Bill Text: IL SB1506 | 2009-2010 | 96th General Assembly | Engrossed

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Bill Title: Creates the Health Carrier External Review Act. Sets forth standards for independent external review procedures for adverse determinations by a health carrier against a covered person. Provides that the Act applies to an entity subject to the insurance laws and regulations of this State or subject to the jurisdiction of the Director and that contracts or offers to contract concerning any costs of health care. Requires health carriers to notify covered persons and their health care providers in writing of the covered person's right to request an external review as provided by the Act. Sets forth notice requirements. Provides that a request for an external review shall not be made until the covered person has exhausted the health carrier's internal grievance process. Sets forth requirements for standard external reviews and expedited external reviews. Provides that an external review decision is binding on the health carrier and binding on the covered person except to the extent the covered person has other remedies available. Sets forth minimum qualifications for independent review organizations and provides that the Director shall approve independent review organizations eligible to be assigned to conduct external reviews. Provides that each health carrier shall maintain written records of external review requests for each calendar year and submit a report to the Director by March 1 of each year. Provides that the health carrier shall be solely responsible for paying the cost of external reviews. Sets forth disclosure requirements. Amends the Managed Care Reform and Patient Rights Act to provide that an enrollee may appeal adverse decisions in accordance with the Health Carrier External Review Act. Deletes a provision concerning external independent review. Makes other changes. Contains a severability clause. Effective January 1, 2010.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2009-05-08 - Rule 19(a) / Re-referred to Rules Committee [SB1506 Detail]

Download: Illinois-2009-SB1506-Engrossed.html

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SB1506 Engrossed LRB096 10769 RPM 20965 b
AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the Health
Carrier External Review Act.
Section 5. Purpose and intent. The purpose of this Act is
to provide uniform standards for the establishment and
maintenance of external review procedures to assure that
covered persons have the opportunity for an independent review
of an adverse determination or final adverse determination, as
defined in this Act.
Section 10. Definitions. For the purposes of this Act:
"Adverse determination" means a determination by a health
carrier or its designee utilization review organization that an
admission, availability of care, continued stay, or other
health care service that is a covered benefit has been reviewed
and, based upon the information provided, does not meet the
health carrier's requirements for medical necessity,
appropriateness, health care setting, level of care, or
effectiveness, and the requested service or payment for the
service is therefore denied, reduced, or terminated.
"Authorized representative" means:

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(1) a person to whom a covered person has given express
written consent to represent the covered person in an
external review;
(2) a person authorized by law to provide substituted
consent for a covered person; or
(3) a family member of the covered person or the
covered person's health care provider only when the covered
person is unable to provide consent.
"Best evidence" means evidence based on:
(1) randomized clinical trials;
(2) if randomized clinical trials are not available,
then cohort studies or case-control studies;
(3) if items (1) and (2) are not available, then
case-series; or
(4) if items (1), (2), and (3) are not available, then
expert opinion.
"Case-series" means an evaluation of a series of patients
with a particular outcome, without the use of a control group.
"Clinical review criteria" means the written screening
procedures, decision abstracts, clinical protocols, and
practice guidelines used by a health carrier to determine the
necessity and appropriateness of health care services.
"Cohort study" means a prospective evaluation of 2 groups
of patients with only one group of patients receiving specific
intervention.
"Covered benefits" or "benefits" means those health care

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services to which a covered person is entitled under the terms
of a health benefit plan.
"Covered person" means a policyholder, subscriber,
enrollee, or other individual participating in a health benefit
plan.
"Director" means the Director of the Division of Insurance
within the Illinois Department of Financial and Professional
Regulation.
"Emergency medical condition" means the sudden onset of a
health condition or illness that requires immediate medical
attention, where failure to provide medical attention would
result in a serious impairment to bodily functions, serious
dysfunction of a bodily organ or part, or would place the
person's health in serious jeopardy.
"Emergency services" means health care items and services
furnished or required to evaluate and treat an emergency
medical condition.
"Evidence-based standard" means the conscientious,
explicit, and judicious use of the current best evidence based
on an overall systematic review of the research in making
decisions about the care of individual patients.
"Expert opinion" means a belief or an interpretation by
specialists with experience in a specific area about the
scientific evidence pertaining to a particular service,
intervention, or therapy.
"Facility" means an institution providing health care

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services or a health care setting.
"Final adverse determination" means an adverse
determination involving a covered benefit that has been upheld
by a health carrier, or its designee utilization review
organization, at the completion of the health carrier's
internal grievance process procedures as set forth by the
American Accreditation Health Care Commission.
"Health benefit plan" means a policy, contract,
certificate, plan, or agreement offered or issued by a health
carrier to provide, deliver, arrange for, pay for, or reimburse
any of the costs of health care services.
"Health care provider" or "provider" means a physician or
other health care practitioner licensed, accredited, or
certified to perform specified health care services consistent
with State law, responsible for recommending health care
services on behalf of a covered person.
"Health care services" means services for the diagnosis,
prevention, treatment, cure, or relief of a health condition,
illness, injury, or disease.
"Health carrier" means an entity subject to the insurance
laws and regulations of this State, or subject to the
jurisdiction of the Director, that contracts or offers to
contract to provide, deliver, arrange for, pay for, or
reimburse any of the costs of health care services, including a
sickness and accident insurance company, a health maintenance
organization, a nonprofit hospital and health service

