page] Section 9.724. Plan-IDS contracts.
The Department received several comments on this proposed section.
One commentator raised issues concerning safe harbor rules under fraud and abuse laws. The commentator stated that this section would affect the ability of an HMO to satisfy these safe harbor rules. The commentator pointed out that to meet safe harbor protections for management contracts and price reductions, the HMO must establish that the initial contract term is for 1-year. The commentator stated that safe harbor for management contracts may be applicable where there is a fee paid for the delegation of an administrative function. The commentator was also concerned that the section would hinder the ability of an HMO to enter into contracts with an IDS that insists on longer initial terms, particularly during the start up period when an IDS has a lot of startup costs. The commentator also commented that plans must have the ability to immediately terminate a contract with an IDS where there is the possibility of harm to the enrollees.
The Department does not believe that this section would in any way limit the term of a contract or require a 1-year minimum or maximum. Given the concerns raised, however, the Department is revising subsection (d)(13) to include language stating that if a plan and IDS agree to a termination without cause provision, neither party may terminate the agreement without cause upon less than 60 days prior written notice. The 60-day notice period is the minimum period the Department will accept. The plan and IDS may negotiate a longer notice provision if they wish, or may choose not to include a clause in the contract.
The same commentator expressed concern that the regulation would discourage out-of-State limited service IDSs from doing business in this Commonwealth. The Department disagrees with this statement.
Another commentator stated that the contract reporting requirements are inadequate. The commentator believes that if HMOs are no longer at financial risk, they will not adequately monitor the health care being provided under the IDS contract. The commentator further claimed that if an IDS is at financial risk, it will not want the HMO interfering with its utilization decisions, its credentialing decisions, and similar decisions of that nature.
The Department has not changed the proposed section to address these concerns. The license of the HMO is at risk in this matter, and it will be held accountable for services provided to its enrollees.
One commentator raised concerns that proposed subsection (a) would permit a licensed entity to subcontract almost all of its functions to any type of entity, and to put that entity at risk for providing all health care services instead of the HMO. The commentator noted that the only function an HMO could not subcontract was soliciting and enrolling members. The commentator also noted that the grievance and complaint process could also be subcontracted to an unlicensed person, corporation or other entity. The commentator stated that the Department had no direct regulatory authority over these entities.
The Department will hold the licensed entity responsible for the appropriate operations of its subcontractors. Should the Department find that the subcontractors are not complying with the terms of Act 68, that failure will be imputed to the licensed entity, which has the responsibility to ensure that its subcontractors comply with the law. Therefore, the Department does not need regulatory authority over the nonlicensed entity to ensure that the provisions of Act 68 and the HMO Act are met.
With respect to grievance reviews, grievance reviews can only be performed by an entity licensed and regulated by the Department.
Another commentator recommended adding time lines for reviews to the proposed subsection. The commentator also recommended adding language stating that nothing would supersede review and approval by Insurance of those contracts subject to Insurance's review under 40 Pa.C.S. § 6124.
The Department has added time frames to § 9.722(a), which, by the terms of § 9.723 and additional language the Department has added to subsection (a), applies to contracts between plans and IDSs. To the extent that a contract is to be used by a hospital plan corporation, it must be reviewed by Insurance. If the same contract includes or incorporates related entities, subsidiaries, or affiliates, and any of these associated or related entities is a managed care plan under Act 68, the contract must also be reviewed and approved by the Department.
The Department has revised the language in proposed subsection (b) to reflect the Department's intention to extend this section to plans as defined by Act 68.
One commentator commented that the proposed subsection contained inadequate remedies for an HMO failing to obtain prior approval of an HMO-IDS contract. The commentator noted that the proposed subsection would not prohibit such contracts without prior approval, rather it would require the contract to be renegotiated if prior approval is not obtained.
Another commentator recommended that the proposed subsection be amended to require review and approval of a contract only if it were not based on the approved generic contract already filed and approved by the Department.
The Department's intention is to review a plan's standard form contracts once, and to review any arrangements that are not based on that standard version. The Department is, however, requiring notice of all plan arrangements with an IDS and the nature of those arrangements to determine if CRE certification is required and to include the IDS in the Department's overall monitoring and compliance activities. The Department has revised the proposed subsection to impose these requirements.
The Department has, however, not added any enforcement language. The Department has the ability to take action against any plan that violates the terms of Act 68, the HMO Act or the Department's regulations. Should it become necessary to require a plan to submit a plan of correction involving the revision of contracts, the Department will take that action. Should it become necessary for the Department to consider fines in egregious situations, the Department has that option available as well.
One commentator recommended that the Department delete the requirement in proposed subsection (c) that plans submit copies of all IDS contracts with individual providers to the Department for approval. The commentator believed this requirement to be excessive. The commentator noted that the HMO was ultimately responsible for services being delivered, and that this level of review was an unnecessary administrative burden on the plan.
IRRC commented that this proposed subsection and § 9.723 were confusing because they would mix requirements for IDS and HMOs with IDS and health care providers. For example, IRRC noted that the proposed subsection would include the requirement that the HMO provide the Department with copies of contracts with IDSs, and also would include requirements for a contract between IDS and a provider. IRRC stated that these requirements should be included in separate sections.
The Department only intends to review the standard form contract between a plan and IDSs and not every single signed contract. The Department has revised this subsection to clarify that fact.
