Bill Text: OR SB1504 | 2012 | Regular Session | Enrolled

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Bill Title: Relating to health insurance; and declaring an emergency.

Spectrum: Unknown

Status: (Passed) 2012-03-13 - Effective date, March 5, 2012. [SB1504 Detail]

Download: Oregon-2012-SB1504-Enrolled.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2012 Regular Session

                            Enrolled

                        Senate Bill 1504

Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Senate Interim Committee on
  Health Care, Human Services and Rural Health Policy)

                     CHAPTER ................

                             AN ACT

Relating to health insurance; creating new provisions; amending
  ORS 743.499, 743.601, 743.610, 743.766, 743.801, 743.804,
  743.806 and 743.822; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

  SECTION 1. ORS 743.499 is amended to read:
  743.499. (1) As used in this section, 'health benefit plan '
has the meaning given that term in ORS 743.730.
  (2) An insurer shall notify a policyholder in writing if the
insurer cancels or does not renew the policyholder's individual
health benefit plan. The notice shall be sent to the
policyholder's last-known mailing address by first class mail in
a specially marked envelope or, if the policyholder has elected
to receive communications from the insurer electronically, to the
policyholder's last-known electronic mail address using a
mechanism that will confirm delivery to the address.
  (3) If the cancellation or nonrenewal results in a refund to
the policyholder of all or part of a premium, the insurer must
mail with the refund a written explanation that includes:
  (a) The effective date of the cancellation;
  (b) The reason for the cancellation; and
  (c) The time period to which the refund is applicable.
  (4) For any cancellation or nonrenewal due to a reported death
of the policyholder, the insurer must:
  (a) Confirm the accuracy of the reported death.
  (b) If the death is confirmed:
  (A) Provide any dependents covered by the plan with information
about how to continue coverage or obtain alternative coverage;
and
  (B) Issue any refund that is due to the estate of the deceased
in accordance with subsection (3) of this section.
  (5) If an insurer cancels or does not renew an individual
health benefit plan and fails to comply with the requirements of
this section, the insurer shall continue the coverage under the
plan for the policyholder and any dependents covered by the plan
until the date that the insurer has complied with the
requirements of this section. The insurer shall waive any
premiums owed for the period during which the coverage was
continued under this subsection and shall process all claims

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incurred by the policyholder or any covered dependents according
to the terms of the plan.
  (6) This section does not apply:
  (a) To a cancellation requested by the policyholder if the
insurer documents the request and confirms the request with the
policyholder;   { - or - }
  (b) To a cancellation or nonrenewal that results from a
policyholder making a change in coverage with the same
insurer { + ; or
  (c) To a cancellation due to nonpayment of premium + }.
  SECTION 2. ORS 743.601 is amended to read:
  743.601. (1) As used in subsections (1) to (6) of this section,
'plan administrator' means:
  (a) The person designated as the plan administrator by the
instrument under which the group health insurance plan is
operated; or
  (b) If no plan administrator is designated, the plan sponsor.
  (2) Within 60 days of legal separation or the entry of a
judgment of dissolution of marriage, a legally separated or
divorced spouse eligible for continued coverage under ORS 743.600
who seeks such coverage shall give the plan administrator written
notice of the legal separation or dissolution. The notice shall
include the mailing address of the legally separated or divorced
spouse.
  (3) Within 30 days of the death of a covered person whose
surviving spouse is eligible for continued coverage under ORS
743.600, the group policyholder shall give the plan administrator
written notice of the death and of the mailing address of the
surviving spouse.
  (4) Within 14 days of receipt of notice under subsection (2) or
(3) of this section, the plan administrator shall notify the
legally separated, divorced or surviving spouse that the policy
may be continued. The notice shall be mailed to the mailing
address provided to the plan administrator and shall include:
  (a) A form for election to continue the coverage;
  (b) A statement of the amount of periodic premiums to be
charged for the continuation of coverage and of the method and
place of payment; and
  (c) Instructions for returning the election form by mail within
60 days after the date of mailing of the notice by the plan
administrator.
  (5) Failure of the legally separated, divorced or surviving
spouse to exercise the election in accordance with subsection (4)
of this section shall terminate the right to continuation of
benefits.
  (6) If a plan administrator fails to notify the legally
separated, divorced or surviving spouse as required by subsection
(4) of this section, premiums shall be waived from the date the
notice was required until the date notice is received by the
legally separated, divorced or surviving spouse.
  (7) The provisions of this section and ORS 743.600 and 743.602
apply only to employers with 20 or more employees and group
health insurance plans with 20 or more   { - enrollees - }  { +
certificate holders + } on a typical business day during the
preceding calendar year.
  SECTION 3. ORS 743.610 is amended to read:
  743.610. (1) As used in this section:
  (a) 'Covered person' means an individual who was a certificate
holder under a group health insurance policy:
  (A) On the day before a qualifying event; and