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corporation, or any other entity providing a plan of health
insurance, health benefits, or health care services. "Health
carrier" also means Limited Health Service Organizations
(LHSO) and Voluntary Health Service Plans.
"Health carrier" does not include a managed care plan as
defined in the Managed Care Reform and Patient Rights Act.
"Health information" means information or data, whether
oral or recorded in any form or medium, and personal facts or
information about events or relationships that relate to:
(1) the past, present, or future physical, mental, or
behavioral health or condition of an individual or a member
of the individual's family;
(2) the provision of health care services to an
individual; or
(3) payment for the provision of health care services
to an individual.
"Independent review organization" means an entity that
conducts independent external reviews of adverse
determinations and final adverse determinations.
"Medical or scientific evidence" means evidence found in
the following sources:
(1) peer-reviewed scientific studies published in or
accepted for publication by medical journals that meet
nationally recognized requirements for scientific
manuscripts and that submit most of their published
articles for review by experts who are not part of the

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editorial staff;
(2) peer-reviewed medical literature, including
literature relating to therapies reviewed and approved by a
qualified institutional review board, biomedical
compendia, and other medical literature that meet the
criteria of the National Institutes of Health's Library of
Medicine for indexing in Index Medicus (Medline) and
Elsevier Science Ltd. for indexing in Excerpta Medicus
(EMBASE);
(3) medical journals recognized by the Secretary of
Health and Human Services under Section 1861(t)(2) of the
federal Social Security Act;
(4) the following standard reference compendia:
(a) The American Hospital Formulary Service-Drug
Information;
(b) Drug Facts and Comparisons;
(c) The American Dental Association Accepted
Dental Therapeutics; and
(d) The United States Pharmacopoeia-Drug
Information;
(5) findings, studies, or research conducted by or
under the auspices of federal government agencies and
nationally recognized federal research institutes,
including:
(a) the federal Agency for Healthcare Research and
Quality;

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(b) the National Institutes of Health;
(c) the National Cancer Institute;
(d) the National Academy of Sciences;
(e) the Centers for Medicare & Medicaid Services;
(f) the federal Food and Drug Administration; and
(g) any national board recognized by the National
Institutes of Health for the purpose of evaluating the
medical value of health care services; or
(6) any other medical or scientific evidence that is
comparable to the sources listed in items (1) through (5).
"Protected health information" means health information
(i) that identifies an individual who is the subject of the
information; or (ii) with respect to which there is a
reasonable basis to believe that the information could be used
to identify an individual.
"Retrospective review" means a review of medical necessity
conducted after services have been provided to a patient, but
does not include the review of a claim that is limited to an
evaluation of reimbursement levels, veracity of documentation,
accuracy of coding, or adjudication for payment.
"Utilization review" has the meaning provided by the
American Accreditation Health Care Commission.
"Utilization review organization" means a utilization
review program as defined by the American Accreditation Health
Care Commission.

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Section 15. Applicability and scope.
(a) Except as provided in subsection (b) of this Section,
this Act shall apply to all health carriers.
(b) The provisions of this Act shall not apply to a policy
or certificate that provides coverage only for a specified
disease, specified accident or accident-only coverage, credit,
dental, disability income, hospital indemnity, long-term care
insurance as defined by Article XIXA of the Illinois Insurance
Code, vision care, or any other limited supplemental benefit; a
Medicare supplement policy of insurance as defined by the
Director by regulation; coverage under a plan through Medicare,
Medicaid, or the federal employees health benefits program; any
coverage issued under Chapter 55 of Title 10, U.S. Code and any
coverage issued as supplement to that coverage; any coverage
issued as supplemental to liability insurance, workers'
compensation, or similar insurance; automobile medical-payment
insurance or any insurance under which benefits are payable
with or without regard to fault, whether written on a group
blanket or individual basis; or any managed care plan as
defined in the Managed Care Reform and Patient Rights Act.
Section 20. Notice of right to external review.
(a) At the same time the health carrier sends written
notice of an adverse determination upon completion of the
health carrier's utilization review process as provided by the
American Accreditation Health Care Commission and a final

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adverse determination, a health carrier shall notify a covered
person and a covered person's health care provider in writing
of the covered person's right to request an external review as
provided by this Act.
(1) The written notice required shall include the
following, or substantially equivalent, language: "We have
denied your request for the provision of or payment for a
health care service or course of treatment. You have the
right to have our decision reviewed by an independent
review organization not associated with us if our decision
involved making a judgment as to the medical necessity,
appropriateness, health care setting, level of care, or
effectiveness of the health care service or treatment you
requested by submitting a written request for an external
review to us. Upon receipt of your request an independent
review organization registered with the Department of
Financial and Professional Regulation, Division of
Insurance will be assigned to review our decision.".
(2) The notice shall also include the appropriate
statements and information set forth in subsections (b) and
(c) of this Section.
(b) The health carrier shall include in the notice required
under subsection (a) of this Section for a notice related to an
adverse determination, a statement informing the covered
person that:
(1) if the covered person has a medical condition where