Further, the inclusion of requirements for IDS-provider contracts in this subsection was deliberate. The Department does need to include this language in this section since it pertains to the Department's approval of the overall plan-IDS contract. It is imperative that the Department verify that the relationship between the first level subcontractor and its second level subcontractors is consistent with the Department's requirements for traditional provider contracts. For this reason, the Department has added language in this subsection requiring notice that the providers have executed plan-provider contracts instead of IDS-provider contracts, or the plan must submit the standard contracts between the IDS and its providers for review and approval prior to the effective date of the plan-IDS contract.
One commentator questioned whether the Department really meant to say in proposed subsection (c)(1) (now subsection (d)(1)) that the ultimate provision of care remained the responsibility of the HMO. The commentator asserted that responsibility would be with the provider. The commentator recommended that the Department delete the term ''ultimate'' and use the term ''HMO operations'' as used in § 9.635.
The Department did not intend to imply that the plan was responsible for the care of providers in a medical sense; however, the Department does mean to make it clear that plans are ultimately responsible for benefits and services to enrollees. It has changed the language of this paragraph to reflect that fact.
Several commentators raised concerns that proposed subsection (c)(2) (now subsection (d)(2)) would permit an unlicensed person or an entity to deliver prepaid basic health services to enrollees and to perform administrative services without obtaining a certificate of authority. One commentator noted that consumers could enroll with an HMO, unaware that their health care has been subcontracted at full risk to an unlicensed entity. The commentator raised concerns that there would be no standards to determine adequate staffing, adequacy of networks or any other criteria necessary for a certificate of authority. The commentator stated that this almost totally unregulated, wholesale transfer of responsibility to unlicensed potentially unqualified entities was without statutory authority and should not be permitted.
Another commentator raised the concern that the HMO would be at risk with minimal protections for important functions such as credentialing and quality assurance.
The Department has abrogated no responsibility here. The licensed entity remains responsible for the subcontracted or delegated functions. This means that the Department will take action against a plan if its subcontractor is not performing in accordance with requirements imposed upon the plan. The Department has the authority to review provider contracts, and IDS is a provider arrangement; therefore, the Department has the authority to review and regulate IDS arrangements. The Department has no authority to prevent IDS arrangements from occurring.
Further, to the extent the IDS contracts with a plan covered by Act 68 for provision of services to enrollees, the IDS is subject to the Department's and to Insurance's regulations. IDS providers, through the IDS contract with the plan, and through the providers' contracts with the IDS, are required to be credentialed. The plan, by regulation, is required to take full responsibility for the benefits and services it provides through the IDS. See subsection (d)(1). The plan, by regulation, is required to ensure that its network is adequate. That network, including the IDS network, is reviewed by the Department. See § 9.679.
One commentator stated that proposed subsection (c)(5) (now subsection (d)(5)) exceeded the scope of the Department's statement of policy. The commentator acknowledged the Department's obligation to protect enrollees from potential disruption of services under HMO-IDS agreements, but it requested that the Department specify its statutory authority to excessively regulate IDSs through HMO contract agreements. For example, the commentator asked why the Department would require the IDS to acknowledge that the HMO was directly accountable to the Department for compliance and high quality cost-effective care. The commentator stated that there was nothing in the HMO regulations or in the HMO Act or Act 68 that would requires a plan to provide high quality cost-effective care.
The Department acknowledges that the use of the word ''high'' in the phrase ''high quality cost-effective care'' was inappropriate, and has deleted that word. With respect to the remainder of the comment, the Department is not regulating the IDS. The Department is regulating the plan, which remains responsible for the actual functions of the IDS. The Department has discussed its statutory authority to review contracts in its response to comments on § 9.722.
The Department requires an acknowledgement from the IDS that it is aware that the plan is accountable to the Department to ensure that the plan's responsibilities are clear to it and to all parties to the contract.
One commentator took issue with the proposed subsection (c)(13) (now subsection (d)(13)) requirement for the inclusion of the 60-day termination without cause clause in an IDS-plan contract. The commentator was concerned that a plan must have the ability to immediately terminate where there is the possibility of harm to the members. The commentator recommended that the Department make the paragraph consistent with § 9.722(e)(7), which states that an IDS must give at least 60 days notice to the plan prior to termination.
The Department has revised language in § 9.722(e)(7) and subsection (d)(13) to take into account situations in which the plan and provider do not negotiate a termination without cause provision, and situations in which the plan and provider choose to negotiate a notice period of longer than 60 days. The language in both sections is now the same.
Section 9.725. IDS-provider contracts.
The Department received three comments on this proposed section.
One commentator recommended that the Department add time lines for reviews of contracts between providers and an IDS that has contracted with a plan. The commentator also recommended the addition of language stating that nothing would supercede the review and approval by Insurance of those contracts subject to their review under 40 Pa.C.S. § 6124.
The Department has included time frames as discussed in comments to § 9.722. To the extent that a contract is to be used by a hospital plan corporation, it must be reviewed by Insurance. If the same contract includes or incorporates related entities, subsidiaries or affiliates, and any of these associated or related entities is a managed care plan under Act 68, the contract must also be reviewed and approved by the Department.
Another commentator commented that the proposed section should require IDSs to submit PBM contracts to the Department for review, and that PBM contracts should be held to the same standards as other IDS-provider contracts.
The same commentator recommended that the title of the section include PBM contracts, since a plan is responsible for the performance of all its subcontractors according to the regulations, which would include PBM contractors. The commentator felt that this required clarification, since PBMs are not specifically defined as health care providers under Act 68.
As the Department discussed earlier in response to a similar comment on § 9.722, a PBM may or may not be considered an IDS. To the extent that a PBM arrangement includes a network of providers, a PBM contract will be covered by the regulations. The determination must be made on a case by case basis.