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  (B) During the three-month period ending on the date of the
qualifying event.
  (b) 'Qualified beneficiary' means:
  (A) A spouse or dependent child of a covered person who, on the
day before a qualifying event, was insured under the covered
person's group health insurance policy; or
  (B) A child born to or adopted by a covered person during the
period of the continuation of coverage under this section who
would have been insured under the covered person's policy if the
child had been born or adopted on the day before the qualifying
event.
  (c) 'Qualifying event' means the loss of membership in a group
health insurance policy caused by:
  (A) Voluntary or involuntary termination of the employment of a
covered person;
  (B) A reduction in hours worked by a covered person;
  (C) A covered person becoming eligible for Medicare;
  (D) A qualified beneficiary losing dependent child status under
a covered person's group health insurance policy;
  (E) Termination of membership in the group covered by the group
health insurance policy; or
  (F) The death of a covered person.
  (2) A group health insurance policy providing coverage for
hospital or medical expenses, other than coverage limited to
expenses from accidents or specific diseases, must contain a
provision that a covered person and any qualified beneficiary may
continue coverage under the policy as provided in this section.
  (3) Continuation of coverage is not available to a covered
person or qualified beneficiary who is eligible for:
  (a) Medicare; or
  (b) Coverage for hospital or medical expenses under any other
program that was not covering the covered person or qualified
beneficiary on the day before a qualifying event.
  (4) The continued coverage need not include benefits for
dental, vision care or prescription drug expense, or any other
benefits under the policy other than hospital and medical expense
benefits.
  (5) A covered person or qualified beneficiary who wishes to
continue coverage must provide the insurer with a written request
for continuation no later than 10 days after the later of the
date of a qualifying event or the date the insurer provides the
notice required by subsection (10) of this section.
  (6) A covered person or qualified beneficiary who requests
continuation of coverage shall pay the premium on a monthly basis
and in advance to the insurer or to the employer or policyholder,
whichever the group policy provides. The required premium payment
may not exceed the group premium rate for the insurance being
continued under the group policy as of the date the premium
payment is due.
  (7) Continuation of coverage as provided under this section
ends on the earliest of the following dates:
  (a) Nine months after the date of the qualifying event that was
the basis for the continuation of coverage.
  (b) The end of the period for which the last timely premium
payment for the coverage is received by the insurer.
  (c) The premium payment due date coinciding with or next
following the date that continuation of coverage ceases to be
available in accordance with subsection (3) of this section.