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the timeframe for completion of an expedited internal
review of a grievance involving an adverse determination
would seriously jeopardize the life or health of the
covered person or would jeopardize the covered person's
ability to regain maximum function or if the adverse
determination involves a denial of coverage based on a
determination that the recommended or requested health
care service or treatment is experimental or
investigational and the covered person's treating
physician certifies in writing that the recommended or
requested health care service or treatment that is the
subject of the adverse determination would be
significantly less effective if not promptly initiated,
then the covered person or the covered person's authorized
representative may file a request for an expedited external
review at the same time the covered person or the covered
person's authorized representative files a request for an
expedited internal appeal involving an adverse
determination as set forth by the American Accreditation
Health Care Commission. The independent review
organization assigned to conduct the expedited external
review will determine whether the covered person shall be
required to complete the expedited review of the grievance
prior to conducting the expedited external review; and
(2) the covered person or the covered person's
authorized representative may file a grievance under the

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health carrier's internal grievance process as set forth by
the American Accreditation Health Care Commission, but if
the health carrier has not issued a written decision to the
covered person or the covered person's authorized
representative within 30 days following the date the
covered person or the covered person's authorized
representative files the grievance with the health carrier
and the covered person or the covered person's authorized
representative has not requested or agreed to a delay, then
the covered person or the covered person's authorized
representative may file a request for external review and
shall be considered to have exhausted the health carrier's
internal grievance process.
(c) The health carrier shall include in the notice required
under subsection (a) of this Section for a notice related to a
final adverse determination, a statement informing the covered
person that:
(1) if the covered person has a medical condition where
the timeframe for completion of a standard external review
would seriously jeopardize the life or health of the
covered person or would jeopardize the covered person's
ability to regain maximum function, then the covered person
or the covered person's authorized representative may file
a request for an expedited external review; or
(2) if a final adverse determination concerns:
(i) an admission, availability of care, continued

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stay, or health care service for which the covered
person received emergency services, but has not been
discharged from a facility, then the covered person, or
the covered person's authorized representative, may
request an expedited external review; or
(ii) a denial of coverage based on a determination
that the recommended or requested health care service
or treatment is experimental or investigational, and
the covered person's health care provider certifies in
writing that the recommended or requested health care
service or treatment that is the subject of the request
would be significantly less effective if not promptly
initiated, then the covered person or the covered
person's authorized representative may request an
expedited external review.
(d) In addition to the information to be provided pursuant
to subsections (a), (b), and (c) of this Section, the health
carrier shall include a copy of the description of both the
required standard and expedited external review procedures.
The description shall highlight the external review procedures
that give the covered person or the covered person's authorized
representative the opportunity to submit additional
information, including any forms used to process an external
review.
Section 25. Request for external review. A covered person

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or the covered person's authorized representative may make a
request for a standard external or expedited external review of
an adverse determination or final adverse determination.
Requests under this Section shall be made directly to the
health carrier that made the adverse or final adverse
determination. All requests for external review shall be in
writing except for requests for expedited external reviews
which may me made orally. Health carriers must provide covered
persons with forms to request external reviews.
Section 30. Exhaustion of internal grievance process.
(a) Except as provided in item (1) of subsection (b) of
Section 20 of this Act, a request for an external review shall
not be made until the covered person has exhausted the health
carrier's internal grievance process as set forth by the
American Accreditation Health Care Commission.
(b) A covered person shall be considered to have exhausted
the health carrier's internal grievance process for purposes of
this Section if the covered person or the covered person's
authorized representative filed a request for an internal
review of an adverse determination pursuant to the American
Accreditation Health Care Commission and has not received a
written decision on the request from the health carrier within
30 days after the request is filed, except to the extent the
covered person or the covered person's authorized
representative requested or agreed to a delay.

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(c) Notwithstanding subsection (b) of this Section, a
covered person or the covered person's authorized
representative may not make a request for an external review of
an adverse determination involving a retrospective review
determination until the covered person has exhausted the health
carrier's internal grievance process.
(d) Upon request for an expedited external review pursuant
to item (1) of subsection (b) of Section 20 of this Act, the
independent review organization conducting the external review
shall determine whether the covered person shall be required to
complete the expedited review process set forth by the American
Accreditation Health Care Commission before it conducts the
expedited external review. Upon determination that the covered
person must first complete the expedited grievance review
process, the independent review organization immediately shall
notify the covered person and, if applicable, the covered
person's authorized representative of this determination and
that it will not proceed with the expedited external review
until completion of the expedited grievance review process and
that covered person's grievance at the completion of the
expedited grievance review process remains unresolved.
(e) A covered person need not exhaust a health carrier's
internal grievance procedures as set forth by the American
Accreditation Health Care Commission, if the health carrier
agrees to waive the exhaustion requirement.

