§ 58-50-61. Utilization review.
§ 58‑50‑61. Utilization review.
(a) Definitions. Asused in this section, in G.S. 58‑50‑62, and in Part 4 of thisArticle, the term:
(1) "Certificate ofcoverage" includes a policy of insurance issued to an individual person ora franchise policy issued pursuant to G.S. 58‑51‑90.
(1a) "Clinicalpeer" means a health care professional who holds an unrestricted licensein a state of the United States, in the same or similar specialty, androutinely provides the health care services subject to utilization review.
(2) "Clinicalreview criteria" means the written screening procedures, decisionabstracts, clinical protocols, and practice guidelines used by an insurer todetermine medically necessary services and supplies.
(3) "Coveredperson" means a policyholder, subscriber, enrollee, or other individualcovered by a health benefit plan. "Covered person" includes anotherperson, other than the covered person's provider, who is authorized to act onbehalf of a covered person.
(4) "Emergencymedical condition" means a medical condition manifesting itself by acutesymptoms of sufficient severity including, but not limited to, severe pain, orby acute symptoms developing from a chronic medical condition that would lead aprudent layperson, possessing an average knowledge of health and medicine, toreasonably expect the absence of immediate medical attention to result in anyof the following:
a. Placing the healthof an individual, or with respect to a pregnant woman, the health of the womanor her unborn child, in serious jeopardy.
b. Serious impairmentto bodily functions.
c. Serious dysfunctionof any bodily organ or part.
(5) "Emergencyservices" means health care items and services furnished or required toscreen for or treat an emergency medical condition until the condition isstabilized, including prehospital care and ancillary services routinelyavailable to the emergency department.
(6) "Grievance"means a written complaint submitted by a covered person about any of thefollowing:
a. An insurer'sdecisions, policies, or actions related to availability, delivery, or qualityof health care services. A written complaint submitted by a covered personabout a decision rendered solely on the basis that the health benefit plancontains a benefits exclusion for the health care service in question is not agrievance if the exclusion of the specific service requested is clearly statedin the certificate of coverage.
b. Claims payment orhandling; or reimbursement for services.
c. The contractualrelationship between a covered person and an insurer.
d. The outcome of anappeal of a noncertification under this section.
(7) "Health benefitplan" means any of the following if offered by an insurer: an accident andhealth insurance policy or certificate; a nonprofit hospital or medical servicecorporation contract; a health maintenance organization subscriber contract; ora plan provided by a multiple employer welfare arrangement. "Healthbenefit plan" does not mean any plan implemented or administered throughthe Department of Health and Human Services or its representatives."Health benefit plan" also does not mean any of the following kindsof insurance:
a. Accident.
b. Credit.
c. Disability income.
d. Long‑term ornursing home care.
e. Medicare supplement.
f. Specified disease.
g. Dental or vision.
h. Coverage issued as asupplement to liability insurance.
i. Workers'compensation.
j. Medical paymentsunder automobile or homeowners.
k. Hospital income orindemnity.
l. Insurance underwhich benefits are payable with or without regard to fault and that isstatutorily required to be contained in any liability policy or equivalent self‑insurance.
(8) "Health careprovider" means any person who is licensed, registered, or certified underChapter 90 of the General Statutes or the laws of another state to providehealth care services in the ordinary care of business or practice or aprofession or in an approved education or training program; a health carefacility as defined in G.S. 131E‑176(9b) or the laws of another state tooperate as a health care facility; or a pharmacy.
(9) "Health careservices" means services provided for the diagnosis, prevention,treatment, cure, or relief of a health condition, illness, injury, or disease.
(10) "Insurer"means an entity that writes a health benefit plan and that is an insurancecompany subject to this Chapter, a service corporation under Article 65 of thisChapter, a health maintenance organization under Article 67 of this Chapter, ora multiple employer welfare arrangement under Article 49 of this Chapter.
(11) "Managed careplan" means a health benefit plan in which an insurer either (i) requiresa covered person to use or (ii) creates incentives, including financialincentives, for a covered person to use providers that are under contract withor managed, owned, or employed by the insurer.
(12) "Medicallynecessary services or supplies" means those covered services or suppliesthat are:
a. Provided for thediagnosis, treatment, cure, or relief of a health condition, illness, injury,or disease.
b. Except as allowedunder G.S. 58‑3‑255, not for experimental, investigational, orcosmetic purposes.
c. Necessary for andappropriate to the diagnosis, treatment, cure, or relief of a health condition,illness, injury, disease, or its symptoms.
d. Within generallyaccepted standards of medical care in the community.
e. Not solely for theconvenience of the insured, the insured's family, or the provider.
Formedically necessary services, nothing in this subdivision precludes an insurerfrom comparing the cost‑effectiveness of alternative services or supplieswhen determining which of the services or supplies will be covered.