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  (d) The date that the policy is terminated. However, if the
policyholder replaces the terminated policy with similar coverage
under another group health insurance policy:
  (A) The covered person and qualified beneficiaries may obtain
coverage under the replacement policy for the balance of the
period that the covered person or qualified beneficiary would
have remained covered under the terminated policy in accordance
with this section; and
  (B) The terminated policy must continue to provide benefits to
the covered person and qualified beneficiaries to the extent of
that policy's accrued liabilities and extensions of benefits as
if the replacement had not occurred.
  (8) A qualified beneficiary who is not eligible for
continuation of coverage under ORS 743.600 may continue coverage
under this section upon the dissolution of marriage with or the
death of the covered person in the same manner that a covered
person may exercise the right to continue coverage under this
section.
  (9) A covered person rehired by an employer no later than nine
months after the layoff of the covered person by the employer may
not be subjected to a waiting period for coverage under the
employer's group health insurance policy if the covered person
was eligible for coverage at the time of the layoff, regardless
of whether the covered person continued coverage during the
layoff.
  (10) If an insurer terminates the group health insurance
coverage of a covered person or qualified beneficiary without
providing replacement coverage that meets the criteria in
subsection (7)(d) of this section, the insurer shall provide
written notice to the covered person and any qualified
beneficiary no later than 10 days after the insurer is notified
of the qualifying event under subsection (5) of this section. The
notice shall include   { - at least the following - }
information { +  prescribed by the Director of the Department of
Consumer and Business Services. + }  { - : - }
    { - (a) Contact information for the insurer; - }
    { - (b) Forms necessary to request continuation of coverage
and instructions for completing the forms; - }
    { - (c) Information sufficient to determine premium rates for
continuation of coverage and instructions for paying
premiums; - }
    { - (d) A clear statement of who is eligible to continue
coverage; - }
    { - (e) Enrollment information relating to other coverage
issued by the insurer that is held by the employer or group and
for which the covered person or a qualified beneficiary may be
eligible; - }
    { - (f) An explanation of the process to appeal a denial of a
claim under the continuation of coverage; - }
    { - (g) Information, in a form approved by the Director of
the Department of Consumer and Business Services, about how to
contact the consumer advocacy unit of the Insurance Division of
the Department of Consumer and Business Services; and - }
    { - (h) Other information required by the director. - }
  (11) This section applies only to employers who are not
required to make available continuation of health insurance
benefits under Titles X and XXII of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, P.L. 99-272, April
7, 1986.
  SECTION 4. ORS 743.766 is amended to read:

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  743.766. (1) All carriers that offer an individual health
benefit plan and evaluate the health status of individuals for
purposes of eligibility shall use the standard health statement
established under ORS 743.745 and may not use any other method to
determine the health status of an individual. Nothing in this
subsection shall prevent a carrier from using health information
after enrollment for the purpose of providing services or
arranging for the provision of services under a health benefit
plan.
  (2)(a) If an individual is accepted for coverage under an
individual health benefit plan, the carrier shall not impose
exclusions or limitations other than:
  (A) A preexisting condition exclusion that complies with the
following requirements:
  (i) The exclusion applies only to a condition for which medical
advice, diagnosis, care or treatment was recommended or received
during the six-month period immediately preceding the
individual's effective date of coverage;
  (ii) The exclusion expires no later than six months after the
individual's effective date of coverage; and
  (iii) Except for grandfathered health plans, the exclusion does
not apply to individuals who are under 19 years of age;
  (B) An individual coverage waiting period of 90 days; or
  (C) An exclusion period for specified covered services
applicable to all individuals enrolling for the first time in the
individual health benefit plan.
  (b) Except for grandfathered health plans, pregnancy of
individuals who are under 19 years of age may not constitute a
preexisting condition for purposes of this section.
  (3) If the carrier elects to restrict coverage through the
application of a preexisting condition exclusion or an individual
coverage waiting period provision, the carrier shall reduce the
duration of the provision by an amount equal to the individual's
aggregate periods of creditable coverage if the most recent
period of creditable coverage is ongoing or ended within 63 days
after the effective date of coverage in the new individual health
benefit plan. The crediting of prior coverage in accordance with
this subsection shall be applied without regard to the specific
benefits covered during the prior period.
  (4) If an eligible prospective enrollee is rejected for
coverage under an individual health benefit plan, the prospective
enrollee shall be eligible to apply for coverage under the Oregon
Medical Insurance Pool.
  (5) If a carrier accepts an individual for coverage under an
individual health benefit plan, the carrier shall renew the
policy unless:
  (a) The policyholder fails to pay the required premiums.
  (b) The policyholder or a representative of the policyholder
engages in fraud or makes an intentional misrepresentation of a
material fact as prohibited by the terms of the policy.
  (c) The carrier discontinues offering or renewing, or offering
and renewing, all of its individual health benefit plans in this
state or in a specified service area within this state. In order
to discontinue the plans under this paragraph, the carrier:
  (A) Must give notice of the decision to the Department of
Consumer and Business Services and to all policyholders covered
by the plans;
  (B) May not cancel coverage under the plans for 180 days after
the date of the notice required under subparagraph (A) of this
paragraph if coverage is discontinued in the entire state or,

