CHAPTER 16. MEDICAL CLAIMS REVIEW
IC 27-8-16
Chapter 16. Medical Claims Review
IC 27-8-16-0.5
Applicability of chapter
Sec. 0.5. (a) This chapter applies to the following:
(1) A person who conducts medical claims review concerning
health care services delivered to an enrollee in Indiana.
(2) A person who acts as a claim review consultant concerning
the:
(A) appropriateness of; or
(B) amount charged for;
a health care service delivered to an enrollee in Indiana.
(b) This chapter does not apply to:
(1) the payment of benefits or compensation;
(2) the furnishing of medical, surgical, hospital, or nursing
services; or
(3) the payment by an insurer or employer to the provider of
health care services for services provided;
under IC 22.
As added by P.L.260-1995, SEC.1.
IC 27-8-16-1
"Claim review agent" defined
Sec. 1. (a) As used in this chapter, "claim review agent" means
any entity performing medical claims review on behalf of an
insurance company, a health maintenance organization, or another
benefit program providing payment, reimbursement, or
indemnification for health care costs to an enrollee.
(b) The term does not include the following:
(1) An insurance company authorized under IC 27-1-3 or
IC 27-1-17 to do business in Indiana or the company's affiliated
companies.
(2) An entity acting on behalf of the federal or state
government. However, an agent described in this subdivision
who performs medical claims review for a person other than the
federal or state government is a claim review agent who is
subject to the requirements of this chapter.
(3) A health maintenance organization or limited service health
maintenance organization that holds a certificate of authority to
operate under IC 27-13.
(4) An insurance administrator that is licensed under
IC 27-1-25.
(5) An individual qualified and acting as an expert witness
under the Indiana Rules of Trial Procedure.
As added by P.L.128-1992, SEC.2. Amended by P.L.26-1994,
SEC.17; P.L.160-2003, SEC.25.
IC 27-8-16-1.5
"Claim review consultant" defined
Sec. 1.5. (a) As used in this chapter, "claim review consultant"
means a person who:
(1) makes a recommendation or provides consultation to:
(A) an entity engaged in performing medical claims review;
or
(B) an insurance company, a health maintenance
organization, or another benefit program providing payment,
reimbursement, or indemnification for health care costs to an
enrollee;
concerning the appropriateness of a health care service or the
amount charged for a health care service delivered to an
enrollee in Indiana; and
(2) is not an employee of an entity referred to in subdivision
(1)(A) or (1)(B).
(b) Making a recommendation or providing consultation
concerning a health care service does not render a person a claim
review consultant under this section if the recommendation or
consultation concerns:
(1) coverage provided; or
(2) medical services rendered;
under IC 22.
(c) The term "claim review consultant" does not include the
following:
(1) An insurance company authorized under IC 27 to do
business in Indiana.
(2) An entity acting on behalf of the federal or state
government. However, an agent described in this subdivision
who performs medical claims review for a person other than the
federal or state government is a claim review agent who is
subject to the requirements of this chapter.
(3) A health maintenance organization or limited service health
maintenance organization that holds a certificate of authority to
operate under IC 27-13.
(4) An insurance administrator that is licensed under
IC 27-1-25.
(5) An individual qualified and acting as an expert witness
under the Indiana Rules of Trial Procedure.
(6) A person who engages in the prospective, concurrent, or
retrospective utilization review of health care services.
(7) A person who engages in the identification of alternative,
optional medical care that:
(A) requires the approval of the enrollee or covered
individual; and
(B) does not affect coverage or benefits if rejected by the
enrollee or covered individual.
(8) An individual who is a licensed health care provider who
makes a recommendation or provides consultation concerning
the appropriateness of health care service. However, this
exception does not apply if the individual:
(A) makes any recommendations or provides consultation
concerning the amount charged for a health care service
delivered in Indiana;
(B) makes any recommendations or provides consultation
concerning the appropriateness of hospital services provided
by a hospital licensed under IC 12-25 or IC 16-21;
(C) is employed by or under contract with an entity that is
required to be registered under this chapter; or
(D) has received more than five thousand dollars ($5,000) in
compensation during the present calendar year for providing
consultation services concerning the appropriateness of
health care services delivered to enrollees in Indiana.
