Text: HF00593 Text: HF00595 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 514J.1 TITLE. 1 2 This chapter shall be known and may be cited as "Third- 1 3 party Payor Liability Act". 1 4 Sec. 2. NEW SECTION. 514J.2 DEFINITIONS. 1 5 As used in this chapter, unless the context otherwise 1 6 requires: 1 7 1. "Appropriate and medically necessary" means the 1 8 standard for health care services as determined by a physician 1 9 or health care provider consistent with accepted practices and 1 10 standards of care provided by the medical profession in the 1 11 community. 1 12 2. "Enrollee" means an individual who is enrolled in a 1 13 health care plan, including covered dependents. 1 14 3. "Health care plan" means a plan under which a person 1 15 undertakes to provide, arrange for, pay for, or reimburse any 1 16 part of the cost of any health care services. 1 17 4. "Health care provider" means a person licensed or 1 18 certified under chapter 147, 148, 148A, 148C, 149, 150, 150A, 1 19 151, 152, 153, 154, 154B, or 155A to provide in this state 1 20 professional health care services to an individual during that 1 21 individual's medical care, treatment, or confinement. 1 22 5. "Health care treatment decision" means a determination 1 23 made when health care services are actually provided under the 1 24 health care plan and a decision which affects the quality of 1 25 the diagnosis, care, or treatment provided to the plan's 1 26 insureds or enrollees. 1 27 6. "Health insurance carrier" means an entity subject to 1 28 the insurance laws and regulations of this state, or subject 1 29 to the jurisdiction of the commissioner of insurance, that 1 30 contracts or offers to contract, or that subcontracts or 1 31 offers to subcontract, to provide, deliver, arrange for, pay 1 32 for, or reimburse any of the costs of providing health care 1 33 services, including an insurance company offering sickness and 1 34 accident plans, a health maintenance organization, a nonprofit 1 35 health service corporation, or any other entity providing a 2 1 plan of health insurance, health benefits, or health services. 2 2 7. "Health maintenance organization" means a health 2 3 maintenance organization as defined in section 514B.1. 2 4 8. "Insured" means an individual who is covered by a 2 5 health care plan provided by a health insurance carrier. 2 6 9. "Managed care entity" means an entity that provides a 2 7 health care plan that selects and contracts with health care 2 8 providers; manages and coordinates health care services 2 9 delivery; monitors necessity, appropriateness, and quality of 2 10 health care services delivered by health care providers; and 2 11 performs utilization review and cost control. 2 12 10. "Ordinary care" means, in the case of a third-party 2 13 payor, that degree of care that a third-party of ordinary 2 14 prudence would provide under the same or similar 2 15 circumstances. In the case of a person who is an employee, 2 16 agent, or representative of a third-party payor, "ordinary 2 17 care" means that degree of care that a person of ordinary 2 18 prudence in the same profession, specialty, or area of 2 19 practice as such person would use in the same or similar 2 20 circumstances. 2 21 11. "Organized delivery system" means an organized 2 22 delivery system as licensed by the director of public health. 2 23 12. "Physician" means an individual licensed under chapter 2 24 148, 150, or 150A to practice medicine and surgery, 2 25 osteopathy, or osteopathic medicine and surgery. 2 26 13. "Third-party payor" means a health insurance carrier, 2 27 health maintenance organization, managed care entity, or 2 28 organized delivery system. 2 29 Sec. 3. NEW SECTION. 514J.3 THIRD-PARTY PAYOR DUTY TO 2 30 EXERCISE ORDINARY CARE LIABILITY. 2 31 1. A third-party payor has the duty to exercise ordinary 2 32 care when making health care treatment decisions and is liable 2 33 for damages for harm to an insured or enrollee proximately 2 34 caused by the third-party payor's failure to exercise such 2 35 ordinary care. 3 1 2. A third-party payor is also liable for damages for harm 3 2 to an insured or enrollee proximately caused by the health 3 3 care services treatment decisions made by an employee, agent, 3 4 or representative of the third-party payor who is acting on 3 5 behalf of the third-party payor and over whom the third-party 3 6 payor has the right to exercise influence or control or has 3 7 actually exercised influence or control if such decision 3 8 results in the failure to exercise ordinary care. 3 9 3. It is a defense in an action brought pursuant to this 3 10 section against a third-party payor that neither the third- 3 11 party payor, nor an employee, agent, or representative of the 3 12 third-party payor controlled, influenced, or participated in 3 13 the health care services treatment decision; or that the 3 14 third-party payor did not deny or delay payment for any health 3 15 care services prescribed or recommended by a health care 3 16 provider to the insured or enrollee. 