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except as provided in subparagraph (C) of this paragraph, in a
specified service area;
  (C) May not cancel coverage under the plans for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health
care providers or organization of health care providers to
provide services under the plans within the service area; and
  (D) Must discontinue offering or renewing, or offering and
renewing, all health benefit plans issued by the carrier in the
individual market in this state or in the specified service area.
  (d) The carrier discontinues offering and renewing an
individual health benefit plan in a specified service area within
this state because of an inability to reach an agreement with the
health care providers or organization of health care providers to
provide services under the plan within the service area. In order
to discontinue a plan under this paragraph, the carrier:
  (A) Must give notice of the decision to the department and to
all policyholders covered by the plan;
  (B) May not cancel coverage under the plan for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph; and
  (C) Must offer in writing to each policyholder covered by the
plan, all other individual health benefit plans that the carrier
offers in the specified service area. The carrier shall offer the
plans at least 90 days prior to discontinuation.
  (e) The carrier discontinues offering or renewing, or offering
and renewing, an individual health benefit plan, other than a
grandfathered health plan, for all individuals in this state or
in a specified service area within this state, other than a plan
discontinued under paragraph (d) of this subsection.
  (f) The carrier discontinues renewing or offering and renewing
a grandfathered health plan for all individuals in this state or
in a specified service area within this state, other than a plan
discontinued under paragraph (d) of this subsection.
  (g) With respect to plans that are being discontinued under
paragraph (e) or (f) of this subsection, the carrier must:
  (A) Offer in writing to each policyholder covered by the plan,
all health benefit plans that the carrier offers to individuals
in the specified service area.
  (B) Offer the plans at least 90 days prior to discontinuation.
  (C) Act uniformly without regard to the claims experience of
the affected policyholders or the health status of any current or
prospective enrollee.
  (h) The Director of the Department of Consumer and Business
Services orders the carrier to discontinue coverage in accordance
with procedures specified or approved by the director upon
finding that the continuation of the coverage would:
  (A) Not be in the best interests of the enrollee; or
  (B) Impair the carrier's ability to meet its contractual
obligations.
  (i) In the case of an individual health benefit plan that
delivers covered services through a specified network of health
care providers, the enrollee no longer lives, resides or works in
the service area of the provider network and the termination of
coverage is not related to the health status of any enrollee.
  (j) In the case of a health benefit plan that is offered in the
individual market only through one or more bona fide
associations, the membership of an individual in the association

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ceases and the termination of coverage is not related to the
health status of any enrollee.
  (6) A carrier may modify an individual health benefit plan at
the time of coverage renewal. The modification is not a
discontinuation of the plan under subsection (5)(c), (e) and (f)
of this section.
  (7) Notwithstanding any other provision of this section, and
subject to the provisions of ORS 743.894 (2) and (4), a carrier
may rescind an individual health benefit plan if the policyholder
or a representative of the policyholder:
  (a) Performs an act, practice or omission that constitutes
fraud; or
  (b) Makes an intentional misrepresentation of a material fact
as prohibited by the terms of the policy.
  (8) A carrier that withdraws from the market for individual
health benefit plans must continue to renew its portability
health benefit plans that have been approved pursuant to ORS
743.761.
  (9) A carrier that continues to offer coverage in the
individual market in this state is not required to offer coverage
in all of the carrier's individual health benefit plans. However,
if a carrier elects to continue a plan that is closed to new
individual policyholders instead of offering alternative coverage
in its other individual health benefit plans, the coverage for
all existing policyholders in the closed plan is renewable in
accordance with subsection (5) of this section.
  (10) An individual health benefit plan may not impose
 { + annual or + } lifetime limits on the dollar amount of the
essential health benefits prescribed by the United States
Secretary of Health and Human Services pursuant to 42 U.S.C.
300gg-11, except as permitted by federal law.
  (11) This section does not require a carrier to actively
market, offer, issue or accept applications for a grandfathered
health plan or from an individual not eligible for coverage under
such a plan as provided by the Patient Protection and Affordable
Care Act (P.L. 111-148) as amended by the Health Care and
Education Reconciliation Act (P.L. 111-152).
  SECTION 5. ORS 743.801 is amended to read:
  743.801. As used in this section and ORS 743.803, 743.804,
743.806, 743.807, 743.808, 743.811, 743.814, 743.817, 743.819,
743.821, 743.823, 743.827, 743.829, 743.831, 743.834, 743.837,
743.839, 743.854, 743.856, 743.857, 743.858, 743.859, 743.861,
743.862, 743.863, 743.864, 743.894, 743.911, 743.912, 743.913,
743.917 and 743.918:
  (1) 'Adverse benefit determination' means an insurer's denial,
reduction or termination of a health care item or service, or an
insurer's failure or refusal to provide or to make a payment in
whole or in part for a health care item or service, that is based
on the insurer's:
  (a) Denial of eligibility for or termination of enrollment in a
health benefit plan;
  (b) Rescission or cancellation of a policy or certificate;
  (c) Imposition of a preexisting condition exclusion as defined
in ORS 743.730, source-of-injury exclusion, network exclusion,
annual benefit limit or other limitation on otherwise covered
items or services;
  (d) Determination that a health care item or service is
experimental, investigational or not medically necessary,
effective or appropriate; or