(13) "Noncertification"means a determination by an insurer or its designated utilization revieworganization that an admission, availability of care, continued stay, or otherhealth care service has been reviewed and, based upon the information provided,does not meet the insurer's requirements for medical necessity,appropriateness, health care setting, level of care or effectiveness, or doesnot meet the prudent layperson standard for coverage of emergency services inG.S. 58‑3‑190, and the requested service is therefore denied,reduced, or terminated. A "noncertification" is not a decisionrendered solely on the basis that the health benefit plan does not providebenefits for the health care service in question, if the exclusion of thespecific service requested is clearly stated in the certificate of coverage. A"noncertification" includes any situation in which an insurer or itsdesignated agent makes a decision about a covered person's condition todetermine whether a requested treatment is experimental, investigational, orcosmetic, and the extent of coverage under the health benefit plan is affectedby that decision.
(14) "Participatingprovider" means a provider who, under a contract with an insurer or withan insurer's contractor or subcontractor, has agreed to provide health careservices to covered persons in return for direct or indirect payment from theinsurer, other than coinsurance, copayments, or deductibles.
(15) "Provider"means a health care provider.
(16) "Stabilize"means to provide medical care that is appropriate to prevent a materialdeterioration of the person's condition, within reasonable medical probability,in accordance with the HCFA (Health Care Financing Administration)interpretative guidelines, policies, and regulations pertaining toresponsibilities of hospitals in emergency cases (as provided under theEmergency Medical Treatment and Labor Act, section 1867 of the Social SecurityAct, 42 U.S.C.S. § 1395dd), including medically necessary services and suppliesto maintain stabilization until the person is transferred.
(17) "Utilizationreview" means a set of formal techniques designed to monitor the use of orevaluate the clinical necessity, appropriateness, efficacy or efficiency ofhealth care services, procedures, providers, or facilities. These techniquesmay include:
a. Ambulatory review. Utilization review of services performed or provided in an outpatient setting.
b. Case management. Acoordinated set of activities conducted for individual patient management ofserious, complicated, protracted, or other health conditions.
c. Certification. Adetermination by an insurer or its designated URO that an admission,availability of care, continued stay, or other service has been reviewed and,based on the information provided, satisfies the insurer's requirements formedically necessary services and supplies, appropriateness, health caresetting, level of care, and effectiveness.
d. Concurrent review. Utilization review conducted during a patient's hospital stay or course oftreatment.
e. Discharge planning. The formal process for determining, before discharge from a providerfacility, the coordination and management of the care that a patient receivesafter discharge from a provider facility.
f. Prospective review. Utilization review conducted before an admission or a course of treatmentincluding any required preauthorization or precertification.
g. Retrospectivereview. Utilization review of medically necessary services and supplies thatis conducted after services have been provided to a patient, but not the reviewof a claim that is limited to an evaluation of reimbursement levels, veracityof documentation, accuracy of coding, or adjudication for payment.Retrospective review includes the review of claims for emergency services todetermine whether the prudent layperson standard in G.S. 58‑3‑190has been met.
h. Second opinion. Anopportunity or requirement to obtain a clinical evaluation by a provider otherthan the provider originally making a recommendation for a proposed service toassess the clinical necessity and appropriateness of the proposed service.
(18) "Utilizationreview organization" or "URO" means an entity that conductsutilization review under a managed care plan, but does not mean an insurerperforming utilization review for its own health benefit plan.
(b) Insurer Oversight. Every insurer shall monitor all utilization review carried out by or onbehalf of the insurer and ensure compliance with this section. An insurer shallensure that appropriate personnel have operational responsibility for theconduct of the insurer's utilization review program. If an insurer contracts tohave a URO perform its utilization review, the insurer shall monitor the URO toensure compliance with this section, which shall include:
(1) A writtendescription of the URO's activities and responsibilities, including reportingrequirements.
(2) Evidence of formalapproval of the utilization review organization program by the insurer.
(3) A process by whichthe insurer evaluates the performance of the URO.
(c) Scope and Contentof Program. Every insurer shall prepare and maintain a utilization review programdocument that describes all delegated and nondelegated review functions forcovered services including:
(1) Procedures toevaluate the clinical necessity, appropriateness, efficacy, or efficiency ofhealth services.
(2) Data sources andclinical review criteria used in decision making.
(3) The process forconducting appeals of noncertifications.
(4) Mechanisms to ensureconsistent application of review criteria and compatible decisions.
(5) Data collectionprocesses and analytical methods used in assessing utilization of health careservices.
(6) Provisions forassuring confidentiality of clinical and patient information in accordance withState and federal law.