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Section 35. Standard external review.
(a) Within 4 months after the date of receipt of a notice
of an adverse determination or final adverse determination, a
covered person or the covered person's authorized
representative may file a request for an external review with
the health carrier.
(b) Within 5 business days following the date of receipt of
the external review request, the health carrier shall complete
a preliminary review of the request to determine whether:
(1) the individual is or was a covered person in the
health benefit plan at the time the health care service was
requested or at the time the health care service was
provided;
(2) either of the following situations is applicable:
(A) the health care service that is the subject of
the adverse determination or the final adverse
determination is a covered service under the covered
person's health benefit plan, but the health carrier
has determined that the health care service is not
covered because it does not meet the health carrier's
requirements for medical necessity, appropriateness,
health care setting, level of care, or effectiveness;
or
(B) the recommended or requested health care
service or treatment that is the subject of the adverse
determination or final adverse determination is a

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covered benefit under the covered person's health
benefit plan except for the health carrier's
determination that the service or treatment is
experimental or investigational for a particular
medical condition and is not explicitly listed as an
excluded benefit under the covered person's health
benefit plan with the health carrier;
(3) the covered person's treating physician has
certified that one of the following situations is
applicable:
(A) standard health care services or treatments
have not been effective in improving the condition of
the covered person;
(B) standard health care services or treatments
are not medically appropriate for the covered person;
or
(C) there is no available standard health care
service or treatment covered by the health carrier that
is more beneficial than the recommended or requested
health care service or treatment described in item (4)
of this subsection (b);
(4) the covered person's treating physician:
(A) has recommended a health care service or
treatment that the physician certifies, in writing, is
likely to be more beneficial to the covered person, in
the physician's opinion, than any available standard

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health care service or treatment; or
(B) who is a licensed, board certified, or board
eligible physician qualified to practice in the area of
medicine appropriate to treat the covered person's
condition, has certified in writing that
scientifically valid studies using accepted protocols
demonstrate that the health care service or treatment
requested by the covered person that is the subject of
the adverse determination or final adverse
determination is likely to be more beneficial to the
covered person than any available standard health care
services or treatments;
(5) the covered person has exhausted the health
carrier's internal grievance process as set forth in
Section 30 of this Act; and
(6) the covered person has provided all the information
and forms required to process an external review as
specified in this Act.
(c) Within one business day after completion of the
preliminary review, the health carrier shall notify the covered
person and, if applicable, the covered person's authorized
representative in writing whether the request is complete and
eligible for external review. If the request:
(1) is not complete, the health carrier shall inform
the covered person and, if applicable, the covered person's
authorized representative in writing and include in the

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notice what information or materials are required by this
Act to make the request complete; or
(2) is not eligible for external review, the health
carrier shall inform the covered person and, if applicable,
the covered person's authorized representative in writing
and include in the notice the reasons for its
ineligibility.
The notice of initial determination of ineligibility shall
include a statement informing the covered person and, if
applicable, the covered person's authorized representative
that a health carrier's initial determination that the external
review request is ineligible for review may be appealed to the
Director by filing a complaint with the Director.
Notwithstanding a health carrier's initial determination
that the request is ineligible for external review, the
Director may determine that a request is eligible for external
review and require that it be referred for external review. In
making such determination, the Director's decision shall be in
accordance with the terms of the covered person's health
benefit plan and shall be subject to all applicable provisions
of this Act.
(d) Whenever a request is eligible for external review the
health carrier shall, within 5 business days:
(1) assign an independent review organization from the
list of approved independent review organizations compiled
and maintained by the Director; and

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(2) notify in writing the covered person and, if
applicable, the covered person's authorized representative
of the request's eligibility and acceptance for external
review and the name of the independent review organization.
The health carrier shall include in the notice provided to
the covered person and, if applicable, the covered person's
authorized representative a statement that the covered person
or the covered person's authorized representative may, within 5
business days following the date of receipt of the notice
provided pursuant to item (2) of this subsection (d), submit in
writing to the assigned independent review organization
additional information that the independent review
organization shall consider when conducting the external
review. The independent review organization is not required to,
but may, accept and consider additional information submitted
after 5 business days.
(e) The assignment of an approved independent review
organization to conduct an external review in accordance with
this Section shall be done on a random basis among those
approved independent review organizations qualified to conduct
external review except for instances of conflict of interest
concerns pursuant to this Act.
(f) Upon assignment of an independent review organization,
the health carrier or its designee utilization review
organization shall, within 5 business days, provide to the
assigned independent review organization the documents and any

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information considered in making the adverse determination or
final adverse determination; in such cases, the following
provisions shall apply:
(1) Except as provided in item (2) of this subsection
(f), failure by the health carrier or its utilization
review organization to provide the documents and
information within the specified time frame shall not delay
the conduct of the external review.
(2) If the health carrier or its utilization review
organization fails to provide the documents and
information within the specified time frame, the assigned
independent review organization may terminate the external
review and make a decision to reverse the adverse
determination or final adverse determination.
(3) Within one business day after making the decision
to terminate the external review and make a decision to
reverse the adverse determination or final adverse
determination under item (2) of this subsection (f), the
independent review organization shall notify the health
carrier, the covered person and, if applicable, the covered
person's authorized representative, of its decision to
reverse the adverse determination.
(g) Upon receipt of the information from the health carrier
or its utilization review organization, the assigned
independent review organization shall review all of the
information and documents and any other information submitted