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  (e) Determination that a course or plan of treatment that an
enrollee is undergoing is an active course of treatment for
purposes of continuity of care under ORS 743.854.
  (2) 'Authorized representative' means an individual who by law
or by the consent of a person may act on behalf of the person.
  (3) 'Enrollee' has the meaning given that term in ORS 743.730.
  (4) 'Grievance' means:
  (a) A   { - request submitted by - }  { +  communication
from + } an enrollee or an authorized representative of an
enrollee { +  expressing dissatisfaction with an adverse benefit
determination, without specifically declining any right to appeal
or review, that is + }:
  (A) In writing, for an internal appeal or an external review;
or
  (B) In writing or orally, for an expedited response described
in ORS 743.804 (2)(d) or an expedited external review; or
  (b) A written complaint submitted by an enrollee or an
authorized representative of an enrollee regarding the:
  (A) Availability, delivery or quality of a health care service;
  (B) Claims payment, handling or reimbursement for health care
services and, unless the enrollee has not submitted a request for
an internal appeal, the complaint is not disputing an adverse
benefit determination; or
  (C) Matters pertaining to the contractual relationship between
an enrollee and an insurer.
  (5) 'Health benefit plan' has the meaning given that term in
ORS 743.730.
  (6) 'Independent practice association' means a corporation
wholly owned by providers, or whose membership consists entirely
of providers, formed for the sole purpose of contracting with
insurers for the provision of health care services to enrollees,
or with employers for the provision of health care services to
employees, or with a group, as described in ORS 743.522, to
provide health care services to group members.
  (7) 'Insurer' includes a health care service contractor as
defined in ORS 750.005.
  (8) 'Internal appeal' means a review by an insurer of an
adverse benefit determination made by the insurer.
  (9) 'Managed health insurance' means any health benefit plan
that:
  (a) Requires an enrollee to use a specified network or networks
of providers managed, owned, under contract with or employed by
the insurer in order to receive benefits under the plan, except
for emergency or other specified limited service; or
  (b) In addition to the requirements of paragraph (a) of this
subsection, offers a point-of-service provision that allows an
enrollee to use providers outside of the specified network or
networks at the option of the enrollee and receive a reduced
level of benefits.
  (10) 'Medical services contract' means a contract between an
insurer and an independent practice association, between an
insurer and a provider, between an independent practice
association and a provider or organization of providers, between
medical or mental health clinics, and between a medical or mental
health clinic and a provider to provide medical or mental health
services. 'Medical services contract' does not include a contract
of employment or a contract creating legal entities and ownership
thereof that are authorized under ORS chapter 58, 60 or 70, or
other similar professional organizations permitted by statute.