(9) A claim review agent under section 1 of this chapter.
As added by P.L.260-1995, SEC.2. Amended by P.L.160-2003,
SEC.26.
IC 27-8-16-2
"Department" defined
Sec. 2. As used in this chapter, "department" refers to the
department of insurance.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-3
"Enrollee" defined
Sec. 3. As used in this chapter, "enrollee" means an individual
who has contracted for or who participates in coverage under an
insurance policy, a health maintenance organization contract, or
another benefit program providing payment, reimbursement, or
indemnification for the costs of health care for:
(1) the individual;
(2) eligible dependents of the individual; or
(3) both the individual and the individual's eligible dependents.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-4
"Medical claims review" defined
Sec. 4. (a) As used in this chapter, "medical claims review" means
the determination of the reimbursement to be provided under the
terms of an insurance policy, a health maintenance organization
contract, or another benefit program providing payment,
reimbursement, or indemnification for health care costs based on the
appropriateness of health care services or the amount charged for a
health care service delivered to an enrollee.
(b) The term does not include the prospective, concurrent, or
retrospective utilization review of health care services.
(c) The term does not include the identification of alternative,
optional medical care that:
(1) requires the approval of the enrollee or covered individual;
and
(2) does not affect coverage or benefits if rejected by the
enrollee or covered individual.
As added by P.L.128-1992, SEC.2. Amended by P.L.135-1994,
SEC.1.
IC 27-8-16-4.5
"Person" defined
Sec. 4.5. As used in this chapter, "person" means an individual, a
corporation, a limited liability company, a partnership, or an
unincorporated association.
As added by P.L.260-1995, SEC.3.
IC 27-8-16-5
Certificate of registration; issuance to agent
Sec. 5. (a) A claim review agent may not conduct medical claims
review concerning health care services delivered to an enrollee in
Indiana unless the claim review agent holds a certificate of
registration issued by the department under this chapter.
(b) To obtain a certificate of registration under this chapter, a
claim review agent must submit to the department an application
containing the following:
(1) The name, address, telephone number, and normal business
hours of the claim review agent.
(2) The name and telephone number of a person that the
department may contact concerning the information in the
application.
(3) Documentation necessary for the department to determine
that the claim review agent is capable of satisfying the
minimum requirements set forth in section 7 of this chapter.
(c) An application submitted under this section must be:
(1) signed and verified by the applicant; and
(2) accompanied by an application fee in the amount established
under subsection (d).
The commissioner shall deposit an application fee collected under
this subsection into the department of insurance fund established by
IC 27-1-3-28.
(d) The department shall set the amount of the application fee
required by subsection (c) and section 6(a) of this chapter in the rules
adopted under section 14 of this chapter. The amount may not be
more than is reasonably necessary to generate revenue sufficient to
offset the costs incurred by the department in carrying out the
department's responsibilities under this chapter.
(e) The department shall issue a certificate of registration to a
claim review agent that satisfies the requirements of this section.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,
SEC.4; P.L.173-2007, SEC.36; P.L.234-2007, SEC.193.
IC 27-8-16-5.2
Certificate of registration; application; requirements; application
fee
Sec. 5.2. (a) A person may not act as a claim review consultant
concerning health care services delivered to an enrollee in Indiana
unless the person holds a certificate of registration issued by the
department under this chapter.
(b) To obtain a certificate of registration under this chapter, a
person must submit to the department an application containing the
following:
(1) The name, address, telephone number, and normal business
hours of the person.
(2) The name and telephone number of a person that the
department may contact concerning the information in the
application.
(3) Documentation necessary for the department to determine
that the person is capable of satisfying the minimum
requirements set forth in this chapter.
(c) An application submitted under this section must be:
(1) signed and verified by the applicant; and
(2) accompanied by an application fee in the amount established
under subsection (d).
The commissioner shall deposit an application fee collected under
this subsection into the department of insurance fund established by
IC 27-1-3-28.
(d) The department shall set the amount of the application fee
required by subsection (c) and section 6(a) of this chapter in the rules
adopted under section 14 of this chapter. The amount may not be
more than is reasonably necessary to generate revenue sufficient to
offset the costs incurred by the department in carrying out the
department's responsibilities under this chapter.