3 17 4. Subsections 1 and 2 do not create an obligation on the 3 18 part of the third-party payor to provide any health care 3 19 services to an insured or enrollee that are not covered by the 3 20 health care plan offered by the third-party payor. 3 21 5. This chapter does not create any liability on the part 3 22 of an employer or an employer group purchasing organization 3 23 that purchases health care services coverage or assumes risk 3 24 on behalf of its employees for providing health care services. 3 25 6. A third-party payor shall not remove a health care 3 26 provider from its plan or refuse to renew the participation of 3 27 a health care provider under its plan for advocating 3 28 appropriate and medically necessary health care services for 3 29 an insured or enrollee. 3 30 7. A third-party payor shall not enter into a contract 3 31 with a hospital or health care provider or pharmaceutical 3 32 company which includes an indemnification or hold harmless 3 33 clause for the acts or conduct of the third-party payor. Any 3 34 such indemnification or hold harmless clause in an existing 3 35 contract is void. 4 1 8. A provision under state law prohibiting a third-party 4 2 payor from practicing medicine or being licensed to practice 4 3 medicine shall not be asserted as a defense by such third- 4 4 party payor in an action brought against it pursuant to this 4 5 section or any other applicable law. 4 6 9. In an action against a third-party payor, a finding 4 7 that a health care provider is an employee, agent, or 4 8 representative of such third-party payor shall not be based 4 9 solely on proof that such a health care provider's name 4 10 appears in a listing of approved health care providers made 4 11 available to an insured or enrollee under a health care plan. 4 12 10. This chapter does not apply to workers' compensation 4 13 coverages. 4 14 Sec. 4. NEW SECTION. 514K.1 DEFINITIONS. 4 15 As used in this chapter, unless the context otherwise 4 16 requires: 4 17 1. "Commissioner" means the commissioner of insurance. 4 18 2. "Director" means the director of public health. 4 19 3. "Emergency medical condition" means a medical condition 4 20 which manifests itself by acute symptoms of sufficient 4 21 severity, including severe pain, such that a prudent layperson 4 22 who possesses an average knowledge of health and medicine 4 23 could reasonably expect the absence of immediate medical 4 24 attention to result in one of the following: 4 25 a. Placing the health of the individual or, with respect 4 26 to a pregnant woman, the health of the woman or the fetus, in 4 27 serious jeopardy. 4 28 b. Serious impairment to bodily functions. 4 29 c. Serious dysfunction of any bodily organ or part. 4 30 4. "Emergency services" means, with respect to an 4 31 individual enrolled with a health maintenance organization, 4 32 organized delivery system, or preferred provider organization, 4 33 covered inpatient and outpatient services that are furnished 4 34 by a provider that is qualified to furnish such services and 4 35 are needed to evaluate or stabilize an emergency medical 5 1 condition. 5 2 5. "Enrollee" means an individual who is entitled to 5 3 coverage under a health maintenance organization, organized 5 4 delivery system, or preferred provider organization contract. 5 5 6. "Health care professional" means a person licensed to 5 6 or certified to practice a profession as defined in section 5 7 147.1 and who provides health care services. 5 8 7. "Health care provider" means a provider as defined in 5 9 section 514B.1. 5 10 8. "Health care services" means services included in the 5 11 furnishing to any individual of medical or dental care, or 5 12 hospitalization, or incident to the furnishing of such care or 5 13 hospitalization, as well as furnishing to any person of all 5 14 other services for the purposes of preventing, alleviating, 5 15 caring, or healing human illness, injury, or physical 5 16 disability. 5 17 9. "Health maintenance organization" means health 5 18 maintenance organization as defined in section 514B.1. 5 19 10. "Organized delivery system" means organized delivery 5 20 system as defined in section 513C.3. 5 21 11. "Participating" means, with respect to a health care 5 22 professional or health care provider, entering into an 5 23 agreement or arrangement with a health maintenance 5 24 organization, organized delivery system, or preferred provider 5 25 organization to provide health care services to enrollees. 