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  (11)(a) 'Preferred provider organization insurance' means any
health benefit plan that:
  (A) Specifies a preferred network of providers managed, owned
or under contract with or employed by an insurer;
  (B) Does not require an enrollee to use the preferred network
of providers in order to receive benefits under the plan; and
  (C) Creates financial incentives for an enrollee to use the
preferred network of providers by providing an increased level of
benefits.
  (b) 'Preferred provider organization insurance' does not mean a
health benefit plan that has as its sole financial incentive a
hold harmless provision under which providers in the preferred
network agree to accept as payment in full the maximum allowable
amounts that are specified in the medical services contracts.
  (12) 'Prior authorization' means a determination by an insurer
prior to provision of services that the insurer will provide
reimbursement for the services. 'Prior authorization ' does not
include referral approval for evaluation and management services
between providers.
  (13) 'Provider' means a person licensed, certified or otherwise
authorized or permitted by laws of this state to administer
medical or mental health services in the ordinary course of
business or practice of a profession.
  (14) 'Utilization review' means a set of formal techniques used
by an insurer or delegated by the insurer designed to monitor the
use of or evaluate the medical necessity, appropriateness,
efficacy or efficiency of health care services, procedures or
settings.
  SECTION 6. ORS 743.804 is amended to read:
  743.804. All insurers offering a health benefit plan in this
state shall:
  (1) Provide to all enrollees directly or in the case of a group
policy to the employer or other policyholder for distribution to
enrollees, to all applicants, and to prospective applicants upon
request, the following information:
  (a) The insurer's written policy on the rights of enrollees,
including the right:
  (A) To participate in decision making regarding the enrollee's
health care.
  (B) To be treated with respect and with recognition of the
enrollee's dignity and need for privacy.
  (C) To have grievances handled in accordance with this section.
  (D) To be provided with the information described in this
section.
  (b) An explanation of the procedures described in subsection
(2) of this section for making coverage determinations and
resolving grievances. The explanation must be culturally and
linguistically appropriate, as prescribed by the department by
rule, and must include:
  (A) The procedures for requesting an expedited response to an
internal appeal under subsection (2)(d) of this section or for
requesting an expedited external review of an adverse benefit
determination;
  (B) A statement that if an insurer does not comply with the
decision of an independent review organization under ORS 743.862,
the enrollee may sue the insurer under ORS 743.864;
  (C) The procedure to obtain assistance available from the
insurer, if any, and from the Department of Consumer and Business
Services in filing grievances; and

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  (D) A description of the process for filing a complaint with
the department.
  (c) A summary of benefits and an explanation of coverage in a
form and manner prescribed by the department by rule.
  (d) A summary of the insurer's policies on prescription drugs,
including:
  (A) Cost-sharing differentials;
  (B) Restrictions on coverage;
  (C) Prescription drug formularies;
  (D) Procedures by which a provider with prescribing authority
may prescribe drugs not included on the formulary;
  (E) Procedures for the coverage of prescription drugs not
included on the formulary; and
  (F) A summary of the criteria for determining whether a drug is
experimental or investigational.
  (e) A list of network providers and how the enrollee can obtain
current information about the availability of providers and how
to access and schedule services with providers, including clinic
and hospital networks.
  (f) Notice of the enrollee's right to select a primary care
provider and specialty care providers.
  (g) How to obtain referrals for specialty care in accordance
with ORS 743.856.
  (h) Restrictions on services obtained outside of the insurer's
network or service area.
  (i) The availability of continuity of care as required by ORS
743.854.
  (j) Procedures for accessing after-hours care and emergency
services as required by ORS 743A.012.
  (k) Cost-sharing requirements and other charges to enrollees.
  (L) Procedures, if any, for changing providers.
  (m) Procedures, if any, by which enrollees may participate in
the development of the insurer's corporate policies.
  (n) A summary of how the insurer makes decisions regarding
coverage and payment for treatment or services, including a
general description of any prior authorization and utilization
control requirements that affect coverage or payment.
  (o) Disclosure of any risk-sharing arrangement the insurer has
with physicians or other providers.
  (p) A summary of the insurer's procedures for protecting the
confidentiality of medical records and other enrollee
information.
  (q) An explanation of assistance provided to
non-English-speaking enrollees.
  (r) Notice of the information available from the department
that is filed by insurers as required under ORS 743.807, 743.814
and 743.817.
  (2) Establish procedures for making coverage determinations and
resolving grievances that provide for all of the following:
  (a) Timely notice of adverse benefit determinations in a form
and manner approved by the department or prescribed by the
department by rule.
  (b) A method for recording all grievances, including the nature
of the grievance and significant action taken.
  (c) Written decisions meeting criteria established by the
Director of the Department of Consumer and Business Services by
rule.
  (d) An expedited response to a request for an internal appeal
that accommodates the clinical urgency of the situation.