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in writing to the independent review organization by the
covered person and the covered person's authorized
representative.
(h) Upon receipt of any information submitted by the
covered person or the covered person's authorized
representative, the independent review organization shall
forward the information to the health carrier within 1 business
day.
(1) Upon receipt of the information, if any, the health
carrier may reconsider its adverse determination or final
adverse determination that is the subject of the external
review.
(2) Reconsideration by the health carrier of its
adverse determination or final adverse determination shall
not delay or terminate the external review.
(3) The external review may only be terminated if the
health carrier decides, upon completion of its
reconsideration, to reverse its adverse determination or
final adverse determination and provide coverage or
payment for the health care service that is the subject of
the adverse determination or final adverse determination.
In such cases, the following provisions shall apply:
(A) Within one business day after making the
decision to reverse its adverse determination or final
adverse determination, the health carrier shall notify
the covered person, if applicable, the covered

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person's authorized representative, and the assigned
independent review organization in writing of its
decision.
(B) Upon notice from the health carrier that the
health carrier has made a decision to reverse its
adverse determination or final adverse determination,
the assigned independent review organization shall
terminate the external review.
(i) In addition to the documents and information provided
by the health carrier or its utilization review organization
and the covered person and the covered person's authorized
representative, if any, the independent review organization,
to the extent the information or documents are available and
the independent review organization considers them
appropriate, shall consider the following in reaching a
decision:
(1) for an adverse determination or final adverse
determination:
(A) the covered person's pertinent medical
records;
(B) the covered person's health care provider's
recommendation;
(C) consulting reports from appropriate health
care providers and other documents submitted by the
health carrier, the covered person, the covered
person's authorized representative, or the covered

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person's treating provider;
(D) the terms of coverage under the covered
person's health benefit plan with the health carrier to
ensure that the independent review organization's
decision is not contrary to the terms of coverage under
the covered person's health benefit plan with the
health carrier;
(E) the most appropriate practice guidelines,
which shall include applicable evidence-based
standards and may include any other practice
guidelines developed by the federal government,
national or professional medical societies, boards,
and associations;
(F) any applicable clinical review criteria
developed and used by the health carrier or its
designee utilization review organization; and
(G) the opinion of the independent review
organization's clinical reviewer or reviewers after
considering paragraphs (A) through (G) of this item (1)
of this subsection (i) to the extent the information or
documents are available and the clinical reviewer or
reviewers considers the information or documents
appropriate;
(2) for an adverse determination or final adverse
determination that involves a denial of coverage based on a
determination that the health care service or treatment

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recommended or requested is experimental or
investigational:
(A) the covered person's pertinent medical
records;
(B) the covered person's health care provider's
recommendation;
(C) consulting reports from appropriate health
care providers and other documents submitted by the
health carrier, the covered person, the covered
person's authorized representative, or the covered
person's treating physician or health care
professional;
(D) the terms of coverage under the covered
person's health benefit plan with the health carrier to
ensure that, but for the health carrier's
determination that the recommended or requested health
care service or treatment that is the subject of the
opinion is experimental or investigational, the
independent review organization's opinion is not
contrary to the terms of coverage under the covered
person's health benefit plan with the health carrier;
and
(E) whether and to what extent:
(i) the recommended or requested health care
service or treatment has been approved by the
federal Food and Drug Administration, if

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applicable, for the condition; or
(ii) medical or scientific evidence or
evidence-based standards demonstrate that the
expected benefits of the recommended or requested
health care service or treatment is more likely
than not to be beneficial to the covered person
than any available standard health care service or
treatment and the adverse risks of the recommended
or requested health care service or treatment
would not be substantially increased over those of
available standard health care services or
treatments; or
(3) except for an expedited external review, for an
adverse determination or final adverse determination that
involves a denial of coverage based on a determination that
the health care service or treatment recommended or
requested is experimental or investigational, each
clinical reviewer selected by the independent review
organization shall provide its opinion to the independent
review organization in writing and include the following
information:
(A) a description of the covered person's medical
condition;
(B) a description of the indicators relevant to
determining whether there is sufficient evidence to
demonstrate that the recommended or requested health

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care service or treatment is more likely than not to be
beneficial to the covered person than any available
standard health care services or treatments and the
adverse risks of the recommended or requested health
care service or treatment would not be substantially
increased over those of available standard health care
services or treatments;
(C) a description and analysis of any medical or
scientific evidence considered in reaching the
opinion;
(D) a description and analysis of any
evidence-based standard; and
(E) information on whether the reviewer's
rationale for the opinion is based on paragraphs (i) or
(ii) of subitem (E) of item (2) of this subsection (i).
(j) Within 5 days after the date of receipt of all
necessary information, the assigned independent review
organization shall provide written notice of its decision to
uphold or reverse the adverse determination or the final
adverse determination to the health carrier, the covered person
and, if applicable, the covered person's authorized
representative. In reaching a decision, the assigned
independent review organization is not bound by any decisions
or conclusions reached during the health carrier's utilization
review process as set forth by the American Accreditation
Health Care Commission. In such cases, the following provisions