For the purposes of clarity, the Department has added language to subsection (a) to require an IDS to provide a copy of its contracts with providers so that the plan may provide those contracts to the Department.
Subchapter K. CRES The Department received approximately 80 comments on this proposed subchapter.
The Department received two comments relating to citation forms from a commentator, who disagreed with the Department's use of the word ''the act'' in references, for example, ''to section 2152 of the act.'' The commentator stated that the Department should have used the term ''Act 68.'' The commentator recommended that the Department make this change in §§ 9.743(c)(5)(iv) and 9.744(a)(4)(ii) (relating to content of an application for certification as a CRE; and CREs participating in internal and external grievance reviews). In both cases, the Department has declined to make the change. The sections referenced are sections of the Insurance Company Law of 1921, or the act, and not sections of Act 68.
The same commentator commented that the Department should change the word ''chapter'' in proposed § 9.742(b) to ''subchapter.'' That section states that ''The Department may subject a CRE to additional review if it determines that the CRE is failing to comply with Act 68 and this chapter.'' The Department intended to use the word ''chapter'' in this proposed section. The Department intends to require CREs to comply with other subchapters of the regulations, in particular, Subchapter I (relating to complaints and grievances) as well as Subchapter K (relating to CREs).
Several commentators raised concerns that there were no ongoing standards for UR, and recommended that the Department include language describing how it intended to enforce these requirements. After reviewing these comments, the Department has divided this subchapter into two parts, one dealing with certification standards, and the other with operational standards. The Department has revised the proposed regulations to include UR standards, and placed those in the part of the subchapter entitled ''Operational standards.'' The Department has included three sections in the final-form regulations to address standards for a description of a UR system (see § 9.749 (relating to system description)), standards for the UR system (see § 9.750 (relating to UR system standards)) and standards for the time frames in which UR must be provided (see § 9.751 (relating to time frames for UR)).
The Department has deleted § 9.601(c), which discussed the applicability of § 9.742. The Department has, instead, expanded this section, which specifically discusses the scope of this subchapter. The Department has added language to § 9.741 to clarify that the sections dealing with certification apply to CREs as defined by the act (see section 2102 of Article XXI). Sections 9.749--9.751 include operational standards for UR. See subsection (b).
Section 9.742. CREs.
Two commentators complained that under subsection (c), a licensed insurer would not be required to go through the certification process to become a CRE. One commentator raised concerns that an insurance company could pose as an outside independent CRE for another insurance company, or its parent or subsidiary without having to be certified. Both commentators stated that the certification process was the only possible mechanism for sorting out potential conflicts of interest. At a minimum, these commentators recommended that licensed insurers be required to comply with sections 2151 and 2152 of Article XXI and be required to obtain certification.
The Department has deleted subsection (c). Act 68 clearly states that a licensed insurer or a managed care plan with a certificate of authority shall not be required to obtain separate certification as a UR entity. See section 2151(e) of Article XXI. Therefore, to require such entities to undergo certification would be a violation of Act 68. The Department has also deleted the term ''licensed insurer'' from § 9.601 since that term no longer appears in the Department's regulations. The comments concerning conflict of interest are discussed in § 9.743 (relating to content of an application for certification as a CRE).
Section 9.743. Content of an application for certification as a CRE.
The Department received one comment in support of this proposed section. Several commentators requested revisions to the proposed section.
Several commentators commented concerning what they viewed as the inability of the proposed regulations to prevent conflicts of interest from arising between plans and CREs, since this proposed section would not specifically request conflict of interest information. One commentator commented that the proposed amendments do not go far enough to implement the intent of Act 68 to protect against conflicts of interest. According to the commentators, an enrollee must be able to access conflict of interest information.
The Department does not see this conflict of interest analysis as useful in the context of standard UR, where, as discussed earlier, the CRE is compensated to perform UR functions by the plan. This can be viewed as an absolute conflict; however, since the CRE must have operating income to employ staff, and systems to conduct CRE, there is no possible way to avoid a situation in which a CRE is paid to perform UR. The Department has made no changes to the proposed section to address the comment. Service organizations are paid to provide the service, and in this case the plan is the one paying for the service. The safeguards are the Department's ability to monitor and investigate complaints and grievances, the external grievance review and the certification and recertification process.
IRRC commented that the proposed section should reference § 9.654, since a requirement of a certificate of authority is that an external quality assurance review be conducted, and this external quality assurance review includes the UR component that is equivalent of the certification of a CRE.
When performed by a plan, the system for conducting UR is assessed through the external quality assurance review. When performed by a CRE, the UR program may also be assessed by the external quality assurance review, but it is definitely assessed by the Department during the certification and recertification process.
One commentator recommended the addition of language to this proposed section stating that the responsibility for the conduct of UR activities shall be assigned to appropriate individuals, and plans shall ensure the mechanisms are in place enabling a provider to verify that an individual requesting information on behalf of that entity is a legitimate representative.
The Department agrees that new language is necessary, and has added new sections substantially including this language. See §§ 9.749(c) and (d) and 9.750(d).
IRRC questioned the Department's intention, as set forth in proposed subsection (b), to make changes to the application form upon publication in the Pennsylvania Bulletin. IRRC stated that any changes to the application form that would be substantive in nature must go through the rulemaking process, and recommended that the subsection include language that any changes would be in accordance with this regulation, or consistent with current requirements in this section.
The Department has deleted proposed subsection (b), and has added subsection (e), which states that the applicant must provide other additional information to the Department which the Department finds necessary to review the application for compliance with Act 68 and this chapter. This is similar to language in § 9.631.