(7) The organizationalstructure (e.g., utilization review committee, quality assurance, or othercommittee) that periodically assesses utilization review activities and reportsto the insurer's governing body.
(8) The staff positionfunctionally responsible for day‑to‑day program management.
(9) The methods ofcollection and assessment of data about underutilization and overutilization ofhealth care services and how the assessment is used to evaluate and improveprocedures and criteria for utilization review.
(d) Program Operations. In every utilization review program, an insurer or URO shall use documentedclinical review criteria that are based on sound clinical evidence and that areperiodically evaluated to assure ongoing efficacy. An insurer may develop itsown clinical review criteria or purchase or license clinical review criteria. Criteriafor determining when a patient needs to be placed in a substance abusetreatment program shall be either (i) the diagnostic criteria contained in themost recent revision of the American Society of Addiction Medicine PatientPlacement Criteria for the Treatment of Substance‑Related Disorders or(ii) criteria adopted by the insurer or its URO. The Department, inconsultation with the Department of Health and Human Services, may requireproof of compliance with this subsection by a plan or URO.
Qualified health careprofessionals shall administer the utilization review program and overseereview decisions under the direction of a medical doctor. A medical doctorlicensed to practice medicine in this State shall evaluate the clinicalappropriateness of noncertifications. Compensation to persons involved inutilization review shall not contain any direct or indirect incentives for themto make any particular review decisions. Compensation to utilization reviewersshall not be directly or indirectly based on the number or type ofnoncertifications they render. In issuing a utilization review decision, aninsurer shall: obtain all information required to make the decision, includingpertinent clinical information; employ a process to ensure that utilization reviewersapply clinical review criteria consistently; and issue the decision in a timelymanner pursuant to this section.
(e) InsurerResponsibilities. Every insurer shall:
(1) Routinely assess theeffectiveness and efficiency of its utilization review program.
(2) Coordinate theutilization review program with its other medical management activity,including quality assurance, credentialing, provider contracting, datareporting, grievance procedures, processes for assessing satisfaction ofcovered persons, and risk management.
(3) Provide coveredpersons and their providers with access to its review staff by a toll‑freeor collect call telephone number whenever any provider is required to beavailable to provide services which may require prior certification to any planenrollee. Every insurer shall establish standards for telephone accessibilityand monitor telephone service as indicated by average speed of answer and callabandonment rate, on at least a month‑by‑month basis, to ensurethat telephone service is adequate, and take corrective action when necessary.
(4) Limit its requestsfor information to only that information that is necessary to certify theadmission, procedure or treatment, length of stay, and frequency and durationof health care services.
(5) Have writtenprocedures for making utilization review decisions and for notifying coveredpersons of those decisions.
(6) Have writtenprocedures to address the failure or inability of a provider or covered personto provide all necessary information for review. If a provider or coveredperson fails to release necessary information in a timely manner, the insurermay deny certification.
(f) Prospective andConcurrent Reviews. As used in this subsection, "necessaryinformation" includes the results of any patient examination, clinicalevaluation, or second opinion that may be required. Prospective and concurrentdeterminations shall be communicated to the covered person's provider withinthree business days after the insurer obtains all necessary information aboutthe admission, procedure, or health care service. If an insurer certifies ahealth care service, the insurer shall notify the covered person's provider.For a noncertification, the insurer shall notify the covered person's providerand send written or electronic confirmation of the noncertification to thecovered person. In concurrent reviews, the insurer shall remain liable forhealth care services until the covered person has been notified of thenoncertification.
(g) RetrospectiveReviews. As used in this subsection, "necessary information"includes the results of any patient examination, clinical evaluation, or secondopinion that may be required. For retrospective review determinations, aninsurer shall make the determination within 30 days after receiving allnecessary information. For a certification, the insurer may give writtennotification to the covered person's provider. For a noncertification, theinsurer shall give written notification to the covered person and the coveredperson's provider within five business days after making the noncertification.
(h) Notice ofNoncertification. A written notification of a noncertification shall includeall reasons for the noncertification, including the clinical rationale, theinstructions for initiating a voluntary appeal or reconsideration of thenoncertification, and the instructions for requesting a written statement ofthe clinical review criteria used to make the noncertification. An insurershall provide the clinical review criteria used to make the noncertification toany person who received the notification of the noncertification and whofollows the procedures for a request. An insurer shall also inform the coveredperson in writing about the availability of assistance from the Managed CarePatient Assistance Program, including the telephone number and address of theProgram.