5 26 12. "Physician" means a person licensed to practice 5 27 medicine and surgery, osteopathic medicine and surgery, 5 28 osteopathy, or chiropractic under the laws of this state. 5 29 13. "Preferred provider organization" means preferred 5 30 provider organization described in section 514F.3. 5 31 14. "Primary care provider" means a health care 5 32 professional who is trained in family practice, general 5 33 practice, internal medicine, obstetrics and gynecology, or 5 34 pediatrics and who is practicing within the scope of practice 5 35 authorized by state law, and designated by the health 6 1 maintenance organization, organized delivery system, or 6 2 preferred provider organization to coordinate, supervise, or 6 3 provide ongoing health care services to enrollees. 6 4 15. "Service area" means an established service area as 6 5 defined in section 513C.3. 6 6 Sec. 5. NEW SECTION. 514K.2 ACCESS TO CARE. 6 7 The commissioner shall adopt rules that address the ability 6 8 of a health maintenance organization or preferred provider 6 9 organization to serve its enrollees residing anywhere in the 6 10 service area. The rules shall address, but are not limited 6 11 to, addressing all of the following: 6 12 1. Geographic limits for travel to receive primary care, 6 13 including inpatient and outpatient health care services. 6 14 2. Health care provider networks that ensure that a 6 15 sufficient number and type of participating primary care 6 16 providers and specialists exist throughout the service area to 6 17 adequately meet the needs of enrollees. 6 18 3. Direct access, without the need for a referral, to 6 19 health care professionals trained in obstetrics and 6 20 gynecology. 6 21 4. The ability of a parent to designate a pediatrician as 6 22 the primary care provider for the parent's child. 6 23 Sec. 6. NEW SECTION. 514K.3 EMERGENCY SERVICES. 6 24 Emergency services, including both inpatient and outpatient 6 25 health care services, shall be provided by a health 6 26 maintenance organization, organized delivery system, or 6 27 preferred provider organization, through the organization's or 6 28 system's participating health care providers or through 6 29 guaranteed arrangements with other health care providers, on a 6 30 twenty-four-hour per day basis. A physician and sufficient 6 31 other licensed and ancillary personnel shall be readily 6 32 available at all times to render such services. 6 33 Sec. 7. NEW SECTION. 514K.4 PROHIBITION OF INTERFERENCE 6 34 WITH CERTAIN MEDICAL COMMUNICATIONS. 6 35 1. A health maintenance organization, organized delivery 7 1 system, or preferred provider organization shall not prohibit 7 2 a participating health care professional or health care 7 3 provider from, or penalize a participating health care 7 4 professional or health care provider for, discussing treatment 7 5 options with enrollees that do not reflect the position of the 7 6 organization or system, or from advocating on behalf of 7 7 enrollees within the utilization review or grievance processes 7 8 established under the organization's or system's contract. 7 9 2. A health maintenance organization, organized delivery 7 10 system, or preferred provider organization shall not penalize 7 11 a participating health care professional or health care 7 12 provider because the health care professional or provider, in 7 13 good faith, reports to state or federal authorities any act or 7 14 practice by the health maintenance organization, organized 7 15 delivery system, or preferred provider organization that, in 7 16 the opinion of the health care professional or health care 7 17 provider, jeopardizes patient health or welfare. 7 18 Sec. 8. NEW SECTION. 514K.5 EXTERNAL REVIEW PROCESS. 7 19 The commissioner shall adopt rules which require health 7 20 maintenance organizations and preferred provider organizations 7 21 and the director shall adopt rules which require organized 7 22 delivery systems to establish an external review process for 7 23 enrollees to appeal a denial of coverage based on medical 7 24 necessity. The rules shall include provisions for a timely 7 25 review, including provisions for expedited review for 7 26 situations in which delay could pose a serious health threat 7 27 to the enrollee. The rules shall also require the review to 7 28 be conducted by an independent review organization which 7 29 includes health care professionals with expertise in the 7 30 specific area of coverage being reviewed. 7 31 Sec. 9. NEW SECTION. 514K.6 HEALTH INFORMATION 7 32 DISCLOSURE HEALTH PROSPECTUS. 