One commentator commented that a CRE be required to update the list of plans for which it performs UR, that it would identify in its application for certification under subsection (c)(4) (now subsection (b)(4)), no less often than at the time of renewal, which is every 3 years. The Department included this requirement in proposed § 9.748(b)(2)(iii), and has adopted that proposal.
One commentator commented that although it appreciated the Department's attempt in proposed subsection (c)(5)(i) (now subsection (b)(5)(i)) to fill a void in Act 68, the language referring back to standards in Act 68 still left the possibility that a CRE's telephone could ring for a significant period of time before being answered, since Act 68 does not provide a time period in which a call must be answered. The commentator recommended that the Department address this concern.
The Department has not changed this proposed paragraph. To set out the time period in which a call must be answered, is over-management of the CRE. The lack of a standard for this in Act 68 and in the regulations implies a reasonable period of time, and the Department is satisfied with that standard.
IRRC raised several questions with respect to proposed subsection (c)(5)(ii) (now subsection (b)(5)(ii)). First, IRRC questioned whether acceptable procedures and criteria for the selection and credentialing of peer reviewers included the requirement in section 2152(a)(5) of Article XXI that providers have current licenses in good standing or other required credentials. IRRC also questioned what was meant by the term used in the act ''other required credentials,'' and requested clarification.
In response to IRRC's questions regarding section 2152(a)(5) of Article XXI, the phrase ''other required credentials'' refers to credentials of persons involved in the conduct of UR who may not be licensed as physicians, but who are nevertheless licensed as professionals and credentialed by the CRE. Because the intention is that these criteria and procedures provide the CRE with the information the CRE is required to obtain by Act 68, the Department has not changed this proposed subparagraph.
IRRC has requested that the Department clarify what accrediting bodies meet the standards set forth in these regulations and Act 68. IRRC recommended that the Department designate these bodies in the regulations, or publish a list that is available to the public.
The Department has not made any change to proposed subsection (c)(5)(viii) (now subsection (b)(5)(viii)). The Department is not requiring accreditation nor adopting the standards of an accreditation organization through this provision. Further, the Department is not suggesting that accreditation bodies meet the standards of Act 68. This provision is merely a request for information. Whether or not the applicant is accredited, and by whom is useful information for the Department to have when considering the applicant because it can be indicative of the entity's structure, resources and operational standards.
One commentator also commented that although the proposed amendments require an applicant to state where it has been denied accreditation, they do not require the applicant to state why the application was denied.
The Department has only requested that the applicant provide information of accreditation by a Nationally recognized accrediting body, if it has such an accreditation. Again, the Department's only intention in requesting this information was informational. The language in that section, ''if it has secured the approval, certification, or accreditation,'' was intended to explain that if the applicant did not have this approval, certification or accreditation, the requirement was not applicable.
IRRC and another commentator expressed concern over proposed subsection (c)(5)(ix) (now subsection (b)(5)(ix)), which would require a list of three clients to be included on an applicant's CRE application. Both commentators are concerned that this proposed requirement could prevent new companies from becoming certified.
This was not the Department's intention, and the final-form regulations have been revised to require a list of three clients, if any, for which the applicant has performed UR.
The Department received four different comments on proposed subsection (d) (now subsection (c)). One commentator recommended that the Department require that reviews be done by a licensed peer of the health care provider who requested the review. Another commentator stated that the proposed subsection was unclear in light of other parts of the proposed rulemaking regarding committee decisions, and would not reflect the input of peer review of the health care provider's grievance.
The Department has declined to make any change based upon these comments, but has changed the section to delete references to a licensed physician in the ''same or similar specialty.'' The language in subsection (c)(1) was intended to track the language in Act 68. The statute requires a licensed physician, or, in certain instances, an approved licensed psychologist, to perform UR that results in the denial of a service. See section 2152(c) and (d) of Article XXI.
The Department received two comments dealing with the differences between physician reviewers and approved licensed psychologists. One commentator threatened a constitutional law suit against the Department if the Department failed to eliminate the language that would only permit a psychologist to perform a UR of behavioral health care services within the psychologist's scope of practice if the psychologist has sufficient clinical experience to review that specific behavioral health care service. See section 2152(d) of Article XXI.
Another commentator argued that the Department should clarify that psychologists doing medical necessity reviews can only deny services provided by or proposed to be provided by a nonphysician provider. According to this commentator, because psychologists do not have medical training, their denial of a physician-ordered service on medical necessity grounds would be outside the scope of a psychologist's practice, and would be an intrusion into the physician's responsibility to determine whether or not medication is appropriate.
The Department has made no change to the proposed subsection based upon these comments. The Department will presume the constitutionality of a statutory provision.
In this case, the purpose of the legislation is to protect consumers. The General Assembly has taken the position that UR decisions to deny services must be made by licensed physicians, unless the decision involves a behavioral health issue, in which case, the denial may only be made by a psychologist who has sufficient expertise to review the particular behavioral health care service. The General Assembly clearly believed that psychologists, who are not medical doctors, should have additional experience before being permitted to deny a health care service. This does not prohibit any psychologist from reviewing behavioral health services as part of a UR decision, it merely places additional requirements on that psychologist.
Further, the recommendation that the Department adopt a standard which calls for review by a same or similar specialist as that which would provide the service is not practical. It is a higher standard than any found in Act 68, and would cause extraordinary delays in turnaround time for reviews, as plans search to find reviewers who are willing to perform UR.