(e) The department shall issue a certificate of registration to a
claim review consultant that satisfies the requirements of this
section.
As added by P.L.260-1995, SEC.5. Amended by P.L.173-2007,
SEC.37; P.L.234-2007, SEC.194.
IC 27-8-16-6
Certificate of registration; renewal; transfer; notice of change in
information
Sec. 6. (a) To remain in effect, a certificate of registration issued
under this chapter must be renewed on June 30 of each year. To
obtain the renewal of a certificate of registration, a claim review
agent or a claim review consultant must submit an application to the
commissioner. The application must be accompanied by a
registration fee in the amount set under section 5(d) of this chapter.
The commissioner shall deposit a registration fee collected under this
subsection into the department of insurance fund established by
IC 27-1-3-28.
(b) A certificate of registration issued under this chapter may not
be transferred unless the department determines that the person to
which the certificate of registration is to be transferred has satisfied
the requirements of this chapter.
(c) If there is a material change in any of the information set forth
in an application submitted under this chapter, the claim review agent
or claim review consultant that submitted the application shall notify
the department of the change in writing not more than thirty (30)
days after the change.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,
SEC.6; P.L.173-2007, SEC.38; P.L.234-2007, SEC.195.
IC 27-8-16-7
Minimum claim review agent requirements
Sec. 7. A claim review agent must satisfy the following minimum
requirements:
(1) Provide toll free telephone access at least forty (40) hours
each week during normal business hours.
(2) Maintain a telephone call recording system capable of
accepting or recording incoming telephone calls or providing
instructions during hours other than normal business hours.
(3) Respond to each telephone call left on the recording system
maintained under subdivision (2) within two (2) business days
after receiving the call.
(4) Protect the confidentiality of the medical records disclosed
to the claim review agent.
(5) Include in every notification of a medical review
determination based on the appropriateness of health care
services delivered to an enrollee the principal reason for the
determination.
(6) Ensure that every medical claims review determination
based on the appropriateness of health care services delivered
to an enrollee is:
(A) made by a provider; or
(B) determined in accordance with standards or guidelines
approved by a provider;
who holds a license in the same discipline as the provider who
rendered the service.
(7) Include in every notification of a medical review
determination based on the appropriateness of the amount
charged for a health care service delivered to an enrollee the
following:
(A) An explanation of the factual basis for the
determination.
(B) If the determination is based on any information from a
claims data base, the name and address of the person or
entity compiling the data base.
(C) If the determination is based on any information from a
claims data base, a statement whether any of the information
was obtained from a data base regarding amounts charged
for health services performed outside Indiana.
(D) Any percentile limiter applied to determine the
appropriateness of an amount charged for a health service
provided to an enrollee.
(8) Ensure that every provider referred to in subdivision (6)
who makes medical claims review determinations or approves
standards or guidelines for medical claims review
determinations for the claim review agent has a current license
issued by a state licensing agency in the United States.
(9) Develop a medical claims review plan and file a summary
of the plan with the department.
As added by P.L.128-1992, SEC.2. Amended by P.L.135-1994,
SEC.2.
IC 27-8-16-8
Appeals procedure; written description; minimum standards;
notice of appeal procedure on limitation or reduction of benefits
Sec. 8. (a) An insurance company, a health maintenance
organization, or another benefit program providing payment,
reimbursement, or indemnification for health care costs that contracts
with a claim review agent for medical claims review services shall
maintain and make available upon request a written description of
the appeals procedure by which an enrollee may seek a review of a
determination by the claim review agent.
(b) The appeals procedure referred to in subsection (a) must meet
the following requirements:
(1) On appeal, the determination must be made by a provider
who holds a license in the same discipline as the provider who
rendered the service.
(2) The adjudication of an appeal of a determination must be
completed within thirty (30) days after:
(A) the appeal is filed; and
(B) all information necessary to complete the appeal is
received.
