Bill Text: OR SB416 | 2013 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to external review by independent review organization of adverse benefit determination by health insurer; declaring an emergency.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-07-08 - In committee upon adjournment. [SB416 Detail]

Download: Oregon-2013-SB416-Introduced.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 912

                         Senate Bill 416

Sponsored by Senator SHIELDS (at the request of Autism Society of
  Oregon) (Presession filed.)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Requires Department of Consumer and Business Services to
provide complaint process for challenging actions or credentials
of independent review organization and to enforce requirements
for external reviews. Allows department to reassign adverse
benefit determination dispute to another independent review
organization if department finds that independent review
organization has failed to follow legal requirements. Requires
Director of Department of Consumer and Business Services to
impose minimum civil penalty on insurer that does not comply with
independent review organization's reversal of adverse benefit
determination. Applies to contracts entered into on or after
effective date of Act.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to external review by independent review organization of
  adverse benefit determination by health insurer; creating new
  provisions; amending ORS 743.858 and 743.863; and declaring an
  emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 743.858 is amended to read:
  743.858. (1) The Director of the Department of Consumer and
Business Services shall contract with independent review
organizations as provided in this section for the purpose of
providing external review under ORS 743.857. The director may
have contracts with no more than five independent review
organizations at any one time. Contracts shall be let with
independent review organizations on a biennial basis. A contract
may be renewed if both parties agree.
  (2) The director shall seek public comment when the director
proposes to enter into a contract with an independent review
organization or proposes to renew or not renew a contract.
  (3) When evaluating proposals to contract with independent
review organizations, the director shall consider factors that
include but are not limited to relative expertise,
professionalism, quality of compliance with the rules
  { - established - }   { + adopted + } under subsection (4) of
this section, cost and record of past performance.
  (4) The director shall adopt rules governing independent review
organizations, their composition and their conduct { +  to ensure
that external reviews are conducted in accordance with ORS
743.857 and 743.862 and this section + }. The rules shall include
but need not be limited to:
  (a) Professional qualifications of health care providers,
physicians or contract specialists making external review
determinations;
  (b) Criteria requiring independent review organizations to
demonstrate protections against bias and conflicts of interest;
  (c) Procedures for conducting external reviews;
  (d) Procedures for complaint investigations;
  (e) Procedures for ensuring the confidentiality of medical
records transmitted to the independent review organizations for
use in external reviews;
  (f) Fairness of procedures used by independent review
organizations;
  (g) Fees for external reviews;
  (h) Timelines for decision making and notice to the parties;
and
  (i) Quality assurance mechanisms to ensure timeliness and
quality of review.
  (5) The director shall develop procedures for assigning cases
filed by enrollees to independent review organizations under
contract with the director. The cases shall be assigned on a
random basis. The procedures shall allow an insurer only one
opportunity to reject the assignment of an independent review
organization to a particular case.
   { +  (6)(a) An insurer, enrollee or provider may file a
complaint with the Department of Consumer and Business Services
if the insurer, enrollee or provider believes that an independent
review organization has failed to comply with ORS 743.857 or
743.862 or this section or has failed to comply with rules
adopted by the director to carry out the provisions of ORS
743.857 or 743.862 or this section. No later than 45 days after
receipt of the complaint, the department shall notify the
complainant:
  (A) Of the results of the department's investigation of the
complaint and of any action the department has taken or intends
to take; or
  (B) If the department has not completed the investigation, of
the status of the investigation, the results thus far, the
reasons for the delay in completing the investigation and a
timeline for completing the investigation.
  (b) The department shall send the notification described in
paragraph (a) of this subsection every 45 days until the
department makes a final determination on the merits of the
complaint.
  (c) If the department finds that the independent review
organization has failed to comply with ORS 743.857 or 743.862 or
this section or has failed to comply with rules adopted by the
director to carry out the provisions of ORS 743.857 or 743.862 or
this section, the department may reassign the adverse benefit
determination dispute to a different independent review
organization for de novo review. The department may also take any
other appropriate action including, but not limited to,
terminating the contract of the independent review organization
that was the subject of the complaint. + }
  SECTION 2. ORS 743.863 is amended to read:
  743.863. (1) An insurer shall comply in a timely manner with a
decision of an independent review organization under ORS 743.862
that reverses, in whole or in part, an adverse benefit
determination. If an insurer fails to comply with the decision,
the Director of the Department of Consumer and Business Services
  { - may - }  { +  shall + } impose on the insurer a civil
penalty of  { + not less than $100,000 and + } not more than $1
million.

  (2) A decision of an independent review organization is
admissible in any legal proceeding involving the insurer or the
enrollee and involving the disputed issues subject to external
review.
  (3) The sanctions under subsection (1) of this section and the
remedies under subsection (2) of this section are in addition to
and not in lieu of other sanctions, rights and remedies provided
by law or contract.
  SECTION 3.  { + The amendments to ORS 743.858 and 743.863 by
sections 1 and 2 of this 2013 Act apply to contracts between
independent review organizations and the Director of the
Department of Consumer and Business Services entered into on or
after the effective date of this 2013 Act. + }
  SECTION 4.  { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }
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