With respect to the issue raised by the second commentator, the Department has reiterated the requirements of Act 68, which prohibit a psychologist from reviewing the denial of payment for a health care service involving inpatient care or a prescription drug. This should be sufficient to meet the commentator's concerns.
IRRC commented that the language of subsection (c)(3) (now subsection (d)(3)) contradicts the language of Act 68. The act states: ''Compensation to any person or entity performing UR may not contain incentives, direct or indirect, for the person or entity to approve or deny payment for delivery of any health care services.'' See section 2152(b) of Article XXI. IRRC stated that the proposed paragraph should not limit the application of statutory language to plans, and that the paragraph should reference section 2152(b) of Article XXI.
The Department has not changed the substance of the proposed paragraph, but will cross reference section 2152(b) of Article XXI for clarity. Compensation implies a reimbursement arrangement. The plan is the one paying for UR services, whether through contract, by salaries, or in some other manner. The Department has not limited the language of Act 68.
The Department has also renumbered proposed subsection (c)(3) as subsection (d). Subsection (e) was added to clarify that information beyond that contained in the application may be required by the Department to determine compliance with Act 68 and the regulations.
Section 9.744. CREs participating in internal and external grievance reviews
The Department received comments from four commentators on this proposed section.
One commentator questioned the extension of additional requirements applicable for external grievances and additional filing fees to internal grievances.
The Department has made no change to the proposed section. The proposed regulations included a filing fee for CREs to cover the cost of the review in § 9.746. They also included an additional filing fee for external grievances (see § 9.746(a)), since the Department's review of an applicant wishing to perform external grievances is more comprehensive and involves a site review, which adds to the Department's costs.
One commentator commented that the proposed regulations would not specify what should be in an application for all CRE applicants, but only those that will do internal and external reviews. This commentator stated that the Department should require the same information for all CREs, not just those performing internal and external grievance reviews, since the initial UR decision is an important point at which an individual's health and the health care process may be significantly thwarted.
The Department believes that information should not be requested unless it will be used for some purpose. The information the Department is requesting in this section is information the Department will use in determining the applicant's ability to conduct internal and external grievance reviews. Because of the different nature of the grievance review versus the standard UR decision, the Department does not find the information in this section to be necessary for it to make a determination of whether an applicant should be certified to conduct UR. As was discussed earlier, the conflict of interest standard is essential to ensure the integrity of the external grievance process and, therefore, it will remain in that part of the application.
IRRC questioned why the language in proposed subsection (a)(3) was not included in § 9.743. IRRC commented that a CRE could avoid these disclosure requirements if it used the application procedures in that section. Further, IRRC stated that because the Department must monitor to ensure that all CREs meet the requirements of Act 68, the Department should have this information from all CREs, and not just those that perform external and internal grievance reviews. Another commentator also commented to this effect, and recommended that the Department define potential conflicts of interest, for example, stating that no entity participating as a reviewer for DPW's fair hearing process utilized in the Health Choices Medicaid managed care plans may be certified as a CRE.
The Department has not changed proposed paragraph as recommended. The Department finds that conflict of interest has no real meaning outside of the context of external grievance reviews. In general, a CRE that does standard UR will be performing those URs for a plan. At that stage of the standard utilization review, there is no requirement of, nor is there a pretence of an independent (from the plan and the enrollee) review. Even at the internal grievance level, the conflict of interest issues do not apply. Again, here, the CRE is performing the internal review for the plan. There is no requirement that a CRE have no conflict of interest in this case either, that is, be unconnected with the plan for which it is conducting the internal grievance review. Act 68 permits a plan to conduct its own internal grievance review, and, of course, the plan is connected to itself--the ultimate conflict of interest. Act 68 attempts to address problems in this area by making certain requirements of the review committees conducting the internal grievance reviews (see section 2161(b)(1) and (c)(1) of Article XXI). As discussed earlier concerning complaints and grievances, the Department has included fundamental fairness requirements, which would apply to plans and CREs conducting internal grievance reviews. See § 9.705.
Further, the Department believes that the requirements for CREs performing external grievance reviews must be more stringent than for those CREs conducting the initial UR. As the grievance progresses in the system, the stakes become higher for the enrollee, and for the plan. An external grievance review involves making an independent assessment to resolve a dispute between a plan and an enrollee or a provider. A higher standard is required for CREs that review these grievances because of the level of the dispute resolution (this is the reviewer of last resort, the last review by a clinical reviewer before the matter is resolved by a court), and the complexity of the issues that generally reach this level.
With respect to the issue concerning the fair hearing process used by Health Choices contractors, the Department disagrees that any difficulty exists. A Health Choices fair hearing contractor may not be involved in external grievance reviews for Health Choices cases, but the contractor would have no conflict with commercial plans that do not have a MA product. The contractor can be certified as a CRE, and can conduct grievance reviews for those plans.
The Department has added language to proposed subsection (a)(3) to clarify that the CRE applicant need only disclose any known potential conflict of interest.
The Department, after experience in certifying CREs, has decided that the language in proposed subsection (a)(4)(ii) needs to be further clarified. Because the Department is aware of the difficulty that CREs have in keeping all the necessary specialists under contract, the Department is not requiring that the CRE applicant have all possible types of reviewers under contract. The Department will require an applicant to have a contracted and credentialed network of providers, including, at a minimum, the general specialties represented by the American Board of Medical Specialties, the subspecialties of oncology and physician reviewers specializing in transplantation. The Department will be satisfied if the applicant provides it with a description of its ability to obtain the services of a qualified peer reviewer from any specialty or subspecialty required for an external grievance review within 24 hours.