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shall apply:
(1) The independent review organization shall include
in the notice:
(A) a general description of the reason for the
request for external review;
(B) the date the independent review organization
received the assignment from the health carrier to
conduct the external review;
(C) the time period during which the external
review was conducted;
(D) references to the evidence or documentation,
including the evidence-based standards, considered in
reaching its decision.
(E) the date of its decision; and
(F) the principal reason or reasons for its
decision, including what applicable, if any,
evidence-based standards that were a basis for its
decision.
(2) For reviews of experimental or investigational
treatments, the notice shall include the following
information:
(A) a general description of the reason for the
request for external review;
(B) the written opinion of each clinical reviewer,
including the recommendation of each clinical reviewer
as to whether the recommended or requested health care

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service or treatment should be covered and the
rationale for the reviewer's recommendation;
(C) the date that the independent review
organization received assignment from the health
carrier to conduct the external review;
(D) the time period during which the external
review was conducted; and
(E) the principal reason or reasons for its
decision.
(3) Upon receipt of a notice of a decision reversing
the adverse determination or final adverse determination,
the health carrier immediately shall approve the coverage
that was the subject of the adverse determination or final
adverse determination.
Section 40. Expedited external review.
(a) A covered person or a covered person's authorized
representative may file a request for an expedited external
review with the health carrier either orally or in writing at
the time the covered person receives:
(1) an adverse determination, if:
(A) the adverse determination involves a medical
condition of the covered person for which the timeframe
for completion of an expedited internal review of a
grievance involving an adverse determination as set
forth by the American Accreditation Health Care

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Commission would seriously jeopardize the life or
health of the covered person or would jeopardize the
covered person's ability to regain maximum function;
and
(B) the covered person or the covered person's
authorized representative has filed a request for an
expedited review of a grievance involving an adverse
determination as set forth by the American
Accreditation Health Care Commission; or
(2) a final adverse determination, if:
(A) the covered person has a medical condition
where the timeframe for completion of a standard
external review would seriously jeopardize the life or
health of the covered person or would jeopardize the
covered person's ability to regain maximum function;
or
(B) the final adverse determination concerns an
admission, availability of care, continued stay, or
health care service for which the covered person
received emergency services but has not been
discharged from a facility.
(b) Upon receipt of a request for an expedited external
review as provided in Section 20 of this Act, the health
carrier shall determine whether the request meets the
reviewability requirements set forth in subsection (b) of
Section 35 of this Act. The health carrier shall immediately

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notify the covered person and, if applicable, the covered
person's authorized representative of its eligibility
determination. The notice of initial determination shall
include a statement informing the covered person and, if
applicable, the covered person's authorized representative
that a health carrier's initial determination that an external
review request is ineligible for review may be appealed to the
Director.
(c) The Director may determine that a request is eligible
for external review under subsection (b) of Section 35 of this
Act, notwithstanding a health carrier's initial determination
that the request is ineligible and require that it be referred
for external review. In making a determination, the Director's
decision shall be made in accordance with the terms of the
covered person's health benefit plan and shall be subject to
all applicable provisions of this Act.
(d) Whenever a request is eligible for external review, the
health carrier shall immediately assign an independent review
organization from the list of approved independent review
organizations compiled and maintained by the Director to
conduct the expedited review. In such cases, the following
provisions shall apply:
(1) The assignment by the health carrier of an approved
independent review organization to conduct an external
review in accordance with this Section shall be done on a
random basis among those approved independent review

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organizations except as may be prohibited by conflict of
interest concerns pursuant to Section 60 of this Act.
(2) Immediately upon assigning an independent review
organization to perform an expedited external review, but
in no case less than 24 hours after assigning the
independent review organization, the health carrier or its
designee utilization review organization shall provide or
transmit all necessary documents and information
considered in making the final adverse determination to the
assigned independent review organization electronically or
by telephone or facsimile or any other available
expeditious method.
(3) If the health carrier or its utilization review
organization fails to provide the documents and
information within the specified timeframe, the assigned
independent review organization may terminate the external
review and make a decision to reverse the adverse
determination or final adverse determination.
(4) Within one business day after making the decision
to terminate the external review and make a decision to
reverse the adverse determination or final adverse
determination under item (2) of this subsection (d), the
independent review organization shall notify the health
carrier, the covered person and, if applicable, the covered
person's authorized representative of its decision to
reverse the adverse determination.

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(e) In addition to the documents and information provided
by the health carrier or its utilization review organization
and any documents and information provided by the covered
person and the covered person's authorized representative, the
independent review organization shall consider the following
in reaching a decision:
(1) for an adverse determination or final adverse
determination, the provisions included in subitems (A)
through (G) of item (1) of subsection (i) of Section 35 of
this Act; or
(2) for an adverse determination or final adverse
determination that involves a denial of coverage based on a
determination that the health care service or treatment
recommended or requested is experimental or
investigational, the provisions included in subitems (A)
through (E) of item (2) of subsection (i) of Section 35 of
this Act.
(f) As expeditiously as the covered person's medical
condition or circumstances requires, but in no event more than
72 hours after the receipt of all pertinent information, the
assigned independent review organization shall:
(1) make a decision to uphold or reverse the final
adverse determination; and
(2) notify the health carrier, the covered person, the
covered person's health care provider, and if applicable,
the covered person's authorized representative, of the