(c) If a medical review determination results in a limitation or
reduction of benefits, a notice of the appeals procedure shall be
provided by the claim review agent to the provider who rendered the
health care services.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-9
Provider's statement; documentation of review agent capability
Sec. 9. To provide documentation demonstrating that a claim
review agent is capable of satisfying the requirement of section 7(6)
of this chapter, the claim review agent must provide a signed
statement of a provider employed by the claim review agent verifying
that determinations are:
(1) made by; or
(2) determined in accordance with standards or guidelines
approved by;
a provider licensed in the same discipline as the provider who
rendered the service.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-9.5
Claim determinations based on data base information
Sec. 9.5. (a) As used in this section, "data base" means a data base
that provides information concerning health care services or amounts
charged for health care services.
(b) If a claim review agent bases a medical claims review
determination concerning a health care service provided by a hospital
licensed under IC 12-25 or IC 16-21 in whole or in part on
information obtained from a data base, the information must relate
exclusively to services provided by a hospital licensed under
IC 12-25 or IC 16-21.
(c) If a claim review consultant makes a recommendation or
provides consultation concerning the appropriateness of or the
amount charged for services provided by a hospital licensed under
IC 12-25 or IC 16-21 based in whole or in part on information
obtained from a data base, the information must relate exclusively to
services provided by a hospital licensed under IC 12-25 or IC 16-21.
(d) This section does not apply to:
(1) medical claims review determinations made under
subsection (b); or
(2) consultations or recommendations made under subsection
(c);
regarding medical services provided under IC 22.
As added by P.L.260-1995, SEC.7.
IC 27-8-16-10
Fraudulent or misleading information; penalties
Sec. 10. A provider, an enrollee, or an agent of a provider or
enrollee who provides fraudulent or misleading information to a
claim review agent is subject to the appropriate administrative, civil,
and criminal penalties.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-11
Prohibited bases for compensation of claim review agents and
consultants
Sec. 11. (a) The compensation of a claim review agent for the
performance of medical claims review may not be based on the
amount by which claims are reduced for payment.
(b) The compensation of a claim review consultant for making a
recommendation or providing consultation concerning the
appropriateness of or amount charged for a health care service
delivered to an enrollee in Indiana may not be based on the amount
by which a claim relating to the service is reduced for payment.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,
SEC.8.
IC 27-8-16-12
Violations; claims review agent; notice; cease and desist orders;
penalties; revocation or suspension of registration; review
Sec. 12. (a) If the department believes that a claim review agent
or claim review consultant has violated this chapter, the department
shall notify the claim review agent or claim review consultant of the
alleged violation.
(b) The claim review agent or claim review consultant shall
respond to a notice given under subsection (a) within thirty (30) days
after receiving the notice.
(c) If the department:
(1) believes that a claim review agent or claim review
consultant has violated this chapter; and
(2) is not satisfied, based on the response given by the claim
review agent or claim review consultant under subsection (b),
that the violation has been corrected;
the department shall order the claim review agent or claim review
consultant under IC 4-21.5-3-6 to cease all claims review activities
in Indiana.
(d) If the department determines that a claim review agent or
claim review consultant has violated this chapter, the department:
(1) shall order the claim review agent or claim review
consultant to cease and desist from engaging in the violation;
and
(2) may do either or both of the following:
(A) Order the claim review agent or claim review consultant
to pay a civil penalty of not more than five thousand dollars
($5,000) if the claim review agent or claim review consultant
has committed violations with a frequency that indicates a
general business practice.
(B) Suspend or revoke the certificate of registration of the
claim review agent or claim review consultant.
(e) An order issued or a ruling made by the department under this
section is subject to review under IC 4-21.5.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,
SEC.9.
IC 27-8-16-13
Confidential information
Sec. 13. (a) This chapter does not require a claim review agent or
claim review consultant to disclose information that is proprietary.
(b) Any:
(1) information concerning standards, criteria, or medical
protocols used by a claim review agent in conducting medical
claims review; and
(2) other proprietary information concerning medical claims
review conducted by a claim review agent;
that is disclosed to the department under this chapter is confidential
for the purposes of IC 5-14-3-4(a)(1).
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,
SEC.10.
IC 27-8-16-14
Rules
Sec. 14. The department shall adopt rules under IC 4-22-2
necessary to carry out this chapter.
As added by P.L.128-1992, SEC.2.