The Department received one comment on proposed subsection (a)(4)(v). The commentator commented that a plan was unable to determine whether the bills it received were consistent with the Department's approved reasonable fees, and so recommended that the Department add language to this proposed subparagraph stating that ''such fees shall be public information.''
The Department has made no change to the proposed subparagraph to address this concern. The Department does not set fees and does not approve fees as reasonable. The Department is requesting this information so that, if necessary, it can investigate and decertify a CRE if its fees are found to be unreasonable. Fees, like reimbursement information in provider contracts, are considered by CREs to be proprietary information in the nature of a trade secret, and the Department has agreed to hold them as confidential and proprietary. A plan can refer billing and fee issues to the Department for review and response, and the Department will make comparisons between the fees of the various CREs to determine whether the fees in question are unreasonable or not.
Section 9.745. Responsible Applicant.
Two commentators raised issues with respect to this proposed section. One commentator commented that the proposed language would fail to inquire into the licensure and good standing of the applicant. The other commentator stated that the Department should look to current licensure and standing in medical profession as well as whether the applicant has been subject to violations of Act 68.
The Department has not changed the proposed subsection with respect to this comment. The licensure of the applicant would not necessarily be useful, since it is unlikely that the applicant itself, which is a corporation or entity and not an individual medical professional, will be an entity for which licensure is required. Managed care plans with certificates of authority and licensed insurers, two types of entities which could perform UR, and which do hold licenses or certificates, are not required to undergo certification. The Department has given itself, through the regulation, the ability to verify the credentials of any officer, director or member of the managing staff, and will include licensure of those individuals in this review. Act 68 itself requires the reviewers utilized by the applicant to be licensed in good standing. See section 2152(a)(5) of Article XXI.
The commentator also commented that the proposed section in general failed to establish uniform standards for UR, and suggested that this could lead to inconsistent decisionmaking. The commentator provided a list of what it believed the appropriate standards are. The commentator stated that the standards should be applied consistently and equitably, should require that the member's specific individual health status be considered, should be based on sound clinical and scientific evidence and should be made under the direction of the plan medical director. The commentator further stated that the standards should require that clinical standards for UR should be current, subject to input from plan providers and made known to plan providers; the standards should not have financial or other incentives that adversely affect the quality of care; the standards should comply with Act 68's prior authorization requirements, and include standards and time frames for prior authorization procedures of plans; and the standards should include review of the plan's ''medical necessity'' definition.
The Department agrees that utilization standards should be created and included in the regulations, and has done so in §§ 9.749--9.751. The Department's standards are discussed at greater length in the discussion of the general comments to this subchapter.
One commentator commented that proposed subsection (a)(2)(i), which would allow the Department to consider whether management personnel, officers or directors of the applicant have filed for bankruptcy, was too broad and intrusive. The commentator stated that the personal bankruptcy history of individuals was not relevant, and could be deemed discriminatory. The commentator recommended that the paragraph be deleted.
After considering this comment, the Department agrees that the language of the proposed amendments should be altered. The Department did not intend to request information regarding personal bankruptcies. The Department has revised the subparagraph to require an applicant to provide the Department with information concerning whether management personnel, officers or directors of the applicant have ever been involved in a bankruptcy proceeding as an officer, director or senior manager of the corporation in question. This should protect the privacy of the individuals and provide the Department with the information it needs to make an informed decision about the applicant.
One commentator recommended that the Department delete the requirement in subsection (a)(2)(v) allowing the Department to consider whether the management personnel, officers or directors of the applicant have a history of malpractice or civil suits, penalties or judgments against them. The commentator argued that this, too, was intrusive and broad.
The Department has not changed this proposed subparagraph. The Department believes this information is necessary to determine whether the individuals in question are capable of operating the applicant in a reasonable manner.
Section 9.746. Fees for certification and recertification of CREs.
The Department received one comment on the proposed section. The proposed section would have required CREs already certified to pay the fee to the Department as well. The commentator commented that the Department had previously told CREs that there would be no application fee if an application were filed before the adoption of final-form regulations. The Department acknowledges that this comment is correct, and has revised the proposed section to remove the language in question.
Section 9.747. Department review and approval of a certification request.
The Department received comments from three commentators on the proposed section. One of these commentators recommended that the Department include in the regulations language providing the Department access to CREs' decisions, in order to review their compliance with Act 68 and the regulations.
The Department has added a subsection (c) to § 9.748 (relating to maintenance and renewal of CRE certification) to clarify that it has access to whatever information is necessary to determine a CRE's compliance with Act 68.
Two commentators have recommended that the Department replace the word ''will'' with the word ''shall'' in proposed subsection (b). One commentator commented that the Department should more specifically state what other information will be necessary for it to determine compliance with Act 68 and the regulations.
The Department agrees that the regulation should more clearly provide it with authority to review this information, and has revised the regulation to require that the Department be given access. With respect to the issue regarding clarification of the term ''other information,'' the language is sufficiently clear, and the Department has not changed it. The Department has stated it must have access to other information necessary to determine compliance with Act 68. Further, the proposed subsection was already fairly all-inclusive, in that it provides the Department with express authority to access books, records, staff and facilities.
Two commentators commented that the Department should not forgo inspection or monitoring to determine whether the CRE is in compliance with Act 68 merely because a Nationally recognized accrediting body accredits that CRE. The commentators stated that the Department should review the actions and inactions of the CRE to fulfill the Department's obligation to implement the requirements of Act 68.