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decision.
(g) In reaching a decision, the assigned independent review
organization is not bound by any decisions or conclusions
reached during the health carrier's utilization review process
or the health carrier's internal grievance process as set forth
by the American Accreditation Health Care Commission.
(h) Upon receipt of notice of a decision reversing the
final adverse determination, the health carrier shall
immediately approve the coverage that was the subject of the
final adverse determination. Within 48 hours after the date of
providing the notice required in this subsection (h), the
assigned independent review organization shall provide written
confirmation of the decision to the health carrier, the covered
person, and if applicable, the covered person's authorized
representative including the information set forth in
subsection (j) of Section 35 of this Act as applicable.
(i) An expedited external review may not be provided for
retrospective adverse or final adverse determinations.
Section 45. Binding nature of external review decision. An
external review decision is binding on the health carrier. An
external review decision is binding on the covered person
except to the extent the covered person has other remedies
available under applicable federal or State law. A covered
person or the covered person's authorized representative may
not file a subsequent request for external review involving the

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same adverse determination or final adverse determination for
which the covered person has already received an external
review decision pursuant to this Act.
Section 50. Approval of independent review organizations.
(a) The Director shall approve independent review
organizations eligible to be assigned to conduct external
reviews under this Act.
(b) In order to be eligible for approval by the Director
under this Section to conduct external reviews under this Act
an independent review organization:
(1) except as otherwise provided in this Section, shall
be accredited by a nationally recognized private
accrediting entity that the Director has determined has
independent review organization accreditation standards
that are equivalent to or exceed the minimum qualifications
for independent review; and
(2) shall submit an application for approval in
accordance with subsection (d) of this Section.
(c) The Director shall develop an application form for
initially approving and for reapproving independent review
organizations to conduct external reviews.
(d) Any independent review organization wishing to be
approved to conduct external reviews under this Act shall
submit the application form and include with the form all
documentation and information necessary for the Director to

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determine if the independent review organization satisfies the
minimum qualifications established under this Act. The
Director may:
(1) approve independent review organizations that are
not accredited by a nationally recognized private
accrediting entity if there are no acceptable nationally
recognized private accrediting entities providing
independent review organization accreditation; and
(2) by rule establish an application fee that
independent review organizations shall submit to the
Director with an application for approval and renewing.
(e) An approval is effective for 2 years, unless the
Director determines before its expiration that the independent
review organization is not satisfying the minimum
qualifications established under this Act.
(f) Whenever the Director determines that an independent
review organization has lost its accreditation or no longer
satisfies the minimum requirements established under this Act,
the Director shall terminate the approval of the independent
review organization and remove the independent review
organization from the list of independent review organizations
approved to conduct external reviews under this Act that is
maintained by the Director.
(g) The Director shall maintain and periodically update a
list of approved independent review organizations.
(h) The Director may promulgate regulations to carry out

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the provisions of this Section.
Section 55. Minimum qualifications for independent review
organizations.
(a) To be approved to conduct external reviews, an
independent review organization shall have and maintain
written policies and procedures that govern all aspects of both
the standard external review process and the expedited external
review process set forth in this Act that include, at a
minimum:
(1) a quality assurance mechanism that ensures that:
(A) external reviews are conducted within the
specified timeframes and required notices are provided
in a timely manner;
(B) selection of qualified and impartial clinical
reviewers to conduct external reviews on behalf of the
independent review organization and suitable matching
of reviewers to specific cases and that the independent
review organization employs or contracts with an
adequate number of clinical reviewers to meet this
objective;
(C) the health carrier, the covered person, and the
covered person's authorized representative shall not
choose or control the choice of the physicians or other
health care professionals to be selected to conduct the
external review;

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(D) confidentiality of medical and treatment
records and clinical review criteria; and
(E) any person employed by or under contract with
the independent review organization adheres to the
requirements of this Act;
(2) a toll-free telephone service operating on a
24-hour-day, 7-day-a-week basis that accepts, receives,
and records information related to external reviews and
provides appropriate instructions; and
(3) an agreement to maintain and provide to the
Director the information set out in Section 70 of this Act.
(b) All clinical reviewers assigned by an independent
review organization to conduct external reviews shall be
physicians or other appropriate health care providers who meet
the following minimum qualifications:
(1) be an expert in the treatment of the covered
person's medical condition that is the subject of the
external review;
(2) be knowledgeable about the recommended health care
service or treatment through recent or current actual
clinical experience treating patients with the same or
similar medical condition of the covered person;
(3) hold a non-restricted license in a state of the
United States and, for physicians, a current certification
by a recognized American medical specialty board in the
area or areas appropriate to the subject of the external

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review;
(4) have no history of disciplinary actions or
sanctions, including loss of staff privileges or
participation restrictions, that have been taken or are
pending by any hospital, governmental agency or unit, or
regulatory body that raise a substantial question as to the
clinical reviewer's physical, mental, or professional
competence or moral character; and
(5) for purposes of conducting an external review of
experimental or investigational treatment adverse
determinations, through clinical experience in the past 3
years, be an expert in the treatment of the covered
person's condition and knowledgeable about the recommended
or requested health care service or treatment; neither the
covered person, the covered person's authorized
representative, if applicable, nor the health carrier
shall choose or control the choice of the physicians or
other health care professionals selected to conduct the
external review.
(c) In addition to the requirements set forth in subsection
(a), an independent review organization may not own or control,
be a subsidiary of, or in any way be owned, or controlled by,
or exercise control with a health benefit plan, a national,
State, or local trade association of health benefit plans, or a
national, State, or local trade association of health care
providers.

