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
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