The Department has considered these comments on this proposed subsection, but has decided not to change the proposed subsection to address them. The Department does have the responsibility to ensure that an applicant meets the certification requirements, and that a CRE continues to meet those requirements for the purpose of maintenance and renewal of certification. The Department may recognize the standards and accreditation of a Nationally recognized accrediting body, whose standards are accepted by the Department as meeting or exceeding the requirements of sections 2151 and 2152 of Article XXI (see section 2151(c) of Article XXI), as a supplement to the Department's review process. The Department may not delegate the discretionary part of this function, and it has not. The Department remains responsible for the final decision of whether the applicant or CRE meets and continues to meet criteria. The Department has not said that it will not make site visits or conduct inspections when it finds them to be necessary. The regulations merely give the Department the option of requiring an onsite inspection by a credentialing body. See § 9.748(a). Nothing in this regulation or any other regulation indicates that the Department is abdicating its responsibility to oversee or monitor CREs.
Section 9.748. Maintenance and renewal of CRE certification.
The Department received two comments on this proposed section. Both IRRC and another commentator commented that the Department should include specific language providing the Department with access to the same records and other information concerning a CRE as described in proposed § 9.747(b).
This was the Department's intention in stating that it would have the ability to perform an onsite inspection in proposed subsections (a)(1) and (b)(3). Since, however, there seems to be some confusion as to the scope of the Department's review in that onsite visit, the Department has added language in to clarify this point. See subsection (c).
IRRC also commented that the proposed section should state that the Department will have access to and review UR decisions made by the CRE. According to IRRC, this would be necessary to allow the Department to monitor compliance under Act 68.
The Department has included language allowing it access to whatever information is necessary to review a CRE's compliance. To clarify this matter, however, the Department has also included language in subsection (c), which states that the Department will have access to the UR decisions of the CRE.
Two commentators stated that the Department should change the word ''may'' in subsection (a). One recommended that the Department change the word ''may'' to ''will,'' another requested that the word be changed to ''shall.'' Both commentators were concerned with clarifying that the Department would maintain a strong oversight over CREs on an ongoing basis, since it is the only agency responsible for that oversight.
The Department has not changed the proposed subsection to implement these recommendations. The Department is charged by the General Assembly with setting standards for certification of CREs, and granting, denying or revoking that certification. Therefore, the Department will monitor, investigate and take appropriate action to ensure compliance with the regulations and all aspects of the statute. The Department does not need to alter the language of the proposed subsection to make that clear. It was the Department's intention to use the word ''may'' and rather than ''will'' or ''shall.'' CREs are subject to review, as Department finds necessary. The Department has, however, added a statement to the subsection that should clarify that CREs are required to comply with the requirements of Act 68 and the regulations to maintain certification.
Two commentators stated that maintenance and renewal of certification must include an onsite inspection by the Department.
The Department has not changed the proposed language of the subsection to address this concern. As the Department has discussed in its response to comments on proposed § 9.747(b), the Department is aware of its responsibility to ensure that an applicant meets the certification requirements, and that a CRE continues to meet those requirements for the purpose of maintenance and renewal of certification. The Department may use a Nationally recognized accrediting body, whose standards the Department finds meet or exceed the standards of Act 68, to perform certain administrative functions for the Department. It is the Department that is still responsible for the final decision of whether the applicant meets the criteria for certification, or the CRE continues to meet that criteria. The Department has not prohibited itself from making site visits or conducting inspections, nor has the Department said it will, in every case, use a Nationally recognized accrediting body to conduct inspections for it. The regulations merely give the Department the option of requiring an onsite inspection by an outside body. Nothing in this regulation or any other regulation indicates that the Department is abdicating its responsibility to oversee or monitor CREs.
One commentator recommended that the Department add language to subsection (b)(2)(i) stating that it would periodically validate the results of the accreditation process to ensure compliance.
The Department has not made a change to this proposed paragraph. Section 9.748(a) already requires CREs to continue to comply with Act 68 and the regulations to maintain certification, and provides the Department with the ability to monitor that compliance as necessary. The Department does not need to restate its ability to validate the results of an accreditation review.
Section 9.749. UR system description.
One of the commentators recommended several specific additions to the Department's proposed regulations. It recommended adding language which states that the ''plan shall use written criteria based on sound clinical evidence and specify procedures for applying those criteria in an appropriate manner,'' that ''utilization management (UM) structures and processes shall be clearly defined and the plan will have a written description of its UM program including the program structure and individual's responsibility and accountability within the structure,'' and that ''the plan conducts UM based on the medical necessity and appropriateness of the health care service being requested, makes UM decisions in a timely manner and communicates its decision in writing to the enrollee and health care providers.''
The Department agrees with the commentator that a system for conducting UR should have standards, and has included in the regulations a section to set standards for a UR system. See § 9.750 (relating to UR system standards). The Department has required that the description of the system be in writing, and that the entity performing UR must make that description available to the Department for review. See subsections (a) and (e).
Rather than taking the commentator's recommendation of requiring a description of the individual's responsibility and accountability within the program, and getting into a discussion of when and how nurses should participate instead of doctors, the Department has chosen to require that a physician be involved in the UR program, and has included that requirement in § 9.750(a). This will provide for physician oversight without dictating resource allocation and job descriptions.
One commentator also recommended language requiring that ''plans must demonstrate that UM decisions are appropriate and that there is consistency in application of UM clinical criteria and procedures among physician and non-physician professional review staff.'' The commentator urged that additional language would state that the ''UM plan shall be evaluated and approved annually by an appropriate committee as outlined in the UM program.''