Enrolled Senate Bill 1504 (SB 1504-A)                     Page 10

  (e) At least one but not more than two levels of internal
appeal for group health benefit plans and one level of internal
appeal for individual and portability health benefit plans. If an
insurer provides:
  (A) Two levels of internal appeal, a person who was involved in
the consideration of the initial denial or the first level of
internal appeal may not be involved in the second level of
internal appeal; and
  (B) No more than one level of internal appeal, a person who was
involved in the consideration of the initial denial may not be
involved in the internal appeal.
  (f)(A) An external review that meets the requirements of ORS
743.857, 743.859 and 743.861 and is conducted in a manner
approved by the department or prescribed by the department by
rule, after the enrollee has exhausted internal appeals or after
the enrollee has been deemed to have exhausted internal appeals.
  (B) An enrollee shall be deemed to have exhausted internal
appeals if an insurer fails to strictly comply with this section
and federal requirements for internal appeals.
  (g) The opportunity for the enrollee to receive continued
coverage  { + of an approved and ongoing course of treatment + }
under the health benefit plan pending the conclusion of the
internal appeal process.
  (h) The opportunity for the enrollee or any authorized
representative chosen by the enrollee to:
  (A) Submit for consideration by the insurer any written
comments, documents, records and other materials relating to the
adverse benefit determination; and
  (B) Receive from the insurer, upon request and free of charge,
reasonable access to and copies of all documents, records and
other information relevant to the adverse benefit determination.
  (3) Establish procedures for notifying affected enrollees of:
  (a) A change in or termination of any benefit; and
  (b)(A) The termination of a primary care delivery office or
site; and
  (B) Assistance available to enrollees in selecting a new
primary care delivery office or site.
  (4) Provide the information described in subsection (2) of this
section and ORS 743.859 at each level of internal appeal to an
enrollee who is notified of an adverse benefit determination or
to an enrollee who files a grievance.
  (5) Upon the request of an enrollee, applicant or prospective
applicant, provide:
  (a) The insurer's annual report on grievances and internal
appeals submitted to the department under subsection (8) of this
section.
  (b) A description of the insurer's efforts, if any, to monitor
and improve the quality of health services.
  (c) Information about the insurer's procedures for
credentialing network providers.
  (6) Provide, upon the request of an enrollee, a written summary
of information that the insurer may consider in its utilization
review of a particular condition or disease, to the extent the
insurer maintains such criteria. Nothing in this subsection
requires an insurer to advise an enrollee how the insurer would
cover or treat that particular enrollee's disease or condition.
Utilization review criteria that are proprietary shall be subject
to oral disclosure only.
  (7) Maintain for a period of at least six years written records
that document all grievances described in ORS 743.801 (4)(a) and