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(d) Conflicts of interest prohibited. In addition to the
requirements set forth in subsections (a), (b), and (c) of this
Section, to be approved pursuant to this Act to conduct an
external review of a specified case, neither the independent
review organization selected to conduct the external review nor
any clinical reviewer assigned by the independent organization
to conduct the external review may have a material
professional, familial or financial conflict of interest with
any of the following:
(1) the health carrier that is the subject of the
external review;
(2) the covered person whose treatment is the subject
of the external review or the covered person's authorized
representative;
(3) any officer, director or management employee of the
health carrier that is the subject of the external review;
(4) the health care provider, the health care
provider's medical group or independent practice
association recommending the health care service or
treatment that is the subject of the external review;
(5) the facility at which the recommended health care
service or treatment would be provided; or
(6) the developer or manufacturer of the principal
drug, device, procedure, or other therapy being
recommended for the covered person whose treatment is the
subject of the external review.

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(e) An independent review organization that is accredited
by a nationally recognized private accrediting entity that has
independent review accreditation standards that the Director
has determined are equivalent to or exceed the minimum
qualifications of this Section shall be presumed to be in
compliance with this Section and shall be eligible for approval
under this Section.
(f) An independent review organization shall be unbiased.
An independent review organization shall establish and
maintain written procedures to ensure that it is unbiased in
addition to any other procedures required under this Section.
Section 60. Hold harmless for independent review
organizations. No independent review organization or clinical
reviewer working on behalf of an independent review
organization or an employee, agent or contractor of an
independent review organization shall be liable for damages to
any person for any opinions rendered or acts or omissions
performed within the scope of the organization's or person's
duties under the law during or upon completion of an external
review conducted pursuant to this Act, unless the opinion was
rendered or act or omission performed in bad faith or involved
gross negligence.
Section 65. External review reporting requirements.
(a) Each health carrier shall maintain written records in

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the aggregate on all requests for external review for each
calendar year and submit a report to the Director in the format
specified by the Director by March 1 of each year.
(b) The report shall include in the aggregate:
(1) the total number of requests for external review;
(2) the total number of requests for expedited external
review;
(3) the total number of requests for external review
denied;
(4) the number of requests for external review
resolved, including:
(A) the number of requests for external review
resolved upholding the adverse determination or final
adverse determination;
(B) the number of requests for external review
resolved reversing the adverse determination or final
adverse determination;
(C) the number of requests for expedited external
review resolved upholding the adverse determination or
final adverse determination; and
(D) the number of requests for expedited external
review resolved reversing the adverse determination or
final adverse determination;
(5) the average length of time for resolution for an
external review;
(6) the average length of time for resolution for an

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expedited external review;
(7) a summary of the types of coverages or cases for
which an external review was sought, as specified below:
(A) denial of care or treatment (dissatisfaction
regarding prospective non-authorization of a request
for care or treatment recommended by a provider
excluding diagnostic procedures and referral requests;
partial approvals and care terminations are also
considered to be denials);
(B) denial of diagnostic procedure
(dissatisfaction regarding prospective
non-authorization of a request for a diagnostic
procedure recommended by a provider; partial approvals
are also considered to be denials);
(C) denial of referral request (dissatisfaction
regarding non-authorization of a request for a
referral to another provider recommended by a PCP);
(D) claims and utilization review (dissatisfaction
regarding the concurrent or retrospective evaluation
of the coverage, medical necessity, efficiency or
appropriateness of health care services or treatment
plans; prospective "Denials of care or treatment",
"Denials of diagnostic procedures" and "Denials of
referral requests" should not be classified in this
category, but the appropriate one above);
(8) the number of external reviews that were terminated

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as the result of a reconsideration by the health carrier of
its adverse determination or final adverse determination
after the receipt of additional information from the
covered person or the covered person's authorized
representative; and
(9) any other information the Director may request or
require.
Section 70. Funding of external review. The health carrier
shall be solely responsible for paying the cost of external
reviews conducted by independent review organizations.
Section 75. Disclosure requirements.
(a) Each health carrier shall include a description of the
external review procedures in, or attached to, the policy,
certificate, membership booklet, and outline of coverage or
other evidence of coverage it provides to covered persons.
(b) The description required under subsection (a) of this
Section shall include a statement that informs the covered
person of the right of the covered person to file a request for
an external review of an adverse determination or final adverse
determination with the health carrier. The statement shall
explain that external review is available when the adverse
determination or final adverse determination involves an issue
of medical necessity, appropriateness, health care setting,
level of care, or effectiveness. The statement shall include

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the toll-free telephone number and address of the Office of
Consumer Health Insurance within the Division of Insurance.
Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
Section 99. Effective date. This Act takes effect January
1, 2010.