The Department currently requires plans to conduct reliability studies of staff application of UR criteria through the NCQA external review. The Department has included language in subsection (b) to make this part of the UR system. There must, however, be a presumption that the UR criteria and decision are based on sound medical evidence. If the provider disagrees, there is the grievance process to challenge medical necessity and appropriateness. Therefore, the Department has added language that requires an entity performing UR to review its UR activities annually and report to the quality assurance committee or the board of directors regarding the appropriateness of criteria, application of criteria, consistency of decisionmaking, staff resources and training and timeliness of decisions. See subsection (b).
The Department has also included language from section 2152(3) of the Article XXI requiring the entity performing UR to have a policy and procedure in place to allow a provider to verify that an individual requesting information for UR purposes is a representative of the entity performing UR. See subsection (c).
One commentator recommended that the Department add language which states that the plan shall have systems and procedures in place, including sufficiently qualified physicians, nonphysician staff and resources, to meet the timeframe requirements for UM decisionmaking and communications of those decisions.
The Department has added a requirement to § 9.654(d) that the external quality assurance assessment be done against Act 68's standards, including UR standards. The Department has also included language in subsection (d) of this section requiring that the entity performing UR have sufficient staff, resources and program oversight to ensure adherence to Subchapter K, and to section 2152 of the Article XXI.
Section 9.750. UR system standards.
One commentator recommended adding language requiring providers in this Commonwealth actively engaged in the delivery of health care to be involved in the development or selection of the clinical criteria and in the development and review of procedures for applying that criteria.
The Department has included language requiring entities performing UR to include input from health care providers in active clinical practice in the development of the clinical criteria for the UR program. See subsection (b). Requiring providers in this Commonwealth to be involved in the development of criteria is not practical in all instances. UR criteria is generally based on large data sets and purchased from standardized sources. Deviations are made regionally, geographically and on a case by case basis with the approval of the medical director or by medical policy. By requiring the medical director to have a Pennsylvania license, the Department has linked the physician to clinical standards in this Commonwealth. Medical policy, which is approved by the quality assurance committee, is generally arrived at by the highest level committee of the plan, meaning in many cases a National quality assurance committee, with review and modifications made as necessary due to regional or State variations. Improvements and progress in health care delivery evolves on a National level. No one state, including this Commonwealth, maintains a monopoly in terms of innovation and improvement. Standards based solely on experience in this Commonwealth, which would be the result if only physicians in this Pennsylvania were involved in the selection, development and review of standards, may serve to inadvertently limit progress.
One commentator recommended that the UR criteria be reviewed at regular intervals and updated as necessary. The Department has added this language in subsection (b)(2).
One commentator recommended that the Department add language that requires a plan to make the clinical criteria available upon request and state in writing how providers can obtain those criteria. The Department has included this language in subsection (b)(3). As discussed earlier, UR standards are generally taken from National sources such as Milliman and Robertson. Reluctance on the part of the plan to release criteria to providers may stem from a concern that the enrollee's condition could be made to fit the criteria instead of being objectively reported; however, health care providers generally come to know the plans' expectations and UR criteria through experience. Although the Department concedes that abuses can occur by reporting symptoms that would make the enrollee's condition meet the criteria for coverage, it also recognizes that those same abuses can occur now. The improvement in patient care that will come from the frank and forthright exchange of ideas and information between providers and plans in applying and modifying UR criteria is to the greater good.
One commentator recommended the addition of language that requires the plan to conduct UR based on the medical necessity and appropriateness of the health care service being requested, make UR decisions in a timely manner and communicate its decision in writing to the enrollee and health care providers. The commentator also recommended language stating that ''The criteria for determining medical appropriateness shall be clearly documented and include procedures for applying criteria based on the needs of the individual patient, such as age, comorbidities, complications, progress of treatment, psychosocial situation and home environment as well as characteristics of the local delivery system that are available for that particular patient.''
The Department has included language in subsection (c) requiring the UR decision to be based on the medical necessity and appropriateness of the health care service being requested. The Department will not go as far as commentators recommended with respect to what should be considered in determining medical appropriateness. The Department does, however, require that the entity performing review consider the individual's medical circumstances when making the UR decision, along with the applicable contract language, and the medical necessity and appropriateness of the requested service. Psychosocial factors and home environment, while they can be of concern, do not necessarily drive clinical decisions, and of themselves cannot be the sole causation for payment. For example, a mother who just delivered a baby may not want to be discharged, even though clinically her physician agrees it is appropriate to do so, because her house is being remodeled and is in disarray. The home environment may indeed not be fit for a newborn; however, the plan cannot be held responsible for the remodeling delay and should not be compelled to provide payment for additional days in the hospital that are not medically necessary.
The Department has also included language from section 2152(c) and (d) of Article XXI) that specifies who may make a UR decision. This language is included in subsection (d). The Department is, however, cognizant of the fact that there are situations in which claims are processed in an automated fashion, without human intervention, according to decision logic. So long as this decision logic implements the clinical criteria developed and approved by the medical director, who is a licensed physician, the Department accepts that these are decisions made by a physician in accordance with the regulations and Act 68.
One commentator has recommended that the Department add language that requires a plan to notify the provider of additional facts or information required to complete UR within 48 hours of receipt of the request for service. The Department has included this language in subsection (e).
The Department has included the requirement that decisions be communicated to enrollees and health care providers within specified time frames in a separate section. See § 9.751 (relating to time frames for UR). The Department has specifically stated in subsection (g) that, for purposes of internal grievance reviews, the decision must be communicated in writing to the enrollee, the enrollee's representative and the health care provider if the health care provider filed the grievance with enrollee consent.
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