Enrolled Senate Bill 1504 (SB 1504-A)                     Page 11

make the written records available for examination by the
department or by an enrollee or authorized representative of an
enrollee with respect to a grievance made by the enrollee. The
written records must include but are not limited to the
following:
  (a) Notices and claims associated with each grievance.
  (b) A general description of the reason for the grievance.
  (c) The date the grievance was received by the insurer.
  (d) The date of the internal appeal or the date of any internal
appeal meeting held concerning the appeal.
  (e) The result of the internal appeal at each level of appeal.
  (f) The name of the covered person for whom the grievance was
submitted.
  (8) Provide an annual summary to the department of the
insurer's aggregate data regarding grievances, internal appeals
and requests for external review in a format prescribed by the
department to ensure consistent reporting on the number, nature
and disposition of grievances, internal appeals and requests for
external review.
  (9) Allow the exercise of any rights described in this section
by an authorized representative.
  SECTION 7. ORS 743.806 is amended to read:
  743.806. All utilization review performed pursuant to a medical
services contract to which an insurer is not a party shall comply
with the following:
  (1) The criteria used in the review process and the method of
development of the criteria shall be made available for review to
a party to such medical services contract upon request.
  (2) A doctor of medicine or osteopathy licensed under ORS
chapter 677 shall be responsible for all final recommendations
regarding the necessity or appropriateness of services or the
site at which the services are provided and shall consult as
appropriate with medical and mental health specialists in making
such recommendations.
  (3) Any  { + patient or + } provider who has had a request for
treatment or payment for services denied as not medically
necessary or as experimental shall be provided an opportunity for
a timely appeal before an appropriate medical consultant or peer
review committee.
  (4) A provider request for prior authorization of nonemergency
service must be answered within two business days, and qualified
health care personnel must be available for same-day telephone
responses to inquiries concerning certification of continued
length of stay.
  SECTION 8. ORS 743.822 is amended to read:
  743.822. (1) As a condition of transacting business in the
health benefit plan market in this state, a carrier shall offer
to residents of this state bronze and silver plans approved by
the Department of Consumer and Business Services as meeting the
requirements of subsection (2) of this section in each individual
and small group market in which the carrier offers a health
benefit plan through the Oregon Health Insurance Exchange or
outside of the exchange.
  (2) The Director of the Department of Consumer and Business
Services shall prescribe by rule the:
  (a) Requirements for a bronze plan to ensure that a bronze plan
offered in this state is actuarially equivalent to 60 percent of
the full actuarial value of benefits included in the essential
health benefits package prescribed by the United States Secretary
of Health and Human Services under 42 U.S.C. 18022(a).

Enrolled Senate Bill 1504 (SB 1504-A)                     Page 12

  (b) Requirements for a silver plan to ensure that a silver plan
offered in this state is actuarially equivalent to 70 percent of
the full actuarial value of benefits included in the essential
health benefits package prescribed by the United States Secretary
of Health and Human Services under 42 U.S.C. 18022(a).
  (c) Form, level of coverage and benefit design for the bronze
and silver plans to be used by carriers in the individual and
small group market in this state.
   { +  (3) As used in this section, 'health benefit plan' has
the meaning given that term in ORS 743.730. + }
  SECTION 9.  { + (1) Notwithstanding any other provision of law,
ORS 743.822 and 743.826 shall not be considered to have been
added to or made a part of ORS 743.730 to 743.773 for the purpose
of statutory compilation or for the application of definitions,
penalties or administrative provisions applicable to statute
sections in that series.
  (2) Notwithstanding any other provision of law, ORS 743.842
shall not be considered to have been added to or made a part of
ORS chapter 743 for the purpose of statutory compilation or for
the application of definitions, penalties or administrative
provisions applicable to statute sections in that series. + }
  SECTION 10.  { + ORS 743.777 (7), 743.822, 743.826 and 743.842
are added to and made a part of the Insurance Code. + }
  SECTION 11.  { + The amendments to ORS 743.499, 743.601,
743.610, 743.766, 743.801, 743.804, 743.806 and 743.822 by
sections 1 to 8 of this 2012 Act apply to policies and
certificates issued or renewed on or after June 23, 2011. + }
  SECTION 12.  { + This 2012 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2012 Act takes effect on
its passage. + }
                         ----------

Passed by Senate February 13, 2012

    .............................................................
                               Robert Taylor, Secretary of Senate

    .............................................................
                              Peter Courtney, President of Senate

Passed by House February 21, 2012

    .............................................................
                                    Bruce Hanna, Speaker of House

    .............................................................
                                   Arnie Roblan, Speaker of House

Enrolled Senate Bill 1504 (SB 1504-A)                     Page 13

Received by Governor:

......M.,............., 2012

Approved:

......M.,............., 2012

    .............................................................
                                         John Kitzhaber, Governor

Filed in Office of Secretary of State:

......M.,............., 2012

    .............................................................
                                   Kate Brown, Secretary of State

Enrolled Senate Bill 1504 (SB 1504-A)                     Page 14