7 33 1. A health maintenance organization, organized delivery 7 34 system, or preferred provider organization shall provide, to 7 35 each of its enrollees at the time of enrollment and on an 8 1 annual basis, and shall make available to each prospective 8 2 enrollee upon request, a prospectus containing information 8 3 that allows the enrollee to determine the performance of the 8 4 health maintenance organization, organized delivery system, or 8 5 preferred provider organization. 8 6 2. The commissioner shall adopt rules for health 8 7 maintenance organizations and preferred provider organizations 8 8 and the director shall adopt rules for organized delivery 8 9 systems which establish the format and content of the 8 10 prospectus. The content requirement shall include but is not 8 11 limited to all of the following: 8 12 a. Quality assessment data. 8 13 b. The type, frequency, and outcomes of and the filing 8 14 procedure for enrollee complaints and grievances. 8 15 c. Covered and excluded benefits. 8 16 d. Compensation arrangements with participating health 8 17 care professionals and health care providers. 8 18 3. The commissioner and the director shall collect the 8 19 information provided in the prospectus and shall compile the 8 20 information in a format and manner that is useful to the 8 21 public. The compiled information shall be available to the 8 22 public in both electronic and printed formats. 8 23 EXPLANATION 8 24 This bill creates new Code chapter 514J. The bill provides 8 25 that a third-party payor has the duty to exercise ordinary 8 26 care when making health care treatment decisions and is liable 8 27 for damages for harm to an insured or enrollee proximately 8 28 caused by its failure to exercise such ordinary care. The 8 29 bill establishes certain defenses to such an action for 8 30 failure to use ordinary care and provides that the duty to 8 31 exercise ordinary care does not create an obligation on the 8 32 part of the third-party payor to provide health care services 8 33 to an insured or enrollee which is not covered by the health 8 34 care plan offered by the third-party payor. The bill defines 8 35 "third-party payor" as a health insurance carrier, health 9 1 maintenance organization, managed care entity, or organized 9 2 delivery system. 9 3 This bill also establishes a new Code chapter 514K which 9 4 provides certain rights for enrollees of a health maintenance 9 5 organization (HMO), organized delivery system (ODS), or 9 6 preferred provider organization (PPO). The bill provides 9 7 definitions used in the new Code chapter. The bill directs 9 8 the commissioner of insurance to adopt rules for HMOs and PPOs 9 9 relating to access to care. Rules relating to access to care 9 10 currently exist for ODSs. The rules relate to access to care, 9 11 include rules relating to geographic limits for travel to 9 12 receive primary care, the requirement that a sufficient number 9 13 of primary care health care professionals and specialists be 9 14 available in the service area, the requirement of direct 9 15 access to an obstetrician and gynecologist, and the 9 16 requirement that a parent be allowed to designate a 9 17 pediatrician as the primary care health care professional for 9 18 the parent's child. 9 19 The bill requires the availability of emergency services, 9 20 through a physician and ancillary personnel, on a 24-hour per 9 21 day basis for HMOs, ODSs, and PPOs. 9 22 The bill provides that a participating health care 9 23 professional or health care provider cannot be prohibited from 9 24 or penalized for discussing treatment options with an enrollee 9 25 and from advocating for an enrollee within the utilization 9 26 review or grievance processes. The bill prohibits an HMO, 9 27 ODS, or PPO from penalizing a health care professional or 9 28 health care provider from reporting an act or practice of the 9 29 HMO, ODS, or PPO to state or federal authorities if the 9 30 professional or provider believes, in good faith, that the act 9 31 or practice jeopardizes patient health or welfare. 9 32 The bill requires an external review process for enrollee 9 33 appeals. 9 34 The bill requires HMOs, ODSs, and PPOs to provide enrollees 9 35 and prospective enrollees with a prospectus containing 10 1 information required by rule of the commissioner or by rule of 10 2 the director of public health which will assist the enrollee 10 3 or prospective enrollee in determining the performance of the 10 4 HMO, ODS, or PPO. The information contained in the prospectus 10 5 submitted by each HMO, ODS, and PPO is to be compiled by the 10 6 commissioner and the director and is to be made available to 10 7 the public in both electronic and printed formats. 10 8 LSB 2780HH 78 10 9 pf/cf/24
Text: HF00593 Text: HF00595 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
© 1999 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Wed Jan 12 05:55:23 CST 2000
URL: /DOCS/GA/78GA/Legislation/HF/00500/HF00594/990310.html
jhf