(i) Requests forInformal Reconsideration. An insurer may establish procedures for informalreconsideration of noncertifications and, if established, the procedures shallbe in writing. After a written notice of noncertification has been issued inaccordance with subsection (h) of this section, the reconsideration shall beconducted between the covered person's provider and a medical doctor licensedto practice medicine in this State designated by the insurer. An insurer shallnot require a covered person to participate in an informal reconsiderationbefore the covered person may appeal a noncertification under subsection (j) ofthis section. If, after informal reconsideration, the insurer upholds thenoncertification decision, the insurer shall issue a new notice in accordancewith subsection (h) of this section. If the insurer is unable to render aninformal reconsideration decision within 10 business days after the date ofreceipt of the request for an informal reconsideration, it shall treat therequest for informal reconsideration as a request for an appeal; provided thatthe requirements of subsection (k) of this section for acknowledging therequest shall apply beginning on the day the insurer determines an informalreconsideration decision cannot be made before the tenth business day afterreceipt of the request for an informal reconsideration.
(j) Appeals ofNoncertifications. Every insurer shall have written procedures for appeals ofnoncertifications by covered persons or their providers acting on theirbehalves, including expedited review to address a situation where the timeframes for the standard review procedures set forth in this section would reasonablyappear to seriously jeopardize the life or health of a covered person orjeopardize the covered person's ability to regain maximum function. Each appealshall be evaluated by a medical doctor licensed to practice medicine in thisState who was not involved in the noncertification.
(k) NonexpeditedAppeals. Within three business days after receiving a request for a standard,nonexpedited appeal, the insurer shall provide the covered person with thename, address, and telephone number of the coordinator and information on howto submit written material. For standard, nonexpedited appeals, the insurershall give written notification of the decision, in clear terms, to the coveredperson and the covered person's provider within 30 days after the insurerreceives the request for an appeal. If the decision is not in favor of thecovered person, the written decision shall contain:
(1) The professionalqualifications and licensure of the person or persons reviewing the appeal.
(2) A statement of thereviewers' understanding of the reason for the covered person's appeal.
(3) The reviewers'decision in clear terms and the medical rationale in sufficient detail for thecovered person to respond further to the insurer's position.
(4) A reference to theevidence or documentation that is the basis for the decision, including theclinical review criteria used to make the determination, and instructions forrequesting the clinical review criteria.
(5) A statement advisingthe covered person of the covered person's right to request a second‑levelgrievance review and a description of the procedure for submitting a second‑levelgrievance under G.S. 58‑50‑62.
(6) Notice of theavailability of assistance from the Managed Care Patient Assistance Program,including the telephone number and address of the Program.
(l) Expedited Appeals. An expedited appeal of a noncertification may be requested by a coveredperson or his or her provider acting on the covered person's behalf only when anonexpedited appeal would reasonably appear to seriously jeopardize the life orhealth of a covered person or jeopardize the covered person's ability to regainmaximum function. The insurer may require documentation of the medicaljustification for the expedited appeal. The insurer shall, in consultation witha medical doctor licensed to practice medicine in this State, provide expeditedreview, and the insurer shall communicate its decision in writing to thecovered person and his or her provider as soon as possible, but not later thanfour days after receiving the information justifying expedited review. Thewritten decision shall contain the provisions specified in subsection (k) ofthis section. If the expedited review is a concurrent review determination, theinsurer shall remain liable for the coverage of health care services until thecovered person has been notified of the determination. An insurer is notrequired to provide an expedited review for retrospective noncertifications.
(m) DisclosureRequirements. In the certificate of coverage and member handbook provided tocovered persons, an insurer shall include a clear and comprehensive descriptionof its utilization review procedures, including the procedures for appealingnoncertifications and a statement of the rights and responsibilities of coveredpersons, including the voluntary nature of the appeal process, with respect tothose procedures. An insurer shall also include in the certificate of coverageand the member handbook information about the availability of assistance from theManaged Care Patient Assistance Program, including the telephone number andaddress of the Program. An insurer shall include a summary of its utilizationreview procedures in materials intended for prospective covered persons. Aninsurer shall print on its membership cards a toll‑free telephone numberto call for utilization review purposes.
(n) Maintenance ofRecords. Every insurer and URO shall maintain records of each reviewperformed and each appeal received or reviewed, as well as documentation sufficientto demonstrate compliance with this section. The maintenance of these records,including electronic reproduction and storage, shall be governed by rulesadopted by the Commissioner that apply to insurers. These records shall beretained by the insurer and URO for a period of five years or, for domesticcompanies, until the Commissioner has adopted a final report of a generalexamination that contains a review of these records for that calendar year,whichever is later.
(o) Violation. Aviolation of this section subjects an insurer to G.S. 58‑2‑70. (1997‑443, s. 11A.122;1997‑519, s. 4.1; 1999‑116, s. 1; 1999‑391, ss. 1‑4;2001‑417, ss. 2‑7; 2001‑416, ss. 4.4, 5; 2003‑105, s.1; 2005‑223, s. 8; 2008‑124, s. 5.1.)