AN ACT REGULATING HEALTH CARRIERS AND MANAGED CARE ENTITIES; PROVIDING THAT HEALTH CARRIERS AND MANAGED CARE ENTITIES ARE RESPONSIBLE FOR HEALTH CARE TREATMENT DECISIONS; PROVIDING FOR INDEPENDENT REVIEW OF HEALTH CARE TREATMENT DECISIONS; PROHIBITING CERTAIN INDEMNIFICATION CLAUSES IN PROVIDER CONTRACTS; PROHIBITING EARLY TERMINATION OF PROVIDER CONTRACTS WITHOUT JUST CAUSE; AND PROVIDING APPLICABILITY PROVISIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Definitions. For the purposes of [sections 1 through 5], the following definitions apply:

(1) "Adverse determination" means a determination by a health carrier, a managed care entity, or an agent of a health carrier or managed care entity that the health care services furnished or proposed to be furnished to an enrollee are not appropriate and medically necessary.

(2) "Appropriate and medically necessary" means the standard for health care services as determined by health care providers in accordance with the prevailing practices and standards of the health care profession and community.

(3) "Department" means the department of public health and human services provided for in 2-15-2201.

(4) "Enrollee" has the meaning provided for a covered person as defined in 33-36-103.

(5) "Health benefit plan" has the meaning provided in 33-36-103.

(6) "Health care provider" has the meaning provided in 33-36-103.

(7) "Health care treatment decision" means a determination made when medical services are actually provided by a health carrier or other managed care entity and that affects the quality of the diagnosis, care, or treatment provided to the insureds or enrollees of a health benefit plan. The term does not include a decision by a health carrier or managed care entity to deny payment or coverage for services based on the provisions of a policy, contract, certificate, or agreement.

(8) "Health carrier" has the meaning provided for in 33-36-103.

(9) (a) "Managed care entity" means a health carrier or any entity that delivers, administers, or assumes risk for health care services with systems or techniques to control or influence the quality, accessibility, utilization, or costs and prices of health care services to a defined enrollee population.

(b) The term does not include an employer purchasing coverage or acting on behalf of its employees or the employees of one or more subsidiaries or affiliated corporations of the employer.

(10) "Peer" means a health care provider actively practicing a health care profession in this state who has substantially the same education and training, who provides substantially the same range of health care services, and who has the same license or certification to practice as the health care provider whose practice, professional services, or activities on behalf of the enrollee are being considered, reviewed, evaluated, or judged.

Section 2. Independent review of adverse determinations. A health carrier or managed care entity or an agent of a health carrier or managed care entity, other than a health carrier or other managed care entity providing medicaid-funded services or any other publicly funded health care-related services authorized under Title 50, 52, or 53, shall:

(1) permit any party whose appeal of an adverse determination is denied by the health carrier, the managed care entity, or the agent of the health carrier or managed care entity to seek independent review of that determination by a peer or, if the health carrier or managed care entity does not maintain an appeals process, permit any party receiving an adverse determination to seek independent review of that determination;

(2) provide to the appropriate peer no later than the third business day after the date that the health carrier, the managed care entity, or the agent of the health carrier or managed care entity receives a request for review a copy of:

(a) any medical records of the enrollee that are relevant to the review. Confidential information in the custody of the health carrier, the managed care entity, or the agent of the health carrier or managed care entity may be provided to a peer.

(b) any documents used by the health carrier, the managed care entity, or the agent of the health carrier or managed care entity in making the determination to be reviewed by the peer;

(c) any documentation and written information submitted to the health carrier, the managed care entity, or the agent of the health carrier or managed care entity in support of the appeal; and

(d) a list of each health care provider who has provided care to the enrollee and who may have medical records relevant to the appeal;

(3) accept and comply with the findings made by a peer conducting the independent review concerning an adverse determination, a determination as to whether the services were appropriate and medically necessary, or a health care treatment decision; and

(4) pay for the reasonable costs of the independent review.

Section 3. Peer review. If independent review is requested pursuant to [section 2], the party seeking the review and the health carrier or managed care entity may agree on a peer to conduct the independent review. In the absence of an agreement, a peer must be selected in accordance with a process established by the department.

Section 4. Contract provisions -- contract termination. (1) [Sections 1 through 5] do not create any liability on the part of an employer or an employer group purchasing organization that purchases coverage or assumes risks on behalf of its employees.

(2) A health carrier or other managed care entity may not enter into a contract with a health care provider that includes an indemnification or hold harmless clause for the acts or conduct of the health carrier or other managed care entity. Any indemnification or hold harmless clause in a contract entered into, amended, or renewed on or after [the effective date of this act] is void.

(3) A health care provider, a health carrier, or other managed care entity may not terminate a contract with a participating provider prior to the expiration of its term except for just cause. For purposes of this subsection, "just cause" means reasonable grounds for termination based on a failure to satisfactorily perform contract obligations or other legitimate business reason.

(4) The provisions of this section are not applicable to any contracts for health care services entered into by the state.

Section 5. Rulemaking authority. The department shall adopt rules to provide a process for selecting peers, ensuring the confidentiality of health care information, and implementing the provisions of [sections 1 through 5].

Section 6. Codification instruction. [Sections 1 through 5 and 8] are intended to be codified as an integral part of Title 33, and the provisions of Title 33 apply to [sections 1 through 5 and 8].

Section 7. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.

Section 8. Application to certain entities. (1) [This act] applies to contracts between a health carrier, managed care entity, or the health carrier's or managed care entity's agent and an insured or enrollee and contracts between a health carrier, managed care entity, or the health carrier's or managed care entity's agent and a health care provider entered into on or after October 1, 1999.

(2) [This act] does not apply to the Montana medicaid program, the children's health insurance program, or other state-funded health care-related programs. Unless specifically provided otherwise, [this act] does apply to a managed care entity that contracts with the state to provide these programs and that makes health care treatment decisions concerning the beneficiaries of the programs.

(3) [This act] does not apply to a health carrier, managed care entity, or preferred provider organization that provides services under Title 39, chapters 71 and 72.

- END -

I hereby certify that the within bill,

HB 0607, originated in the House.

Chief Clerk of the House

Speaker of the House

Signed this	day

of	, .

President of the Senate

Signed this	day

of	, .

HOUSE BILL NO. 607

INTRODUCED BY L. SOFT, A. BISHOP, J. BOHLINGER, C. CHRISTIAENS, B. DAVIES, M. GUGGENHEIM, B. KRENZLER, J. QUILICI

AN ACT REGULATING HEALTH CARRIERS AND MANAGED CARE ENTITIES; PROVIDING THAT HEALTH CARRIERS AND MANAGED CARE ENTITIES ARE RESPONSIBLE FOR HEALTH CARE TREATMENT DECISIONS; PROVIDING FOR INDEPENDENT REVIEW OF HEALTH CARE TREATMENT DECISIONS; PROHIBITING CERTAIN INDEMNIFICATION CLAUSES IN PROVIDER CONTRACTS; PROHIBITING EARLY TERMINATION OF PROVIDER CONTRACTS WITHOUT JUST CAUSE; AND PROVIDING APPLICABILITY PROVISIONS.